Interim report
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RNS Number : 0828PXP Power Limited04 August 2026 4 August 2026 XP Power Limited 2026Interim Results H1 in line with expectationsStrong order intake supports robust growth in H2FY expectations unchanged XP Power Limited ("XP Power", "the Group" or "the Company"), one of the world's leading developers andmanufacturers of critical power control solutions for the Semiconductor Manufacturing Equipment,Healthcare and Industrial Technology sectors, today announces its interim results for the six months ended30 June 2026 ("H1 2026" or "the period"). Six months ended 30 June (£m unless otherwisestated) 2026 2025 Change At actual exchangerates In constantcurrency Order intake 167.2 112.7 48% 55% Revenue 109.1 110.9 (2)% 2% Book-to-bill 1.53x 1.02x 0.51x Order book 173.9 121.8 Adjusted results1: Gross margin 45.9% 41.4% 450bps Operating profit 8.6 4.8 79% 23% Profit before tax 5.1 0.8 538% Diluted earnings per share (pence) 14.2p 0.4p 3450% Operating cash flow 8.4 13.9 (40)% Statutory results: Gross margin 45.8% 41.6% 420bps Operating profit 5.3 2.6 104% Profit/(loss) before tax 2.0 (1.4) 243% Diluted earnings/(loss) per share (pence) 3.6p (7.2)p 150% Net Debt1 47.7 57.9 (18)% Net Debt : Adjusted EBITDA1 1.3x 1.8x 1 Details of the adjustments made and reconciliations to the statutory results can be found in Note 5 to the condensed consolidatedfinancial statements Financial Highlights · Order intake of £167.2m: o Up 55% on the prior period and 48% sequentially in constant currency, with all sectors improving o Sequential growth from Q1 (£79.1m) to Q2 (£88.1m) o Book to Bill of 1.53x, the highest since H1 2022 · Revenue of £109.1m: o Up 2% in constant currency, in line with expectations o Improving from Q1 (£51.8m) to Q2 (£57.3m) o Order book supports a stronger second half · Adjusted Operating Profit of £8.6m: o Significantly improved profitability, with Adjusted Operating Margin of 7.9% (H1 2025: 4.3%) o Adjusted Gross Margin of 45.9%, 450bps higher than the prior period, exceeding initial mid-40s target o Continued discipline on operating expenses · Net Debt of £47.7m:
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o Net Debt : LTM Adjusted EBITDA of 1.3x, in line with expectations and expected to reduce by year- end o Investment in capacity expansion in H1 to support growth in H2 Operational Highlights · H1 demonstrates the strength of our market positioning: o Balanced portfolio drives broad order growth across all regions and sectors o Attractive end markets demonstrate their clear long-term growth potential o Strongest growth achieved within strategically important areas such as technology solutions o Significant growth in new business wins and expansion of the sales pipeline · Well positioned to maximise the market recovery: o Optimised manufacturing footprint, with China factory now closed and Malaysia factory nearing pilot production o Vietnam factory output being rapidly expanded to support future growth o Investment in raw material inventory to support operations in tighter global supply chain conditions Outlook · Strong order intake in H1 supports robust revenue growth with £135m of firm orders scheduled for H2 · Full year expectations unchanged · Confident of long-term progress given healthy end-market growth and attractive market positions, aligned with our Financial Framework Gavin Griggs, Chief Executive Officer, commented: "The first half of 2026 saw a significant, broad-based improvement in market conditions across all oursectors and regions, with order intake up 55% in constant currency. I am encouraged that this reflects notonly recovering end markets but also our strategy of consistent investment in our product offering, with thestrongest demand in the technically complex categories and technology solutions central to our long-termgrowth. The structural actions taken in 2025 are also clear in our results. We enter this growth phase well positioned, with a focused portfolio, a well-invested manufacturing footprintand the balance sheet strength to invest behind future revenue. With our markets returning to healthy growthand an expanded order book, our focus is firmly on converting this demand into revenue as we deliver ourunchanged long-term strategy." Enquiries: XP PowerGavin Griggs, Chief Executive Officer +44 (0)118 976 5155 Matt Webb, Chief Financial Officer +44 (0)118 976 5155 CDRClaire de Groot +44 (0)20 7638 9571 An analyst meeting will be held at 09:00 BST today, 4 August 2026 at the offices of Investec, 30Gresham St London EC2V 7QP. To register to attend please email jonah.boon@cdrconsultancy.com.A live audio stream of the meeting can be accessed via https://brrmedia.news/XPP_HY26. XP Power designs and manufactures power controllers, the essential hardware component in every piece of electricalequipment that converts power from the electricity grid into the right form for equipment to function. Power controllers arecritical for optimal delivery in challenging environments but are a small part of the overall customer product cost. XP Power designs power control solutions into the end products of major blue-chip OEMs, with a focus on theSemiconductor Manufacturing Equipment (c.40% of sales in H1 2026), Industrial Technology (c.41% of sales in H12026) and Healthcare (c.19% sales in H1 2026) sectors. Once designed into a programme, XP Power has a revenueannuity over the life cycle of the customer's product which is typically five to seven years depending on the industrysector. XP Power has invested in research and development and its own manufacturing facilities in Vietnam, Malaysia,North America and Germany, to develop a range of tailored products based on its own intellectual property that provideits customers with significantly improved functionality and efficiency. Headquartered in Singapore and listed on the Main Market of the London Stock Exchange since 2000, XP Power is aconstituent of the FTSE 250 Index. XP Power serves a global blue-chip customer base from over 30 locations in Europe,North America, and Asia. For further information, please visit www.xppowerplc.com Forward-looking statements This announcement contains forward ‑ looking statements that are subject to risk factors associated with, among otherthings, the economic and business circumstances occurring from time to time in the countries, sectors and markets inwhich the Group operates. It is believed that the expectations reflected in these statements are reasonable, but they maybe affected by a wide range of variables which could cause actual results to differ materially from those currentlyanticipated. No assurances can be given that the forward ‑ looking statements in this announcement will be realised.
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The forward ‑ looking statements reflect the knowledge and information available to management at the date ofpreparation of this announcement. XP Power and its Directors accept no responsibility to third parties and undertake noobligation to update these forward ‑ looking statements. Nothing in this announcement should be construed as a profitforecast. Chief Executive Officer's Review The first half of 2026 brought a significant and broad improvement in market conditions across all marketsectors and all geographic regions. Demand increased as the half progressed, with Q2 order intake strongerthan Q1. Strong order intake in the first half underpins our expectation of robust revenue growth in thesecond half. The improvement in market conditions was strongest in the Semiconductor Manufacturing Equipment sector,reflecting increased capex spending to expand wafer fabrication capacity, but was also driven by the end ofdestocking by customers within the Industrial Technology and Healthcare sectors. This creates a broad andresilient base of growth that we expect to be maintained into subsequent periods. This improvement does not simply reflect a market recovery. It is also being driven by our strategy tocontinually invest in our product offering to maintain our competitive advantage. For example, we werepleased to see particularly strong demand within our more technically complex product categories and fortechnology solutions projects, both of which generate attractive margins - a key focus of our strategy inrecent years. Furthermore, we believe we enter this growth phase having taken the steps necessary to maximise thebenefit of the market recovery. Our portfolio is focused, with clear resource allocation priorities. Our grossmargins are significantly improved and our overheads deployed efficiently. Our manufacturing infrastructureis well invested and now well located. We have the balance sheet strength necessary to invest to supportfuture revenue growth and can invest with confidence given the annuity nature of our sales arrangements. With our markets now returning to healthy growth, our focus is on operational execution to convert thisdemand into revenue while also continuing to deliver our unchanged long-term strategy. Review of H1 Order intake of £167.2m (H1 2025: £112.7m) was 55% higher than the comparative period in constantcurrency and 48% higher than the preceding half (H2 2025: £113.2m). The growth was led by theSemiconductor Manufacturing Equipment sector in the US driven by the upcycle in the Wafer FabricationEquipment market which is widely predicted to be a prolonged multi-year expansion. The improved demandin the Industrial Technology and Healthcare sectors confirms the end of the industry wide destocking cyclethat started in late 2023. Strong order intake in Q1 (£79.1m) was exceeded in Q2 (£88.1m), with some indications of earlier orderingby customers in the Semiconductor Manufacturing Equipment sector to better position themselves to serviceincreased demand moving forward. The strong order intake did not benefit H1 revenue but is expected todrive robust revenue growth in H2, although earlier ordering means some of the orders received will bedelivered in future periods. Revenue of £109.1m was 2% higher than the comparative period in constant currency. The expiry at the endof 2025 of US export licences governing sales of RF products to China reduced revenue in the first half, asexpected, and revenue from tariff recovery naturally reduced following the US Supreme Court ruling IEEPAtariffs invalid in February. The latter impact is expected to increase in H2 but has no effect on profit given theequal reduction in tariff costs. Absent these factors beyond our control, underlying revenue growth in H1 wasin the mid-single digit range. Revenue grew sequentially from Q1 (£51.8m) to Q2 (£57.3m) and this trend isexpected to accelerate into the second half as manufacturing output is increased to meet demand. Our order book grew by £58.1m in the period to £173.9m, providing improved visibility of full year revenue.The order book at 30 June 2026 includes £135m of firm orders scheduled for delivery in H2 