4 March 2025

XP Power Limited

(‘XP Power’ or ‘the Group’ or ‘the Company’)

 

2024 Full Year Results

 

Delivering progress in a challenging market, significant long-term potential

Share Placing launched to prudently strengthen capital structure prior to market recovery

 

XP Power, one of the world's leading developers and manufacturers of critical power control solutions for the Semiconductor Manufacturing Equipment, Industrial Technology and Healthcare sectors, announces its annual results for the year ended 31 December 2024 (“2024” or “the year”).

 

Year ended 31 December

(£m unless otherwise stated)

2024

2023

Change

At actual exchange rates

In

constant currency

 

 

 

 

 

Order intake

181.6

208.8

(13)%

(10)%

Revenue

247.3

316.4

(22)%

(20)%

Book-to-bill

0.73x

0.66x

0.07x

 

Order book

122.3

192.0

 

 

Adjusted results1:

 

 

 

 

Gross margin

41.0%

41.5%

(50)bps

 

Operating profit

25.1

38.1

(34)%

(32)%

Profit before tax

13.8

26.6

(48)%

(46)%

Diluted earnings per share (pence)

42.9p

81.8p

(48)%

 

Operating cash flow

65.6

66.1

(1)%

 

Reported results:

 

 

 

 

Gross margin

39.2%

41.5%

(230)bps

 

Operating profit

3.6

24.5

(85)%

 

(Loss) / profit before tax

(7.7)

11.2

(169)%

 

Diluted loss per share (pence)

(40.4)p

(45.3)p

(10.8)%

 

Net Debt1

93.5

112.7

(17)%

 

Net Debt : Adjusted EBITDA1

2.3x

2.0x

 

 

1 Details of the adjustments made and reconciliations to the reported results can be found in Note 2 of the consolidated financial statements

 

Financial Highlights

 

Order intake of £181.6m: Encouraging growth in orders from the Semiconductor Manufacturing Equipment sector, up 37% on prior year in constant currency, with momentum building as the year progressed Destocking continued in the Industrial Technology and Healthcare sectors but with channel inventory moving closer to equilibrium

 

Revenue of £247.3m: Year-on-year reduction due to destocking in the Industrial Technology and Healthcare sectors and the tail end of a market-wide downcycle within the Semiconductor Manufacturing Equipment sector Record sales of High Voltage High Power (HVHP) products, supported by backlog clearance Market position and share maintained

 

Adjusted Operating Profit of £25.1m: Significant management actions to protect profitability in challenging conditions Adjusted Gross Margin of 41.0%, improving during the year due to cost savings and other efficiency measures Adjusted Operating Expenses 18% lower than the comparative period, with sources of long-term competitive advantage preserved

 

Adjusted Operating Cash Flow of £65.6m: Cash generation maximised in challenging market conditions Inventory reduced by a further £20.5m in the year to £71.1m Net debt reduced by £19.2m in the year to £93.5m, equal to 2.3x Adjusted EBITDA

 

Diluted loss per share of (40.4) pence and Adjusted Diluted Earnings Per Share of 42.9 pence.

 

Operational Highlights

 

Robust response to the current market slowdown: Rapidly right-sized the cost base to reflect market conditions Ringfenced resources necessary for long-term growth Inventory reduced and optimised, generating cash and shortening delivery lead times

 

Well positioned for progress as the market recovers: Healthy pipeline of new products, with 25 scheduled for launch in 2025 Record new business wins in the year, supporting medium-term growth Improved customer service and satisfaction levels Improved supply chain efficiency, supporting long-term gross margin recovery

 

Update on Comet Legal Action

 

As announced in January 2025, the Group was recently found liable for plaintiff’s legal fees and pre-judgement interest of c.$19m or £15.2m

 

Provision for costs increased accordingly by £7.0m to £51.4m as at 31 December 2024

 

Appeal likely to be heard in mid-2025

 

Share Placing / Funding Actions

 

Wide range of full year outcomes at this early stage of 2025, with uncertainty as to the timing and scale of market recovery, resulting in significant H2 weighting

 

£40m Share Placing (before costs) launched to proactively strengthen capital structure and prudently manage though current unprecedented market conditions and into the recovery. In the event of the expected market recovery, the Group will return any excess proceeds from the Placing to shareholders.

 

Gavin Griggs, Chief Executive Officer, commented:

“2024 was a mixed year. Importantly, our execution significantly improved, delivering greater operational efficiency, an upgraded supply chain capability, lower costs and substantial cash generation primarily driven by a reduction in working capital. We also maintained our focus on delivering our long-term strategy which is underlined by our healthy pipeline of new products and record new business wins. Despite the internal progress, market conditions were more challenging than expected. We continued to experience industry-wide customer destocking in the Industrial Technology and Healthcare sectors and a slow Semiconductor Manufacturing Equipment sector, albeit with an improvement in the second half.

 

At the start of 2025 we are seeing continued challenging market conditions and recent US trade restrictions are causing increased headwinds for sales to Semiconductor Manufacturing Equipment customers in China, which we expect to result in a sequentially weaker first half result. We expect demand to improve as the year progresses but the timing and scale of recovery remains hard to predict. This leads to a wide range of potential outcomes for 2025, with an expectation of a significant second half weighting. The relative lack of visibility has led the Board to prudently strengthen the balance sheet with a £40m share placing, providing additional financial headroom while the timing of the market recovery remains uncertain.

 

The Group’s maintained market position, strong product pipeline, robust operational performance and proven business model gives the Board confidence in our long-term prospects and the fundamental and strategic value of the Company.”

 

Enquiries:

 

XP Power        

Gavin Griggs, Chief Executive Officer +44 (0)118 976 5155

Matt Webb, Chief Financial Officer    +44 (0)118 976 5155

 CDR 

Kevin Smith/Lucy Gibbs +44 (0)20 7638 9571

 

An analyst meeting will be held at 10:15am GMT on 4 March 2025 at the offices of CDR, with refreshments served from 10:00am. 8th Floor, Holborn Gate, 26 Southampton Buildings, London, WC2A 1AN. To register to attend please email