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SPDR S&P Aerospace & Defense ETF Stock Price: Quote, Forecast, Splits & News (XAR)

Perplexity Finance

Company Profile

SPDR S&P Aerospace & Defense ETF Price & Performance (XAR)

Stock Performance

Updated Apr 17, 8:00 PM UTC

SPDR S&P Aerospace & Defense ETF

$162.86USD

-$0.05 (-0.03%)

After Hours

+$0.01 (+0.01%)

Open

$162.63

Market Cap

$2.59B

Year High

$181.39

High

$164.23

P/E Ratio

30.5

Year Low

$131.83

Low

$161.65

Dividend Yield

0.69%

Volume

78.41K

Latest News

Market Signals Point to Short-Term Weakness for SPDR S&P Aerospace & Defense ETF
Nov 12, 2023
The SPDR S&P Aerospace & Defense ETF (XAR) has been downgraded to a sell candidate after falling 0.43% to $162.91 on April 16. Technical indicators suggest further declines over the next three months, with increased trading volume on falling prices signaling caution for investors seeking near-term opportunities.12
Northrop Grumman Outpaces Sector Peers Amid Volatile Defense Market
Apr 7, 2025
Northrop Grumman’s shares have risen 1% over the past three months, outperforming the SPDR S&P Aerospace & Defense ETF, which dropped 3.9%. Analysts maintain a 'Moderate Buy' rating, citing optimism about upcoming earnings and the company’s exposure to increased European defense spending.32
Defense ETFs Remain Resilient Despite Broader Market Volatility
While the broader market faced pressure from tariff-driven sell-offs, aerospace and defense ETFs, including the iShares Aerospace & Defense, gained over 2% this week. Major holdings like General Dynamics and Lockheed Martin contributed to this outperformance, showcasing the sector’s defensive appeal amid economic uncertainty.42

What's Happening

Peers

Earnings

Report Date

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Rev Estimate

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Avg 1d Change

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Report Period

H2 2024

EPS Estimate

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Implied Move 1d

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Transcript

5m 19s

And welcome to Xaar's twenty twenty four full year results presentation. My name is Paul Janes, and I'm pleased to be joined by our [indiscernible] Usually, John will be presenting our results, However, he is currently a little unwell. And we wish John a speedy recovery and look forward to seeing him back to work very soon. Since joining Xaar in November, I have witnessed firsthand the solid foundations and cutting edge technology that Xaar possesses. Despite clear short term headwinds that we have still to navigate. I'm excited at the prospects lie ahead of the group. And this is why today I intend to purchase shares in the company. Because I believe firmly believe, in the potential of this business. This morning, we will provide an overview of what was a mixed year for the group. While we did not meet our original revenue aims, largely due to the difficult market backdrop, we did make strong strategic progress. Shortly, I will hand over to Graham to set out the overview of the group's progress during the year. And then, after I have provided details on the full year financial performance, Graham will set out the main drivers of future revenue growth.

6m 37s

And I will then set out the medium term outlook and provide guidance for 2025. Graeme, over to you. Thanks, Paul. I've been at Xaar for nearly thirty years.

6m 48s

Starting out as an R and D technician before moving up through the ranks, becoming group COO in May 2022. I have been here through all the ups and downs. Historically, Xaar has been almost exclusively reliant on traditional print and ceramics. However, over the last six years, the recognition of our differentiated technology has slowly gained momentum. Opening up a wide variety of new industrial markets, new print head business, defined as revenue from products launched since 2019 has delivered an average compound annual growth rate of 24%. Delivering revenue of $18,900,000 in 2024. However, this progress has been masked by the last stage deterioration of the ceramics market as it approaches the trough sooner than expected. The EV battery coating automotive coating and desktop three d printer markets where we currently see the most significant revenue potential. Crucially, in all these markets, there are now fully operational machines using Xaar print heads. Significantly derisks future growth prospects. Our business model is to access markets through leading customer focused OEMs. During the year, we continued to make significant progress in the Wax and Textiles markets, as well as successfully trialing our enhanced go to market strategy. Being able to provide complete ready made solutions to OEMs, lessen some of the unique technical challenges posed by adopting high viscosity fluids.

