Xeros Technology Group (LSE:XSG) — Full year results presentation for the year ended 31 December 2023

0:01 Good afternoon, ladies and gentlemen. Welcome to the XEROS TECHNOLOGY GROUP PLC Full Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and we'll publish those responses where it's appropriate to do so on the Investor Meet company platform.

0:32 And before we begin, I would just like to submit the following poll. And if you would give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the Board of the XEROS TECHNOLOGY GROUP. Klas, good afternoon, sir. Thank you, Jake, for the introduction, and welcome everyone indeed to XEROS' annual results presentation. For those of you who don't know me, I'm Klas DeBour, chairman of the board, and have been in this role since the beginning of twenty twenty. All I'll do is say a few words at the beginning and then hand over to to Neil and Alex to run you through, as I can see, 31 slides. I hope we're not going through all of them. Sort of to kick off, we've just come out of a a project Procopay, the the fundraising process we we ran, giving an extensive update to all shareholders either through meetings, or through the circular that came at the end of the process.

1:28 There's not that much new news today, so we can keep today's update relatively brief. Also, what we won't do this time around, I think we did it the last time, is to go in detail through all the business activities of XEROS. For those of you interested, there is a previous version to to watch, but we're trying to keep it sort of focused on what is important at this point in time for the business.

1:55 We'll what what we will cover today is a very brief summary of the business, financials 2023, an operational update, and then we'll provide sort of a brief outlook into 2024 and beyond and explain why, spite of some of the delays that we've had, we collectively about the prospects of of XEROS. Neil and Alex have have promised me that they'll keep the slides to about twenty minutes. So assuming that we do that, there will be plenty of time for q and a at the end, and we won't take any more of your time on that. With that, Neil, handing over to you to take us through the the slides.

2:41 Super. Thank you, class. Yeah. Equally, for those of you who've who've not met with me, I'm Neil Austin. I'm the chief executive of XEROS in position since August 2022. I'm complementing presentation today's Alex Tristram, our finance director who has been in situ for how long now, Alex? I think what final starter since kind of March last year, on the board from from March this year. Yeah. Good stuff. Okay. So so just just kinda pick up on what on what class said. So we will give a brief kind of a company introduction, but but, really, we're hoping that majority of people know who and what XEROS are about. So we'll keep that quite brief before we move on to to more some of the more specifics of of what we've done in the last year and indeed what we're working on currently as well. So very top level introduction of of of what it is that we do. There are some key kind of words in the text, the left hand side, just to draw some notes out. So we are a licensing business, a licensing of proprietary sustainable technology. We are a green technology company, first and foremost, and we bring innovation. So so very much proprietary technology.

3:50 Our work is very much on garments. So the the production of garments and and then do the cleaning of those. And and as a result of that, the two industries that we focus on are the laundry and the apparel manufacturing industries. And specifically, the XEROS technology is all about driving efficiencies and and and savings. So we drive significant cost, energy, and water efficiencies, and we also reduce pollutants both in the manufacture and the laundering of of clothes. We'll talk a little bit about the microfiber capture element that we've we've added in recent years. So the the this chart just gives you a very kind of a brief overview of the life of a garment from fiber production right in the very beginning through to the yarn fabric turned into a textile and article of clothing, and then gets into the hands of the consumer through the consumption phase. And then ultimately, end of life when it's when it's no longer in use anymore.

4:49 The the percentages that you can see is effectively the c o two e footprint of that that garment through its lifetime, and you can see there are two very clear and obvious peaks. And these are the areas where effectively we believe that the industry is is effectively kind of in distress. So this is where it has not innovated. It has not brought new technology to market. And as a result, that's why we're focusing our technologies in those two areas. The the first one being that final just the final stage of textile production, which is the bleaching diamond finishing. So we have our XFN finish technology to to help with that. And then the second one being in terms of the the consumption, the laundering of that technology. We've got two technologies at play there, the XF filtration technology and the XC care technology.

