Interim Report for the six months ended 30 June XP Power. Outstanding Performance World Leading Critical Power Control Solutions

Transcription

1 Interim Report for the six months ended 30 June 2010 XP Power Stock code: XPP Outstanding Performance World Leading Critical Power Control Solutions

2 XP Highlights Six months Six months ended ended 30 June June 2009 Highlights (Unaudited) (Unaudited) Revenue 40.7m 33.1m + 23% Gross profit 19.0m 14.9m + 27% Gross margin 46.7% 45.0% +1.7% points Operating margin 18.9% 13.0% + 5.9% points Adjusted (*) profit before tax 7.3m 3.8m + 92% Adjusted (*) profit after tax 5.9m 3.5m + 69% Diluted earnings per share adjusted (*) (see Note 11) 31.1p 18.6p + 67% Interim dividend per share (see Note 10) 13.0p 10.0p + 30% (*) Adjusted for amortisation of intangibles associated with acquisitions of 0.1 million (2009: 0.2 million) Continued evolution of the Group to an own brand/own manufactured business model delivers a very strong result for the period which sets new records for revenue, gross margins and earnings per share. Further new product introductions and the development of an industry leading in-house manufacturing capability have generated multiple new program wins which are driving growth as market share gains gather pace. Broad recovery now evident in core Technology, Medical and Industrial end-user markets. Increased gross margins of 46.7% (2009: 45.0%) driven by continued expansion of inhouse developed, XP brand products, which now represent 90% of revenues (2009: 83%). Production volumes at Chinese facility now double those of 2009 and approaching 50% of capacity, triggering plans for second facility in Vietnam, on land acquired in Net debt reduced to 19 million at 30 June 2010 (2009: 25 million). Current trading remains robust new program wins underpin prospects in the second half and beyond. Our long term strategy of investing in the development and manufacture of our own products has enabled XP to produce excellent financial results in the first half of 2010, which set new records in terms of revenue, gross margins and earnings per share. We entered the second half with record order books and new business secured to date should produce improved revenue in the second half as customer orders enter production, underpinning our confidence in prospects for the full year. We are working hard to ensure that in 2011 and beyond we continue to improve value to our customers and therefore our shareholders. Larry Tracey, Executive Chairman stock code: XPP 01

3 Chairman s Statement Overview The trading environment in the first half has been buoyant. Our long term strategy of investing in the development of our own products has enabled XP to weather the economic storm of the last two years and produce excellent financial results in the first half of 2010, which set new records in terms of revenue, gross margins and earnings per share. Further, significant new product introductions and the development of an industry leading inhouse manufacturing capability are at the core of our strategy and are leading to multiple new program wins which are driving our growth as we take market share. This strong performance has enabled the Group to reduce net debt further to 19 million at 30 June 2010 compared to 25 million at 30 June Using the exchange rates prevailing at 30 June 2009, net debt at 30 June 2010 would have been 17 million. Markets XP Power supplies power control solutions to original equipment manufacturers ( OEMs ) who themselves supply the healthcare, technology and industrial markets with high value products. The increasing importance of energy efficiency, for both environmental and economic reasons, the necessity for ever smaller products, the accelerating rate of technological change and the increasing proliferation of electronic equipment, all underpin the strength of medium term demand for XP Power s products. Revenues for the period were up 23% (28% in constant currency) to 40.7 million compared with 33.1 million in the same period a year ago. Improving demand for the capital equipment that our products power has been reasonably broad based as the economic recovery has taken hold. In North America this has been most pronounced in Technology. In Europe all three sectors have grown with Industrial leading the field. In Asia all three sectors have grown, led by the Technology segment. For the six months ended 30 June 2010, 46% of our revenues were generated from Industrial (2009: 49%), 26% from Healthcare (2009: 29%) and 28% from Technology (2009: 22%). The Group s customer base remains highly diversified. The largest customer was 4% of our revenue spread over 68 different programs/part numbers. Margins Our value proposition to our customers is to reduce their costs of manufacture and operation. We achieve this by producing new products that consume less power, take up less space, reduce installation times and which are highly reliable in service. As the proportion of revenue generated from our own designed and manufactured product has increased, so to have our gross margins. The 46.7% gross margin achieved in the first half of 2010 is a record (2009: 45.0%). As less than half our revenue at present is both own design and manufactured there remains plenty of scope for further improvements. Revenue growth is being driven from the long term investment we have made in building a broad portfolio of leading edge products. 02 XP Power Interim Report 2010