8m 22s

Reducing the dependency on their product development cycles. Something which has historically been out of our control. Thereby reducing time to revenue for Xaar. Our focus remains on managing what is within our control, prioritizing key revenue drivers, maintaining disciplined cost and cash management, and continually assessing opportunities to further strengthen and utilize the balance sheet. The unique capability of our technology differentiates us from our competitors. Allowing first mover advantage. Ultimately providing us with a substantial pipeline for future revenue growth. Going forward, our product portfolio has much more diversity in end markets and customers than it has ever had. Me hand over to Paul, who will take you through the financial performance for 2024.

9m 13s

Thank you, Graham. Overall, we have delivered a solid performance in a challenging market capital equipment. Revenue was £61,400,000 down 13% compared to 2023. And this was due to the decline in print head revenue. Driven by the last stage weakness in the ceramics market. Delays in OEM product launches and underperformance at EPS. Amidst a backdrop of market uncertainty. However, gross margin was protected at 36% despite increased energy costs and reduced overheads absorption as a result of lower sales volume. And this was largely offset by operational expense savings of 16% year on year.

9m 56s

Overall, our adjusted profit before tax for the period was £300,000 Despite the challenging conditions, we maintained investment in product development, with R and D investment of £5,000,000 or roughly 8% of revenue. We aim to maintain this level of R and D as a percentage of revenue in the medium term. With an increased proportion being deployed to support our OEMs to move from concept to launch more promptly. As this is seen as a priority for the group outside of our three key opportunities. The group remains well capitalized with net cash of £8,000,000 at the end of the year, an increase of 23% since the start of 2024. Driven by disciplined cash management and improvements to working capital. This liquidity provides a strong base to invest in any or R and D expenditure required to grow group revenue. Slide seven illustrates group performance. The first three bars concerning print head alone, negative volume variance and mix of sales was worse than prior year. However, we managed positive movements in average selling price across the portfolio. EPS is down due to weakness in the single pass market. Year on year, the group achieved cost savings of £600,000 leading to a drop down to £300,000 at profit level.

11m 20s

So let us look at operating results in more detail. Slide eight, Print Head U Business. Shows a faster than anticipated decline in ceramics revenue as a result of the significant large state stage weakness. In the global ceramics tile market. And this continues to be a headwind for the print head business. We have continued to grow our print head customer base with two eighty four unique customers in 2024, compared to two eighty one in 2023 and two seventy in 2022. New business revenue has increased by 23% year on year to £18,900,000 which is a positive underlying dynamic and bodes well for the future. Given the relatively low level of revenue from ceramics in 2024, further downside is limited. As the rate of decline levels off, the underlying growth should be more apparent in the headline numbers. Adjusted profit before tax fell 24% to £2,500,000 due to lower sales volume and changes in sales mix. As we saw on the previous slide.

12m 31s

Now, let's look at print head performance. At the interims, we set out our expectations for new versus legacy print head business for the full year. Given the macroeconomic conditions, we provided a range as the outcome was still uncertain. Overall, print head performance was at the bottom end of this range. Driven both by worse than anticipated decline in legacy revenue and a strong but less than hoped for, increase in new business. This is primarily the result of market uncertainties delaying investment. We continue to diversify our product portfolio. Significantly de risking Xaar's overreliance on a single market and therefore improving the resilience of the business to factors outside of our direct control. And as a result, in 2024, ceramics only contributed 17% of the print head revenue. This diversification does not mean we have to give up on ceramics. This market does remain a future opportunity. And we expect it to return to growth over the medium term. We are proactively ensuring that we are well positioned to take advantage of any growth. Working closely with both system, the global leader in the sector, and NKT, both of whom have recently launched products using our technology. The combination of significant growth in new print head business and a relenting ceramics market headwind providing a strong foundation for the business going forward.

14m 10s

Let's look at FFEI. Following the disposal of the non core life sciences business, revenue grew 7% to £9,300,000 due to the last time orders for the Life Sciences business. Gross margin grew eight percentage points due to improved pricing decisions during the completion of the last time buy orders. During the year, we successfully transferred manufacturing of FFEI print systems to Huntington from Hemmel Hempstead, generating overhead savings and enabling the capture of synergies as it facilitated closer collaboration between our team to work on integrating our heads into print bars and print engines. Ultimately making it easier for OEMs to adopt our technology. Now let's look at the slide on Magnajet. This business delivered £2,500,000 worth of revenue. A 7% improvement compared to the previous year. This was largely due to significant order growth from one customer in particular who had been through a period of destocking in 2023. With 44% growth in intra group sales to Xaar compared to 2023, Our main focus is on group projects. As this is where our systems can help to exploit Xaar's high viscosity and high pigment capability. By providing enhanced offerings into target markets such as textiles. Gross margin improved significantly from 32% to 50% due to operational improvements and better pricing.