5:37 Okay. So just give you a very top level view of what those technologies do. The first one being filtration. So, Jack, if you play the first video. So when we talk about filtration, we're talking specifically about microfiber filtration. And so this little video gives you a sense of one of the piece of pieces of kit, which is what we call x f one, and that is an internal integrated

6:01 filtration device. As you can see, this is for a domestic washing machine. The second piece is what we call our finish technology. So, Jackie, again, if you could tee this up. This is the manufacturing stage of clothes, in this case, denim. And effectively, can see here that we are introducing a new element, and that element is what we call XORBs. So the XORBs displace a certain amount of the water to reducing that water. The heating of that water is very energy intensive, so we reduce the energy. And actually, the the the the XORBS do a very effective job in terms of creating that final look and finish that we want. So actually does it in a more gentle fashion as well. So as well as the reduction on energy, water, and so on, we actually see garment life extension.

6:51 And equally within the finished technology, we are able to talk a little bit about a replacement of a level of chemistry and also replacement of finite resources such as as pumice stone. Okay. So I think Jake, if can go back to the slide that's get the idea there. And then the final bit of technology is is effectively the same. So it's an introduction of XORBS, albeit it's now into the laundry laundry industry. So Jake, we can tee that video up.

7:24 So, basically, you can see same idea again. We are loading up a washing machine. This is domestic washing machine and the the key bit that the XEROS technology provides us for introducing XORBs within this. The XORBs do exactly the same thing as the finish. We are reducing the amount of water by displacing it with the XORBs. Reduced water means reduced energy since the heating of that water is so energy intensive. And also because it's much more effective medium, we can reduce the amounts of chemicals. So in a domestic washing scenario, we're talking about, you know, fabric softener, we're talking about washing liquid. Okay. So if we keep going, how do we bring those bits of technology to to market and the hands of consumers? So so if I say we've got three strands, the first strand is not surprisingly through commercial partnerships. So as I said, we are a licensing business. We do not manufacture any of the technology ourselves. We don't have whole stock, which is great from a a kind of a capital expenditure side of it. And so we look for commercial partnerships to be able to bring that to to to market.

8:27 And actually, in all of our technologies that we just run through, filtration, finish, and care, we have live commercial partnerships in place, we'll come on to talk about. The second piece is we talk that we talk about is direct engagement. Now in many cases, the partnerships, the licensees that we have are not necessarily the final conclusive step to bring that technology to market. So for example, within a washing machine environment, we may have a license with a component manufacturer. But actually, the washing machine brand will be the one that makes the final decision. So as well as the component manufacturer that we have the license agreement with, we also have direct correspondence, direct communication, and even go as far as to effectively start the selling process with decision makers. So this is what we call this direct engagement.

9:18 And the third piece is that because we're talking about innovative technology, quite often we have to go above and beyond the core players within the industry. So again, if we think about washing machine industry, we do talk to all the washing machine brands. But because we're talking about innovation, we're also being involved in conversations with NGOs and increasingly with legislators as well. So microfiber filtration capture is something that XEROS is becoming very well known for, very well respected for, and we have whether that's The US, whether it's Europe, indeed, or even Australasia, we've been asked to provide expert testimony about how those can be used within those industries. So it's a three three keys. We are not we're not just a licensing business, we're not just engineers and scientists, we're also a commercial business as well.

10:11 Okay. I'm gonna skip through these slides in the interest of time. I'm presuming most people know, but for those that want to, you can go back and and have a read. We've got a slide for filtration and finish and for care, gives you a little bit more of an idea about the specifics of what the technology provides. Okay. If I just hand over to Alex to give us some of the headlines in terms of what we kind of achieved from a financial perspective last year. Thanks very much, Neil. Yes. So just to run you through some of the financial headlines from the from the results that were released last week. So revenue up last year by by 81% up to up to 300,000, and that's off the back of some additional license fees and some of the sales of XORPs to our partners. The kind of the main thing to highlight there was we talk about Neil will touch on later the the the the readiness of IFB to launch. That that revenue included the the final milestone payment from IFB as we complete the technology transfer process back in the last year. So that's really the final step that we needed from IFB to get to the to the live commercials, which we which we which we plan to this year.

