XTPL S.A. maintains strong growth momentum in Q3 2021

XTPL S.A., a global provider of breakthrough nanoprinting solutions for the global electronics market, has published its financial report for the three quarters of 2021, showing sales revenues of PLN 213 thousand YTD compared to PLN 44 thousand last year. This was possible as a result of the Company’s entry into the phase of commercialization and sale of its solutions in two out of three business lines – the Delta Printing System devices and nanoinks. The sale of these products supports XTPL’s further growth and comes before commercialization of the technology on the industrial lines of the largest players in the global printed electronics market.

As stated in the Management Board’s letter to the report, in the third quarter of 2021, the Company primarily focused both on continuing the commercialization of the solutions and technologies developed by XTPL and on extending patent protection for its intellectual property. Further commercialization efforts resulted in new contracts being signed. The key events of the previous quarter include the strengthening of XTPL’s position on the markets of Great Britain and Ireland by establishing cooperation with Semitronics Sales Ltd., a distributor from this region, as well as the sale of another Delta Printing System to the German Karlsruhe Institute of Technology (KIT), where the printer is used for work on development of nanotechnology for applications in microelectronics and optoelectronics. Significantly, the numerous activities undertaken in the third quarter of 2021 contributed to the signing of further printer sales agreements in the fourth quarter of the year.

According to analysts, the market of electronic prototyping devices is to see a 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.

“Last quarter was another very busy period for us this year. At the same time, the work we did in previous years, including the achievement of further milestones in technology development, brings the expected outcomes in the commercialization area. This year, we have sold more Delta Printing System devices, which will enable their owners – prestigious research institutes – to make further technological progress in such fields as photonics, medicine, wearable electronics, and robotics. There’s also a growing market demand for our highly concentrated inks based on metallic nanoparticles – we also observe major interest from large market players in this business line. Thanks to all these efforts we note a steady increase in revenues, a trend set to continue going forward. We’re not stopping here and we’re engaged in many talks that have already resulted in several promising projects. They reveal to us new niches where the XTPL technology can perfectly demonstrate its capabilities. I’d also like to add that at the current stage of the Company’s development, we on the one hand focus on the development of our technology by using it to address technological problems of our potential clients, and on the other hand we persistently continue the successful commercialization of our solutions in the three business lines while forging business relationships that will help introduce our technology where it can do its work,” says Filip Granek, the CEO of XTPL S.A.

The Company’s current pipeline includes nine projects at various stages of evaluation carried out together with potential clients. The Company continues the implementation of those projects, delivering further results to its partners in accordance with the intended goals of those evaluation processes. In some cases, formulation of nanoinks must be modified in order to meet the specific requirements of a particular industrial application. This work entails the commitment of the Company’s whole R&D team, taking advantage of the in-house integration of the nanoink development competencies, the printing device (hardware and software) and the printing process itself.

Through the continuous evaluation process the Company is able to see which results have significant and unique market potential and should be covered by patent protection. In this way, last quarter the Company developed and evaluated a technological solution for printing conductive mesh that can be transferred onto other substrates. The related patent application was submitted after the end of the third quarter – at the beginning of October this year. It should be added that at present the solution is unique on a global scale and so far unattainable by any available method.

The steady expansion of the patent cloud ensures protection for XTPL’s global solutions. Patent protection starts from the moment the application is filed with the competent office. Development and protection of a patent family contribute to building the value of technology companies and their business position in commercialization processes.

FINANCIAL RESULTS

In the three quarters of 2021, XTPL generated consolidated revenues from the sale of products of PLN 213 thousand YTD, compared to PLN 44 thousand achieved in the same period last year. The Company also obtained grants of PLN 2,598 thousand compared to PLN 2,057 thousand in the same period of 2020, although only a part of this amount (PLN 1,039 thousand) was reflected in the current revenues and profits. The remaining portion in the form of advances and asset grants has been recognized as deferred income. EBIT for the three quarters of 2021 was -PLN 6,374 thousand, remaining broadly flat year-on-year, despite the lower value of grants recognized in revenues. This was possible thanks to the efforts put into efficient operation of the business.

Quarter over quarter, the Company is improving its cash flows by starting and intensifying activities related to the sale of its solutions, as well as on the back of new planned and implemented sales contracts. This has led to the successful commercialization of two out of three XTPL business lines, supporting continued growth of the business.

“Effort, commitment and determination of the entire XTPL team are already bringing tangible results with regard to the commercialization of the XTPL technology, which can be seen in the Company’s revenues. Proceeds from the sale of printers will become a noticeable item in our cash flow. With steadily growing sales of printers and nanoinks, this trend can be expected to continue. To ensure effective cash management, we’ve also decided to start cooperation with ARP Leasing to finance our capital expenditure under R&D projects co-financed by the National Center for Research and Development. Proceeds from grants should also increase as we are entering the next stages of subsidized projects. Early in November we announced the signature of another two sales agreements for the Delta Printing System. We may expect to see these transactions reflected in the performance for the fourth quarter, alongside other completed nanoink orders,” says Jacek Olszański, Management Board Member and CFO of XTPL S.A.

As in the previous periods of the year, in Q3 XTPL also participated in selected industry and investor conferences (including Nanotexnology 2021 and Equity Forum). In addition, on 14 September the Company organized the virtual XTPL Investor Day, whose goal was to educate the market on the Company’s operations and solutions, to present its development vision, achievements and the importance of Intellectual Property. During the meeting, the investors could also meet our key employees who are instrumental to XTPL success, as well as selected business partners. Several hundred people attended the event.

The XTPL technology is a response 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 recent global trend is also environmental protection by efficient use of limited resources while reducing the production waste, which is enabled by additive technology. XTPL develops its proprietary innovative nanoprinting solutions that support those trends, offering them to global players in the rapidly growing printed electronics industry. In 2020, its value was USD 41.2 billion (+11.0% YoY), in 2025 it is forecast to grow to USD 63.3 billion, while 2030 it is expected to reach even USD 74.1 billion (source: IDTechEx). This means an increase in the market value at a CAGR of 9.0% in 2020–2025.