4 Product Development New products are fundamental to driving our revenue growth. The markets we serve and the customer requirements we identify are numerous and diverse. The broader our product offering the more opportunity we have to increase our revenues by expanding our available market. XP Power helps its customers reduce their own production costs and lower the operating costs of their equipment when in service. Materials, space and energy consumption savings are achieved by applying the power control intellect of a multi-disciplined team of some 200 engineers. This is the essence of the value we add for our customers. We launched 14 new product families in the first half of In response to customer requirements for improved efficiency and environmental performance, our design teams are focusing on developing new products that reduce power wastage, reduce heat, and consume less raw material. Product development spending increased 33% from 1.2 million in the first half of 2009 to 1.6 million in the first half of Larger customers are also keen to reduce the number of vendors they deal with and XP Power s broad product offering, excellent global engineering support and in-house manufacturing capability make us an ideal candidate as a preferred supplier. Supply Chain Dynamics The decision of some component manufacturers to significantly reduce their capacity during the recession led to the supply chain for many electronic components becoming very thin as the recovery commenced, with lead times for many components particularly active components and certain capacitors increasing dramatically and shortages becoming common. We anticipated this dynamic which has occurred during other recoveries and acted early to significantly increase our safety inventories of critical components. Inventories increased from 10.7 million at the 2009 year end to 15.2 million at 30 June 2010, with 2.6 million of this increase due to higher safety inventories of critical components. Manufacturing XP Power s products frequently power critical applications and our key customers demand the ultimate in quality control to ensure reliability for the life of their equipment. In 2005 the Group recognised an opportunity to take direct control of its manufacturing activities to strictly manage the production processes and to reduce its product costs. The evolution of the Group to this own brand/own manufactured business model is delivering both higher margins and more rapid customer response times. stock code: XPP 03

5 Chairman s Statement In June 2009 production commenced at a new manufacturing facility constructed on our existing site at Kunshan, close to Shanghai, China. This new facility has enabled us to win more of the available business from our existing Blue Chip customer base and to attract new larger customers where we have yet to gain preferred supplier status. These customers demand that their suppliers have complete control over their supply chain and product manufacture to ensure the highest levels of quality. The facility, which is certified under the ISO Environmental Management Standard, delivers manufacturing capabilities which match the best of our competitors. The facility underwent 7 customer inspections during the period and all were successful, paving the way for XP to secure approved and/ or preferred supplier status with further new key customers. The launch of the in-house manufacturing facility was a major milestone in the Group s development and it is playing a crucial role in driving revenue growth. The Kunshan factory is now approaching 50% capacity utilisation due to the increased demand for our latest products which are own manufactured. Output from the factory is now more than double the volumes experienced in As anticipated, we are therefore progressing plans to gain planning consent for an additional factory in Vietnam to help meet future demand. In 2008 the Group purchased land on the outskirts of Ho Chi Minh City, with sufficient space for two new factories which would more than triple our existing production capacity. We expect to break ground on the first of these new factories on this site later this year. The Vietnam site has sufficient space for us to build two factories equivalent to the size of our existing China factory in a phased approach as demand dictates. Adding manufacturing capacity in Vietnam will also help mitigate the rapid salary inflation in evidence in China as well as the inevitable appreciation of the Chinese currency over time, although at present these are a comparatively small constituent of our cost structure. We anticipate that the more labour intensive manufacturing operations will be transferred to the new facility in Vietnam within two years. Capital requirements to expand our manufacturing capacity are very modest compared to the returns. We expect the site preparation and first building cost to be approximately $6.0 million and the initial equipment set to be approximately $2.5 million. Dividend In April this year we announced that the Company s dividend payment schedule would change from a half yearly to a quarterly basis, to increase the attractiveness of the Group s shares to certain investors and to smooth cash flows. Our strong financial performance and confidence in the Group s prospects have enabled us to increase dividends for the first half by 30% to 13.0 pence per share (2009: 10.0 pence per share). The first quarterly payment of 6.0 pence per share was made on 6 July A second quarterly dividend of 7 pence per share will be paid 12 October 2010 to shareholders on the register at 10 September These first two quarterly payments total 13.0 pence per share versus the interim dividend of 10.0 pence per share paid for the equivalent period in A third quarterly dividend will be paid in January 2011 and a final dividend in April XP Power Interim Report 2010