15m 39s

And this resulted in growth in adjusted profit of 50% to £1,200,000 Let's turn to EPS. EPS remains largely separate to the rest of our business with a distinct strategy and business model. As it utilizes both Xaar and competitor print heads. Revenue at EPS was 27% lower than the previous year at £16,100,000 with the performance negatively impacted by market uncertainty delaying the rate of new customers switching from analogue to digital. This meant we were unable to replace revenue that had been generated in 2022 and 'twenty three from a single customer who had placed a multiunit order across both years, and this order completed in early twenty twenty four. Gross margin fell seven percentage points to 31% largely due to lower order volumes. Despite a substantial 30% reduction in operating expenditure, adjusted profit before tax still fell by £2,000,000 to £1,200,000 It will likely remain a drag on group profitability during 2025, as new management focus on turning this business around by reducing overreliance on specific customers. [indiscernible] widening the customer pipeline leading to growth beyond 2026. And now let's turn to the balance sheet and our cash position. The Group retains a healthy balance sheet and cash position.

17m 14s

Which gives us the liquidity and flexibility to deliver on our strategy. Without the need for utilization of other sources of cash in the medium term. Net cash at the year end was £8,700,000 a net inflow of £1,600,000 as a result of an ongoing focus on careful liquidity management. We work hard to manage working capital effectively, and it was pleasing to reduce overall trade balances by £3,500,000 to £30,400,000 While we reduced inventory levels during the year, we retain roughly six months of stock. Allowing for a rapid response to anticipated future demand when required. Our revolving credit facility of £5,000,000 remains undrawn. And during 2024, we renegotiated the covenant going forward to provide further liquidity if required. As previous terms did not take into consideration our healthy existing cash position. So to summarize, we have delivered a solid performance in the face of significant headwinds. New print head revenue continues to grow as Xaar technology becomes more widely utilized. And ceramics revenue is in the final stage of decline before bottoming out in the short term. As Graham will explain, we have a compelling value proposition in a number of markets which we are confident will deliver meaningful revenue in the medium term.

18m 43s

We remain cautious on providing precise timing given the current market backdrop. And uncertainty caused by economic and geopolitical factors. With a sufficiently strong and liquid balance sheet, we are well set to take advantage of the significant opportunities for revenue and profit growth. I will provide our outlook for 2025 at the end of presentation. At this point, I will hand over to Graham.

19m 12s

Thank you, Paul. Over recent years, have developed a more resilient product portfolio with applications and avenues for growth in a diverse range of end use markets. With the declining ceramics market largely behind us, we can now concentrate on the accelerated uptake of our technology markets that have substantial long term and repeat revenue potential. Over the course of 2024, Xaar has continued to make strategic progress in opening up new potentially sizable markets. Providing the opportunity for sustainable and significant growth. Remain focused on fully utilizing Xaar technology, in applications where our unique capability namely the jetting of high viscosity and high particle loaded material, can add significant value and revolutionize manufacturing processes. [indiscernible] we still believe there is significant opportunity across a wide breadth of market sectors, we recognize the importance of focusing on a few key markets. We believe these will deliver substantial and enduring revenue streams. The unique capability of our technology differentiates us from competitors. Allowing first mover advantage in areas such as EV battery coating, automotive coating and desktop three d printing. For each of these opportunities, will set out the clear value proposition of using Xaar printheads. I will start with the problems facing the current solutions in our target markets, before explaining why technology will be successful.

20m 51s

We have reached key milestones in each of our target markets. There are now fully operational machines using our print heads. This has historically been the most significant hurdle to long term growth. Moreover, this means that most of the heavy lifting, including r and d investment and CapEx from our side, has been completed. Future revenue growth is dependent on the rate of customer uptake of OEM machines rather than the integration of our technology. Promisingly, the EV battery coating and automotive coating markets in particular, we have extremely strong and highly credible OEM partners. Driving additional customer interest in our technology. While adoption of Xaar print heads within the three main target markets will be key to the future prospects of the business, other markets continue to generate meaningful revenue. It is these markets which will benefit from our ability to offer a complete turnkey solution. And I'll provide more color on this later in the presentation. So firstly, EV battery. Starting with the battery coating market, there are currently two solutions used to insulate EV batteries. The dominant technology uses PET film to wrap the battery. The alternative is to spray a fluid. With the requirement for even bigger and more powerful batteries, there is a corresponding increase in the amount of heat generated The use of a plastic film, PET film, is increasingly becoming no longer fit for purpose.

