Sondrel Plc Regulatory News (SND)

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21 October 2022

Sondrel (Holdings) plc

("Sondrel", the "Company" and together with its subsidiaries the "Group")

First Day of Dealings on AIM

Sondrel (Holdings) plc, the fabless semiconductor business providing turnkey services in the design and delivery of 'application specific integrated circuits' ("ASICs") and 'system on chips' ("SoCs") for leading global technology brands, is delighted to announce the admission of its entire issued ordinary share capital to trading on AIM, a market operated by the London Stock Exchange plc ("Admission").

Admission will take place, and dealings in the Company's ordinary shares of £0.001 each ("Ordinary Shares") will commence, at 8.00 a.m. today under the ticker 'SND'.

In conjunction with Admission, gross proceeds of £20 million have successfully been raised by way of a placing with institutional investors of 36,363,636 new Ordinary Shares (the "Placing") at a price of 55 pence per Ordinary Share (the "Placing Price").

Cenkos Securities plc ("Cenkos") is acting as Nominated Adviser, sole broker and sole bookrunner to the Company.

Key Highlights:

· The Placing received strong support from institutional investors and raised gross proceeds of £20 million.

· The market capitalisation of the Company will be approximately £48.1 million on Admission. The Company has 87,461,772 Ordinary Shares in issue and a free float of approximately 41.1 per cent.

· Sondrel has grown over a period of 20 years and its previous designs have been included in well-known products such as Apple iPhone, Sony PlayStation, Meta's Oculus Quest virtual reality headset, Samsung, Google and Sony smartphones, JVC prosumer camcorders and Tesla and Mercedes-Benz cars.

· The net proceeds of the Placing will enable the Company to:

o  increase the number of engineers it employs;

o  invest further in developing its Architecting the Future IP platforms;

o  accelerate sales in the USA and in other geographies; and

o  strengthen the Group's balance sheet in, inter alia, the delivery of project-based designs and customer supply management contracts.

· As at 31 July 2022, the Group's pipeline of revenue opportunities stood at more than £300 million[1] (excluding potentially material related production/supply revenues).

· The Directors have ambitions to grow revenues to over £100 million in the medium term.

· The Company's admission document is available for viewing at https://ir.sondrel.com/investors

· The ISIN of the Ordinary Shares will be GB00BJN54579, the SEDOL of the Ordinary Shares BJN5457 and the Company's LEI number 984500D6E7L2A9A54935.

Graham Curren, Chief Executive Officer of Sondrel, commented:

"I am delighted with the strong institutional support we received to enable us to successfully complete our IPO and welcome our new investors. Sondrel is well positioned to benefit from a number of industry and geopolitical megatrends and has a clear strategy to grow revenues to over £100 million in the medium term as demand for our highly complex ASIC chip solutions continues to grow. The differentiated design capability we have developed, designing down to 5nm, makes this a highly significant IPO for the UK semiconductor industry. Our focus is now on increasing the number of engineers we employ, investing further in developing our Architecting the Future IP platforms, and accelerating growth in the USA and other geographies.

"I look forward to providing updates on our progress in the months ahead as we accelerate our growth and deliver value for our shareholders."

Investor Presentation

Sondrel will be presenting via the Investor Meet Company platform on Tuesday, 1 November 2022 at 15:00 UK Time. The meeting will be hosted by Graham Curren (CEO) and Joe Lopez (CFO) who will provide an introduction to Sondrel and there will be an opportunity for Q&A at the end of the session. Questions can either be submitted pre-event via the Investor Meet Company dashboard up until 9.00 a.m. the day before the meeting or at any time during the live presentation. To sign up for the Sondrel (Holdings) plc presentation via Investor Meet Company please click the following link:

https://www.investormeetcompany.com/sondrel-holdings-plc/register-investor

FOR FURTHER ENQUIRIES:

To find out more, please visit: https://ir.sondrel.com/investors

Overview of Sondrel

Sondrel is a UK founded and headquartered fabless semiconductor business providing turnkey services in the design and delivery of complex, high end ASICs and SoCs for leading global technology brands. Sondrel's capabilities are provided to customers seeking competitive advantage by including customised ASIC/SoC devices enabling differentiation of their end products when addressing fast growth technology megatrends.

