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Annual Results 2015 xppower.com xp 1 Disclaimer This document - - PowerPoint PPT Presentation
Annual Results 2015 xppower.com xp 1 Disclaimer This document - - PowerPoint PPT Presentation
Annual Results 2015 xppower.com xp 1 Disclaimer This document contains statements about XP Power Limited that are or may be forward-looking statements. Forward-looking statements include statements relating to (i) future capital expenditures,
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xp xppower.com
Disclaimer
This document contains statements about XP Power Limited that are or may be forward-looking statements. Forward-looking statements include statements relating to (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of XP Power Limited’s
- perations and potential synergies; and (iii) the effects of government regulation on business.
These forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of XP Power Limited. They involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person to be materially different from any results, performance or achievements expressed or implied by such statements. They are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the
- future. All subsequent oral or written forward-looking statements attributable to XP Power Limited or any of its shareholders or any persons acting on
its behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included in this document speak
- nly as of the date they were made and are based on information then available to XP Power Limited. Investors should not place undue reliance on
such forward-looking statements, and XP Power Limited does not undertake any obligation to update publicly or revise any forward-looking statements. No representation or warranty, express or implied, is given regarding the accuracy of the information or opinions contained in this document and no liability is accepted by XP Power Limited or any of its directors, members, officers, employees, agents or advisers for any such information or opinions. This information is being supplied to you for information purposes only and not for any other purpose. This document and the information contained in it does not constitute or form any part of an offer of, or invitation or inducement to apply for, securities. The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of laws of any such other jurisdiction. XP Power Annual Results 2015
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Highlights
- Strong results in a year the market is reported to have declined – weakness in North America
industrial offset by a strong performance in technology and healthcare
- Record order intake of £110.5 million (2014: £105.1 million) up 5% (1% in constant currency)
- Record revenues of £109.7 million (2014: £101.1 million) up 9% (4% in constant currency)
- Own design revenues increased to £74.6 million (2014: £67.2 million) up 11% (7% in constant
currency) to 68% of total revenue (2014: 66%)
- High efficiency “Green XP Power” product revenue up 27% to £23.6 million (2014: £18.6
million) representing 22% of total revenue (2014: 17%)
- Total dividend for the year of 66 pence (2014: 61 pence) up 8%
- Invested in additional sales and engineering resources in North America
- Acquired the assets and business of EMCO High Voltage
XP Power Annual Results 2015
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XP Power Annual Results 2015
Execution of Strategy
Key Performance Indicator Strategy point 2010 2011 2012 2013 2014 2015
Number of new product introductions
- Develop a strong pipeline of
leading edge products 31 38 19 31 26 22 “Green” product revenues
- Expansion of high efficiency
“Green” products £2.8m £5.0m £8.1m £13.7m £18.6m £23.6m Top 30 customers percentage of revenue
- Target and increase
penetration of key accounts 35% 38% 39% 40% 40% 44% Own design product revenues
- Manufacture our own
products £44.1m £59.2m £57.6m £64.2m £67.2m £74.6m Proportion of own design products
- Increase contribution of own
design products 48% 57% 62% 64% 66% 68% Adjusted diluted Earnings per share
- Target and increase
penetration of key accounts 83.7p 106.4p 81.3p 95.1p 101.1p 104.3p
Acquisitions will become a strategy point
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Market Data
Market 2015 (£ Millions) Size Share Asia £740 1.2% Europe £390 11.6% North America £620 9.0% Total £1,750 6.3%
XP Power Annual Results 2015
Source: Micro-Tech Consultants and XP Power Management