11:17 From an adjusted EBITDA point of view, we brought the loss down by 38% to to to 4,600,000. That's off the back of slight increase in gross margin, which which is touched on above, but but mostly through the cost controls that that that Neil and I have implemented since since since we've been involved. That was just through through cost control on those expenses, which is which is touched on below, and that's and that's includes a headcount reduction of 37% with a with a real focus within the business on on commercial facing roles and the roles that we have in the business, making sure that we are focusing the the spend and the the the personnel that we have to execute on those commercial opportunities that we have, both those that we've already signed up and those that we're anticipating to to sign in the in in

12:01 the coming months and years. Consequences of that was the cash flow was down by 33% down to 4.7. So we obviously concluded our fundraise, and and there was some warrants exercise that are in the year. So that was, at that point, an additional 5,600,000 of cash into the business. The cash cash burn rate in in 2023 was down below naught 400,000 a month, and that rate is is is certainly not gonna not gonna rise in 2024, and and we anticipate that it actually might might come down as well. So that's, you know, it's positive progress from us on a on a cash point of view.

12:36 Just to highlight the fundraising exercise of warrants that took place in the in the first part of this year. So we we know that we needed to strengthen our balance sheet and provide work capital to to enable us to support our partners to launch. But, also, what was very important in in executing that that raise was to to provide us with with effectively a platform to execute on the significant global opportunities we have. We we are

12:58 and, again, Neil will touch on this later, we're in discussions with a number of significant partners about commercial opportunities, and they needed to understand that we are a a stable partner that they can work within the in the in the longer term And the the ability for us to show that strong balance sheet and the platform that that that will provide us is is really important over the coming coming months and years.

13:21 Okay. So just to kinda give some headlines beyond the finances of what what what did we achieve last year. So just on filtration first and foremost, when I joined the business in August 2022, we had one licensee in place for the integrated filtration technology. I mean, it was it was it was obvious and it was key to me that we needed to provide multiple choices to washing machine manufacturers. So we extended that from one to three within 2023. So we now have as I said, we have three licensing agreements in place all with a very well respected component manufacturers, all three based in Europe. And and through those three licensing agreements, we now effectively have access through approved supplier status to to effectively the entirety of the global washing machine industry. So nine 99% of that 105,000,000 per annum washing machine business.

14:18 In addition to that, we were aware that we also needed to be able to access the pre installed, so the installed washing machine market, of which there's probably about a billion. And so we previewed an external device effectively taking exactly the same technology with market leading capture rate. We previewed that at the preeminent consumer electronics fair in Europe called IFA in Berlin in September 2023. And as a direct result of that, we are in the final stages in the next month or so to be able to announce effectively a license for that. It will be a manufacturing distribution and potentially brand agreement, a quite significant development for for XEROS and will very much give us full capability with within this space.

15:11 In terms of finish, so Alex just kinda briefly mentioned it. It's a technology that we've had for a few years, but but but again, it's clear to me that we needed an additional licensee for that for that space. We actively went after one of the leading machinery manufacturers within the industry, a Turkish company called Yermak Makena. They're one of the top three machinery manufacturers the world. I'm delighted to to reach agreement with them in June of last year and signed a a licensing agreement. The good news to compound that is that we have kind of really fast forwarded our, what we call, tech transfer process, and this is effectively our engineers working with the engineers of the licensee to be able to create a finished product, which works to provide the results that that that they want. So so literally, as I speak,

16:02 our sales lead for this area is on his way to one of the industry's leading trade first called ITM, and it's Istanbul, will which will start tomorrow to support Yilmak as they effectively launch full scale, the XEROS technology to garment manufacturing companies throughout the world. To supplement this as well, we have continued to work with retail and indeed, apparel brands. And we're actually, we're we're in a very good place, particularly now with the Yealmag partnership, to be able to, work towards them prescribing the XEROS technology in the production of some of their core denim ranges.

