26/04/22

2021: a breakthrough year for XTPL growth

XTPL S.A. (WSE: XTPL), a global supplier of ground-breaking nanoprinting solutions for the world’s modern electronics market, has published its results for 2021. XTPL’s key achievements last year include conclusion of four agreements for the sale of the Delta Printing System, increasing the sale of nanoinks and building an international network of distributors. At the same time, the Company also continued major industrial implementation projects with global manufacturers of consumer electronics.

The consistently pursued strategy of international commercialization of the Company’s technological solutions has led to a YoY surge in revenues from the sale of products and services to more than PLN 2.08 million, which is testament to the Company’s transformation from an R&D entity into a firm that successfully commercializes its solutions. Total revenues reached PLN 4.7 million.

“A brief summary of 2021 would be that it was a time of fundamental change for XTPL. We closed the first, very demanding stage of the Company’s growth, becoming a business that generates and gradually increases revenues from the sale of its solutions. This transformation is the outcome of our sustained work and our globally competitive products and technology. Our proprietary UPD method and the technological solutions based on it have already won market recognition and are being successfully commercialized by us,” says Filip Granek, PhD, CEO of XTPL S.A.

2021 brought the first positive results of the popularization of the XTPL technology thanks to the Delta Printing System (DPS), a device whose production and sale is one of the Company’s three business lines. XTPL commercializes the DPS in line with its strategy, namely by reaching out to the world’s major scientific centers, whose research is constantly followed by the largest global market players. Thanks to the DPS sales agreements signed to date and the cooperation with scientists e.g. from the Universities of Stuttgart, Glasgow and Brescia, the Company obtained positive recommendations for its technology from opinion leaders who are regarded in the scientific community and among representatives of microelectronics, microsystems, semiconductors, biosensors, and display industries.

“We built the Delta Printing System to effectively connect with global manufacturers of next generation electronics, making sure that they can learn about and test the capabilities of our technology. Our target last year was to sell five such devices, and we did that. It was essential to ensure that the first devices sold were received by institutions in Poland and abroad where they could play the role of ambassadors for our ultra-precise deposition (UPD) technology. We managed to achieve this goal by addressing our offer to selected research, scientific and academic centers that established and maintain relationships with industrial players from the printed electronics industry. As a result, we have already obtained many positive recommendations for our technology from those centers. It is noteworthy that at the end of 2021, the research team led by Ravinder Dahiya published a paper based on results achieved using the Delta Printing System. The publication was very well received by the global community connected with the development of the microelectronics and semiconductor industry,” said the CEO of XTPL.

The second business line – conductive inks based on metallic nanoparticles – also grew significantly last year. Sales increased almost threefold compared to the previous year. XTPL also expanded its offer by introducing the IJ36 ink intended for the common inkjet printing technique. The Company’s R&D team is currently working on new formulations of nanoinks containing metals other than silver (e.g. copper and gold). At the beginning of 2022, the Company also proudly announced the start of cooperation with NASDAQ-listed Israeli company Nano Dimension, for which XTPL is developing a dedicated ink formulation. Recently, XTPL reported that it had reached the first milestone in the implementation of this agreement with the first payment being triggered to the Company.

“The cooperation agreement with Nano Dimension is a huge success that confirms the possibilities of our technology and products based on it. But this is also the first step towards introducing our technology to the industrial lines of global players. The cooperation has shown an existing market need for technologies that will improve and replace the currently used electronics production processes. And XTPL is going to cater for this market need. Recently, we also entered into an agreement with American company nScrypt, which has already recognized the potential of our nanoinks and decided to introduce one of them – Ag Nanopaste CL85 – to the offer for its medical device, defense, and space customers. Those agreements confirm the visibility of XTPL and the recognition of the uniqueness of our nanoinks,” Filip Granek points out.

The Company is also continuing work to finalize the commercialization of its main business line: industrial implementation by integrating the EPSILON printing module on the production lines of global manufacturers. Last year, XTPL carried out nine simultaneous evaluation processes relating to the Company’s main project portfolio. The most advanced work concerned the application of the XTPL technology in the segment of repair of high-resolution OLED displays and in the semiconductor industry, in the area of back-end processing of semiconductor chips, as well as in relation to the deposition of metallic inks to create interconnections for high-density packing for advanced PCBs.

“Our prospective clients who conduct advanced evaluation processes with us point to the major potential of using our technology to address prospective production efficiency issues and support the popularization of new products such as micro-LED displays and more efficient integrated circuits. We stick to the plan agreed with our partners. It is worth noting that a change in production processes is an event that requires careful prior planning. Global suppliers of components and devices dedicated to electronics are bound by contracts ensuring the stability of supplies, and any change in the production cycle entails consideration of many factors so as not to disrupt the supply chain,” the CEO of XTPL explains.

The commercialization of the Company’s technology and products is also helped by the international distribution network, which has been developed since 2021. It currently includes five firms from Europe and Asia, i.e. markets that play a key role in the development of next generation electronics.

“The need to set up a distribution network results from the nature of our sector: the need for physical presence and for building direct relationships, especially in China and Korea. We selected our business partners in this area very carefully to ensure that the promotion of our business and building the contact base is entrusted to entities that have a good understanding of the sector. At the moment, we have five distributors who support us, and we are seeing the first results of their work. The size of our distribution network will certainly evolve – it may increase in the short-term, but moving forward we might decide to limit the cooperation to the entities that work best for us,” says Filip Granek.

2021: THE YEAR OF FIRST ROBUST SALES

In 2021, as a result of consistent execution of its business strategy, XTPL achieved more than PLN 2.08 million in revenues from the sale of products and services compared to PLN 64 thousand in the previous year. The Company also obtained grants totalling approx. PLN 4.5 million (including PLN 2.6 million recognized as revenue in the income statement) compared to PLN 2.2 million achieved a year earlier. EBITDA was approx. PLN -5.7 million compared to PLN -7.6 million in 2020. Operating flows improved as well: from PLN -5 million in 2020 to PLN -3,8 million in 2021. The Company’s cash position at the end of 2021 was PLN 4.58 million.

“The more than PLN 2 million in revenues from the sale of products is the result of our persistent and hard work. In addition to their monetary value, they represent a milestone in our business development. We have started the commercialization of our products and technologies, which is gradually increasing our ability to grow independently on the back of operating cash flows. In 2021, the Company’s growth was also supported by efficient use of grants totaling more than PLN 4 million. We are building our business with strong momentum while maintaining cost discipline, which creates space for further, gradual growth,” says Jacek Olszański, Management Board Member and CFO of XTPL S.A.

XTPL develops and commercializes three complementary business lines that can also generate independent revenue streams: the Delta Printing System prototyping devices; conductive nanoinks, and the EPSILON printing heads intended for industrial implementation on the production lines of global manufacturers of next generation electronics. All the indicated technological solutions are based on the Company-developed technology of printing conductive structures. The technology responds to the three megatrends in the production of modern electronics. The industry is currently strongly focused on further miniaturization of the size and weight of electronic devices, modifying their forms and properties, and moving towards an increased flexibility and three-dimensionality. The last global trend is also environmental protection based on efficient use of limited resources while reducing the production waste, which is enabled by additive technology.

In 2020, the value of the rapidly growing printed electronics industry was USD 41.2 billion (+11.0% YoY). In 2025, it should stand at USD 63.3 billion, while in 2030 it is expected to reach even USD 74.1 billion (source: IDTechEx). This means that the market will grow at a CAGR of 9.0% in 2020–2025.