Hello and welcome to this Xaar 2025 Interim Results Presentation. Captions are enabled on Zoom, however, these are automatic and can sometimes contain errors. If you would like to ask a question as part of our Q&A later, you can submit a question by using the Q&A function on Zoom. We will now hear from John Mills, CEO, and Paul James, CFO. Good morning and welcome to Xaar's 2025 Interim Results Presentation. My name is John Mills, and I'm pleased to be joined by our CFO, Paul James. This morning, we will provide an overview of what has been a promising start to the year. Paul will provide details of the financial performance before I present an update of our key market opportunities, namely EV battery coating, automotive coating, and desktop 3D printing. I will then provide an outlook for the rest of the current year, followed by concluding remarks and an opportunity to ask questions. Before handing over to Paul, I am pleased to say that the group continues to make strategic progress with continued recognition of our differentiated technology in our target end markets. This is perhaps best illustrated by the 96% year-on-year growth in new printhead business revenue. This was generated from the sale of printheads used in OEM products that have launched since 2019. In H1, 49% of our total printhead revenue was attributed to this new business. The most substantial progress made during this period was in the jewellery wax market. In the first six months of 2025, we generated GBP 3.3 million of revenue, up from just GBP 600,000 of revenue for the first half of 2024 and zero revenue in 2023. This clearly illustrates the potential for rapid uptake of our technology once it has been accepted by customers in the end market. In June, we announced a collaboration with Sorkam, a long-standing partner of the group, for the production of the next generation of battery coating fluids. This, alongside our existing partnerships, increases the availability of our unique high-viscosity technology in the EV battery coating market. Moving on to automotive coating, in Q2, another important milestone was reached as Durr received their first inbound request to quote from a luxury car manufacturer. This provides concrete evidence of demand for our technology. Within the desktop 3D market, we have been encouraged by the demand for a recently launched 2.5D full color printer, which is being sold at a similar price point to Flashforge's new machine. Sales were a multiple of what was initially expected, which reinforces our belief that the market potential for a well-priced, high-quality 3D full color printer is significant. Lastly, while EPS has been a headwind on financial performance in the first half of the year, the new management team has begun to rebuild the order pipeline, so we should see the benefit of this in 2026 and beyond. I will now hand over to Paul, who will take you through the financial performance for the first half of the year. Thank you, John. Overall, we have delivered an encouraging performance. Revenue was GBP 27.2 million, up 7% compared to the first half of 2024, despite a challenging half for EPS and the increased uncertainty that tariffs brought. Growth was generated by our printhead division, which saw revenue up a fifth on last year, and this was largely due to our success in the Jewellery wax market, as John alluded to, and an easing of the headwinds from our exposure to the predominantly Chinese ceramics market. Gross margin was stable, just below 37%, due primarily to proactive supply chain management. In addition, we were able to minimize the impact of inflationary salary increases and higher ancillary costs on the overall operating expense, thanks to stringent cost control. Our adjusted loss before tax for the period was broadly the same at GBP 0.7 million, largely as anticipated given the 16% decline in EPS revenue and our expectation that revenue will be more heavily second-half weighted. The group remains well-capitalized with a net cash balance of GBP 5.1 million. Cash utilization was driven by increased investment in capital equipment to boost growth and capitalization of development spend on several exciting projects that will further drive growth over the medium term. Our cash position, alongside the undrawn revolving credit facility, means we retain the ability to deliver on our strategy where additional investment is required. Now, this slide illustrates group revenue performance with the dashed area showing the performance of the printhead division. As you can see, we achieved an improvement in sales volumes and overall mixed price dynamics across the printhead portfolio, which was partially offset by the weakness in EPS. When it comes to performance at the level of adjusted profit before tax within printhead, we made the strategic decision to secure market share in the ceramic segment in anticipation of its recovery through deepening our relationship with a key large customer. This has negatively affected price variance for this half, but we don't expect this headwind to continue. Despite this, tight cost management drove a 30% increase in adjusted profit before tax within printhead to GBP 1.9 million, offset by reductions in EPS and MagnaJet, with central costs being broadly flat. These dynamics led