16:51 And then finally on care, quite quite busy area within care as well. So we kind of split care into two areas, one being the domestic application and one being what we call the kind of commercial. So the the the larger machines for for commercial implementation.

17:07 The good news is that in December of last year, we concluded, again, the tech transfer process with IFB on a mass market nine kg domestic laundry platform. Really significant development of breakthrough that we're able to to to finally demonstrate that that technology can work on a domestic washing machine.

17:28 And I have been now in field trials with a view to launching that technology into the end of market later this year. In addition to that, we have also supplemented on the commercial laundry side of our business a a distribution partnership effectively. So a three way agreement between ourselves, IFB, and a company called Ecoprod. Ecoprod are effectively a water reduction expert. So they are very

17:58 well known within a number of different industries. So the likes of leisure, private health care, NHS, and the hospitality markets, their raison d'etre is to provide hardware to those industries which helps them reduce water. So water reducing showers, water reducing taps, and washing machines is something that they wanted for a number of years. So a very a very relevant partnership and we're expecting that that that will be able to generate further revenue this year and into '25 and beyond. And then just as an FYI, I really are kind of a poster child for the use of the technology as a commercial laundry outfit in France called Georges. They have a number of high profile contracts with the likes of Air France, SNCF, and they use exclusively the XEROS technology to be able to clean the uniforms, and the workwear for those for those companies.

18:59 Really, excitingly, they managed to share with us last year, feedback that they indeed had got from SNCF, which highlighted the lab based government life extension benefits that that we knew existed. And they're saying that in the real world, SNCF were able to report that their uniforms are now lasting for 20% longer. A really significant saving for for for them to add to the the direct benefits that Georgios were getting in the water and the energy and the chemistry savings using the technology.

19:34 Okay. So that that's kind of what we've been working on through 2023, and that's what gives us that level of confidence to say that we're gonna be able to to to make a step up in terms of revenue generation this year. And but we're by no means resting upon our laurels. So we're continuing to work to move to what kind of term a globalization of our of our technology. And to give you kind of some headlines on that, so we we've really been very to the point and clear in terms of both my statement and classes in the annual report that, you know, we are now working with six of the global top 10 washing machine brands. So I should technically say they're washing machine brand groups. So there are multiple brands. You might be surprised that how many of them are actually part of the same ownership structure.

20:21 And that has really come about because one of the things I've really worked hard to implement over the last twelve to eighteen months is really a very, very much improved commercial engagement. So we have a newly enlarged commercial team in place. They have very significant industry expertise, not not least within the washing machine, the white goods industry. And we've been able to leverage that extensively to be able to get very, very positive and meaningful engagement with some of those big big brands. And and this is really all about what our focus is at this moment in time, which is commercialization of what I'm calling the market ready technology. We are an r and d business, but actually we've got technology which the world wants, which is ready, and that's what the focus of the business is right now. And that's manifest really in in all of the technologies. So from a filtration perspective, we are in active discussions with four global consumer electronics brands, a global chemical company, a multiple European retail group about bringing that XEROS filtration technology to to to market whether that's the integrated x x f one or the external x f three technology.

21:32 On the care side of it, it's really very significant momentum. Again, we are in discussions with four global washing machine brands, not not the same brands as we're talking about on on filtration, but four brands. So one Southeast Asian, one North American, and two European based companies about bringing that XC one technology into their current platforms. So I I can tell you that this moment in time, our engineers are actively engaged on working on machines from those brands to be able to demonstrate that that technology works. And, you know, the the initial results we're getting are extremely encouraging. We're also active on the commercial laundry side of it. So most of you, I think, will know that we have licenses in place with a Chinese company called Sea Lion, an Indian company, which is which is IFB.