2026, withfurther orders likely to be received, supporting our expectation of robust revenue growth in the second half. Adjusted Gross Margin was 450bps higher than the comparative period at 45.9% (H1 2025: 41.4%),exceeding our initial objective of returning margins to the mid-40s range, reflecting our extensive efforts toimprove cost efficiency. Our manufacturing facility in China closed at the end of 2025, saving factoryoverheads in the period. We also improved margins by transferring some production from the US toVietnam. The outlook for margin in the second half is balanced, with higher revenue likely to bring betterutilisation of factory overheads but also the potential for temporarily reduced efficiency as line capacity israpidly expanded. We also expect some input cost inflation as the global electronics supply chain tightens.The conflict in the Middle East has not had a material impact on our supply chain to date. Adjusted overheads of £41.5m were broadly flat against the comparative period. On a constant currencybasis, there was a 10% increase, largely reflecting a reset of variable pay as Group performance improvesand a change in the balance between amortisation and capitalisation of product development costs, both aspreviously indicated. Discretionary spend remained well controlled with no increase in indirect headcount. As a result, Adjusted Operating Profit increased by £3.8m to £8.6m, reflecting significantly improvedprofitability from similar revenue to the comparative period, positioning us well to benefit as revenue expandsgoing forward. Increased profit and a strong balance sheet allowed us to invest in growth. Raw material inventory wasincreased to support second half deliveries. We invested in our new Malaysia factory, which is nearing pilotproduction, and expanded line capacity in Vietnam. Net debt increased in the first half, as expected, but the
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leverage ratio increased only slightly to 1.3x and our balance sheet remains strong. We expect leverage toreduce in the second half to approaching 1.0x. As previously announced in respect of the Comet legal case, the United States Court of Appeals hasreversed the earlier 2022 judgment of the District Court and remanded the case for a new trial. As a result,the previous award of approximately $40m in compensatory and punitive damages, together withover $19m in attorney fees and pre-judgement interest, and the permanent injunction, have been vacated.The cash for these awards is currently held outside the Group in a bond lodged with the District Court. Therehas been no impact on profit for the period to 30 June 2026. The Group's full year expectations for theleverage ratio do not assume any cash benefit from the release of the bond. Revenue by market sector The breakdown of our revenue by sector was as follows: RevenueSix months to 30 June 2026£m 2025£m % change inconstantcurrency Semiconductor Manufacturing Equipment 44.1 43.8 5%Industrial Technology 44.6 42.4 9%Healthcare 20.4 24.7 (13%) Total 109.1 110.9 2% Semiconductor Manufacturing Equipment We provide power supplies to all stages of a wafer fabrication process, including etching, deposition, ionimplantation and inspection. Our customers are beginning to ramp up production in response to the demandfor new wafer fabrication equipment, driven by the demands of AI for leading edge logic and High BandwidthMemory. Revenue of £44.1m (H1 2025: £43.8m) was ahead of the comparative period in constant currency, whichwas a pleasing result given the headwind from the exit of the China Semi market within this sector. Order intake of £79.9m (H1 2025: £38.6m) was 116% higher than the comparative period in constantcurrency reflecting the improved demand conditions in this sector, which included some customers placingorders earlier in response to generally tight conditions in the AI infrastructure supply chain. We were pleasedto see particularly strong demand from our Semi customers for technology solutions projects, where weprovide an advanced, custom power system, including hardware, firmware and software to a tight timetable,underlining how increasingly integral we are to their technology roadmaps. Ordering patterns in the first halfalso indicate we are gaining share within strategically important High Voltage High Power ("HVHP")applications. Book to Bill was a record 1.81x (H1 2025: 0.88x). Given the significant increase in production capacity whichis required to accommodate the exceptional increase in orders, the pace of expansion in our output levelswill determine the actual revenue we achieve in H2 for this sector. Industrial Technology Industrial Technology is a highly diversified sector which we are well positioned to serve with our broadrange of products and the ability to customise base products for specific customer applications across arange of power and voltage requirements. Revenue of £44.6m (H1 2025: £42.4m) was 9% higher than the prior period in constant currency followingthe conclusion of a period of destocking across most of our customers. Demand from the distributionchannel, which forms an important part of this sector, was strong, particularly in the US. This reflectsimproved end-market demand and distribution customers modestly increasing their inventory cover toimprove their ability to serve a buoyant global electronics sector. Order intake totalled £59.5m (H1 2025: £51.0m) with sequential growth of 51% (H2 2025: £39.5m). For the half, Book to Bill was 1.33x (H1 2025: 1.20x) as we build momentum. Healthcare An ageing global population and advancements in healthcare technology are both significant drivers of thelong-term structural growth that we expect in this sector. The overstocking that arose from supply chainissues during and after the pandemic is resolved. We have a broad base of healthcare customers in the USand Europe, with a strategic focus on advanced therapeutic technologies involving electricity such as PulsedField Ablation. Revenue of £20.4m (H1 2025: £24.7m) was 13% lower than the comparative period in constant currency.The reduction reflects the occasionally uneven demand patterns of individual projects within this relativelysmall sector and is expected to recover in the second half. H1 2026 order intake is much improved, at £27.8m (H1 2025: £23.1m). Sequentially, H1 order intake is onpar (H2 2025: £28.0m). Book to Bill of 1.36x (H1 2025: 0.94x) shows a marked improvement as recovery in this sector gainsmomentum.
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Revenue by region The breakdown of our revenue by region was as follows: Revenue 2026£m 2025£m % changeinconstantcurrency North America 67.5 68.3 3%Europe 32.9 32.4 6%Asia 8.7 10.2 (11)% Total 109.1 110.9 2% Sales to North America totalled £67.5m (H1 2025: £68.3m) which was 3% higher than the comparativeperiod in constant currency. The key driver of the growth was the Semiconductor Manufacturing Equipmentsector where the current upcycle began earlier than the end of the destocking seen in other sectors. All threesectors in North America present significant growth opportunities. Sales to Europe totalled £32.9m (H1 2025: £32.4m) and were 6% higher than the prior period in constantcurrency, with progress most evident from distribution customers. Growth in order intake and revenue fromour pan-European design-in distribution partner, who we started to work with in 2022 to help grow smallercustomer accounts, was well above the regional average which was pleasing to see. Sales to Asia totalled £8.7m (H1 2025: £10.2m) and were 11% lower than the prior period in constantcurrency, primarily due to our exit from the China Semiconductor market and the expiry of key exportlicences as explained above. However, order intake was strong and Book to Bill was 1.40x, underlining thatwe are on track to replace sales lost in China with new business elsewhere in the region, particularly inIndia's growing technology sector. Delivery of our strategy Products Product development activities have continued at pace. We continually review our existing product portfolioand product development pipeline, together with market intelligence and feedback from our customers, toensure that our product development investments are made in the right areas. Product development is undertaken in two distinct but complementary areas: the development of new baseproduct families, and the customisation and/or integration of these base products into an overall technologysolution for a customer that is often unique. The customisations vary in complexity and generate an annuityrevenue stream at attractive margins. Technology solutions account for approximately one-third of Grouprevenue. We further strengthened our product range during the period, spanning from 60W desktop power suppliesthrough to high-accuracy, high-voltage dividers for DC voltage measurement up to 450kV. We also deliveredbespoke design technology solutions for customers, and we maintained a healthy product developmentpipeline. During H1 we completed the development of our first application-specific HVHP platform. These massspectrometry source and detector power supplies allow us to better serve leading instrument manufacturers.This was an important step for the Group as new cutting-edge technologies, such as mass spectrometry,present a significant growth opportunity. We are one of only a limited number of providers globally with thedesign capability to develop these products. Customers We place customers at the centre of everything we do and aim to exceed their expectations from designthrough to delivery, product performance and aftercare. During the recent period of extended destocking, we continued to invest in relationships with our keycustomers to ensure that we were well positioned to meet their requirements when demand improved. Wewere pleased to see the benefit of this investment within our key sales metrics in the period. Demand from our Top 30 Direct and Distribution customers was higher than the Group average in theperiod, illustrating the opportunity we have to continue to grow our business with these focus accounts. Newbusiness wins across all customers were 30% higher than the comparative period, leading to expansion inthe overall value of our sales pipeline, which is indicative of long-term growth. Supply chain and operations Production was successfully transferred from China to Vietnam during H1. Disruption was minimised throughcareful planning and a well-managed ramp up of production capacity in Vietnam. We have identified a buyerfor the manufacturing plant in China and the sale process is progressing well. Completion is expected in H2. Expansion of our production capacity in Vietnam to accommodate the uptake in order volumes seen in H1 isa key focus area. The extensive work over recent years to strengthen our procurement capability and delivermanufacturing process efficiencies has been vital to prepare for the increase in output.
