Trading Update

XAAR plc 

TRADING UPDATE

Xaar plc ("Xaar", "the Group" or "the Company"), the leading inkjet printing technology group, today announces a trading update for the year ended 31 December 2022.

TRADING

Strong revenue growth and full-year profitability

· Revenue for the period is expected to be approximately £74 million (2021: £59.3 million), representing year on year growth of 24% driven by a combination of organic growth (9%) and acquisitions

· The Group is expected to deliver an on track adjusted profit for the year

· During 2022 the Group continued to invest in working capital and infrastructure development and in March completed the acquisition of Megnajet

Further operational and strategic progress

· Further progress was made throughout the year in implementing the strategy to achieve long-term profitable growth

· Successful launch of Aqueous printhead product in November 2022 as planned, and on budget, is receiving strong customer engagement

· Factory reorganisation commenced in December and is progressing well and on schedule for completion by March 2023. This project is expected to deliver increased efficiency, reduce power usage, and reduce costs

· The integration of recent acquisitions (FFEI and Megnajet) has been completed successfully and both are contributing positively to Group results 

· Continued progress at EPS delivered its best performance to date with revenue growth of 36%

Challenging macro conditions expected to continue into 2023

· Sales volumes in the Printhead business continue to be affected by the uncertainty in China, which is expected to continue in the short term as Covid cases increase. At this stage it remains unclear when normal levels of business will return

· We have maintained our policy of increased investment in inventory to ensure availability of product during the factory reorganisation in Q1 2023 and the remainder of the year

BALANCE SHEET AND LIQUIDITY

· The Group remains well capitalised with a strong balance sheet with a net cash position as at 31 December 2022 of £8.6 million

John Mills, Chief Executive Officer, commented:

"I am hugely proud of the team in delivering a strong performance and making further progress with our strategy. We expect to deliver strong profitable revenue growth and the important milestone of achieving full year profitability representing great progress against our plan and remain well positioned for the business to achieve its exciting potential.

Aquinox has been successfully launched and is already being well received by our customers. With the operational improvements now well underway, notwithstanding the challenging external environment, the business is in good shape to continue to make further progress over the long term."

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