22:23 And but we've always known that to to really get globalization of the technology, we need a North American and a European manufacturing partnership. So we're in negotiations with such a group at this moment in time with a view to them licensing the XC two technology and that has the potential to to go

22:43 live actually within this calendar year. And finally, on the finish side of it, as I mentioned before, the Yealmak partnership to complement what we already have with Ramsons in India is really transformational for us. We will have really approved manufacturers of garment manufacturing machinery, which nearly pretty much any garment manufacturer in the world will be will be happy to work with. And so we're leveraging that to create greater awareness, greater demand, and pull for our technology. So there are a number, as I've said before, of brand and retailers that that that take down products that want to specify the XEROS technology within their within their their ranges. So really very significant opportunities that the team are working hard on so that we can we can have that next level of step up for the business in in probably 2025 and and beyond.

23:41 Okay. I mean, that that that's kind of where we are. On the presentation, you'll see as it will be hosted on our website and indeed on the investor made platform. There is further granularity related to the financials. But I mean, in terms of what what we what we really wanted to talk to you guys about today, I I think that's the conclusion of the the key parts of the presentation. Jake, shall I hand back to you? Absolutely. Please, Noah. And, class and Alex, well, thank you very much indeed for your presentation this afternoon. If I may just jump back in there. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while the company take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

24:31 Guys, as you can see there in the q and a tab, we have received a number of questions, that were both presubmitted ahead of today's event as well as those that have come through, throughout your presentation this afternoon as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. And, guys, at this point, if I may just hand back to you to read out those questions and give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Great. Thank you, Jake. So we we we got the the first question which is one I've had, and you're be surprised to know a number of a number of occasions through the through the last week or so on, which is which is about when the first royalty income will be raised and to and to what to to what levels. Alex, do you wanna maybe give a bit of color to to the investors on that one? Yeah. Absolutely.

25:17 So so thanks, Neil. Yeah. So in terms of royalty income and and the the value of that, I guess, without going into individual commercial specifics on all of our deals, the our view is very much that we expect revenue in the form of both license royalty income, and, the the income we we generate from the sale of our XOR to where appropriate. So that's on the on the on the care and on the finished technologies. We expect those to come through across across all four of the technologies, so finished filtration and care, both commercial and domestic in 2024. We're expecting contributions, from all four of those, and this is contributions from, our existing license partners. So if we take them kind of in term, IFP domestic being being the first one. So as Neil mentioned, absolutely, their their view is that they will launch their domestic platform in India in 2024.

26:09 So we're in discussions with them about exactly how that launch is gonna look and and the kind of the stocks of XSG that they're gonna need on hand, and and there will be some kind of lumps in our revenue as we work through the kind of real life commercial specifics of those contracts. That that's absolutely on track for this year. The kind of a as a business, they they are India's third largest kind of washing machine supplier. They they sell about about a million machines a year, which is which is, you know, a significant part of the global market. So we're expecting, you know, revenue from them. Likewise, on commercial, they they they have their own kind of sales process that goes through India, and we are helping them, as Neil mentioned, with Ecoprop earlier this year. So we we signed earlier this year. So, yeah, we expect to see revenue from them as well.

26:56 Again, Neil talked about Yield Mac and their kind of full launch, which is which is imminent and literally imminent in the next couple of days. We expect to see revenue from those this year. They the the it's obviously a a kind of smaller in terms of numbers of machines sold. The the the the data processing market is about eight to 10,000 machines sold a year, and our licensees cover roughly 10 to 15% of that that market. So we expect the the penetration to to to start to come through this year, but it'll we think it'll take a little bit of time to get up to the the numbers we really want on that on that one. And the same on filtration. So we've we've we've been clear previously that we expect expect our first bits of filtration revenue to come through from our the external external units, the x f three I, the retrofit one that that that will be sold alongside new machines, but also can be accessed by consumers wishing to to kind of retrofit to their their already installed machine. So we think that that royalty will come through this year.

