22/11/23

XTPL announces its Strategy for 2023‑2026 and summarizes the successful Q1‑Q3 2023

XTPL has adopted its 2023–2026 Strategy focused on business scaling and accelerating the Company’s growth. The main goal is to generate PLN 100 million in commercial sales by the end of the Strategy horizon, and put the XTPL technology on industrial lines of global producers of advanced electronics. The strategy envisages a focus on two key areas: business and sales growth coupled with operational and organizational development. The Strategy was formulated and adopted based on the high advancement of the Company’s projects and a pronounced increase in demand for its products and solutions, as evidenced by the results reported since 2022. This trend continued also over the three quarters of this year, with year-to-date revenues from the sale of products and services coming in at PLN 9.2 million, up 38% year-on-year. This performance is the effect of commercialization of all three business lines, including a high number of Delta Printing Systems delivered during the three quarters of 2023 – 8 devices in total.

“The Strategy for 2023-2026 is a landmark in the development of XTPL, an outcome of an extensive analysis of our achievements, capabilities and opportunities we have identified in the last several quarters. Our commercial sales are growing strongly, and we are gaining more and more visibility internationally, which drives a significant progress in our industrial implementations and sales growth in other business lines – Delta Printing Systems (DPSs) and High Performance Materials (HPMs, nanoinks). We now intend to build on the solid foundations created over the recent years, and leverage the positive trends and demand identified within our portfolio to scale up our business and strongly accelerate the Company’s development. The main goal is to achieve commercial sales of PLN 100 million by the end of 2026 – a 10-fold increase compared with 2022 – which will require a number of investments and changes in the structure of our organization. This is a challenge we are well prepared for. Our public offer completed in July this year largely secures the financing of our activities and allows us to fully focus on the execution of our Strategy. At the same time, we sustain our plan to complete the first full implementation of the XTPL technology on an industrial scale in the second half of 2024. In the third quarter of 2023, we delivered two industrial modules to our foreign partners and entered the most important stage of building prototype devices that integrate our printing module, heading towards final tests on production lines of our end clients, brands with a world-wide recognition” says Filip Granek, CEO of XTPL.

XTPL’s strategy for 2023–2026 zooms in on two main areas of operations. The first area is developing business and sales in order to achieve commercial revenues of PLN 100 million by the end of 2026 and achieving the first implementations of the XTPL technology on an industrial scale. In addition, the Company’s plan is to expand its projects to include new industries – telecommunications and biosensors, continue to expand the international distributor network, and establish physical sales centers in technologically key destinations: the United States, Taiwan and South Korea. The second area is operational development and the development of the entire organization in order to significantly increase production capacity in all three business lines, as well as continuation of R&D on the existing portfolio and future products of the Company. This will be accompanied by the adaptation of the organization’s structure by streamlining internal processes with a view to building a strong brand with a tailored proposition and targeted markets. The Company also expects to strengthen and expand its competences by attracting new talented people.

The Strategy for 2023–2026 is to be funded by the Company’s investment plan estimated at approx. PLN 60 million. Its first elements are to be financed with the proceeds of PLN 34.6 million net raised as part of the public offer of shares completed in July this year. Subsequent stages are to be financed primarily with equity generated from day-to-day activities, as well as from R&D grant projects. XTPL also has the option of using debt instruments, but there are no plans to do that for the time being.

“The Strategy for 2023–2026 sets out a long-term vision for the growth of our organization, and also influences the type and pace of our investments, which will temporarily affect our reported financial performance. In the third quarter, we increased our capital expenditures, including on equipment for R&D and production activities, and development of new device prototypes. We hired additional team members, strengthening competences in all key areas of the organization; and following up on that, we expanded our production, laboratory and office space. Furthermore, we increased our inventories to be able to complete the several planned deliveries of the Delta Printing Systems by the end of the year. As our production capacity increases, we also expect the volume of orders for our products to increase, which in turn will have a positive impact on the reported results. We place a key focus on our cash position, which secures our main investments and facilitates a comfortable start of the business scaling process. In addition to generating commercial revenues, we will also continue to recognize grant revenues under current projects and future ones that we are actively seeking. The innovative nature of our technological solutions ensures a good fit with many national and European programs. In addition to the gradual increase in production capacity, we expect that the first full implementation of the XTPL technology on an industrial scale will be an important test of our technology and a strong reference with a positive impact on the pace of progress in the other nine projects we are developing concurrently” says Jacek Olszański, CFO of XTPL.

After three quarters of 2023, XTPL generated PLN 9.2 million in revenues from the sale of products and services, a 38% increase year-on-year. In that period, total revenues stood at PLN 10.8 million, up 27% year-on-year. EBITDA was PLN -1.2 million, up PLN 0.1 million compared to the year-ago period. Net loss was PLN 2.6 million, down PLN -0.5 million year-on-year. Net cash flows were PLN 25.7 million, mainly due to the recognition of proceeds from the public offer completed in July this year. As at September 30, 2023, the cash position was PLN 31.7 million, comfortably securing the start of the ambitious 2023–2026 Strategy.

XTPL’s business model is based on three complementary business lines: printing modules for industrial implementation on the production lines of global manufacturers of electronics, the Delta Printing System (DPS) prototyping devices, and High Performance Materials (HPM, nanoinks). The Company has a total of nine projects aimed at industrial implementation of its technology, four of which are at an advanced stage of development. They cover three areas the Company considers strategic: semiconductors, displays and advanced PCBs. The potential average annual revenues from all nine industrial projects being developed at present totals an estimated PLN 400 million. The Company’s end customers are global entities responsible for the production of next generation electronics, including a leading semiconductor manufacturer from Taiwan, one of the world’s largest producers of FPDs (Flat Panel Displays) from South Korea and a top manufacturer of industrial machines from the United States, listed on the Nasdaq 100 index.

Since its inception, XTPL has been operating a carefully developed industrial and intellectual property protection policy, having 24 patents granted and a total of 28 patent applications filed, from September 2019 to November 2023. The increase in the number of patents (from the previously reported 8 patents) is the result of a change in methodology – now protection for an invention is counted separately for each location (country).

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