to a first-half loss of GBP 700,000. Looking at the operating results in more detail, starting with the printhead division, following the disposal of our life sciences business within FFEI, we have consolidated the remainder of that business within printhead. For the sake of consistency, historic numbers have been restated. Printhead new business revenue has driven growth in the division, with year-on-year revenue almost doubling to GBP 9.8 million. As I will touch on in the next slide, the main driver of this growth was the sales of the Xaar 2002 printhead in the jewellery wax market. As revenue from legacy printhead stabilizes, as can be seen from our ceramics and glass segments in the chart, we are pleased to see the underlying growth becoming more apparent at a divisional level. High volumes and increasing average selling price, as well as strong cost control, led to 30% growth in adjusted profit before tax to GBP 1.9 million, despite the lower like-for-like pricing and gross margin mix impact. Now, as a reminder, Xaar printheads facilitate the use of more viscous, higher-quality wax, which enables a higher quality, more accurate product that requires less finishing work and hence lower material loss. The significant benefits of using our technology have meant that from having no revenue just 18 months ago, we now supply printheads to four of the five biggest OEMs in the market, and we expect to take a majority share of the market by the end of this year. In addition, OEMs are now developing multiple products using our technology to deepen their share of the market. Most recently, in April 2025, a year after launching the WaxJet 510, a single printhead machine, Flashforge launched a second machine, the WaxJet 530, which utilizes three printheads. Demand for this new product has been almost double the level we anticipated. This meant that in the first six months of 2025, we generated GBP 3.3 million of revenue from this market. On top of this, we have started an exciting multi-year process to develop a variation of the Xaar 2002 printhead that will significantly expand our addressable market within wax. EPS is our U.S. subsidiary, which sells print systems utilizing both Xaar and competitor printheads, printing all kinds of industrial and promotional objects such as tools, appliances, sports equipment, medical equipment, golf balls, and toys. As highlighted in the 2024 full-year results, the start to this year was always going to be challenging for EPS due to historic uncertainty in the market, creating order pipeline weakness. As a result of this, coupled with the additional uncertainty caused by U.S. tariffs and the completion of a substantial multi-year project in FY2024, revenue was 16% lower than the previous year at GBP 6.3 million. While it will remain a drag on group profitability during 2025, the management changes made in 2024 are already starting to deliver positive improvements. The pipeline is in the process of being rebuilt, and despite the fall in revenue, gross margin rose 3.5%- 34%, and operating expenditure fell 8% thanks to the efforts to take costs out of the business. Going forward, management is focused on optimizing the supply chain alongside strengthening and widening the customer pipeline to reduce over-reliance on a single customer. The benefits of these initiatives should be realized in the next financial year. MagnaJet plays an important role in supporting the sale of printheads through the design and manufacture of industrial fluid management systems for digital inkjets, with the most integrated and compact ink systems in the market today. As a consequence of a process of increased integration, Xaar and EPS are two of MagnaJet's biggest customers and represent over a third of MagnaJet's sales, with a 133% uplift in intra-group transactions year on year. Despite this closer collaboration between the businesses, MagnaJet will continue to sell its products externally. On an external basis, revenue in the period was GBP 1.1 million, a 19% reduction compared to last year. This is a reflection of a slowdown in end markets due to growing uncertainty caused by tariffs. Overall, we are pleased with MagnaJet's performance. It remains an important contributor to the group's strategy. Now looking at the group's balance sheet, as I mentioned earlier, we are in a strong position thanks to our healthy cash balance and undrawn revolving credit facility. This ensures we remain well-placed to deliver on our strategy without the need for the utilization of other sources of cash in the medium term. Over the period, we saw net cash outflow of GBP 3.6 million, primarily due to capital equipment investment and development spend on several exciting projects for future growth. This led to a net cash position as of June 30th, 2023, of GBP 5.1 million, which will provide sufficient liquidity when required. Now, at this point, I will hand back to John. Thanks, Paul. We believe there is significant opportunity for our unique printheads across a wide variety of market sectors. However, we recognize the need to focus our efforts on markets where the high-viscosity capability of our technology gives the end user considerable benefits in terms of performance, cost, and quality. We see these key opportunities as being