Delivering designs down to 5 nanometre process nodes and now working on 3 nanometres

· This level of engineering capability is limited to Sondrel and a small number of Asian competitors and positions Sondrel to benefit from megatrends driving the increasing use of ASICs globally and the production of products utilising increasingly complex design geometries.

· Positioned to benefit from the geopolitical and business drive to shorten geographically stretched and complex supply chains.

Geographic reach in fast-growth end markets

· Sondrel provides leading edge ASIC/SoC designs to a global customer base in advanced end markets with significant structural growth drivers including high performance computing, automotive, artificial intelligence, VR/AR, video analytics, image processing, mobile networking and data centres.

Deeply rooted within the semiconductor industry

· Established relationships with semiconductor IP and electronic design automation ("EDA") providers, materials and equipment companies and fabrication partners. Sondrel has a long-standing partnership with and capability approval from Arm; is one of only 22 global partners in TSMC's Design Centre Alliance; and has comparable relationships with Samsung, and Global Foundries.

· Sondrel is able to provide customers with the ability to de-risk the design of ASICs/SoCs through the use of Sondrel's 'Architecting the Future' IP platforms.

Full-service product for customers seeking a reliable route to market

· Sondrel's customers are able to differentiate their end products with Sondrel's market leading design capabilities at the forefront of technology whilst also leveraging Sondrel's expertise and relationships throughout the semiconductor industry. In doing so, Sondrel's customers are able to remove the requirements for multiple counterparties in the ASIC/SoC supply chain and for supply chain management.

· With OEMs and OEM suppliers increasingly focused on semiconductor supply chain resilience and efficiency, customers are able to contract Sondrel as a single counterparty in the design, supply chain management and production of ASIC/SoC devices.

Strong track record

· Sondrel has grown over a period of more than 20 years and delivers complex ASIC/SoC designs for a wide range of leading multi-national corporate customers.

· Sondrel has delivered revenue growth from inception to 31 December 2021 at a CAGR of 20 per cent. As at 31 July 2022, the Group's pipeline of revenue opportunities stood at more than £300 million[1] (excluding potentially material related production and supply revenues).

Clear growth strategy

· The Directors have ambitions to grow revenues to over £100 million in the medium term.

· Sondrel's organic growth strategy is focused on increasing its engineering headcount and investing in IP to further enhance its competitive position, accelerating its growth in key geographies including the USA and Asia.

Highly skilled and experienced team

· Sondrel has a team of 137 engineers that are located across 5 design centres globally; the UK, USA, China, India and Morocco. This enables Sondrel to be one of only a handful of companies worldwide with the scale, capability and strength of industry relationships to deliver projects in leading technologies.

· Sondrel has a proven and experienced founder-led management team.

CURRENT TRADING AND PROSPECTS

Since the year ended 31 December 2021, the Group has traded strongly in receiving new customer orders with an aggregate value of £19.4 million in the six months ended 30 June 2022 and in securing and commencing work on a material turnkey design and supply engagement in Q2 2022 for a multi-billion dollar European customer. Unaudited Group revenues generated in the six month period ended 30 June 2022 of £8.0 million were significantly ahead of the prior period, with full year revenues generated in the full year ended 31 December 2021 of £8.2 million.

Given the positive momentum following the Group's transition in business model and the Directors' positive assessment of the strength of the Group's growth strategy, the Directors have confidence in the Group's prospects for the current and upcoming financial years.

BOARD OF DIRECTORS

Executive Directors

Graham Curren - Chief Executive Officer

Graham founded Sondrel in 2002 after identifying a gap in the market for an international company specialising in complex digital IC design.