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The actions taken over the past two years to strengthen our balance sheet, reduce our net debt andincrease our liquidity have enabled the required increase in working capital to support growth, together withinvestments in additional manufacturing capacity. Production headcount in Vietnam increased in the firsthalf, with further recruitment underway to deliver the required capacity. The pace of expansion inmanufacturing output for Vietnam will be a key determinant of our full year revenue. Commissioning of our new Malaysia facility continues at pace and remains on schedule to begin fullproduction in the fourth quarter of 2026. We have continued to demonstrate our capability to effectivelytransfer manufacturing processes between facilities, with a number of key HVHP products now in massproduction in Asia. This stands us in good stead as we prepare for the transfer of some production fromVietnam to Malaysia. Our inventory levels have increased from £57.0m at the end of 2025 to £73.8m, driven by an increase in rawmaterials and semi-finished goods to support the production needed in H2. People Charlotta Ginman joined the Board on 1 January 2026, bringing a wealth of experience across a broadrange of international companies, including in the technology and healthcare sectors. The Board visited our sites on the West Coast of the US during H1 and had the opportunity to receivepresentations from the US leadership team and to have informal discussions with key team members, whichmade clear the growth opportunity we have within our US business. We appointed a new Executive Vice President for People & Organisation (P&O) during this year, to helpdrive forward key initiatives across our business. This has included spending time in Asia to support our localP&O team with the significant headcount expansion in Vietnam and the initial hiring for key roles in the newMalaysia site. We maintained an ongoing focus on site safety, complemented by our global quality and sustainabilityprogrammes. Local engagement activities, global communications and mandatory training programmes allcontributed to ensuring we focused on keeping our employees, customers and environment safe. Our LostTime Injury Rate (LTIR) remains very low. Our latest employee survey results show that our employee engagement levels remain strong,demonstrating the resilience of our culture and people. We continue to focus on meaningful communicationand leadership development to further empower employees, strengthen decision making, and sustainengagement momentum. Sustainability We continued to strengthen our sustainability performance in 2026, exceeding our science-based emissionsreduction targets ahead of schedule and advancing our commitment to achieving Net Zero across the valuechain. The Group achieved a CDP Climate A rating, placing XP Power among the top 4% of companies assessedglobally, and improved its EcoVadis sustainability score. XP Power also expanded its portfolio of high-efficiency power solutions, launching new Titanium, Platinum and Gold-rated product families with the aim ofincreasing the share of revenue generated from Carbon Rated Products. These products help customersreduce energy consumption, lower operating costs and decrease lifecycle carbon emissions whilemaintaining industry-leading performance and reliability. Together, these achievements reinforce XP Power's position as a trusted partner in delivering innovative andsustainable power solutions. Outlook The medium-term outlook for XP Power remains very positive. We are well positioned in attractive marketsand through our focused portfolio, our well invested manufacturing footprint and a robust balance sheet, weexpect to capitalise on current and future market growth opportunities. Our expectations for the full yearremain unchanged. Gavin GriggsChief Executive Officer Chief Financial Officer's Review Statutory Results Revenue for the six-month period to 30 June 2026 of £109.1m was in line with expectations and 2% lowerthan the comparative period due to a currency headwind as the US dollar weakened against sterling.Revenue grew in constant currency, albeit only modestly due to a headwind from the expiry of US exportlicenses for the China Semiconductor Manufacturing Equipment market. Gross margin continued to improve to 45.8%, driven by factory overhead savings and production efficiencyimprovements. Operating expenses increased modestly, driven by increases in the underlying cost base asdetailed below and some one-off costs relating to the closure of the China manufacturing site and thedecision to exit the RF business line. The improvement in gross margin helped to drive a significant
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improvement in operating profit. Overall profit for the period of £1.1m compared to a loss of £1.8m for thefirst half of 2025. Adjusted Results As in prior periods, Adjusted and other alternative performance measures are used in this announcement todescribe the Group's results. These are not recognised under International Financial Reporting Standards(IFRS) or other generally accepted accounting principles (GAAP). Adjustments are items included within our statutory results that are deemed by the Board to be unusual byvirtue of their size or incidence. Our Adjusted measures are calculated by removing such Adjustments fromour statutory results. The Board believes Adjusted measures help the reader to understand XP Power'sunderlying results and are used by the Board and management team to interpret Group performance. Note 5to the condensed consolidated financial statements includes reconciliations of statutory metrics to theirAdjusted equivalent and provides a breakdown of the Adjustments made. On an Adjusted basis, the Group delivered an operating profit of £8.6m and a profit before tax of £5.1mcompared to a profit before tax of £0.8m in H1 2025. The Chief Executive Officer's Review includes an explanation of revenue performance and an analysis oforder trends during the year. Gross Profit The Group delivered a gross profit of £50.0m on revenue of £109.1m for the period. This represents a grossmargin of 45.8%, 420bps higher than the comparative period. Excluding Adjustments, which largely relate to the Board's decisions in late 2025 to close the China factoryand exit the RF market, the Adjusted Gross Margin was 45.9% and improved by 450bps from H1 2025. Themain sources of the improvement were as follows: · Factory overhead reduction, driven by the closure of our factory in China at the end of 2025 and the full effect of factory overheads removed by restructuring actions taken during the first half of 2025 · Product cost savings in our HVHP and RF Divisions, with the latter able to secure volume purchasing discounts when buying with the benefit of firm multi-year customer orders as it winds downoperations · Price and sales mix improvements, particularly in North America and Europe · A modest net benefit from currency movements, most notably a weaker US dollar. We are very satisfied with the margin performance in the first half as it signals the return to our historicnorms and reflects the impact of numerous initiatives. The outlook for the second half is more balanced. An expected increase in revenue in H2 should improve theleverage of fixed factory costs, improving margin, but it is also not unusual to experience temporarilyreduced efficiency as production output is scaled up quickly. We also expect inflation in components pricesas the electronics supply chain tightens. We continue to target further gross margin expansion once thesupply chain has adapted to this new growth phase. Operating Expenses Operating Expenses for H1 of £44.7m included £3.2m of costs which have been classified as AdjustingItems, as explained more fully below. Adjusted Operating Expenses of £41.5m were only £0.4m higher than the comparative period but benefitedfrom a £3.7m reduction driven by currency movements. Therefore, Adjusted Operating Expenses grew by£4.1m, or 10%, in constant currency. This was primarily due to increased variable pay as the Group'sperformance improves and an increase in non-discretionary accounting costs such as those relating to thecapitalisation and amortisation of product development costs, as previously guided. There has not been anysignificant change in underlying overhead costs. Operating Profit On a reported basis, operating profit was £5.3m compared to £2.6m for the comparative period. Adjusted Operating Profit for the first half of 2026 increased by £3.8m to £8.6m due to the net of thefollowing: · Revenue volume reduction, reducing profit by £0.6m · Increase in gross margin %, increasing profit by £4.9m · Increase in adjusted operating expenses, reducing profit by £0.5m Adjusting items