in EV battery coating, automotive coating, and desktop 3D printing. It is our view that these markets represent the most significant opportunity for growth and repeat revenue. We remain focused on enabling the accelerated uptake of our technology through supporting the development and scale-up of our OEM customers' machines. There is a clear value proposition for using Xaar printheads in each of our target markets, thanks to our technology providing solutions to the fundamental drawbacks of the incumbent technology. As we discussed in March, there are OEMs with fully functioning machines using our printheads in each of these target markets. Most of the heavy lifting for these specific applications, including R&D investment and CapEx, is behind us. As these OEMs continue to launch their products, our focus is on supporting them to accelerate the rates of end user uptake. Given the potential significance of each of these market opportunities, I'll now update you on the progress we have made with each of them since the start of the year, as well as reminding you of the value proposition that our technology brings. Starting with the EV battery coating market, there is growing demand for more powerful batteries to increase the range of EV vehicles. 800V battery technology enables faster charging times, but has the downside of generating more heat, which can cause safety issues with the current main insulation method. As of today, there are two solutions used to insulate EV batteries. The dominant PET technology, essentially a plastic film that wraps around the battery, has limitations when applied to the new 800V technology in relation to yield per unit cost and safety. The alternative method is to eliminate the plastic film by spray painting the battery, thus eliminating the issues with the plastic film. However, this method has significant waste, cost, and yield issues that have severely restricted its uptake. Our printhead technology provides a coating solution that addresses the issue with the plastic film and the yield and waste issues associated with spray painting. As a result of overwhelmingly positive feedback from the EV car manufacturers, our partners have all signaled the intent of the battery industry to adopt inkjet coating as the default solution for EV battery insulation. As the leading provider of this technology, the market uptake could be substantial. There are an estimated 1,300 EV battery production lines in China, which will increase as demand for batteries continues to grow. With an anticipated replacement cycle of two to three years, we expect to generate healthy repeat revenue once our printheads are installed. Our product offering has been in the market for nine months, and we will generate more than GBP 1 million of revenue this year. Today, the only solution for car graphics is either through expensive hand painting or the use of decals. The decals can quickly appear dirty around the edges and are prone to jet wash damage, historically limiting their appeal. Xaar's ultra-high viscosity technology enables high-resolution digital images to be printed on any surface of the vehicle during manufacture. Last year, Axalta and Durr announced a partnership to provide a digital paint solution combining Axalta's coating technology with Durr's robotics. With a focus on graphic applications, Durr, who supplies spray paint systems to 50% of car plants globally, have demonstrated this solution to over 20 car manufacturers in the first half of this year. The response has been extremely positive, and they are now in negotiations for the first installations in 2026. Given the unpredictability of when the car industry adopts any new technology, the exact timing of when this opportunity will start to deliver sizable revenue remains uncertain. However, with revenue generated from a business model of fee per car painted, as well as the rental of the printheads, and approximately 90 million passenger vehicles produced annually, a conversion rate of 1% would generate significant revenues at an attractive margin. The current retail cost of a high-quality, full-color enabled 3D printer is approximately GBP 50,000, making it inaccessible to the vast majority of potential users. The alternative is a single nozzle monochrome 3D printer with a price point of between GBP 300 to over GBP 5,000. With over 1 million of these comparatively low-quality 3D printers sold annually, there is an obvious opportunity for a company that can produce an accessible and high-quality full-color solution. Working in partnership with Flashforge, our high-viscosity printhead capability has led to the development of the world's first consumer-focused, full-color, high-resolution desktop 3D printer. With a more direct-to-market strategy than initially envisaged, Flashforge will be selling their desktop 3D printers around calendar year end, priced for the consumer market. As a positive lead indicator, earlier this year, an OEM launched a 2.5D full color printer at a similar price point to the Flashforge system. The overwhelmingly positive reaction to this launch, with sales being a multiple of that initially expected, has served to reinforce our belief in the potential demand for Xaar's superior technology. As I hope we've demonstrated, our technology