XP Revenue (£ Millions) Asia Europe North America Total % Healthcare 1.7 11.3 21.3 34.3 31% Industrial 3.9 27.1 17.6 48.6 44% Technology 3.3 6.7 16.8 26.8 25% Total £8.9 £45.1 £55.7 £109.7 100% 8% 41% 51% 100%
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- 44% of revenue
- Down 1% (year on year)
driven by North America
- Most fragmented sector
Interesting sub-sectors:
- Test and measurement
- 3D printing
- Industrial printing
- Industrial LED lighting
- Smart Grid
- 31% of revenue
- Grew 11% (year on year)
- Building a leading position
- Gains in the “Big 3” but the next
tier driving our growth
- High efficiency products well
received due to high reliability
- Corporate approvals with all the
major players
- 25% of revenue
- Grew 28% (year on year)
- Good growth after being in the
doldrums
- Semi fab grew 12% from $11.7m
to $13.4m
- New programs like Avid driving
growth
Sector Dynamics
XP Power Annual Results 2015
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XP Power Annual Results 2015 30.8 31.9 4.6 44.8 41.4 5.6 49.0 45.4 9.2 45.4 40.8 7.7 50.1 43.7 7.3 51.3 42.2 7.6 55.7 45.1 8.9
NORTH AMERICA EUROPE ASIA
2009 2010 2011 2012 2013 2014 2015
Revenue by Geography (£M)
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Revenue by Sector (£M)
28.7 19.8 18.8 42.2 22.8 26.8 46.9 26.6 30.1 43.7 26.1 24.1 47.4 30.3 23.4 49.1 31.0 21.0 48.5 34.3 26.9
INDUSTRIAL HEALTHCARE TECHNOLOGY
2009 2010 2011 2012 2013 2014 2015
Growth 2009 2010 2011 2012 2013 2014 2015 Industrial
- 21%
+48% +11%
- 7%
+8% +3%
- 1%
Healthcare +31% +15% +17%
- 2%
+16% +2% +11% Technology +4% +42% +12%
- 20%
- 3%
- 10%
+28%
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XP Power Annual Results 2015
Own Design Revenue Trend
2009 2010 2011 2012 2013 2014 2015 Third party 11.4 11.0 9.9 6.9 7.4 5.9 4.8 Labelled product 29.7 36.7 34.5 29.3 29.5 28.0 30.3 Own design product 26.2 44.1 59.2 57.7 64.2 67.2 74.6 20 40 60 80 100 120 Revenue (£ Millions)
66% 44%
Average compound annual growth rate of 11% for own brand revenue to 2015 (own design 19%)
Own Design Labelled Own Brand
39% 44% 17% 48% 40% 12% 57% 33% 10% 62% 31% 7% 7% 29% 64% 6% 28% 28% 4% 68%
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Revenue from “Green” Products
2.8 5.0 8.1 13.7 18.6 23.6
- 5.0
10.0 15.0 20.0 25.0 2010 2011 2012 2013 2014 2015 Revenue (£ millions) % of revenue
- “Green” products are continuing to gain traction
- Reliability has been the key demand driver for these products so far
- Green products remain a major market opportunity
XP Power Annual Results 2015
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Customers – Selection of Top 30
XP Power Annual Results 2015
- We do business with over 70% of the S&P 500 Equipment Manufacturers
- Top 30 customers account for 44% (2014: 40%) of revenue (largest customer 7%)
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Case Study
Outdoor Communication Structures
- Outdoor high speed wi-fi
access points
- Installation in major US city
- USB device charging ports
- Touch screen web browsing
- Large scale digital advertising
- Power challenges
- Extreme temperatures
- Moisture and dust
- No fans
XP Power Annual Results 2015
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Vietnam Manufacturing Facility
483 employees First new product launch direct to Vietnam – ALM65 series First customer audit and successful approval of factory process qualification Audited for EICC compliance
XP Power Annual Results 2015
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Magnetics Highlights
4.3 million magnetic parts manufactured in 2015 - an 18% increase from 2014 Record month in December with 0.5 million parts manufactured 28 transformer production lines 654 part numbers approved for mass production with 105 pending >98% First Pass Yield
Inductor production line Transformer production lines
XP Power Annual Results 2015
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Vietnam Power Converter Highlights
- >172,000 power converters manufactured in 2015
- First Pass Yield >99%
- 70 part numbers approved for mass production
Power converter production line Final Test Stations Preparation Stations
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Typical Product Life Cycle
0.0 0.2 0.9 2.0 3.7 4.6 4.1 6.2 7.4 6.1 6.7 7.1 5.4
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Revenue (£ Millions)
XP Power Annual Results 2015
- Substantial revenue annuity
- Design in cycle typically 18 months
- 2009 and 2012 dips due to market downturn and not typical