22m 28s

It is unable to withstand the greater heat generated causing safety concerns. And while spraying doesn't have the same safety concerns, 40% of the paint is lost in this process. Therefore requiring a paint recovery system making the process significantly more expensive. Meanwhile, 99% yield, therefore minimizing waste. In July, we launched two new printheads. The Xaar EX and Nitrox EX. Through which we became the first company to enter this sector with specifically designed print heads. Through partnerships with OEMs, Amijia and Xifeng, EV car manufacturers are now able to access our technology. While the highest quality batteries are used in EVs, those which don't reach the required standard are utilized in battery storage. This provides further incremental opportunity for Xaar as these also have a coating requirement. And customers in this market face the same issues as EV manufacturers. Amijia and Xifeng launched the world's first and second inkjet EV battery coating machines during 2024. Both OEMs have had initial orders for their machines, and we anticipate orders scaling markedly going forwards as customer confidence grows. As we are the sole provider of this technology, the market uptake could be substantial. To scale the market opportunity within EV battery coating, there are an estimated 1,300 EV battery production lines globally. 100% conversion of this market could generate £260,000,000 of revenue.

24m 17s

It is anticipated that the print heads would need replacing every two to three years. Moving on. Automotive coating is a market the issues with current solutions inhibit its potential size. Both end customers and the OEMs are seeking out a solution. With roughly 40% of paint lost when spraying, it is costly in terms of both materials and energy. On top of this, if manufacturers wish to utilize multiple colors, after the first color is applied, the car is taken off the production line masked and processed for a second time in the paint shop. This process is currently very inefficient. [indiscernible] consequence of this is that the paint shop is not only the largest environmental footprint, and the biggest waste producer in a car plant, but it is also the major capacity bottleneck. If customers wish to customize their cars, adhesive decals are typically used. However, these are prone to jet wash damage. Existing inkjet solutions at a lower viscosity face several challenges. Including sagging of the paint once it's applied onto a sloped or vertical surface. In terms of the two tone vehicle market, Xaar technology eliminates the need for masking. And reduces energy and paint requirements.

25m 32s

Therefore making it significantly more efficient than paint spraying. Our partner Xaarlta global leader in the sector, recently launched the Xaarlta Nextjet using the Xaar 2,002 and Equinox printheads. Xaar has already reported that this can contribute to a 30% in CO2 emissions and significant cost savings for two tone vehicle manufacturers. Xaar technology also provides a high quality solution to the drawbacks of the decal market. The ability to jet lower volumes precisely, our print heads are leading the way in replacing current solutions with no sagging and no risk of damage when jet washing. Xaarlta has recently announced a partnership with DER whose machines currently paint 50% of cars globally. To provide a digital paint solution combining Xaarlta's Nextjet technology with DERZ Robotics. DER are currently demonstrating their machines equipped with this technology to potential customers. And alongside Xaarta and DER, we will select our go to market partners around the middle of this year. There will initially be two to three as there has to be a level of support required for installation commissioning testing of the application. We aim to have the first operational car plant with this capability in 2026. Start to see revenue from this market from this point onwards.

26m 57s

Through our partnership with Xaarta, this market presents a significant opportunity for Xaar. And we anticipate that our technology will expand the levels of decals and two tone used today. The market has been crying out for this solution for years, we are confident that the benefits outweigh the costs required to adopt the technology. Xaar will receive a royalty based on the number of cars painted. Currently, roughly 1% of the 90,000,000 cars produced globally have decals or two tone paint. As the current sole provider of this technology, we have the potential to take 100% of the market. Moving on now to three d printing. Within the desktop three d printing market, there is currently an absence of a low cost, high quality product. Our technology provides the ability to jet high viscosity fluids at a relatively low cost. This has enabled the world's first full color high resolution desktop three d printer aimed at the consumer market. Utilizing Xaar technology, cost is no longer a barrier for end customers to purchase a high quality three d printing machine. The retail cost of the nearest competitor of equivalent quality roughly £40,000. Currently, those unwilling to pay so much for a printer resort to a single nozzle monochrome three d printer the price point of these machines varies between a few hundred pounds to over £5,000.