has the potential to transform each of these markets, and if successful, will generate significant recurring revenue. By focusing on applications across a number of markets where the unique benefits of our technology act as an enabler, we have significantly de-risked the business going forward. As illustrated by the speed at which we have taken over 50% of the jewellery wax market, we believe that these opportunities will grow rapidly once our technology is embedded in each of our target markets. In the short term, our expectations for 2025 remain unchanged. This is despite the introduction of tariffs announced in April, which we will continue to monitor. As anticipated, revenue will be second-half weighted, with order volumes expected to grow steadily throughout the year and into 2026. We expect printhead revenue to be strong, although we are hesitant to speculate on the exact timing of orders given the global geopolitical environment. EPS will remain a headwind to group growth as the team focuses on rebuilding the order pipeline. Looking further ahead, our focus areas will deliver meaningful revenue at attractive margins. With this, the future is now closer than ever. In summary, I am pleased that we are now progressing as planned. New business revenue growth is significant, and with the ceramics market beginning to stabilize, the positive initiatives underway over the past few years are starting to drive the group's top line forward. We are aware that there is still work to be done to navigate the uncertain economic environment, and we will continue to make the right decisions to ensure we capitalize on the opportunity ahead of us, both in the medium and long term. There are now fully functional machines using our printheads in our first four target markets, and the overwhelming success of our technology in the jewellery market provides a blueprint which we aim to replicate elsewhere. As such, we are confident that our technology will transform our target markets while delivering significant value for our shareholders. The scale of the opportunities at Xaar has never been so strong. At this point, I would like to open up to questions. We will now take your questions. If you would like to ask a question, please type it into the Q&A function on Zoom. We will then read it out on your behalf. Just to reiterate, if you would like to ask a question, please type it into the Q&A function in Zoom. We will then read it out on your behalf. I will now hand over to John, Paul, and Chris. If you gents would like to unmute and go ahead. Good morning, everyone. Hope everyone is well. We have a couple of questions to get through. First question from Andy Edmond. Gentlemen, can you say what skills you were looking for in your new Chairman? Yes. First of all, I think we've done a very good search, and we're delighted that Ben will be joining us from the 1st of October. I take the opportunity to thank Andrew for his service to the business over the last nine years. He's helped us steer through an incredibly difficult period, so thank you for that. The key thing was having somebody who's actually been in a similar situation to Xaar. If you look at the history of Paul Vere, they had similar challenging times early in Ben's time as CEO, and he then, over time, turned that round, and Paul Vere ended up being a very long-term successful organization. We We look forward to working with Ben and hopefully replicate the model that Ben successfully executed at Paul Vere. Thanks, John. Question now for Paul. What does future R&D investment look like, given progress on key markets so far? Will it scale down from here? We aim to sustain R&D at a high single-digit percent of revenue, and it is absolutely key to the success of this business. Innovation is really at the heart of Xaar on everything we do, so there are no plans certainly to scale down R&D. It will remain at a sustained level, constantly driving innovation and growth in this business for the foreseeable future. Thanks, Paul. A Thanks, Paul. A question from Tom Rance of Barenburg. Hi. Please, could you give me more detail on the timing of the GBP 40 million jewellery opportunity and the investment required? Yeah. Hi, Tom. The jewellery opportunity is substantial. We have now got substantial market share. There are five major OEMs globally that really dominate the market. Four of those five now have transitioned to using Xaar printheads, and we expect the fifth to join, hopefully, through 2026. The total market also depends on the reliability of the head in the application. There's the volume that go into new machines, and then there is the replacement cycle. It's interesting how the incumbent technology, typically the heads were replaced annually, and so far our heads have proven to be more reliable, which is one of the things that's attracted people to our heads. The exact volume of heads that we will sell into the application largely depends on the reliability of the head in the field. It's a two-edged sword, really, but I would prefer us to generate a reputation for very, very solid reliability because these industrial applications are going to be the thing that grows this business the most. I think the wax market, I think we are a significant market share at the moment. The exact