Q1 Trading Update
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Q1 trading in line with expectations and full year outlook unchanged
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 first quarter ended 31 March 2024.
Trading
| Q1 | 2024 | 2023 | Change | Change in constant currency |
|---|---|---|---|---|
| Order intake (£m) | 43.7 | 61.2 | (29)% | (27)% |
| Revenue (£m) | 64.6 | 77.9 | (17)% | (15)% |
| Book-to-bill | 0.68x | 0.79x | (0.11)x | |
| Trailing 12 months by quarter | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 |
| Order intake (£m) | 54.4 | 44.2 | 49.0 | 43.7 |
| % change vs prior year - constant currency | (42)% | (54)% | (22)% | (27)% |
| Revenue (£m) | 82.3 | 75.1 | 81.1 | 64.6 |
| % change vs prior year - constant currency | 28% | (1)% | (5)% | (15)% |
| Book-to-bill | 0.66x | 0.59x | 0.60x | 0.68x |
On a constant currency basis, Q1 revenue of £64.6m was 15% lower than last year. Q1 order intake of £43.7m was 27% lower than last year. Sales and order intake in the Semiconductor Manufacturing Equipment sector were at a similar run-rate to that achieved in the second half of 2023. Sales and order intake in the Healthcare and Industrial Technology sectors slowed as customers continued to destock.
Our order book at the end of Q1 was c.£171m.
Financial Position
Net debt at 31 March 2024 was £103.4m, £9.3m lower than at 31 December 2023.
The Group generated strong cash flow from ongoing inventory reduction and cash preservation measures. We continue to expect the Group's net debt to peak around the mid-year point. The Group's previously announced actions to reduce costs and borrowings are on track and are delivering the benefits expected.
Outlook
Our full year expectations are unchanged. As expected, revenue in Q2 is likely to be slightly lower than Q1 due to ongoing customer destocking, and we continue to expect trading to improve during 2024 as channel stock levels reach equilibrium and as demand for Semiconductor Manufacturing Equipment begins to increase. Order intake in Q2 will provide greater clarity on the timing and trajectory of this improvement.
We are confident that our market positions remain strong and that the Group is well positioned to prosper as our key markets resume their trajectory of healthy long-term growth.
We will announce our Interim Results on 6 August 2024.
XP Power typically designs power control solutions into the end products of major blue-chip OEMs, with a focus on the Semiconductor Manufacturing Equipment (circa 32% of sales), Industrial Technology (circa 43% of sales) and Healthcare (circa 25% sales) sectors. Once designed into a programme, XP Power has a revenue annuity over the life cycle of the customer's product which is typically five to seven years depending on the industry sector.
XP Power has invested in research and development and its own manufacturing facilities in China, North America, and Vietnam, to develop a range of tailored products based on its own intellectual property that provide its customers with significantly improved functionality and efficiency.
For further information, please visit www.xppowerplc.com.
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