XP Power Ltd (LON:XPP) reported strong H1 revenue and earnings growth, despite significant currency headwinds. Order intake remained robust, providing good support going into H218. While management’s expectations for FY18 are unchanged, we have revised our forecasts to reflect currency moves and tightness in the supply chain. This results in normalized EPS upgrades of 0.2% in FY18 and 2.4% in FY19. Post the recent acquisitions, we believe the company’s more comprehensive product range positions it well to grow market share further.
H118 sees continuation of strong growth
XP reported revenue growth of 16% y-o-y for H118; taking into account currency headwinds, constant currency growth (cc) reached 25% and cc like-for-like (l-f-l) growth was 13%. This resulted in normalized operating profit growth of 19% and a 50bp increase in the operating margin to 22.2%. Normalized EPS grew 24% y-o-y. XP saw strong demand from all end markets, particularly semiconductor manufacturing, boosted by the contributions from the Comdel and Glassman High Voltage acquisitions.
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