6 Environmental Impact XP Power has placed improved environmental performance at the heart of its operations both in terms of minimising the impact its activities have on the environment and in its product development strategy. These practices and initiatives not only resonate with our customers and employees, they also make enormous commercial sense as countries legislate to reduce power wastage, improve recyclability of manufactured goods and ban the use of harmful chemicals. I am therefore pleased to announce that XP Power has been accepted as an Applicant Member of the Electronic Industry Citizenship Coalition ( EICC ). The EICC is a collaboration of leading electronics companies that promotes an industry code of conduct for global supply chains to improve working and environmental conditions. XP s successful membership application reflects the major progress achieved by the Group in enhancing the energy efficiency of its power converters in recent years and its ongoing commitment to improving its environmental performance. In summary, XP Power is on a mission to develop smaller products that waste less energy, consume less physical material and avoid hazardous substances. I am confident that these initiatives will not only benefit the environment but will help us grow our business and increase the value of our Company. Corporate Governance The Board has recently reviewed the areas where the Company is not fully compliant with the Combined Code on Corporate Governance. In accordance with the Listing Rules these areas are set out in the Corporate Governance Report contained with the Company s 2009 Annual Report. Action is being taken such that XP Power expects to be fully compliant with the Combined Code before the year end. Outlook Trading since the period end has continued to be robust, with sustained momentum in customer orders and production volumes. We entered the second half with record order books and new business secured to date should produce improved revenue in the second half as customer orders enter production, underpinning our confidence in prospects for the full year. Our challenge is to ensure that the exceptional results achieved in 2010 are progressively improved over the next five years to the benefit of customers, employees and shareholders. I believe the Group is well placed to execute these objectives. Larry Tracey Executive Chairman 2 August stock code: XPP 05

7 Consolidated Statement of Comprehensive Income For the six months ended 30 June 2010 Six months Six months ended 30 ended 30 June 2010 June 2009 Millions Note (Unaudited) (Unaudited) Revenue Cost of sales 8 (21.7) (18.2) Gross profit Operating expenses 8 (11.5) (10.6) Other operating income Operating profit Finance cost 8 (0.5) (0.7) Profit before taxation Tax on profit 9 (1.3) (0.3) Net profit Other comprehensive income: Fair value gains/(losses) on cash flow hedges 0.8 (1.3) Exchange differences on translation of foreign operations (0.7) 1.3 Other comprehensive income, net of tax 0.1 Total comprehensive income Profit attributable to: equity holders of the Company non-controlling interest Total comprehensive income attributable to: equity holders of the Company non-controlling interest Earnings per share for profit from continuing operations attributable to equity holders of the Company Pence per Share Pence per Share Basic Diluted XP Power Interim Report 2010