28m 29s

FlashForge announced their full color desktop three d machine with Xaar print heads in November. Priced at roughly £2,400, this significantly undercuts machines which can match its finishing quality. In the short term, the machines are being sent to social media influencers to promote the product. FlashForge expects to ship its first orders in the second half of the year. We expect the other major global suppliers to engage with us to begin developing their own machines this year. As awareness of the benefits of our technology continues to permeate through the market. While there are over 1,000,000 single nozzle monochrome d printers currently sold annually, we anticipate our technology will create a brand new market. As well as converting some of the current market. 1% share of existing monochrome market would generate meaningful revenue on initial sales alone. As these machines have been designed for printheads to be regularly replaced. We anticipate recurring revenue streams for each unit sold. Now on to other market opportunities. So in April 2024, FlashForge, also a market leader within the wax printing market, launched their first product using a single Xaar printhead and we anticipate a second product with three printheads launch in the second quarter of this year.

29m 53s

Despite OEM product delays encountered in 2023 and 2024, we are confident the market leading capabilities of the Xaar 2,002 print head provide an excellent opportunity. With the potential market size for this application being £20,000,000 per year, and the expectation that our technology will ultimately take a majority share the opportunity is significant. Even in established markets like textiles and corrugate, are significant opportunities for revenue growth. The Equinox print head and its embedded ink recirculation technology delivers a higher quality and more consistent finish in a single pass compared to other solutions in the market. In collaboration with our ink partners, [indiscernible] have developed sector specific high viscosity aqueous inks. For use with the Equinox printhead. Thereby overcoming one of the fundamental barriers to adoption and growth of inkjet within this sector. M and R launched its latest product, powered by Xaar's Equinox print head in September 2024. Our technology enables consistently high quality prints while printing direct to garments. With the textiles markets being market being of a similar scale to the wax market, and our belief that we will take significant market share in the medium term this also provides exciting opportunity. So to summarize, overall, these markets represent opportunities similar to the magnitude of ceramics.

31m 25s

Further illustrating how we are de risking our business model in a relatively short period of time. Unlike in ceramics, where repeat sales take longer to occur, the print heads in each of our target markets need to be replaced regularly. Making revenue more reoccurring highly attractive. And earnings of a higher quality. Previously, we have discussed how these and other opportunities will deliver revenue in the future. And while the most substantial revenue growth remains in the medium term, key markets such as EV battery coating and desktop three d will deliver revenue this year. With revenue from automotive coating expected in 2026.

32m 7s

These opportunities top of the opportunities in the more mature wax and textiles markets, are no longer on the distant horizon. They are rapidly coming into view. Now to talk about the turnkey solutions. As alluded previously, we have not historically appreciated how the capability of our OEMs to harness our technology has varied process has repeatedly been frustrating and time consuming for OEMs, and on occasion, this has led to them withdrawing from the development process due to an apparent unresolvable integration issues. However, we have been working to evolve our strategy to work more closely with customers, in order to lessen some of the unique challenges posed by working with high viscosity fluids. Providing a turnkey solution we can significantly reduce the timeline from a point of engagement to a Xaar embedded solution being fully operational and available for customers to purchase. This has significant benefits for us, both in terms of time to revenue and deepening customer relationships. In addition, can recycle this solution to other customers within that market. Leveraging the initial investment made. As discussed in the interims during 2024, M and R took part in the first project of a complete turnkey solution in an effort to reduce the time to market of a new machine utilizing Xaar technology.

33m 36s

We provided them with a functioning system which could easily be attached to their material handling system. This significantly reduced integration issues The product launched in early September just six months after the project began. Previously, it would have typically taken three years. We are currently undertaking a second project, is already delivering promising results. Although the provision of a complete turnkey solution is not appropriate at all our market segments, it is relevant to some. And while the turnkey solution does not expand the market itself, it does increase both our ability to grow market share and the timeliness of that revenue. We recognize this approach has a cost, we are of the firm belief that it's an extremely good use of capital. With returns well in excess of the cost of the capital. I will now hand over to Paul to discuss the financial outlook for 2025 and wrap up today's results.