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Items which have been treated as Adjusting and are therefore excluded from Adjusted Operating Profit andAdjusted Profit Before Tax are shown below. Income / (cost) impactBy Income Statement lineSix months ended 30 June£m 2026 2025 Operatingprofit Profitbeforetax Operatingprofit Profitbeforetax Restructuring costs - - (0.6) (0.6)Exit from China Semi market - - 0.2 0.2Costs relating to legal dispute (0.1) (0.1) (0.5) (0.5)Amortisation of acquired intangibles (1.3) (1.3) (1.3) (1.3)Costs relating to RF exit (0.5) (0.5) - -Costs relating to China factory closure (1.0) (1.0) - -Malaysia commissioning costs (0.4) (0.5) - -Fair value gain on derivative financialinstruments - 0.3 - - Total (3.3) (3.1) (2.2) (2.2) In late 2025, the Board took the decision to exit the RF market and close the China factory, and costs whichmet the criteria for recognition as a provision at the point of the announcement were accrued for in 2025. InH1 2026, the costs in relation to the RF exit primarily comprise estimates of retention bonuses which will bepayable at closure. These retention arrangements accrue benefits for the employees over the period of theircontinued service. For the China factory closure, costs incurred in H1 2026 relate to the winding down of thefacility and preparation of the site for sale. The China factory is held for sale at 30 June 2026 as we are inadvanced negotiations with a potential buyer of the site, with completion expected in H2 2026. In February, the Group entered into interest rate swaps to fix our interest rates for the next 3 years. Theseinterest rate swaps are recorded at fair value and are marked to market at the end of each reporting period.The change in the fair value of the interest rate swaps is treated as an Adjusting Item as the fair valuechanges will always be an unrealised gain or loss. Construction of our Malaysia factory was completed in 2025 and one-off costs relating to the commissioningof the site were incurred H1 2026 as we prepare for the site to begin full production in Q4 2026. Tariffs The US government introduced IEEPA tariffs, commonly known as reciprocal tariffs, in April 2025. The mostsignificant impact on the Group was a tariff on imports from Vietnam, the rate of which varied in H1 2025 butsettled at 20% from H2 2025 onward. The US Supreme Court ruled all IEEPA tariffs invalid in February 2026,leading to the US government introducing a replacement global tariff regime at a lower 10% rate. All tariffsthat could not be mitigated have been passed through to the market throughout, meaning we face a modestrevenue headwind as we enter H2, at current rates. This should not impact profit. Currency We report our results in sterling; however, most of our revenues and costs arise in other currencies. A largeproportion of our revenue and costs are denominated in US dollars, so our results are impacted by relativemovements in the currencies that the underlying transactions arise in compared to pounds sterling. Theweakening of the US dollar in H1 2025 had a negative impact on our results for the comparative period. Wetook steps to mitigate currency effects in H2 2025 meaning that the impact on H1 2026 was modest. Theprofit growth attributable to currency impacts shown in the table below largely reflects the negative impactfrom H1 2025 not repeating. Adjusted £m Six monthsended30 June2025 Add:Currencyimpact Add:Constant Currency1 Six monthsended30 June2026 Revenue 110.9 (4.5) 2.7 109.1 Revenue change % (4)% 2% (2)% Cost of sales (65.0) 3.5 2.5 (59.0) Gross margin 45.9 (1.0) 5.2 50.1 Gross margin % 41.4% 0.9% 3.6% 45.9% Operating expenses (41.1) 3.7 (4.1) (41.5) Operating profit 4.8 2.7 1.1 8.6 Operating margin % 4.3% 2.7% 0.9% 7.9% 1 The constant currency change is calculated with reference to the prior period amount at current year exchange rates and excludes any impact from the retranslation of foreign currency balance sheet amounts The Adjusted Operating Profit increase in constant currency was 23%. Net finance expense Adjusted Net Finance Expense of £3.5m was 13% lower than the comparative period (H1 2025: £4.0m). Thereduction reflects lower base rates in the period, including the benefit of swapping the interest rateapplicable to the majority of our borrowings from a variable base rate to a lower fixed base rate in February2026. It also reflects lower average borrowing levels as we reduced our Net Debt from £57.9m at 30 June2025 to £47.7m at 30 June 2026.
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Taxation The tax charge for the period was £0.9m on a reported basis. This tax charge is based on an estimate of thefull-year effective tax rate by tax jurisdiction. The full-year effective tax rate for the Group will depend on thesplit of profits between tax jurisdictions. On an adjusted basis the H1 effective tax rate was 20%, which islower than the statutory tax rates in effect due to the utilisation of brought forward losses to relieve H1profits. Profit after tax The Group reported a profit after tax of £1.1m compared to a loss of £1.8m in H1 2025. Adjusted profit forthe period was £4.1m (H1 2025: £0.2m). The basic earnings per share was 3.6 pence compared with basicloss per share of 7.2 pence in H1 2025. Adjusted diluted earnings per share was 14.2 pence compared with0.4 pence in H1 2025. The increase in adjusted diluted earnings per share is primarily due to the reduction incosts due to cost savings initiatives enacted in 2025 of which we are seeing the benefit in 2026. Cash flows Six months ended 30 JuneAdjusted £m 2026 2025 Operating profit 8.6 4.8Depreciation, amortisation & impairment 7.7 8.1 EBITDA 16.3 12.9Change in working capital (8.3) (0.7)Other items 0.4 1.7 Operating cash flow 8.4 13.9Net capital expenditure - Product development costs (3.7) (4.8)Net capital expenditure - Other assets (7.6) (1.4)Net capital expenditure - Government grant 1.2 1.5Net interest paid (3.7) (4.5)Tax paid (1.2) (1.5)Other items (1.0) (1.0) Free cash flow (7.6) 2.2 Adjusted Operating Cash Flow for the period was £8.4m compared to £13.9m for H1 2025, mainly driven bythe increase in working capital in H1 2026 to support delivery on our growing order book, compared to thecomparative period where inventory levels were being actively reduced. The other notable change to thecomparative period is the increase in other assets expenditure, which reflects the timing of payments forcompletion of the Malaysia factory and the related capital equipment and investment to expand productionline capacity in Vietnam. As a result, Free Cash Flow for the period was negative £7.6m. Financial Framework Our Financial Framework of through-cycle performance targets is as follows: · Organic growth of c.10% · Adjusted Operating Margin of c.20% · Adjusted Operating Cash Conversion of c.85% (see below) · Return on Capital Employed of >20% · Leverage Ratio of 0-1x Adjusted EBITDA We have changed the definition of Operating Cash Conversion in the period. Previously, we showed thepercentage conversion of Adjusted Operating Profit into Adjusted Operating Cash Flow, with the target set at100%. We now show the percentage conversion of Adjusted EBITDA into Adjusted Operating Cash Flow, toalign with listed peers, with an equivalent target of 85%. This is a definitional change only and does notrepresent a change to the Group's cash generation ambition. We remain confident in the delivery of these through-cycle targets. The strong growth in order intake seen in2026 underlines our confidence in our organic growth target. Gross margins have been materially improvedby previous actions and, with the benefit of operating leverage largely still to come, should support continuedoperating margin expansion. While cash has been invested to support growth in H1, which is the first priorityof our capital allocation policy, the Group has demonstrated its ability to convert profit into cash over recentyears. The leverage ratio should return to our target range in the near future, allowing a dividend to bereinstated. Funding position and capital structure Our Net Debt increased from £41.5m at 31 December 2025 to £47.7m at 30 June 2026. There were no changes to the revolving credit facilities during the period. The Group's borrowing facilitiesremain at $130m, with approximately $100m maturing in June 2028 and $30m maturing in June 2030. Thefacility continues to offer ample liquidity. At 30 June 2026, total liquidity, combining undrawn headroom inborrowing facilities and cash on deposit, totalled £48.7m. The covenants applicable to our borrowing facilities are tested at each calendar quarter end and are now setas follows until maturity of the facility: · Leverage ratio: Not more than 3.0x (H1 2026: 1.3x)
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· Interest cover: Not less than 3.0x (H1 2026: 6.4x) The Board is confident that the Group will continue to de-lever, as market conditions recover, until it entersits target leverage ratio range of 0-1x Adjusted EBITDA. The Director's assessment of going concern has involved consideration of the Group's forecast covenantposition in various scenarios, including a severe but plausible downside case. The Group is forecast toremain compliant with its covenants and have adequate borrowing liquidity in all scenarios. Further detailscan be found in Note 2 of the condensed consolidated financial statements. At the end of the first half of 2026, net current assets reduced to £59.7m compared to £66.9m at the end of2025. During H1 2026 there has been a significant increase in inventory holding of raw materials and semi-finished goods to support the improved order intake (£16.8m increase in inventory) with a significantincrease in trade and other payables to fund the inventory purchases (£8.5m increase in trade and otherpayables). In addition, excess cash was used to pay down the revolving credit facility, with a reduction incash and bank balances of £17.9m. Dividends Dividend payments were suspended in late 2023. Dividends remain an important part of the Group's long-term capital allocation strategy. However, the Board believes it is in Shareholders' long-term interests fordebt reduction to be prioritised over Shareholder distributions until net debt moves closer to our long-termleverage ratio target of 0-1x Adjusted EBITDA. As a result, no interim dividend has been declared. Change in Auditor Following a mandatory tender of its external audit conducted in the first half, the Board will recommend theappointment of KPMG LLP as auditor of the Group for the financial year ending 31 December 2027 at the2027 Annual General Meeting, replacing PricewaterhouseCoopers LLP. Matt WebbChief Financial Officer XP Power LimitedCondensed Consolidated Income StatementFor the six months ended 30 June 2026 £m Note Adjusted Adjustments(see Note 5) Sixmonthsended 30June 2026 Adjusted Adjustments(see Note 5) Sixmonthsended 30June2025Revenue 4 109.1 - 109.1 110.9 - 110.9 Cost of sales (59.0) (0.1) (59.1) (65.0) 0.2 (64.8)Gross profit 50.1 (0.1) 50.0 45.9 0.2 46.1 OperatingExpenses:Distribution and marketing (29.2) (2.2) (31.4) (28.6) (1.7) (30.3)Administrative (1.9) (1.0) (2.9) (2.1) (0.7) (2.8)Research and development (10.4) - (10.4) (10.4) - (10.4) Operating profit 8.6 (3.3) 5.3 4.8 (2.2) 2.6 Net financeexpense (3.5) 0.2 (3.3) (4.0) - (4.0) Profit/(loss) before tax 5.1 (3.1) 2.0 0.8 (2.2) (1.4) Tax expense 6 (1.0) 0.1 (0.9) (0.6) 0.2 (0.4) Profit/(loss) for the period 4.1 (3.0) 1.1 0.2 (2.0) (1.8) Attributable to: Equityshareholders 1.0 (1.9) Non-controlling interests 0.1 0.1 Profit/(loss) for the period 1.1 (1.8) Earnings pershare (pence)Basicearnings/(loss) pershare 8 14.3 (10.7) 3.6 0.4 (7.6) (7.2) Dilutedearnings/(loss) pershare 8 14.2 (10.6) 3.6 0.4 (7.6) (7.2) Condensed Consolidated Statement of Comprehensive IncomeFor the six months ended 30 June 2026 £m Six months ended30 June 2026 Six months ended30 June 2025 Profit/(loss) for the period 1.1 (1.8)
