In this interview, CEO Duncan Penny and CFO Gavin Griggs discuss XP Power’s FY19 results. Duncan discusses the performance by sector, highlighting that demand from the industrial, technology and healthcare markets remained robust through the year, while the semiconductor sector was weak for the first three quarters of the year. Order intake rebounded in Q4, setting up a strong backlog going into FY20. Gavin outlines the growth in revenues and orders over the year and explains the issues that affected gross margins in FY19, including US-China trade tariffs, foreign exchange, product mix and higher component costs. He highlights the actions taken by the company to mitigate these challenges, including shifting more production from China to Vietnam, clawing back the tariffs from customers, and the ongoing shift of production from a facility in Nevada, US to Vietnam.
Duncan discusses the more recent challenge posed by the COVID-19 virus, which has reduced the availability of labour at XP’s Chinese facility and affected the supply chain. He notes that the Vietnam facility is operating as normal and, where possible, manufacturing is being shifted there from China. In terms of outlook for FY20, Duncan highlights that order intake remains strong and the company is upbeat, despite the uncertainty posed by COVID-19.
XP Power is a developer and designer of power control solutions with production facilities in China, Vietnam and the US, and design, service and sales teams across Europe, the US and Asia.