ECM40/60 Series
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Income and Expenditure Statement
£ Millions 2015 Margin 2014 Margin Change
GBP/USD exchange rate 1.54 1.65 +7%
Orders 110.5 105.1 +5% Revenue 109.7 100.0% 101.1 100.0% +9% Gross margin 54.6 49.8% 50.1 49.6% +9% Research and development (net) 5.8 4.3 +35% Other operating expenses 22.9 21.3 +8% Exceptional one-off acquisition costs 0.3
- Adjusted EBITDA*
29.2 26.6% 27.2 26.9% +7% Operating profit 25.6 23.3% 24.5 24.2% +4% Net interest expense 0.2 0.2
- Profit before tax
25.4 23.2% 24.3 22.7% +5% Adjusted profit before tax* 25.7 23.4% 24.3 22.7% +6% Taxation 5.5 4.8 +15% Minority interest 0.2 0.1
- Profit after tax
19.7 18.0% 19.4 18.0% +2% Adjusted profit after tax* 20.0 18.2% 19.4 18.0% +3% Adjusted diluted earnings per share* 104.3p 101.1p +3% Dividend per share 66.0p 61.0p +8% XP Power Annual Results 2015 * Adjusted for exceptional one-off acquisition costs of £0.3 million
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Operating Expenses Reconciliation
£ Millions R&D Other Opex Total Opex 2014 4.3 21.3 25.6 % of revenue 4.3% 21.1% 25.3% Foreign exchange 0.3 0.8 1.1 Acquisitions (EMCO & Hanpower)
- 0.4
0.4 Additional people 0.4 0.4 0.8 R&D costs 0.5
- 0.5
Amortisation of R&D costs 0.3
- 0.3
2015 5.8 22.9 28.7 % of revenue 5.3% 20.9% 26.2%
XP Power Annual Results 2015
As reported in February 2015, additional resource was added in engineering and sales in North America to drive future revenue growth
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Summary Balance Sheets
XP Power Annual Results 2015 £ Millions December 2015 December 2014
GBP/USD exchange rate 1.50 1.56
Cash 4.9 3.8 Trade and other receivables 19.9 18.0 Inventories 28.7 25.2 Total current assets 53.5 47.0 Property, plant and equipment 16.1 14.4 Other non-current assets 49.3 41.7 Total non-current assets 65.4 56.1 Trade and other current payables 15.8 16.1 Short term borrowings 4.0 2.5 Total current liabilities 19.8 18.6 Deferred consideration and deferred tax 5.4 4.2 Long term borrowings 4.6
- Net assets
89.1 80.3 (Net debt)/net cash (3.7) 1.3
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Cash Flow Statement
£ Millions 2015 2014 Operating Profit 25.6 24.5 Amortisation of development costs 1.8 1.5 Depreciation 2.0 1.6 Currency translation losses/(gains) 0.7 1.7 Change in working capital (4.5) (4.0) Income tax paid (4.7) (3.6) Cash provided by operating activities 20.9 21.7 Capitalised development costs (2.9) (2.9) Interest paid (0.1) (0.1) Free cash flow 17.9 18.7 Opening net cash/(net debt) 1.3 (3.5) Acquisitions (net of cash acquired) (8.3)
- Purchase of property and equipment (net of disposals)
(2.5) (2.8) Dividends (12.2) (11.0) Effects of currency translation on cash / ESOP loans repaid 0.1 (0.1) Closing (net debt)/net cash (3.7) 1.3 XP Power Annual Results 2015
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Acquisitions – EMCO High Voltage
- Acquired the business and assets of EMCO High Voltage Corporation on 24
November 2015 for $11.7 million (£7.7 million) in cash
- Reported historic revenues of $7.9 million in 2014 and $8.5 million in 2015
- Based in Northern California with manufacturing operations in Nevada
- Supplies the industrial, medical and technology sectors with a wide range of
standard and modified high voltage DC-DC converter modules
- Gives the Group a new product line to sell to its existing customer base plus
provides a number of new customers
- Synergy in the distribution channels
- Significant growth opportunity with multiple customer synergies already identified
XP Power Annual Results 2015
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High Voltage – Example Applications
- Electrostatic precipitation
- Photomultiplier tubes
- Detection
- Mass spectrometry
- Detection systems
- Industrial printing
- Lasers
XP Power Annual Results 2015
Attractive, high value, niche market populated by small players
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2016 Outlook
- Economic uncertainty increased in early 2016
- Record order intake, strong backlog and strong US
Dollar underpins confidence
- EMCO high voltage products will create additional
revenue and profit
- With a strong balance sheet we continue to look for
additional acquisitions to expand our available market and to boost growth
- While not immune to macro-economic impacts we
would expect to grow revenues again in 2016
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