8 Consolidated Balance Sheet At 30 June 2010 At 30 At 31 At 30 June December June Millions Note (Unaudited) (Unaudited) Assets Current assets Cash and cash equivalents Derivative financial instruments Trade and other receivables Other current assets Inventories 6, Total current assets Non-current assets Interests in associates Property, plant and equipment Goodwill Other intangible assets ESOP loans to employees Deferred income tax assets Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Current income tax liabilities Derivative financial instruments Bank loans and overdraft Total current liabilities Non-current liabilities Borrowings Deferred income tax liabilities Provision for other liabilities and charges Total non-current liabilities Total liabilities Net assets Capital and reserves attributable to equity holders of the Company Share capital Merger reserve Treasury shares (0.9) (0.9) (0.8) Hedging reserve 0.6 (0.2) (0.3) Translation reserve (8.1) (7.4) (7.2) Retained earnings Non-controlling interest Total equity stock code: XPP 07

9 Consolidated Statement of Changes in Equity For the six months ended 30 June 2010 (unaudited) Company Share treasury Merger capital shares reserve Balance at 1 January (0.8) 0.2 Dividends paid Total comprehensive income for the period Balance at 30 June (0.8) 0.2 Balance at 1 January (0.9) 0.2 Dividends paid Total comprehensive income for the period Balance at 30 June (0.9) XP Power Interim Report 2010

10 Total attributable to equity Non- Hedging Translation Retained holders of controlling reserve reserve earnings the parents interest Total equity 1.0 (8.5) (2.1) (2.1) (2.1) (1.3) (0.3) (7.2) (0.2) (7.4) (2.3) (2.3) (0.2) (2.5) 0.8 (0.7) (8.1) stock code: XPP 09

11 Consolidated Cash Flow Statement For the six months ended 30 June 2010 Six months Six months ended 30 ended 30 June 2010 June 2009 Millions Note (Unaudited) (Unaudited) Cash flows from operating activities Total profit Adjustments for Income tax expense Amortisation and depreciation Finance cost Gain on fair valuation of derivative financial instruments (0.1) (0.1) Research and development expense Change in the working capital Inventories (4.5) 3.9 Trade and other receivables (2.5) 2.7 Trade and other payables 4.8 (5.6) Income tax paid (1.3) (0.3) Net cash provided by operating activities Cash flows from investing activities Purchases and construction of property, plant and equipment (1.0) (0.8) Research and development expenditure 8 (2.1) (1.8) Net cash used in investing activities (3.1) (2.6) Cash flows from financing activities Repayment of borrowings (0.4) (1.8) Interest paid (0.4) (0.7) Dividends paid to equity holders of the Company (2.3) (2.1) Dividends paid to non-controlling interest (0.2) Net cash used in financing activities (3.3) (4.6) Effects of currency translation (1.1) 1.2 Net increase/(decrease) in cash and cash equivalents (1.1) 0.8 Cash and cash equivalents at start of period 3.9 (3.9) Effects of currency translation on cash and cash equivalents Cash and cash equivalents at the end of the period (2.9) 10 XP Power Interim Report 2010

12 Notes to the Interim Results For the six months ended 30 June General information XP Power Limited (the Company ) is listed on the London Stock Exchange and incorporated and domiciled in Singapore. The address of its registered office is 401 Commonwealth Drive, Lobby B #02-02, Haw Par Technocentre, Singapore The nature of the Group s operations and its principal activities is to provide power supply solutions to the electronics industry. These condensed consolidated interim financial statements are presented in Pounds Sterling (GBP). 2. Basis of preparation The condensed consolidated interim financial statements for the period ended 30 June 2010 has been prepared in accordance with the Listing Rules of the Financial Services Authority and with IAS 34, Interim Financial Reporting as adopted by the European Union. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2009 which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union. 3. Going concern The Directors, after making enquiries, are of the view, as at the time of approving the financial statements, that there is a reasonable expectation that the Group will have adequate resources to continue operating for the foreseeable future and therefore the going concern basis has been adopted in preparing these financial statements. stock code: XPP 11