34m 34s

Thank you, Graham. Well, the group enters 2025 with renewed optimism. As several new potentially significant market opportunities start to gain momentum. [indiscernible] Over the medium term, these opportunities should deliver revenue at attractive margins. However, in the short term, despite the decline in ceramic market beginning to abate, we will continue to feel the impact of the slowdown in EPS' end markets. While these dynamics will continue to impact revenue and profitability, they highlight the value of our strategy to diversify across a broad number of markets and applications. We are greatly encouraged by the progress we are making across our focused markets. Having already secured some key customer orders and partnerships we are confident that we will continue to make strategic progress. Whilst recognizing that how this translates to near term revenue and profitability will be dependent on market dynamics, and customer decisions to adopt OEM products. We will continue to manage cash tightly and maintain a strong technical balance sheet. In summary, I am pleased that through the continued focus of an outstanding team, the milestones John outlined in September have been delivered as planned. New business revenue growth is substantial. And we continue to work towards reducing the time to market for OEMs through our enhanced go to market strategy.

36m 6s

Meanwhile, in the short term, the slowdown in EPS will remain a headwind and the exact timing of the market uptake of our technology is uncertain. We will continue to make the right long term decisions to ensure we capitalize on opportunity ahead of us. Crucially, in our all our target markets, there are now fully operational machines using our print heads. There are EVs on the road using batteries coated by Xaar printheads. Our automotive coating technology is being demonstrated by our partners, Xaarta and Dura. And a groundbreaking three d printer using Xaar pinheads has been launched. We are confident that our approach will deliver significant value for our shareholders. The visibility and scale of the opportunities at Xaar have never been so strong. At this point, would like to open up to questions. Thank you.

37m 10s

Click on the Q and A icon on your screen and type your question. I'm now going to hand you over for questions. Thank you.

37m 18s

Well, hello. Welcome. I'm Paul. Saw me on the video. I'm joined with our CEO, Graham, and we also have us today our chairman, Andrew Thurbert, who's joined us along with two colleagues, Chris and Dan from CEO. So we're all here, all ready for your questions. Thank you. Kick off. Good morning, Paul and Graham. Two questions from Todd Rams. Firstly, you please give some comments on the EV battery progress versus initial timelines?

37m 46s

And how disruptive technology could develop through 2025?

37m 51s

Sure. Sure. So we've seen that the the first two OEMs have got their machines commissioned on plan. So they'll now be running those with the customer for them to gain confidence and that the technology can deliver And then we expect to see repeat orders as we move through into the second half of the year. So in terms of timing, that appears to be on plan. It's now a question of the end user, the customer, the battery producer, getting confidence in the technology. And a quick follow-up. Your technology allow more flexible design than the actual batteries? Away from the traditional cylinder or square formats?

38m 28s

Yes. We're able to print objects of any shape because we can print in any orientation. We see most of the market heading towards prismatic shaped batteries. There are still some cylinders, and we can trim both of those. But as with automotive printing, we can print lots of difficult objects and shapes because we can print in any orientation. So we don't see any limitation there.

38m 49s

And on EPS, which end markets were challenging in 2024? And how do you see these and new end markets developing in 2025? Anticipate headwinds from U. S. Tariffs on exporting your print heads to The U. S? Okay. As if there's one pack, I think the the drivers behind the headwinds at EPS was the fact that they had this long term contract being running for a number of years, which came to an end January 24. And there's a bit of a going through a bit of a dry patch now because there's quite a bit of a time between when you win a contract and when you start to recognize the revenue. So that team, because of that contract coming to an end, need a bit of catching up to do now to refill that pipeline, get those contracts running. And then full start to recognize the revenue. And the management, they are now absolutely busy with that and getting that business back to growth. Probably into 2026. In terms of I think it was the second part of tariffs question, kept Yeah. So obviously, tariffs are a hot topic at the moment in The States. There already have been tariffs imposed for importations from China, but this is, something which affects everyone in the industry.

40m 2s

We don't think we're going to lose any share from that. And in fact, there's going to be a pass on across all the industry players of those particular tariffs. Where there are importations from other regions where tariffs may be applied, then actually what's happening is probably what tariffs are designed to do. There are discussions around localization of supply where necessary. So we've done quite a bit of thinking about it, but we think we have sufficient mitigation in place for those.