numbers we'll find out once the market analysis is done, but I think we will see the growth of that market as our technology embeds in. Thanks, John. Another one for you, Paul. Congrats on the cost mitigation in the first half. All the signs are for further tax pressures on U.K. employees. How confident are you on again containing tax and inflation increases? We've obviously forecast, as best as we understand it, these cost pressures into our model. As we've said, current guidance around what we're going to achieve this year includes that, and we're okay with that so far. What more is to come into next year and beyond is a little bit more opaque, but Xaar does have a proven track record of being able to meet those challenges and a very, very good capability in terms of cost control and planning for costs. I'm confident that we'll be able to mitigate to the greatest possible extent any sort of increase in tax take that government might decide to apply to us. Thanks, Paul. Another one following on for you from David Buxton. In the first half, there was a decent level of CapEx. Could you let us know what equipment projects were undertaken and what are expected in H2? Also, are there any potential bottlenecks to scaling up production? Okay, that's a great question. I like that one. In terms of the CapEx investment that we had, one of the investments we did was to actually deal with the bottleneck on the sales process, which was speeding up the analysis of what's known as waveforms. These are unique characteristics for each application, which it's difficult to do, and we've invested money to basically speed up that process and speed up the sales process. That's one great example. We've also done a lot of development spend into new areas around printhead technology, but also further innovating existing applications to drive greater penetration into markets. We've got lots of great examples of those investments we've made in the first six months, and those will continue into the second half. As I said earlier, you know, R&D is at the heart of what we do, and we intend to sustain that and CapEx going forward to grow the business. Thanks, Paul. Turning to you, John. On the EV battery opportunity, please could you expand on your thoughts around the 2-3 year replacement cycle? Would this be further system development or printhead replacement into newly installed machines? Yes, that's right. I mean, it's picking up from a point on the wax that there are two sources of revenue for every application. There's printheads that we sell to go into new machines, and that's really the first phase. There are 1,300 production lines. There's a question of how many of those will transition to the new technology. That market probably will be very strong initially as those machines get replaced. We expect in that application, and we have evidence to show that we should expect around about a two to three-year replacement cycle for the heads once they're installed. That would give us recurring revenue into that application once all of the lines have actually upgraded to using the Xaar technology. Thanks, John. A question now about U.S. tariffs. U.S. tariffs have caused delays in Q2 for nearly all manufacturers there, but OEMs have recently seen more confidence of normalisation in Q4 calendar year. What are they saying to you? Yeah, it's interesting because in the new applications that we are really targeting, we haven't seen much effect on the tariffs. The battery market, for instance, the EV battery market is predominantly a Chinese market, and a lot of their sales are into domestic areas. We don't really see a big impact on the first four markets. The big impact for us for tariffs has really been in the U.S. on our EPS business, where they are selling capital equipment into the U.S. manufacturing industry, and the tariffs have created a level of uncertainty. Uncertainty usually restricts investment, and that restriction in investment and lack of confidence is a thing that's really hurt EPS in the first half of the year. Hopefully, we all get clarity on the final situation of where tariffs will end up, and then I suspect whatever they are, as long as there is certainty, I think that's when we'll see companies investing and returning to normal levels of business. Thanks, John. A set of questions from Scott here at Investech. Is there any difference in margins between the four target markets? That's the first question. Let's maybe start there. Yeah, I mean, I think one of the things that's really important to understand is that ceramics became very commoditized, and therefore the margins for everybody, the people who made the machines, the people who sold the ink, the people who made the printheads, the margins were pretty, pretty small in there. As we move into these new industrial markets where we have a unique offering and really selling on the value proposition of the capabilities of our head to deliver functionality that wasn't before possible, we are able to demand a much higher margin. What we should see over time is as these new applications come through, when we move away from the older, more commoditized markets into these newer markets, we should see margins become stronger over time. Thanks, John. A question about capacity within our