13 Notes to the Interim Results For the six months ended 30 June Accounting policies The condensed consolidated interim financial statements have been prepared under the historical cost convention except for the fair value of derivatives in accordance with IAS 39, Financial Instruments: Recognition and Measurement. The same accounting policies, presentation and methods of computation are followed in these condensed consolidated interim financial statements as were applied in the presentation of the Group s financial statements for the year ended 31 December On 1 January 2010, the Group adopted the following standards that are mandatory for application from that date: IAS 1 (Amendment) IFRS 2 (Amendment) IFRS 3 (revised) IFRS 5 (Amendment) IFRS 9 IFRIC 17 IAS 27 (revised) IAS 38 (Amendment) Presentation of Financial Statements Group cash-settled and share-based payment transactions Business combinations Measurement of non-current assets (or disposal groups) classified as held-for-sale Financial Instruments Distribution of non-cash assets to owners Consolidated and Separate Financial Statements Intangible Assets The adoption of the above standards did not result in any substantial changes to the Group s accounting policies or any significant impact on these financial statements. 5. Property, plant and equipment Items of property, plant and equipment, including leasehold land and buildings, are stated at cost less accumulated depreciation and any recognised impairment losses. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Freehold land and property under development are not depreciated. Depreciation on other items of property, plant and equipment is charged so as to write off the cost or valuation of the assets over their estimated useful lives, using the straight line method, on the following bases: Plant and equipment 10 33% Motor vehicles 20 25% Building improvements 10% or over the life of the lease if shorter Buildings 2 5% Leasehold land 2% or over the life of the lease if shorter The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are recognised in the income statement when the changes arise. 12 XP Power Interim Report 2010

14 6. Inventories Inventories are stated at the lower of cost and net realisable value. The cost of finished goods and work-in-progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Cost is calculated using weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. 7. Segmented analysis The Group operates substantially in one class of business, the provision of power control solutions to the electronics industry. Analysis of total Group operating profit, net assets, revenue and total Group profit before taxation by geographical region is set out below. Six months Six months ended 30 ended 30 June 2010 June 2009 Millions (Unaudited) (Unaudited) Revenue Europe USA Asia Total revenue stock code: XPP 13

15 Notes to the Interim Results For the six months ended 30 June Segmented analysis (continued) Reconciliation of segment results to profit before tax: Six months Six months ended 30 ended 30 June 2010 June 2009 Millions (Unaudited) (Unaudited) Europe USA Asia (0.3) Segment result Corporate recovery from operating segment Research and development cost (1.6) (1.2) Finance income and cost (0.5) (0.7) Profit before taxation Tax (1.3) (0.3) Total profit The Group s three business segments operate in the following countries: Six months Six months ended 30 ended 30 June 2010 June 2009 Millions (Unaudited) (Unaudited) United States United Kingdom Singapore Germany Switzerland Other countries Total revenue XP Power Interim Report 2010

16 7. Segmented analysis (continued) At June 2010 (Unaudited) At June 2009 (Unaudited) Millions Europe USA Asia Total Europe USA Asia Total Other information Capital additions Depreciation Intangible additions Amortisation Balance Sheet Goodwill Other non-current assets Inventories Trade receivables Derivative financial instruments Other current assets Cash and cash equivalents Segment assets Unallocated deferred tax assets Consolidated total assets Trade and other payables (2.5) (1.7) (9.8) (14.0) (1.7) (1.4) (3.5) (6.6) Derivative financial instruments (0.3) (0.3) (0.2) (0.1) (0.3) Provision for other liabilities and charges (3.7) (3.7) (2.0) (2.0) Segment liabilities (6.2) (2.0) (9.8) (18.0) (3.7) (1.6) (3.6) (8.9) Unallocated corporate liabilities (22.1) (26.8) Unallocated deferred and current tax liabilities (4.6) (4.4) Consolidated total liabilities (44.7) (40.1) stock code: XPP 15

