Chemring Regulatory News (CHG)

FOR IMMEDIATE RELEASE 10 NOVEMBER 2023

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

FINANCIAL YEAR-END, ENERGETICS AND US SENSORS UPDATE

FY23 Year-End Update

Chemring is pleased to announce that trading in the period to 31 October 2023 progressed as planned with the outturn for the year ending 31 October 2023 expected to be in-line with Board and analyst expectations*.

Net debt at year end is expected to be approximately £14.4m (2022: £7.2m). Strong operating cash conversion of 90% of EBITDA (three year average: 101%), has been used to fund growth opportunities, both organic and bolt-on, increase dividends by 20%, and deploy £9m into the £50m share buyback programme announced on 1 August 2023.

The Group continues to see robust market conditions, with increasing customer demand for its technology-driven solutions and a resurgent demand for traditional defence capabilities. This robust growth outlook is expected to be maintained over the long term.

Energetics Contract Awards and Further Capacity Expansion

The Group continues to experience significant increases in demand for energetic materials and devices, with its Norwegian-based subsidiary Chemring Nobel winning over £40m of orders in the final month of the year, and its US-based subsidiary Chemring Energetic Devices winning a $46m order from United Launch Alliance ("ULA") in support of their Vulcan Launch Vehicle.

Considering the increased levels of demand for energetic materials and the strong organic growth opportunity this presents, the Group has decided to invest a further c£30m in increasing the capacity of Chemring Nobel. This investment, which is in addition to the c£90m capacity expansion plan across the Group's three Energetics businesses that was announced in June 2023, is expected to deliver c£25m of incremental annual revenue. The total investment in increased capacity in the Group's three Energetics businesses over the next three years is expected to be c£120m, which will generate increased revenue of c£85m and increased operating profit of c£21m.

Strategic Review of US Sensors

With both of the Group's US DoD sole-source biological detection Programs-of-Record now in production phases**, and following the US Army's decision to curtail production of the Husky Mounted Detection System ("HMDS") and accelerate the transition of the program into a sustainment phase, and our assessment that it is no longer probable the Group will proceed to the next phase of the competitive Aerosol and Vapor Chemical Agent Detector ("AVCAD") program, the Group has conducted a strategic review of its US Sensors business and concluded that a focus on biological detection and security markets presents the best opportunity to maintain strong margins and deliver growth.

As a result, the Explosive Hazard Detection ("EHD") business will be treated as a discontinued operation in 2023 with a non-cash impairment of the goodwill associated with its acquisition in 2009, and other assets, totalling £31m being recorded. Also, a non-cash (pre-tax) impairment of the previously capitalised AVCAD development costs and other assets associated with the program totalling £18m has been recorded as a non-underlying item; given its competitive nature the Group had not included any AVCAD program revenues in its forecasts.

The Group has moved quickly and decisively to reposition and reshape its US Sensors business to ensure sustainable competitive advantage in its targeted biological detection and security markets.

FY23 Results

Chemring's FY23 results are scheduled to be announced on 12 December 2023.

-ENDS-

* The Group believes the consensus of analyst forecasts for adjusted operating profit for the year ended 31 October 2023 is £67.0m.

** The Enhanced Maritime Biological Detector ("EMBD") is now in full rate production and the Joint Biological Tactical Detection System ("JBTDS") is in low rate initial production.

For further information:

Rupert Pittman Group Director of Corporate Affairs, 01794 463401

Chemring Group PLC

James McFarlane ? MHP Communications ? 020 3128 8100

Ollie Hoare

Cautionary statement

This announcement contains 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 FTSE250 global business that specialises in the manufacture of high technology products and the provision of services to the aerospace, defence and security markets

· Employing approximately 2,600 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: Sensors & Information and Countermeasures & Energetics

· Chemring has a diverse portfolio of products that deliver high reliability solutions to protect people, platforms, missions and information against constantly changing threats

· Operating in niche markets and with strong investment in research and development ("R&D"), Chemring has the agility to rapidly react to urgent customer needs

www.chemring.com.