27:55 And, yeah, we're we we hopefully can talk more about about that in due course. Okay. Good. Thank you, Alex. That that kinda quite nicely tees up some other questions that we've got specifically about about microfiber legislation. So that there's kind of a three part or effectively as I can see it to this question. So so the first is how likely and more importantly, how plausible is it that governments in The UK, Germany, and Italy, Germany and Italy being the largest producers of washing machine in Western Europe, will implement legislation and regulations in the short term. And that will make the use of microfiber filtration technology mandatory. So again, I I I get this question on a kind of a weekly basis. I can I can answer it in terms of the facts as we have them today and also my opinion? So, I mean, the the facts as we have it today is that there are there's either legislation on books or indeed there is conversations at a kind of a governmental level for a significant number of countries across the world. And so that would be France, and that would be the European Commission, that would be several states within The US, Canada, and Australasia.

29:12 So France is the only one that has put anything on the legislative books at this moment in time. But there is definitely a very clear awareness and there is indeed a kind of an an initiative place. At In in terms of will people be compelled or will they be obliged to to to buy? Is that the only way that there would ever be a demand for filtration products? I mean, the again, objectively, we we can tell you that there are two reference points we always talk to. One is we conduct our own consumer insight studies. So several thousand people across France, Germany, and The UK. Not not profiled anyway, so not specifically very much environmentally can can considerate people. Probably just an average cross section.

30:02 And and actually, we got some very, very interesting information back from that. The one stat which always sticks in my head is that once made aware of the issue of microfibers for one, and once made aware of the solution that the XEROS technology can provide at a an appropriate price point, which is kinda circa £100, €100 or there or thereabouts, four in 10 people said that they would be willing to to spend more money. So not not needing to be compelled by governments, but given the option, they absolutely, would be interested to to to buy that technology. In in, in more recent times, in the last twelve months as well, we also know one of the washing machine manufacturers also conducted a kind of a a blind test.

30:49 So they, on their website, put up a a kind of a a mocked up microfiber solution with a view to try and do a bit of of testing to see if people were given the option. Would they be apply would they be interested to to to purchase the technology? So, they tried different price points and the same thing again. That that kind of actually, in their in their studies, that sub €130 seemed to be the kind of key price points, and and they were getting similar sort of levels of of take up. So so independently, people being made aware or sometimes they even just being an option from a purchase perspective clearly demonstrates to us that there is no there is already an awareness and there is an interest in being able to to to purchase it.

31:36 Second part of the question is whether I I think if I'm reading it correctly is, will manufacturers have to rely on a third party provider for that technology or will they develop it on their own? So I I again, we can't sort of answer generically about that one because each washing washing machine manufacturer has its own approach to these things. What I can tell you from my own some sort of eight, nine years working within that industry is that any innovations that you have seen that come out from the washing machine industry, and there haven't been many to be honest, any innovations have exclusively come through third parties. So as consumers, we wouldn't be aware of that, but I can tell you that any of the innovations have been because washing machine companies have partnered with a an expert within the space, and we see that being played out again within microfiber.

32:26 So without betraying confidence, as I can tell you, there isn't a single washing machine company that I'm aware of that is doing its own in house development without the support of of third party. And this is because in reality, these washing machine companies are are becoming brands. So they are brands and assemblers of componentry, but actually a lot of the development and then indeed the manufacture of the componentry is is is being man is being handled by by third parties. So yeah. From a XEROS perspective, this goes back to that secondary point of our how do we break our technology. We have to have direct relationships with those manufacturers so that they want to work with with us and and indeed some of our licensing on on microfiber filtration.