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Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations 0.6 (4.9) Other comprehensive income/(loss), net of tax 0.6 (4.9) Total comprehensive income/(loss) for the period 1.7 (6.7) Attributable to: Equity shareholders 1.6 (6.8) Non-controlling interests 0.1 0.1 Total comprehensive income/(loss) for the period 1.7 (6.7) The above condensed consolidated income statement and statement of comprehensive income should beread in conjunction with the accompanying notes XP Power LimitedCondensed Consolidated Balance SheetAs at 30 June 2026 £m Note 30 June2026 31 December2025 ASSETSCurrent assets Cash and bank balances 14.8 33.8Inventories 73.8 57.0Trade receivables 34.2 34.2Bond receivables 50.4 48.8Other current assets 7.8 5.9Derivative financial instruments 0.3 -Current income tax receivables 0.5 1.2Total excluding assets of disposal group held for sale 181.8 180.9Assets of disposal group held for sale 7 1.8 -Total current assets 183.6 180.9 Non-current assets Goodwill 72.8 72.8Intangible assets 9 54.3 54.2 Property, plant and equipment 10 64.8 65.6Right-of-use assets 47.4 47.8Cash collateral 1.7 1.7Deferred income tax assets 1.8 0.7Total non-current assets 242.8 242.8 Total assets 426.4 423.7LIABILITIESCurrent liabilitiesAccrued consideration 0.9 -Current income tax liabilities 1.7 2.6Trade and other payables 67.7 59.2Lease liabilities 1.9 1.8Provisions 50.9 50.1Borrowings 11 0.2 0.3Total excluding liabilities of disposal group held for sale 123.3 114.0Liabilities of disposal group held for sale 7 0.6 -Total current liabilities 123.9 114.0Non-current liabilitiesAccrued consideration 0.9 1.7Borrowings 11 65.1 76.7Deferred income tax liabilities 8.0 7.9Provisions 2.3 1.2Lease liabilities 49.8 49.6Total non-current liabilities 126.1 137.1Total liabilities 250.0 251.1 NET ASSETS 176.4 172.6 EQUITYEquity attributable to equity holders of the Company Share capital 110.8 110.8Merger reserve 0.2 0.2Share-based payments reserve 4.3 3.3Translation reserve (5.0) (5.6) Other reserve 11.2 10.1 Retained earnings 54.3 53.3 175.8 172.1Non-controlling interests 0.6 0.5TOTAL EQUITY 176.4 172.6 The above condensed consolidated balance sheet should be read in conjunction with the accompanyingnotes
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XP Power LimitedCondensed Consolidated Statement of Changes in EquityFor the six months ended 30 June 2026 Attributable to equity holders of the Company £m Sharecapital Mergerreserve Share-basedpaymentreserve Translationreserve OtherreserveRetainedearnings Total Non-controllinginterests TotalEquity Balance at 1January 2025 71.2 0.2 3.1 (2.6) 8.6 64.8 145.3 0.6 145.9 Exercise of share-based paymentawards - - (0.8) - 0.8 - - - - Share-basedpaymentexpenses, net oftax - - 0.7 - - - 0.7 - 0.7 Issuance ofshares 39.6 - - - - - 39.6 - 39.6 Dividend paid - - - - - - - (0.1) (0.1) Futureacquisitions ofnon- controllinginterests - - - - (0.2) - (0.2) - (0.2) Exchangedifference ontranslation offinancialstatements offoreign operations - - - (4.9) - - (4.9) - (4.9) (Loss)/profit forthe period - - - - - (1.9) (1.9) 0.1 (1.8) Totalcomprehensive(loss)/income forthe period - - - (4.9) - (1.9) (6.8) 0.1 (6.7) Balance at 30June 2025 110.8 0.2 3.0 (7.5) 9.2 62.9 178.6 0.6 179.2 Balance at 1January 2026 110.8 0.2 3.3 (5.6) 10.1 53.3 172.1 0.5 172.6 Exercise of share-based paymentawards - - (1.1) - 1.1 - - - - Share-basedpaymentexpenses, net oftax - - 2.1 - - - 2.1 - 2.1 Exchangedifference ontranslation offinancialstatements offoreign operations - - - 0.6 - - 0.6 - 0.6 Profit for theperiod - - - - - 1.0 1.0 0.1 1.1 Totalcomprehensiveincome for theperiod - - - 0.6 - 1.0 1.6 0.1 1.7 Balance at 30June 2026 110.8 0.2 4.3 (5.0) 11.2 54.3 175.8 0.6 176.4 The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanyingnotes. XP Power LimitedCondensed Consolidated Statement of Cash FlowsFor the six months ended 30 June 2026 £m Six monthsended30 June 2026 Six monthsended30 June 2025Cash flows from operating activities Profit/(loss) after income tax 1.1 (1.8) Adjustments for: - Income tax expense 0.9 0.4- Amortisation and depreciation 9.1 9.4 - Net finance expense 3.3 4.0 - Share-based payment expenses 1.6 0.8- Loss on disposal of property, plant and equipment - 0.1 - Unrealised currency translation (gain)/loss (0.5) 2.3- Impairment of intangible assets 0.1 -- Provision for doubtful debts - 0.1
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Change in working capital:- Inventories (16.0) 6.5 - Trade and other receivables and other current assets (2.9) (4.8)- Trade and other payables 14.3 (2.4)- Provision for liabilities and other charges 0.1 (1.3) Cash generated from operations 11.1 13.3Income tax paid, net of refund (1.2) (1.5)Net cash provided by operating activities 9.9 11.8 Cash flows from investing activitiesGovernment grant relating to the purchase of property, plant andequipment 1.2 1.5Purchases and construction of property, plant and equipment (6.7) (1.3)Additions of product development costs (3.7) (4.8)Additions of software and software under development (0.9) (0.1)Purchase of bond receivables - (11.6)Bond premium paid (0.3) (0.2)Proceeds from disposal of property, plant and equipment 0.1 -Interest received 0.1 -Net cash used in investing activities (10.2) (16.5)Cash flows from financing activitiesProceeds from issuance of new ordinary shares - 39.6Proceeds from borrowings 14.1 19.6Repayment of borrowings (27.0) (44.4) Principal payment of lease liabilities (1.0) (0.9)Interest paid (3.8) (4.4)Dividends paid to non-controlling interests - (0.1) Net cash (used in)/provided by financing activities (17.7) 9.4 Net (decrease)/increase in cash and cash equivalents (18.0) 4.7Cash and cash equivalents at beginning of financial period 33.8 13.9Effects of currency translation on cash and cash equivalents 0.1 (1.0) Cash and cash equivalents at end of financial period 15.9 17.6Reconciliation to the statement of financial position Cash and cash equivalent as per balance sheet 14.8 17.6Cash included within assets classified as held for sale 1.1 -Total cash and cash equivalents for the purposes of thestatement of cash flows 15.9 17.6 Cash and cash equivalents included within assets classified as held for sales amounting to £1.1m have been includedin the cash and cash equivalents balance for the purposes of the condensed consolidated statement of cash flows. The above condensed consolidated statement of cash flows should be read in conjunction with the accompanyingnotes. XP Power Limited Notes to the condensed consolidated financial statements 1. Basis of preparation The condensed consolidated financial statements for the period ended 30 June 2026 have been prepared inaccordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority and withInternational Accounting Standards ('IAS') 34 Interim Financial Reporting as issued by the International AccountingStandards Board. The condensed consolidated financial statements should be read in conjunction with the annual financial statements forthe year ended 31 December 2025 which have been prepared in accordance with International Financial ReportingStandards ('IFRSs') as issued by the International Accounting Standards Board (IFRS as issued by the IASB) andSingapore Financial Reporting Standards (International) (SFRS(I)s'). The condensed consolidated interim financial statements have not been audited. 2. Going concern Overview of liquidity The Group has available to it a Revolving Credit Facility (RCF) of $130m with approximately $100m maturing in June2028 and $30m maturing in June 2030 and therefore the whole facility is committed throughout the minimum period forwhich going concern is assessed, which is 12 months from the date of signing these condensed consolidated financialstatements. At 30 June 2026, the Group had drawn down $89m (£67m) from the RCF, leaving undrawn facility headroom of $41m(£31m). The Group is compliant with the associated covenants, which are leverage ratio (Net Debt : Adjusted EBITDA)of not more than 3:00 and interest cover (Adjusted EBITDA : Adjusted Net Finance Expense) of not less than 3.00.Each covenant is tested quarterly. Approach to going concern review As part of its going concern review, the Group has developed both base case and downside case financial scenarios,with the latter representing a severe but plausible downside scenario, assessing forecast liquidity and covenantcompliance in each case.
