THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION NO. 596/2014 (AS INCORPORATED INTO UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED BY VIRTUE OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

5 February 2025

Xeros Technology Group plc

("Xeros", the "Company" or the "Group")

Trading Update

Xeros Technology Group plc (AIM: XSG), the creator of technologies that reduce the impact of clothing on the planet, announces the following trading update ahead of its results for the year ended 31 December 2024 ("FY24"), which will be published in May 2025.

The Group is delighted to share that it has signed a Letter of Intent with a major electronics distributor for an initial order of the XF3 external microfibre plug and go filter.  This will see it placed into several major retail outlets, initially in the UK under a well-known electronics brand, towards the latter part of 2025.  Additionally, further discussions for orders of XF3 with some of the World's largest electronics brands and distributors are progressing well, with other partnership announcements anticipated in early Q3.

Interest in the Group's FABRIC CARE technology is gaining further momentum globally. The Group recently entered into a paid-for technical verification process ("tech verification") with a leading global washing machine brand. Tech verification is a proof-of-concept process, which precedes a Joint Development Agreement ("JDA"), and typically takes around six months to complete. 

The Group is now in the tech verification process with four of the world's largest washing machine companies as regards the Group's FABRIC CARE technology. Of these global brands, two are in final stage evaluations ahead of signing a JDA, which would aim towards a commercial launch during 2026.

This growing momentum is testament to the potential for the Group's technology to revolutionise washing machines and garment care.

The Group continues to near commercialisation with its existing licensing agreements. IFB Industries Limited ("IFB"), the largest washing machine manufacturer in India, continues to track positively towards launch of a FABRIC CARE enabled domestic washing machine range later this year.

On GARMENT FINISHING an unanticipated additional requirement during the final stage of cycle development with the Group's denim finishing partner, Yilmak, resulted in an order for XOrbs moving from FY24 into the first quarter of FY25. This issue was fully resolved but created a revenue timing difference and has resulted in FY24 revenue coming in below expectation though Adjusted EBITDA and net cash is in line following better than expected cost savings of £0.2m.

Net cash at 31 December 2024 was £2.8m.  With our ongoing focus on operating cost discipline the Board continues to anticipate that this will be sufficient to take the Group to month on month cash flow break even during the course of this year.  Cognisant of potential timing issues when working with large global organisations, the Board is taking a prudent view of its revenue expectations for FY25.  Allowing for some delays and slippages within the existing pipeline, the Board expects to achieve revenue of approximately £2.5m in the current year, though this does not include the significant upside potential of additional revenue opportunities from the numerous discussions we currently have underway.

With the Group's clear near-term commercial deliverables, the Board remains both confident and excited about Xeros' technology and the drivers for clean-tech solutions, which continue to gain momentum across global markets. The potential for global adoption of Xeros' technologies is evidenced by the current discussions with major global laundry OEMs covering all major geographies, fashion brands, and pressure for change from industry regulators and governments seeking to reduce the environmental impact of cleaning our clothes.

Neil Austin, CEO said: "The importance of our discussions with these major global players should not be underestimated. A JDA with any one of these could be potentially transformational for the Group, opening the door for others to follow. The washing machine industry is ripe for innovation and change. Existing washing machines have remained largely the same for 40 years and there is pressure on leading OEMs to innovate to secure future sales and market share, as well as meeting upcoming environmental regulations."

An online investor Q&A session will be hosted early next week with Neil Austin, CEO, and Alex Tristram, Finance Director. The session will be held on the Investor Meet Company ("IMC") platform. Registered investors, who follow Xeros on IMC, will be invited automatically, everyone else should register at:

https://www.investormeetcompany.com/xeros-technology-group-plc/register-investor

Enquiries

About Xeros

Xeros Technology plc has developed patented and proven, industry-leading technologies which reduce the environmental impact of how industries make and care for clothes.

The traditional wet processing methods used in industrial and domestic laundry and garment manufacturing consume billions of litres of fresh water and large amounts of energy and chemicals, as well as damaging and weakening clothing fibres and creating rising levels of environmental pollution. It is estimated that washing machines contribute 35% of the 171 trillion microplastic particles in the ocean.

A range of actors, including consumers, the media NGOs and regulators are exerting pressure on these industries, with legislative action beginning to be taken.

Xeros' three main technologies, Filtration, Finish, and Care, facilitate garment manufacturers, industrial laundries, domestic washing machine manufacturers and consumers, to reduce their environmental impact, whilst also significantly improving efficiency in the process.

Xeros' model is to generate revenue from licensing its technologies, generating royalties and the sale of consumables. Currently there are eight agreements in place. The addressable markets in Filtration, Finish and Care are estimated to be valued at £350m p.a., £132m p.a. and £3bn p.a. respectively.