40m 30s

And the first from Tom, given the improving cash pile, you think about the further stages of the Huntington manufacturing foot footprint development? Well, it's I think you could probably have a to say about that really. Would you would you want Yeah. Sure. I mean, we continue to look at how we can drive operational efficiency in the plant in Huntington. While maintaining the ability to respond to growth as it as it comes through. So we've we made the first changes to the layout of the factory a couple of years ago. And it's now more of a continuous improvement approach to continue driving efficiency as part of, you know, the everyday everyday role. So rather than much sort of more significant projects like the layout of the clean room, it'll be an ongoing continuous improvement in driving production efficiency. I think it's probably also worth adding enterprise, the investment in the technology, which will enable significantly reduced manufacturing time and and other cost Yes. Medium term. But that's where one of the areas where cash will be invested. [indiscernible] the key market opportunities, EV battery coating, automotive coating, and desktop three d, For 2026, could you give us a sense from where the most material revenue opportunities over the next three years would be?

41m 54s

Perhaps rank these market opportunities in terms of largest to smallest?

42m

Well, so out of those big three, three d wax has already, you know, started. It's actually earning us increasing revenue. This year. The other two are probably gonna start to get some meaningful revenues next year. I mean, right between the two, I think EV's battery is probably the largest at the moment.

42m 19s

Yes.

42m 20s

So EV battery, there were machines, as I said, in in plants at the moment, people testing and getting confidence in the technology. So I think out of the two, we'd probably see that one grow [indiscernible] I think the the the automotive coating application that will take a little bit longer to grow because are more infrastructure things to consider in the plant when you're implementing that technology.

42m 45s

I think it'll be batteries first followed by the automotive coating. Yeah.

42m 49s

And in terms of our print head business, the 24% revenue CAGR since 2019 could you touch upon to the main end market applications which contributed to this revenue growth? [indiscernible] Sorry. So since 2019, new business new print head business CAGR has been 24%. What have been the main end market opportunities that have developed this revenue?

43m 13s

There's there's been a number. So we've seen we've seen growth in in wax printing. As Paul mentioned, we've seen that now start to expand and grow. We've seen growth in glass printing and also in coding and marking.

43m 25s

Where, you know, we had a significant product launch last year with one of our customers. And now we're starting to see some of the the new industrial applications like EV battery, coating, the desktop three d start to come through. I think that could be the main ones from 2019. Driven growth. And textiles last year as well.

43m 44s

I have a question from Georgia Pollack. Graham, are the OEMs exclusive deals or you have do they have exclusive period coaching and three d printing.

43m 53s

No.

43m 54s

No. There's no exclusivity in that market.

43m 57s

And, Paul, great work on Capital. Look at the inputs. DSO seemed relatively flat. The improvement in inventory. Listening to Graham on business development should expect inventory to [indiscernible] Any general view of how you see working capital changes think what we're putting in place is more of a longer term view around what cuts in inventory. So by way of example, are rolling out throughout the organization stock turn targets. And I personally am a great fan of having continuous improvement in stock term. So that that that is definitely an area of of focus improving the efficiency that we have in the organization.

44m 37s

So yeah.

44m 39s

Then two questions from Charlie Cullen. First of all, do you have a target on proportion of sales from Turkey Solutions going forward? And what do you expect in terms of margins from this sort of solution?

44m 51s

Well, I think I think we don't yet have a formal target, but we clearly see, given the experiences we've had with M and R, this method being deployed very widely. So there are going to be continuing developments of that technology, that capability, across more and more markets as we proceed. So it could well end up being a significant proportion. What's the other part of the question?

45m 16s

What do expect on the margins from the solution?

45m 19s

Well, I think it's reasonable to expect that as we deploy our technology, particularly around the viscosity advantage that we have, that when we go into new markets, we could expect to see better margins, perhaps we've before. So that's not unreasonable expectation to see an improvement there.

45m 37s

And in terms of outlook, what sort of revenue cover do you from the current order book?

45m 42s

Well, it's quite interesting how how things operate at Xaar. So, I mean, formally, the the cover is a a matter of a few weeks, actual orders, you know, made. But, the the team have a fairly good understanding about uncertainty around orders that are coming in the short to medium term. So it's actually quite encouraging at the moment that that longer term order view is is is relatively strong.

46m 12s

An additional question from Tom Rams. Could you give an update on the development of Xaar technology to print on corrugated packaging?