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The key assumption in these scenarios was revenue, particularly revenue beyond the initial circa six-month period forwhich the business already has visibility via existing sales orders. Revenue beyond this initial period will be determinedby, amongst other things, the timing of the semiconductor upcycle and general global macroeconomic conditions. The Group remains fully compliant with its financial covenants and maintains adequate liquidity in both base anddownside case under those scenarios. Outcome of downside scenario The downside case assumes only a 6% increase in revenue in the next 12 months compared to base case whichassumes 11% following increasing orders in late 2025 and 2026. The lowest point of headroom in the leverage ratio covenant in this scenario was at 30 September 2026. EBITDA wouldneed to fall c. 52% short of expectations for the 12 months to 30 September 2026 for a breach to occur. The lowestpoint of headroom in the Interest Cover covenant was at 31 December 2026. EBITDA would need to fall c. 45% short ofexpectations for the 12 months to 31 December 2026 for a breach to occur. Over 100% of forecast H2 2026 downsidecase revenue is now covered by firm orders in hand. Conclusions The Directors are confident that the base case and downside case provide an appropriate basis for the going concernassumption to be applied in preparing the financial statements, while recognising more modest headroom in the severebut plausible case. In both cases, the Group remains in full compliance with its financial covenants and with ampleliquidity throughout the going concern assessment period. Therefore, the Directors have a reasonable expectation that the Group has adequate resources to continue inoperational existence for the foreseeable future. The Group, therefore, continues to adopt the going concern basis inpreparing its consolidated financial statements. 3. Accounting policies The condensed consolidated interim financial statements have been prepared under the historical cost conventionexcept as disclosed in the accounting policies within the Group financial statements for the year ended 31 December2025. The accounting policies, presentation and methods of computation adopted in these condensed consolidated interimfinancial statements are consistent with those applied in the preparation of the Group's annual financial statements forthe year ended 31 December 2025, except for the adoption of the amendments to IFRS 9 Financial Instruments andIFRS 7 Financial Instruments: Disclosures which became effective for the current reporting period. The adoption of the amendments to IFRS 9 and IFRS 7 did not result in significant changes to the Group's accountingpolicies and had no material effect on the amounts reported for the current or prior financial periods. 4. Segmented and revenue information The Board of Directors monitors the business based on the three primary geographical areas: North America, Europeand Asia. All geographic locations market the same classes of products to their respective customer base. The revenue by class of customer and location of the design win is as follows: Six months ended 30 June 2026 Six months ended 30 June 2025 £m Europe NorthAmerica Asia Total Europe NorthAmerica Asia Total SemiconductorManufacturingEquipment 4.1 37.9 2.1 44.1 2.6 36.7 4.5 43.8 IndustrialTechnology 22.2 17.6 4.8 44.6 21.8 16.9 3.7 42.4 Healthcare 6.6 12.0 1.8 20.4 8.0 14.7 2.0 24.7 Total 32.9 67.5 8.7 109.1 32.4 68.3 10.2 110.9 Reconciliation of segment results to profit for the period: £m Six months ended30 June 2026 Six months ended30 June 2025 Europe 8.7 7.3 North America 19.6 18.1 Asia 3.1 3.8 Segment results 31.4 29.2 Research and development (7.3) (8.6) Manufacturing (5.7) (7.4) Corporate costs (9.8) (8.4) Adjusted operating profit 8.6 4.8 Net finance expenses (3.5) (4.0) Adjusting items (Note 5) (3.1) (2.2) Profit/(loss) before tax 2.0 (1.4) Income tax expense (0.9) (0.4) Profit/(loss) after tax for theperiod 1.1 (1.8)
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5. Reconciliation of non-statutory measures The Group presents Adjusted Gross Profit, Adjusted Operating Expenses and Adjusted Operating Profit by adjusting forcosts and profits which management believes to be significant by virtue of their size, nature or incidence or which havea distortive effect on current year earnings. Such items may include, but are not limited to, costs associated withbusiness combinations, gains and losses on disposal of businesses, fair value movements, restructuring charges,acquisition related costs and amortisation of intangible assets arising from business combinations. In addition, the Group presents Adjusted Profit measures for the period by adjusting for certain tax charges and creditswhich represent the tax effect of Adjusting items or which management believe to be significant by virtue of their size,nature, or incidence or which have a distortive effect (shown as Tax effects of Adjusting items below). As a result, the Group also presents certain Adjusted measures which include the consequential impact of theadjustments made in Adjusted Gross Profit, Adjusted Operating Profit and Adjusted Tax Expense / Credit. This includesAdjusted Gross Margin, Adjusted Operating Margin, Adjusted Profit for the Period, Adjusted Diluted Earnings PerShare, Adjusted Operating Cashflow and Cash Conversion %. The Group uses these Adjusted measures to evaluate performance and as a method to provide shareholders with clearand consistent reporting. The Group also reports key financing measures which are relevant to shareholders as they are used in determiningcovenant compliance. These include Leverage Ratio, Interest Cover, Net Debt, Adjusted Net Finance Expense andAdjusted EBITDA. See below for a reconciliation of all non-statutory measures to the closest statutory measure included in these financialstatements. i. Adjusted Gross Profit, Operating Expenses, Operating Profit, Net Finance Expense, Profit Before Tax, TaxExpenses and Loss for the Period Six months ended 30 June 2026 £m Grossprofit Operatingexpenses OperatingProfit Netfinanceexpense Profitbeforetax Taxexpense Profitfor theperiodStatutory result 50.0 (44.7) 5.3 (3.3) 2.0 (0.9) 1.1Adjusted for: Costs relating to legaldispute - 0.1 0.1 - 0.1 - 0.1Amortisation ofintangible assetsacquired from businesscombinations - 1.3 1.3 - 1.3 (0.2) 1.1Fair value gain onderivative financialinstruments - - - (0.3) (0.3) - (0.3)Malaysiacommissioning costs - 0.4 0.4 0.1 0.5 - 0.5Costs relating to RFexit (0.2) 0.7 0.5 - 0.5 - 0.5Costs relating to Chinafactory closure 0.3 0.7 1.0 - 1.0 0.1 1.1Total adjustments 0.1 3.2 3.3 (0.2) 3.1 (0.1) 3.0Adjusted result 50.1 (41.5) 8.6 (3.5) 5.1 (1.0) 4.1 5. Reconciliation of non-statutory measures (continued) Six months ended 30 June 2025 £m Grossprofit Operatingexpenses OperatingProfit Netfinanceexpense Profitbeforetax Taxexpense Profitfor theperiodStatutory result 46.1 (43.5) 2.6 (4.0) (1.4) (0.4) (1.8)Adjusted for: Restructuring costs - 0.6 0.6 - 0.6 (0.1) 0.5Exit from ChinaSemiconductor market(0.2) - (0.2) - (0.2) 0.1 (0.1)Costs relating to legaldispute - 0.5 0.5 - 0.5 - 0.5Amortisation ofintangible assetsacquired from businesscombinations - 1.3 1.3 - 1.3 (0.2) 1.1Total adjustments (0.2) 2.4 2.2 - 2.2 (0.2) 2.0Adjusted result 45.9 (41.1) 4.8 (4.0) 0.8 (0.6) 0.2 ii. Adjusted Operating Cash Flow and Conversion % £m Six months ended30 June 2026 Six monthsended30 June 2025(restated) Cash generated from operations 11.1 13.3 Adjusted for cash flows in respect of: Restructuring costs - 0.5 Malaysia commissioning costs 0.3 -
