Carclo Regulatory News (CAR)

1 May 2014

Carclo plc

("Carclo" or "the group")

Atmel Corporation Announcement and Trading Update

The group notes the comments in respect of XSense made by Atmel Corporation ("Atmel") executives during the Analysts Earnings call that accompanied Atmel's Q1 results on 30 April 2014. Extracts from the transcripts of the Earnings Call are reproduced below:

"As to new tier one OEM products in production, HP began shipping its third system featuring XSense, HP's EliteBook 1000 G2. This product combines our XSense metal mesh sensor with maXTouch and also features our maXStylus and an AVR micro for the capacitive home key.

Corning recently announced they are collaborating with Atmel to develop ultra-thin capacitive touchscreens with superior multi-touch performance for next-generation applications. This collaboration combines XSense flexible touch sensors with 0.4mm damage-resistant Corning® Gorilla® Glass. Very thin cover glass has been a problem for ITO technology but it is not an issue for XSense. Together, Corning and Atmel are able to deliver outstanding capacitive touch performance through thin, flat or curved cover glass."

As previously reported, the market for touch sensors is proving to be more competitive than was initially expected and selling prices have continued to decline to approximately half of prior year levels. Asian competition remains strong with low pricing offered by a Japanese and a Chinese metal mesh supplier and also the "One Glass Solution", using lower cost ITO.

Whilst the announcement of the third HP programme and the collaboration with Corning are both good news for Conductive Inkjet Technology's ("CIT's") Touch business, building volume business has been more difficult than expected and we have recent confirmation from our partner that several anticipated programs have not yet been awarded. Based on current levels of demand, we anticipate that volume growth, tempered by the effect of lower prices, will give a modest overall increase in sales revenue from our CIT Touch materials business for FY2015 versus FY2014. Predicting the rate of adoption of the XSense™ product continues to be very difficult. The business may develop more rapidly than we are now forecasting and, should that happen, our manufacturing capacity remains capable of dealing with such growth. Our partner, Atmel, remains in a strong position to grow a large and sustainable market share for XSense™ over the coming years.

Elsewhere in the group, Technical Plastics is set to grow well in the new financial year benefitting particularly from new work for our US and Czech businesses. Our LED Technologies division will see substantial growth from additional supercar lighting programmes with sales and profits likely to be materially higher than in the prior year. Precision Engineering is likely to report a slightly lower level of profitability relative to the prior year in which its aerospace business benefitted from one-off higher margin work. Technology developments at our Carclo Diagnostic Solutions and CIT Printed Electronics businesses remain on target.

Overall we expect a strong year on year improvement in trading performance despite the reduction in previously anticipated sales at CIT.

Carclo will announce its preliminary results for the year ended 31 March 2014 on 10 June 2014.

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Notes to editors

Carclo plc is a technology group. It is a public company whose shares are quoted on the London Stock Exchange.

Carclo's strategy has been to develop new technologies and products to drive future growth. Its investment in CIT has led to the introduction of a new material for use in Capacitive Touch Screens. Further investment has been made in Carclo Diagnostic Solutions, where a novel Point-of-Care hardware platform has been developed.

Approximately three fifths of revenues are currently derived from the supply of fine tolerance, injection moulded plastic components, which are used in medical, optical and electronics products. This business, Carclo Technical Plastics, operates internationally in a fast growing and dynamic market underpinned by rapid technological development.

Approximately two fifths of revenues are derived from the supply of specialised precision LED based systems to the premium automotive industry, as well as key control systems for the aerospace industry.