Prior to establishing Sondrel, Graham graduated in Electronic Engineering from Leeds University and worked in both ASIC design and manufacturing before joining electronic design automation ("EDA") company, Avant Corporation. There, he managed the technical and marketing teams across EMEA, supporting products across the whole range of IC design.

In 2010, Graham accompanied the UK prime minister at the time, David Cameron, in his business delegation to China. He also acted as a non-executive director for the China-Britain Business Council between 2011 and 2017.

Jose ("Joe") Lopez - Chief Financial Officer

Joe joined Sondrel in April 2019. His career began as a Business Services Manager for Grant Thornton LLP between 1993 and 1999 where he qualified as a Chartered Accountant.

After leaving Grant Thornton, Joe worked in a variety of directorship roles and has over 12 years' experience as a Chief Financial Officer, ranging from start-ups to corporate multi nationals. Prior to joining Sondrel, Joe was Finance Director of ShopperTrak Limited, a provider of data analytics aimed at helping retailers improve their in-store customer experience, between 2012 and 2017, before joining Airways Aviation Academy Limited as Chief Financial Officer for two years.

Non-Executive Directors

Nigel Vaughan - Independent Non-Executive Chairman

Nigel joined the board of Sondrel in 2011. He has 30 years of international Board level experience acting for businesses in both an executive and non-executive capacity. He has held Board level positions in businesses of varying sizes, including UK public limited companies and US multinationals, and he also built an early-stage business, Sifam Limited, that was sold for US$100 million after 7 years.

He most recently acted as non-executive director of Quantex-Arc Limited between 2018 and 2021. In addition to founding and owning a management consulting business, Vaughan Management Solutions Limited, Nigel currently also acts as Chairman to the Global Advisory Board of the Walsn Group.

Gordon Orr - Independent Non-Executive Director

Gordon currently acts as a Senior Advisor to management consultancy firm, McKinsey & Company, having previously acted as Chairman of its Asia division. Gordon also sits on the boards of Chinese multinational technology company, Lenovo Group Limited, and conglomerate, Swire Pacific Limited. In addition, he works with the CEOs of a number of China's globalising companies, is an advisor to Oxford University and Harvard Business School in Asia and is a Board Member of the China Britain Business Council.

Gordon spent the majority of his career at McKinsey & Company having joined in 1986. He opened McKinsey's Beijing office in the early 1990s and led its Greater China practice for many years and McKinsey Asia between 2009 and 2014. Gordon was on McKinsey's global board of directors between 2003 and 2015 with responsibilities for Asia, Governance and Risk, before retiring from the firm.

Sherry Madera - Independent Non-Executive Director

Sherry is currently Mastercard's Senior Vice President of Global Public Policy and Government Affairs. A Canadian and British national, Sherry joined Mastercard from the London Stock Exchange Group where she held the position of Chief Industry & Government Affairs Officer. She has also worked for the City of London Corporation where she was Economic Ambassador and Special Advisor to Asia, and also acted as a Minister-Counsellor at the British Embassy in Beijing, responsible for promoting trade and investment between the UK and China.

Recognised as an expert on green and sustainable finance as well as on data policy, Sherry continues to hold the role of Chair of the Future of Sustainable Data Alliance, a global alliance dedicated to working with the financial industry to use data to build a sustainable future.

Adrian Carey - Independent Non-Executive Director

Adrian has more than 35 years of board experience across listed, AIM, private equity, venture backed and private businesses, primarily in the technology, legal and educational service sectors. Adrian acted as CEO for three companies over a 17 year period, prior to which he was a finance director, venture capitalist and Chartered Accountant. He most recently acted as Executive Chairman for AIM quoted Melorio plc before being appointed as a non-executive director until it was bought by Pearson plc in June 2010.

Adrian has had significant additional non-executive experience, including acting as a non-executive director for Impellam Group and, more recently, Oxford Metrics plc, both quoted on AIM. He currently acts as a non-executive director for Blacktrace Holdings Limited.