18/07/22

In Q2 2022, XTPL records more than PLN 2 million in revenues from the sale of products and services

XTPL S.A. (WSE: XTP), a global supplier of ground-breaking nanoprinting solutions for the world’s modern electronics market, has published estimated consolidated revenues from the sale of products and services: in Q2 2022, they stood at PLN 2.04 million, up 26 times compared to PLN 0.08 million recorded in Q2 2021. The Company estimates that in the entire first half of this year, revenues from the sale of products and services were in the order of PLN 2.97 million (a 21-fold increase year-on-year). Such significant increases were mainly helped by the implementation of projects with industrial partners. Currently, XTPL conducts nine advanced projects whereby clients confirm the possibility of using in their products the innovative method of applying microscopic conductive structures to electronic components. One of those clients is the Israeli company Nano Dimension, which started cooperation with XTPL at the beginning of the year. A few days ago, the second stage of the cooperation was completed and accepted, triggering the second payment tranche for XTPL.

Another source of financing of the Company’s operations in the past period, in addition to cash flows from the commercialization of three business lines, also included proceeds from grants that XTPL uses in its R&D projects. In Q2 2022, the Company obtained grants of PLN 1.31 million (compared to PLN 1.03 million in Q1 2021) and PLN 2.39 million in the first half of this year (compared to PLN 2.01 million in H1 2021).As the Company has pointed out, in accordance with the rules for accounting for those grants, only part of the proceeds will be included in the Company’s income statement for H1 2022, while the remainder will be recognized as deferred income in the balance sheet. For this reason, the final share of grants in the structure of sales revenues is subject to change.

As at 30 June 2022, the Company’s estimated cash position remained stable at PLN 3.4 million compared to PLN 3.7 million as at 31 March 2022. As indicated in the report, in the corresponding period of 2021, the level of cash decreased by slightly more than PLN 2 million.

“The presented estimated sales revenues for the second quarter and the first half of this year demonstrate that XTPL, as we pointed out earlier, continues on the growth path in terms of technology commercialization. We’re working on our solutions, actively building customer relationships and expanding sales. We now generate revenues from all our three business lines, with projects with industrial clients having the largest share in this structure. At the same time, it should be noted that growth is also reported for the other two business lines: the Delta Printing System and nanoinks. We’re glad that one of the clients who had previously leased our device, decided to go ahead with the purchase. For us, this proves the attractiveness and effectiveness of our product. The transaction should take place in the current quarter. On top of that, by the end of the second half of the year, we expect to close further sales transactions, which will be communicated by means of current reports. In terms of nanoinks, we’ve seen a stable growth in orders and a sustained advantage of industrial clients,” says Jacek Olszański, Management Board Member and CFO of XTPL S.A.

“We keep working with industrial clients. These processes of evaluation, testing and checking the capabilities of our technology are now entering the next stages of advancement. We’re getting more and more positive feedback. I strongly believe that our proprietary UPD method can hit selected production lines of future generation electronics, and that we’ll soon be able to report further achievements in this area,” says Filip Granek, CEO of XTPL S.A.

In Q1 2022, XTPL posted total revenues of PLN 1,619 thousand. This includes PLN 930 thousand from the sale of products and services, and PLN 689 thousand in grant revenue. In Q1 this year, commercial revenues alone reached 45% of the total sales reported in 2021. The Company’s EBITDA was PLN -2,406 thousand and was broadly similar year-on-year. It is noted that the progressing commercialization already has a marked positive impact on cash flows. After the first three months of 2022, net cash flows were PLN -889 thousand compared to PLN -1,877 thousand in the same period last year.

XTPL S.A. developed its proprietary method of ultra-precise deposition of nanomaterials (UPD), i.e. the application of ultra-thin conductive structures that enable innovative production of printed electronics. The UPD technology responds to three market megatrends in its manufacturing: miniaturization of the size and weight of electronic devices, modifying their forms and properties towards an increased flexibility and three-dimensionality, and sustainability, by efficient use of limited resources while reducing manufacturing waste.

XTPL’s operating model is based on three complementary business lines that can 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.

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.

According to market analyzes, the market of electronic prototyping devices is to see CAGR of 31% in the years 2021–2031 (source: Transparency Market Research). Global annual sales of printers for R&D, rapid prototyping and small-lot production in the area of the broadly understood printed electronics sector amount to approx. 250–500 devices per annum, at a price of approx. EUR 50–500 thousand per device.

Analysts from the research company Research and Markets (The Global Market for Conductive Inks to 2030) estimate that the annual revenues of the global conductive inks market were USD 2.5 billion in 2020. The analysis are of the opinion that the development of new materials and processes will contribute to the emergence of new market opportunities for producers and suppliers of conductive inks, especially in the flexible printed electronics industries. They expect that in the coming years silver- and copper-based nanoinks will dominate the market. At the same time, according to the data published in the Nano Silver Inks Market – Forecasts from 2019 to 2024 (Knowledge Sourcing Intelligence LLP), the estimated size of the market of conductive inks based on silver nanoparticles may reach USD 52.38 million in 2024 (18.83% CAGR in 2018–2024). The market is buoyed by the growing use of electronics in the rapid urbanization processes, miniaturization of electronic components, as well as by the possibility of reducing production costs while maintaining high electrical conductivity.