manufacturing and for printheads. Do you have capacity if all is to ramp up quickly in 2026? Yeah, so I think we have two things there. One of the challenges for Xaar over the last five or six years has been the overcapacity that we have had in the operations. If you recall back in 2013, Xaar was GBP 140 million of revenue predominantly in ceramics, and the business at that time had really invested in a factory that was able to supply that level of printheads. Now, as revenues have declined, as that market went away, that capacity still sits there, largely dormant. As we grow the business, we're able to re-tap into that capacity. We believe we could actually get to probably three times the revenue we are today with the current capacity that we have in the factory with the introduction of more labor into the facility. Labor typically takes us six months to bring somebody in to train them. One of the reasons why we've been historically carrying a little more stock and inventory than you would normally feel comfortable doing is to ensure that when these opportunities do take off and we do see a sudden increase in demand, we have a level of buffer so that we can actually bring people in and we have time to train them before they actually start working directly onto new products. Our strategy is twofold. One, we've got a little bit of inventory to give us a buffer, and secondly, we have three times the capacity than we currently sell in the factory with that additional labor. Could I just add a small point to that? I think the inventory point is interesting. Absolutely, we will maintain levels of inventory necessary to support our customers for their launches, etc. However, we've also set a medium to long-term ambition within the business, which has been accepted, to improve stock turn. I'm a great believer in continuous improvement in stock turn, and I would like to see a half to one times improvement year on year as we go forward, improving the efficiency of stockholding. That's something now that's part of the Xaar makeup. Thanks, Paul. We do have a series of questions on inventory, but I think you've covered that off there. A question about EV battery plants: Do you expect any new build EV battery plants outside of China to also use the new coating technology? Do your current partners cover these plants or do you need additional partners? Yeah, good question. There are, say, 1,300 production lines in China. I'm not sure of the exact percentage, but that's the majority of the battery volume is in China, and then it's in Japan and Korea, and then there is some in the West. I think that the first market is going to be China. From that point of view, that's where our main focus is. We're actually starting to see now Western companies who are suppliers to the Chinese market in terms of material and equipment approach us because they recognize that the industry is moving towards this new digital coating technology. We're actually seeing Western partners coming to us to engage because they see that our head has been adopted as the printhead of choice. I think it will be China first, and I think as the technology gets adopted in China, any new plant that's built by any of the Chinese manufacturers will almost certainly have this new technology. If any Western companies build a new facility, I suspect they would also be looking to adopt this new technology. Thanks, John. The final question that we have this morning, again, another one from Tom at Barenburg. Now you are starting to see the printhead volumes grow. When is the right time to implement the next phases of the hunting and manufacturing footprint efficiency improvements? That's quite hard to say. Yeah, it's a good question, Tom. I think that we have very much focused on the four applications that we have here. If you then look behind that, there are further applications that we are currently working on. We're also looking at what's the next generation of printhead technology that allows us to, as Tom implies, look at how we could improve the yield, efficiency, and cost base of our operation. I think the right time is once these first four applications really are generating revenues. The first ones happened. Wax has gone from promise and two years ago to actually delivering real revenues. I hope that this time next year we are talking about some of the other applications in the top four having done the same thing. I think at that point, when we've seen real significant movement in the top line, we are ready with plans to execute on the next generation of printheads and on the next applications in the pipeline. Yeah, that was the final question, John. Any concluding remarks? Thank you for your time today and taking the time to come and listen to the story. It's been a journey. I think that I hope that the takeaway is that we're now actually starting to see some of the things that we've been working on for the last three or four years coming through, and particularly with the wax converting from promise into actual revenue. I hope that gives more encouragement and belief that actually we can do the same thing with the other applications and drive the top line further. Thank you very much for your time and hope to see you in the not-too-distant future. Thank you. Thank you.