XP Power Ltd Trading Update

 
TIDMXPP 
 
12 January 2023 
 
                               XP Power Limited 
 
                   ("XP Power" the "Group" or the "Company") 
 
Q4 and Full Year Trading Update 
 
XP Power, one of the world's leading developers and manufacturers of critical 
power control components to the electronics industry, is today issuing a 
trading update for the fourth quarter and full year ended 31 December 2022. 
 
Trading 
 
The Group's trading performance improved significantly in the second half of 
2022, both sequentially and year-on year, as supply chain conditions improved. 
Revenue in Q4 increased to £87.6 million, a record, up 30% year-on-year at 
constant currency and 49% as reported. Consequently, full year revenue 
increased to £290.6m, up 21% year-on-year on a reported basis and up 5% on an 
organic constant currency basis1.  As a result, and subject to normal audit 
adjustments, 2022 adjusted operating profit is expected to be approximately in 
the middle of the range of current market expectations2. We are pleased with 
our second half trading performance, which better reflects the Group's 
capability. 
 
As expected, and as previously guided, the strong order intake momentum seen 
through Q3 2022 moderated somewhat in Q4 but remained above historic levels. Q4 
orders were down 31% at constant currency and 23% as reported to £68.5 million 
against a very strong comparator in the prior year. The book to bill ratio for 
Q4 was 0.78, reflecting a strong performance in shipments during in the 
period. 
 
On a full year basis, orders of £362.7m were up 6% as reported, down 7% on an 
organic constant currency basis, and resulted in a positive book to bill of 
1.25 for the year as a whole. 
 
Each business segment has good order book visibility, with Healthcare order 
intake the strongest in Q4, and the Group enters 2023 with a greater visibility 
than normal with an order book of c. £300 million. We would expect order book 
visibility to return to more normal levels during 2023. 
 
£ Millions         Q4 2022      Q4 2021        Change  Change in Like-for-like 
                                                        constant   in constant 
                                                        currency     currency1 
 
Orders                68.5         88.6          -23%       -31%          -34% 
 
Year to date         362.7        343.4           +6%        -3%           -7% 
 
Revenue               87.6         58.9          +49%       +30%          +24% 
 
Year to date         290.6        240.3          +21%       +11%           +5% 
 
Book to Bill 
 
Fourth quarter        0.78         1.51         -0.73 
 
Year to date          1.25         1.43         -0.18 
 
1 Change in constant currency and adjusting for the acquisitions of FuG 
Elektronik GmbH and Guth High Voltage GmbH on 31 January 2022. 
 
2 The current range of analyst expectations for adjusted operating profit for 
the year ended 31 December 2022 is £41 million to £46 million. 
 
Financial Position and dividend 
 
Net debt at 31 December 2022 was £152.0 million, compared with £118.7 million 
at 30 September 2022, reflecting a $44 million collateral payment for a bond 
held against the damages awarded against the Group in the Comet Legal Action in 
the US, which remains ongoing. Working capital benefited from inventory 
beginning to unwind in Q4 and although the pace of that unwind was slower than 
expected, it is expected to accelerate in H1 2023 as supply chain conditions 
continue to normalise. The Group expects financial leverage to reduce 
significantly during 2023. 
 
In addition, XP has recently secured greater banking covenant flexibility from 
its lenders with the net debt to EBITDA covenant now required to be less than 
3.5x at December 2022, 3.25x in June 2023 and 3.0x in December 2023. The Group 
was comfortably within these covenant levels at the 2022 year end and expects 
to remain well inside them during 2023 and beyond. The greater flexibility also 
highlights the ongoing support from our lending banks. 
 
The proposed dividend for the fourth quarter of 2022 will be announced with the 
2022 Final Results on 28 February 2023 but is expected to be not less than 36 
pence per share, representing a minimum total dividend of 94 pence per share 
for the year as a whole. 
 
Outlook 
 
The Group starts the new financial year with a significant order book, which 
provides good visibility for 2023, particularly the first half. We remain 
mindful of the ongoing uncertainties relating to component supply, China, 
inflation and recessionary concerns and are continuing to monitor the situation 
closely. That said, we are generally optimistic on the Group's prospects for 
the current year based on our strong H2 2022 trading momentum and the benefits 
of price increases coming through our order book to a greater extent during 
2023. 
 
Longer term, the Board believes XP Power to be very well positioned to grow 
ahead of its end markets, supported by its improving cash generation and a 
reduced level of debt. 
 
The Group will announce its results for the 12 months to 31 December 2022 
results on 28 February 2023. 
 
Enquiries: 
 
XP Power 
 
Gavin Griggs, Chief Executive Officer  [phone] 
 
Oskar Zahn, Chief Financial Officer  [phone] 
 
Citigate Dewe Rogerson 
 
Kevin Smith/Lucy Gibbs  [phone] 
 
 
 
END 
 
 

(END) Dow Jones Newswires

January 12, 2023 02:00 ET (07:00 GMT)