Chemring Regulatory News (CHG)

FOR IMMEDIATE RELEASE 3 MARCH 2022

CHEMRING GROUP PLC ("Chemring", the "Group" or the "Company")

AGM Update Announcement

Chemring issues the following update announcement on trading in the period from 1 November 2021 to 25 February 2022, to coincide with the Company's Annual General Meeting taking place later today.

Current trading and outlook

Both sectors have performed well since the start of the current financial year, in line with management expectations. Due to recent positive order intake, including Roke's award of an £8m contract to supply electronic warfare ("EW") equipment to the Swedish Ministry of Defence which is expected to be partially delivered in FY22, the Board now expects the financial results for the current year to be slightly ahead of the current consensus of analyst expectations.*

The Group continues to successfully manage the ongoing post-COVID-19 challenges with its supply chain, labour availability and other inflationary pressures. The Group has worked to pass through costs and to generate additional operational efficiencies, and as such does not expect there to be any material short-term financial impacts.

Balance sheet

Net debt at 25 February 2022 was £28.4m (28 February 2021: £51.0m) as strong operating cash conversion continues to fund investment in capital expenditure. We expect to reduce net debt further by the year end.

Our strong balance sheet has allowed the Group to increase organic investment and returns to shareholders while continuing to search for high quality, complementary acquisitions similar to Cubica, which continues to perform well. The Group's acquisition pipeline remains healthy.

Orders

Having started the financial year with order cover of 84% our expected FY22 revenue is now 89% (2021: 89%) covered by revenue in the period to date and the current order book, split 99% (2021: 94%) in Countermeasures & Energetics and 73% (2021: 79%) in Sensors & Information. The order book stood at £476m at 25 February 2022 (2021: £481m).

In the Sensors & Information sector, Roke has continued its positive momentum into FY22. Order intake has been strong with notable highlights during the period being the renewal of its largest UK framework contract for the next three years with an expected value of c£20m per annum, which represents growth of 40% over the average of the last three years.

As noted above, Roke also secured a further sale of EW equipment into Sweden with the award of a contract by the Defence Materiel Administration ("FMV") of the Swedish Ministry of Defence, to provide advanced EW equipment to meet a number of Swedish Armed Forces requirements. All Roke EW systems now feature a common operations and planning software suite, designed to maximise operator effectiveness and deliver enhanced situational awareness, and this order demonstrates the strong market demand for Cyber and Electromagnetic Activities ("CEMA") capabilities.

In the Countermeasures & Energetics sector, Chemring Countermeasures USA ("CCM USA") has been awarded an initial delivery order valued at US$16.8m for the supply of MJU-75/B infrared countermeasures. This award was made under a five-year split award IDIQ with total contract value of up to US$250m. Deliveries for this initial contract will be made in FY22 and FY23 with all work completed at CCM USA's new fully-automated manufacturing facility in Toone, Tennessee. Characterisation and testing activity continues and we remain on track to generate revenue from the new facility in the second half of the current financial year.

Interim results date

The Group will report its interim results for the six months ended 30 April 2022 on 8 June 2022.

- ENDS -

* The Group believes analyst forecasts for its adjusted operating profit for the year ending 31 October 2022 are in the range of £61.0m to £63.3m, with a consensus of £62.2m.

For further information:

Cautionary statement

This announcement contains unaudited information based on management accounts and forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Chemring's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.

Chemring undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.

Notes to editors

· Chemring is a global business that specialises in the manufacture of advanced technology and high reliability products and the provision of critical services to the aerospace, defence and security markets

· Chemring is a business with an evolving purpose of innovating to protect and with that the Group is focused on protecting people, platforms, missions and information from constantly changing threats

· Employing approximately 2,300 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries

· Chemring is organised under two strategic product segments: Countermeasures & Energetics, and Sensors & Information

· Operating in niche markets and with strong investment in research and development, Chemring has the agility to rapidly react to urgent customer needs

www.chemring.com