46m 20s

Yes. We've made some announcements recently of our collaboration with Nasdaq. We've been developing high viscosity ink for printing onto corrugate board. And we're delivering great results with a on our capability that we have in place in Huntington. So we are in the process of demonstrating that to potential OEM customers.

46m 41s

At this point, we have no further questions. Well, I'd like to thank everyone for, coming today. And I look forward to hopefully meeting many of you in the coming weeks and months. Thank you.

46m 55s

Think so.

46m 57s

Thank you.

Key Insights

Xaar delivered FY2024 revenue of £61.4m, down 13% YoY, mainly due to a sharp decline in ceramics and delays in OEM product launches, but maintained a gross margin of 36% and achieved £0.3m adjusted profit before tax.
New printhead business (products launched since 2019) grew at a 24% CAGR, reaching £18.9m in 2024, with diversification into markets such as EV battery coating, automotive coating, desktop 3D printing, wax, and textiles, reducing reliance on ceramics (now only 17% of printhead revenue).
The company is targeting significant medium-term growth opportunities in EV battery coating (potential £260m market), automotive coating (royalty-based revenue from global car production), and desktop 3D printing (new consumer market with recurring printhead replacement revenue), with first revenues from EV and 3D printing expected in 2024 and automotive in 2026.
Xaar remains well-capitalized with net cash of £8.7m (+23% YoY), disciplined cash management, and an undrawn £5m revolving credit facility; ongoing focus on operational efficiency and working capital improvements.
While short-term headwinds persist (notably in EPS and ceramics), Xaar is optimistic for 2025 and beyond, citing a strong pipeline, operational machines in key markets, and an enhanced go-to-market strategy (including turnkey solutions) expected to improve margins and accelerate time to revenue; however, precise timing of market uptake remains uncertain due to macroeconomic factors.

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Xaar delivered solid strategic progress despite a 13% revenue decline, driven by ceramics market weakness.

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And I will then set out the medium term outlook and provide guidance for 2025. Graeme, over to you. Thanks, Paul. I've been at Xaar for nearly thirty years.

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Click on the Q and A icon on your screen and type your question. I'm now going to hand you over for questions. Thank you.

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And how disruptive technology could develop through 2025?

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Perhaps rank these market opportunities in terms of largest to smallest?

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Yes.

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I think it'll be batteries first followed by the automotive coating. Yeah.

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I have a question from Georgia Pollack. Graham, are the OEMs exclusive deals or you have do they have exclusive period coaching and three d printing.

43m 53s

No.

43m 54s

No. There's no exclusivity in that market.

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44m 37s

So yeah.

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What do expect on the margins from the solution?

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45m 37s

And in terms of outlook, what sort of revenue cover do you from the current order book?

45m 42s

46m 12s

An additional question from Tom Rams. Could you give an update on the development of Xaar technology to print on corrugated packaging?

46m 20s

46m 41s

At this point, we have no further questions. Well, I'd like to thank everyone for, coming today. And I look forward to hopefully meeting many of you in the coming weeks and months. Thank you.

46m 55s

Think so.

46m 57s

Thank you.

Key Insights

Xaar delivered FY2024 revenue of £61.4m, down 13% YoY, mainly due to a sharp decline in ceramics and delays in OEM product launches, but maintained a gross margin of 36% and achieved £0.3m adjusted profit before tax.
New printhead business (products launched since 2019) grew at a 24% CAGR, reaching £18.9m in 2024, with diversification into markets such as EV battery coating, automotive coating, desktop 3D printing, wax, and textiles, reducing reliance on ceramics (now only 17% of printhead revenue).
The company is targeting significant medium-term growth opportunities in EV battery coating (potential £260m market), automotive coating (royalty-based revenue from global car production), and desktop 3D printing (new consumer market with recurring printhead replacement revenue), with first revenues from EV and 3D printing expected in 2024 and automotive in 2026.
Xaar remains well-capitalized with net cash of £8.7m (+23% YoY), disciplined cash management, and an undrawn £5m revolving credit facility; ongoing focus on operational efficiency and working capital improvements.
While short-term headwinds persist (notably in EPS and ceramics), Xaar is optimistic for 2025 and beyond, citing a strong pipeline, operational machines in key markets, and an enhanced go-to-market strategy (including turnkey solutions) expected to improve margins and accelerate time to revenue; however, precise timing of market uptake remains uncertain due to macroeconomic factors.

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