17 Notes to the Interim Results For the six months ended 30 June Segmented analysis (continued) Operating net assets are defined as net assets adjusted for net borrowings. 30 June 30 June Millions (Unaudited) (Unaudited) Net assets Net debts Total operating net assets Expenses by nature Six months Six months ended 30 ended 30 June 2010 June 2009 Millions (Unaudited) (Unaudited) Profit for the period is after charging/(crediting): Gross research and development expense Development expense capitalised (0.9) (0.8) Amortisation of development expense capitalised Net research and development expense Amortisation of other intangible assets Depreciation of property, plant and equipment Foreign exchange loss 0.2 Foreign exchange (gains) on forward contracts (0.1) (0.1) Cost of inventories recognised as expense Charge for doubtful debts (0.1) Fees paid to auditor: Audit All other charges Total XP Power Interim Report 2010

18 9. Taxation Income tax expense is recognised based on management s best estimate of the weighted average annual income tax expected for the full financial year. In arriving at the tax expense estimate, consideration for certain tax uncertainties were accounted for. The estimated effective annual tax rate used for 2010 is 17% (2009: 9%). The 2009 rate is reduced by certain factors, some of which will not recur in the future. Six months Six months ended 30 ended 30 June 2010 June 2009 Millions (Unaudited) (Unaudited) Singapore Other overseas taxation Total taxation Dividends Amounts recognised as distributions to equity holders in the period: Six months ended Six months ended 30 June June 2009 (Unaudited) (Unaudited) Pence Pence per share Millions per share Millions Prior year final dividend paid The dividend paid recognised in the interim financial statements relates to the 2009 year-end dividend. Six months ended Six months ended 30 June June 2009 (Unaudited) (Unaudited) Pence Pence per share Millions per share Millions Proposed interim dividend stock code: XPP 17

19 Notes to the Interim Results For the six months ended 30 June Dividends (continued) On 12 April 2010 we announced that the Company s dividend payment schedule would change from a half yearly to a quarterly basis, to increase the attractiveness of the Group s shares to certain investors and to smooth cash flows. The first quarterly payment of 6 pence per share was made on 6 July 2010 to shareholders on the register at 11 June A second quarterly dividend of 7 pence per share will be paid 12 October 2010 to shareholders on the register at 10 September A third quarterly dividend will be paid in January 2011 and a final dividend in April Earnings per share Earnings per share attributable to equity holders of the Company arise from continuing operations as follows: Six months Six months ended 30 ended 30 June 2010 June 2009 Millions (Unaudited) (Unaudited) Earnings Earnings for the purposes of basic and diluted earnings per share (profit for the period attributable to equity shareholders of the Company) Amortisation of intangibles associated with acquisitions Earnings for adjusted earnings per share Number of shares Weighted average number of shares for the purposes of basic earnings per share (thousands) 18,803 18,795 Effect of potentially dilutive share options (thousands) Weighted average number of shares for the purposes of dilutive earnings per share (thousands) 18,953 18,817 Earnings per share from operations Basic 30.8p 17.6p Diluted 30.6p 17.5p Diluted adjusted 31.1p 18.6p 18 XP Power Interim Report 2010

20 12. Other intangible assets Other intangible assets comprises development expenditure capitalised when it meets the criteria laid out in IAS 38, Intangible Assets, trademarks and non-contractual customer relationships. 13. Cash and cash equivalents For the purpose of presenting the consolidated cash flow statement, the consolidated cash and cash equivalents comprise the following: Six months Six months ended 30 ended 30 June 2010 June 2009 millions (Unaudited) (Unaudited) Cash and bank balances Less: Bank overdrafts (4.7) Cash and cash equivalents per consolidated cash flow statement 2.9 (2.9) Reconciliation to free cash flow: Net cash inflow from operating activities Development expenses capitalised (0.9) (0.8) Net interest expense (0.4) (0.7) Free cash flow Borrowings, bank loans and overdraft 30 June 31 December 30 June Millions (Unaudited) (Unaudited) Non-current Current Total stock code: XPP 19