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Costs relating to legal dispute 0.4 0.1Costs relating to China factory closure 0.3 - One-off customer prepayment (3.7) -Adjusted Operating Cash Flow 8.4 13.9 Adjusted EBITDA* 16.3 12.9 Adjusted Operating Cash Conversion 52% 108% * Reconciliation to compute the Adjusted EBITDA is as per below: £m Six monthsended 30 June2026 Six monthsended 30 June2025 Adjusted Operating Profit 8.6 4.8 Adjusted for: Depreciation1 3.9 4.5 Amortisation2 3.7 3.6 Impairment 0.1 - Adjusted EBITDA 16.3 12.9 1 Excludes £0.2m (H1 2025: nil) of depreciation relating to the Malaysia building as these are included within adjusting items in arriving at adjustedoperating profit;2 Excludes £1.3m (H1 2025: £1.3m) of amortisation of intangible assets acquired through business combinations as these are included withinadjusting items in arriving at adjusted operating profit; The Adjusted Operating Cash Conversion metric has been updated since the issue of the Consolidated FinancialStatements for the year ended 31 December 2025. Previously we showed the conversion of Adjusted Operating Profitinto Adjusted Operating Cash Flow but we now show the conversion of Adjusted EBITDA into Adjusted Operating CashFlow, to align with listed peers. 5. Reconciliation of non-statutory measures (continued) iii. Adjusted LTM EBITDA £m Twelve monthsended 30 June2026 Twelvemonths ended30 June2025Operating profit/(loss) 3.4 (3.0) Adjusted for: Depreciation 8.4 8.8 Amortisation 10.0 10.0 Impairment 5.3 0.5 LTM EBITDA 27.1 16.3 Adjusted for: Restructuring costs 0.8 1.4 Exit from China Semiconductor market (2.1) 6.5 Costs relating to legal dispute 2.2 7.5 Global supply chain transformation - 0.7 Malaysia commissioning costs 0.4 - Costs relating to RF exit 4.7 - Cost relating to China factory closure 5.0 - Adjusted LTM EBITDA 38.1 32.4 iv. Net Debt £m At 30 June2026 At 30 June2025 Borrowings Current 0.2 0.2 Non-current 65.1 76.6 Total borrowings 65.3 76.8 Cash and cash collateral Cash at bank and on hand 14.6 17.5 Short-term bank deposits 0.2 0.1 Cash collateral 1.7 1.3 Cash included within assets held for sales 1.1 - Total cash and cash collateral 17.6 18.9
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Net Debt 47.7 57.9 v. Leverage ratio (Net Debt : Adjusted LTM EBITDA) £m At 30 June2026 At 30 June2025 Net Debt (Note 5(iv)) 47.7 57.9 Adjusted LTM EBITDA (Note 5(iii)) 38.1 32.4 Leverage Ratio (Net Debt : Adjusted LTM EBITDA) 1.3x 1.8x 5. Reconciliation of non-statutory measures (continued) vi. Interest Cover (Adjusted LTM EBITDA : Adjusted LTM Net Finance Expense) £m Twelve monthsended 30 June2026 Twelve monthsended 30 June2025 Adjusted LTM EBITDA (Note 5(iii)) 38.1 32.4 Net finance expense 7.3 9.3 Adjusted for: Amortisation of financing costs (1.3) (0.6) Fair value gain on derivative financial instruments 0.3 - Malaysia commissioning costs (0.1) - Costs relating to RF exit (0.2) - Adjusted LTM Conformed Net Finance Expense 6.0 8.7 Interest Cover(Adjusted LTM EBITDA : Adjusted LTM ConformedNet Finance Expense) 6.4x 3.7x Adjusted LTM Conformed Net Finance Expense reflects the definition of interest used to calculate Interest Cover for our borrowing facility covenants. 6. Taxation The average effective tax rate applied to Adjusted Profit Before Tax for the period is 20% (H1 2025: 75%). This is basedon an estimate of the full year effective tax rate by tax jurisdiction. 7. Assets and liabilities of disposal group held for sale - China manufacturing plant Overview On 31 March 2026, XP Power (Hong Kong) Limited signed a share transfer agreement to sell 100% of the equity ofKunshan Ripang Electronics Technology Co., Ltd, which currently holds the assets associated with the Kunshanmanufacturing plant. The criteria in IFRS 5 for classification as a disposal group held for sale have been met as there is a committed plan tosell, the subsidiary is available for immediate sale in its present condition subject only to usual terms, the asset is beingactively marketed at a reasonable price, and completion is highly probable within 12 months. Accordingly, the disposalgroup has been classified as held for sale in these financial statements. The transaction is not presented as adiscontinued operation because it does not represent a separate major line of business or geographical area ofoperations. The agreed consideration for the disposal exceeds the carrying amount of the disposal group and therefore noimpairment loss has been recognised in the period. Major classes of assets and liabilities classified as held for sale £m At 30 June 2026 Cash and cash equivalents 1.1 Property, plant and equipment 0.6 Right-of-use assets 0.1 Total assets of disposal group held for sale 1.8 Trade and other payables 0.6 Total liabilities of disposal group held for sale 0.6 8. Earnings per share
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The calculations of the basic and diluted earnings per share attributable to the ordinary equity holders of the Companyare based on the following data: £m Six monthsended 30 June2026 Six monthsended 30 June2025Earnings Earnings/(loss) after tax attributable to equity holders of theCompany 1.0 (1.9) Earnings/(loss) for earnings per share 1.0 (1.9) Number of shares Weighted average number of ordinary shares outstanding forbasic earnings per share (thousands) 27,958 26,398 Effect of dilutive potential share awards (thousands) 174 4 Weighted average number of shares for diluted earnings pershare (thousands) 28,132 26,402 Earnings/(loss) per share Basic 3.6p (7.2)p Basic Adjusted1 14.3p 0.4p Diluted 3.6p (7.2)p Diluted Adjusted1 14.2p 0.4p 1 Reconciliation to compute the Adjusted Earnings is as per below: £m Six monthsended 30 June2026 Six monthsended 30 June2025 Profit/(loss) after tax attributable to equity holders of the Company 1.0 (1.9) Restructuring costs - 0.5 Exit from China Semiconductor market - (0.1) Costs relating to legal dispute 0.1 0.5 Amortisation of intangibles assets acquired from businesscombinations 1.1 1.1 Fair value gain on derivative financial instruments (0.3) - Malaysia Commissioning costs 0.5 - Costs relating to RF exit 0.5 - Cost relating to China factory closure 1.1 - Adjusted Earnings 4.0 0.1 9. Intangible assets ProductDevelopmentcosts Brand Trademarks Technology Customerrelationships Customercontracts Software Assetsunderdevelopment 1 Total £ Millions Cost At 31December2025 62.2 1.6 1.1 7.7 23.9 2.6 22.7 28.2 150.0 Additions - - - - - - 0.1 4.5 4.6Transfers 3.6 - - - - - - (3.6) -Currencytranslationdifferences 0.8 - - - 0.1 - 0.3 0.5 1.7 At 30 June2026 66.6 1.6 1.1 7.7 24.0 2.6 23.1 29.6 156.3 Accumulated amortisation/impairment At 31December2025 44.8 1.0 1.0 5.4 16.2 2.6 11.4 13.4 95.8 Amortisationcharge 2.7 0.1 - 0.3 0.9 - 1.0 - 5.0 Impairmentcharge - - - - - - - 0.1 0.1 Currencytranslationdifferences 0.5 - - - 0.2 - 0.3 0.1 1.1At 30 June2026 48.0 1.1 1.0 5.7 17.3 2.6 12.7 13.6 102.0 Net bookvalueAt 30 June2026 18.6 0.5 0.1 2.0 6.7 - 10.4 16.0 54.3 At 31December2025 17.4 0.6 0.1 2.3 7.7 - 11.3 14.8 54.2 1 Assets under development pertains to cost incurred for software development of £0.9m and product development costs of £15.1m.