21 Notes to the Interim Results For the six months ended 30 June Currency Impact We report in Pounds Sterling (GBP) but have significant revenues and costs as well as assets and liabilities that are denominated in United States Dollars (USD). The table below sets out the prevailing exchange rates in the periods reported June December 30 June First half First half % Period Period Period Average Average Change end end end USD/GBP % EUR/GBP % Approximately 70% of the Group s revenues are invoiced in USD so the change in the USD to GBP exchange rate has a significant effect on reported revenue in GBP. However, as the majority of our cost of goods sold and operating expenses are also denominated in USD the change in profit before tax with the USD to GBP exchange rate is relatively minor. The impact of changes in the key exchange rates from the first half of 2009 to the first half of 2010 is summarised as follows: Millions USD EUR Impact on revenues (1.6) (0.1) Impact on profit before tax (0.3) Impact on net debt (1.7) 16. Directors responsibility statement The interim financial statements were approved by the Board of Directors on 2 August The Directors confirm that to the best of their knowledge that: This unaudited condensed financial information has been prepared in accordance with IAS 34 Interim Reporting as adopted by the European Union; and The interim management report includes a fair view of the information required by DTR (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year) and DTR (disclosure of related party transactions and changes therein). The Directors of XP Power Limited are as listed in the Company s 2009 Annual Report. 20 XP Power Interim Report 2010

22 XP Mission Inspiring our people to be The Experts in Power delivering genuine value to our customers XP Power is a leading international provider of essential power control solutions. Power direct from the electricity grid is unsuitable for the equipment which it supplies. XP Power designs and manufactures power converters which convert power into the right form for our individual customer s needs, allowing their electronic equipment to function. XP Power supplies the healthcare, industrial and technology industries with this mission critical equipment. Significant, long term investment into research and development means that XP Power s products frequently offer significantly improved functionality and efficiency. Headquartered in Singapore and listed on the Main Market of the London Stock Exchange since 2000, XP serves a global blue chip customer base from 27 locations in Europe, North America and Asia. For further information, please visit CONTENTS XP Highlights 01 Chairman s Statement 02 Consolidated Statement of Comprehensive Income 06 Consolidated Balance Sheet 07 Consolidated Statement of Changes in Equity 08 Consolidated Cash Flow Statement 10 Notes to the Interim Results 11 Directors and Advisors 21 XP Power Interim Report 2010

23 Directors and Advisors Board of Directors Larry Tracey Executive Chairman James Peters Deputy Chairman Duncan Penny Chief Executive Mike Laver President North America Mickey Lynch Finance Director Andy Sng General Manager Asia John Dyson Senior Non-Executive Michael Hafferty Non-Executive Advisors Company Brokers Investec 2 Gresham Street London EC2V 7QP United Kingdom Principal Bankers Halifax Bank of Scotland Uberior House 61 Grassmarket Edinburgh EH1 2JF United Kingdom Solicitors Osborne Clarke 2 Temple Back East Temple Quay Bristol BS1 6EG United Kingdom Registrars Capita IRG Plc Northern House Woodsome Park Fenay Bridge Huddersfield West Yorkshire HD8 0LA United Kingdom Company Secretary M & C Services Private Limited 138 Robinson Road #17-00 The Corporate Office Singapore Auditors PricewaterhouseCoopers LLP 8 Cross Street, PWC Building, #17-00 Singapore David Hempleman-Adams Non-Executive stock code: XPP 21

24 XP POWER LIMITED LOBBY B #02-02 HAW PAR TECHNOCENTRE 401 COMMONWEALTH DRIVE SINGAPORE TEL FAX WEBSITE