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The amortisation period for development costs incurred on the Group's products varies between five and seven yearsaccording to the expected useful life of the products being developed. Amortisation commences when the product is ready and available for use. 10. Property, plant and equipment £ Millions Freeholdland Buildings Plant andequipment Motorvehicles Buildingimprovements Assetsunderconstruction Total Cost At 31 December2025 1.5 18.3 38.6 0.1 23.7 20.3 102.5 Additions - - 1.9 - - 0.1 2.0 Cost adjustments 1 - - - - - (0.4) (0.4)Reclassified toassets held forsale - (2.4) (3.9) - (1.0) - (7.3)Disposals - - (1.0) - - - (1.0) Transfers2 - 19.5 0.8 - 0.2 (20.5) - Currencytranslationdifferences - - 0.5 - 0.4 0.6 1.5 At 30 June 2026 1.5 35.4 36.9 0.1 23.3 0.1 97.3 AccumulateddepreciationAt 31 December2025 - 6.1 25.9 0.1 4.8 - 36.9 Depreciationcharge - 0.3 1.7 - 0.5 - 2.5 Disposals - - (0.9) - - - (0.9) Reclassified toassets held forsale - (2.0) (3.8) - (0.9) - (6.7)Currencytranslationdifferences - 0.2 0.5 - - - 0.7 At 30 June 2026 - 4.6 23.4 0.1 4.4 - 32.5 Net book valueAt 30 June 2026 1.5 30.8 13.5 - 18.9 0.1 64.8 At 31 December2025 1.5 12.2 12.7 - 18.9 20.3 65.6 1 The cost adjustment of £0.4m recognised within assets under construction related to the reversal of an over-accrual of buildings work in Malaysia; 2 Transfers include £20.5m from assets under construction following the completion of the Malaysia manufacturing facility, comprising £19.5mtransferred to buildings and £1.0m transferred to plant and equipment. Transfers also include a £0.2m reclassification from building improvements toplant and equipment to reflect the allocation of a government grant which had been accrued against building improvements in 2025. During 2026,£0.2m of the grant was determined to relate to plant and equipment and was reclassified accordingly. 11. Borrowings The Group's debt is sourced from a $130 million Revolving Credit Facility ("RCF"). Following the renegotiation of thefacility in December 2025, the loan was split into two facilities: Facility A and Facility B. The total committed facility is$130 million, comprising $100.7 million under Facility A and £22.2 million under Facility B. The facility has no fixedrepayments until maturity, being June 2028 for Facility A and June 2030 for Facility B. Interest on Facility A accrues atSOFR for US dollar borrowings plus a margin ranging from 1.95% to 3.2% depending on the leverage ratio. Interest onFacility B accrues at SONIA plus a margin of 4.75%. Both facilities incur a commitment fee equal to 40% of theapplicable margin on the unutilised portion of the facility. There were no changes to the terms of the Revolving Credit Facility during the six months ended 30 June 2026.Thecovenants attaching to the RCF are set out in Note 2. The borrowings are repayable as follows: £m At 30 June 2026 At 31 December 2025On demand or within one year 0.2 0.3In the second year 50.3 56.3In the third year - - In the fourth year 14.8 20.4Total 65.3 77.0 All loan covenants have been complied with as at 30 June 2026. 12. Foreign exchange rates Exchange rates applied in these condensed consolidated financial statements are the average for the six month periodfor Income Statement items (including £1/USD1.34, £1/€1.15, £1/SGD1.72) and are the closing rate for Balance Sheetitems (including £1/USD1.32, £1/€1.16, £1/SGD1.71 at 30 June 2026). 13. Post balance sheet events On 14 July 2026 the United States Court of Appeals for the Ninth Circuit issued its judgement in respect of the appealbrought by the Group against the earlier judgement of the District Court in the trade secret proceedings broughtby Comet Technologies USA, Inc. and affiliates against the Group. The judgement of the Court of Appeals reversed theearlier judgement of the District Court and remanded the case for a new trial because it held that the District Court hadmisdirected the jury at the original trial. Having considered the range of possible directions for the case from here, theBoard has elected to prudently retain the provision previously established, then adjust accordingly as next stepsbecome clearer.
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14. Principal risks The Group has well-established risk management processes to identify and assess risks. The Group's principal risksare regularly reviewed by the Board and mapped onto a risk universe, where risk mitigation or reduction can be trackedand managed. This facilitates further discussion regarding risk appetite and identifies the risks that require greaterattention. Details of our risk management framework are set out in the Group's Annual Report & Accounts for the yearended 31 December 2025 on pages 34 to 41. The Board has reviewed the principal risks as of 30 June 2026 against the context of the environment in which theGroup operates and the operational developments during the first six months of the financial year and the outlook forthe remainder of the financial year. There is no change in principal risks as disclosed in the Group's Annual Report &Accounts: 1. Disruption to manufacturing2. Supply chain risks3. Market/customer related risks4. Product-related risks5. IT/data risks6. Funding/treasury risks7. Legal & regulatory8. People-related risks9. Climate-related risks Directors' responsibility statement The Directors confirm to the best of their knowledge that: · the unaudited interim results have been prepared in accordance with IAS 34 Interim Financial Reporting issued bythe International Accounting Standards Board; and· the interim results include a fair view of the information required by DTR 4.2.7 (indication of important events duringthe first six months and description of principal risks and uncertainties for the remaining six months of the year)and DTR 4.2.8 (disclosure of related party transactions and changes therein). The Directors of XP Power Limited are as follows: Jamie Pike Non-Executive Chair Gavin Griggs Chief Executive Officer Matt Webb Chief Financial Officer Andy Sng Executive Vice President, Asia Charlotta Ginman Senior Independent Director Pauline Lafferty Non-Executive Director Sandra Breene Non-Executive Director Daniel Shook Non-Executive Director By order of the Board: Gavin Griggs Matt WebbChief Executive Officer Chief Financial Officer 4 August 2026 Report on review of interim financial information We have reviewed the accompanying condensed consolidated interim financial information of XP Power Limited ("theCompany") and its subsidiaries ("the Group") set out on pages 14 to 27, which comprise the condensed consolidatedbalance sheet of the Group as at 30 June 2026, the condensed consolidated income statement, statement ofcomprehensive income, changes in equity and cash flows for the 6-month period then ended and the other explanatorynotes. Management is responsible for the preparation and presentation of this condensed consolidated interim financialinformation in accordance with International Accounting Standard 34 Interim Financial Reporting as issued by theInternational Accounting Standards Board. Our responsibility is to express a conclusion on this condensed consolidatedinterim financial information based on our review. Scope of ReviewWe conducted our review in accordance with International Standard on Review Engagements 2410 Review of InterimFinancial Information Performed by the Independent Auditor of the Entity. A review of interim financial informationconsists of making inquiries, primarily of persons responsible for financial and accounting matters, and applyinganalytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditingand consequently does not enable us to obtain assurance that we would become aware of all significant matters thatmight be identified in an audit. Accordingly, we do not express an audit opinion.
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We have read the other information contained in the interim report for the 6-month period ended 30 June 2026, whichcomprise the "Interim Results" set out on pages 1 to 3, "Chief Executive Officer's Review" set out on pages 4 to 8 and"Chief Financial Officer's Review" set out on pages 9 to 13 and considered whether it contains any apparentmisstatements or material inconsistencies with the information in the condensed consolidated interim financialinformation. ConclusionBased on our review, nothing has come to our attention that causes us to believe that the accompanying condensedconsolidated interim financial information is not prepared, in all material respects, in accordance with InternationalAccounting Standard 34 Interim Financial Reporting as issued by the International Accounting Standards Board. Restriction on Distribution and UseThis report has been prepared solely for the Company in accordance with the letter of engagement between us and theCompany. We do not accept or assume liability or responsibility to anyone other than the Company for our work or thisreport. PricewaterhouseCoopers LLPPublic Accountants and Chartered AccountantsSingapore, 4 August 2026 This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authorityto act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this informationmay apply. For further information, please contact rns@lseg.com or visit www.rns.com. RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the informationcontained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. Forfurther information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy. END