33:15 And then I think the third part of it is about in the absence of legislation, how likely and more importantly, how plausible is it that consumers will voluntarily install microfiber filtration technology. So I think I've kind of addressed that one in terms of some of the reference points I talked about. The pieces about whether they would want to be able to have that inside the machine over having that as an external device. So I think the the again, the simple answer to that is our consumer insight studies tells us, and indeed we hear it played back from the brands that they know ultimately consumers would prefer to have it inside of the machine. And ultimately, I think longer term, that's where we'll get to. However, this is where it becomes very important that the usability of external devices has been considered. And and, you know, we would say this, but we're very confident that XEROS are a combination of flexibility of positioning of it. The fact that there are no replacement cartridges, the fact that it works ex with the all washing machine brands really puts puts us in a in a in a very strong position. So yeah. I mean, longer term, it will be an an integrated solution. I've I've no doubt about that, but the market will be made in the next few years and and external devices will help us to do that. And not least, as I said before, it gives us the ability to provide that technology to people who already have perfectly good, perfectly working operational washing machines that have been

34:45 purchased in the last couple of years because obviously, we don't want them to to to ditch that just to just to get their hands on it. Okay. Second bit, just reading through these questions as they come. So comments in terms of your news flow. So when do we expect commercial revenues for each of the business verticals? We we've we've referenced the fact that on filtration, we are we are hoping in the next month or so, month or two, to be able to make some announcements there. We've also talked to some of the really exciting leads that we've got also unfinished with with garment brands and indeed with some of the really big global brands on care and indeed on on on filtration. We we see there's potential that we could have news flow on those within this year.

35:34 And and certainly, that's what we're that's what we're working towards. Next question I might perhaps put towards class. I think having had a bit more context on on the businesses, Given the innovative and essential XEROS technology, why do you think the share price has lagged value? Yeah. Thank you, Neil. Obviously, the end of the day, the share price is the result of what what investors do voting with their their feet. What you see is that the segment we operate in, which is the the very low end of the the a market, many, many companies have seen share prices under pressure. So I yeah. I think the the market as a whole, the fund managers operating in the segment have seen outflows. So some of them have been forced sellers of whole portfolios of shares just to provide liquidity to their investors.

36:34 That was driven, to a large degree by sort of the interest rates, and inflationary environment we've been in. But I think we also have to to put it back to ourselves. If you go back to to when I joined the board four years ago and sort of expectations at that point in time about when we would commercialize our technologies, as I said in my introduction, we have seen delays. And if you look at sort of bigger picture at our end user markets, if you think about commercial laundry and hospitality, that industry suffered very, very badly during COVID. Balance sheets were hit hard, and those businesses have had to rebuild their balance sheets before they invest.

37:21 And and adopting our technology means they have to invest in in equipment. The good news is that our equipment delivers both benefits from sort of a sustainability perspective, but at the end of the day, it's also better. So it's it's not that you pay more to get the benefits, but actually, you're paying less to get those benefits. So, ultimately, that once those balance sheets are properly rebuilt, we'll see that take off. But but those are the delays that we as a business have had. And I think similarly, if you look think about what we're doing in Finnish the apparel industry, you just have to pick up a newspaper what's going on in the high streets and and how brands are are struggling. So also there, again, the positive is that on on denim finishing, at the end of the day, we deliver benefits at lower cost.

38:09 So the adoption is a matter of time. And I I think all of that together is probably an explanation why we have lagged. But at the same time, what you've heard from from Neil and Alex expecting revenues to come in from all four segments we're operating in this year. Hopefully, we can convince all of you over the course of this year with news flow that XEROS shares are are worth owning. Okay. Thank you, Klas. Got a question about IP. So the status and longevity of our IP. So and I mean, as I said, we're we're very much in that that phase now, is commercialization of the technology we've got. We have an extensive IP portfolio, multiple families of protection.

38:58 But but equally, they have continued to develop. So even on some of those, if you like, more mature technologies that we've got such as such as care, some of the original IP maybe doesn't have so much life left in it, we've actually superseded on that. So we've got a good level of of protection on pretty much all of our all of our technologies. And, Alex, maybe if you could help me in terms of when those are due to expire. I think we've got got, you know, about twenty plus years on on most of the time. So yeah. The I mean, as you said, there's a there's a kind of breadth across the portfolio because some of our technologies, it's been an iterative process. It wasn't just file a patent and then and then done. There's there's some which are still going through the ground process, but kind of the call range that we have goes out to the late twenty thirties and beyond that. So we are we're not expecting kind of any free to operate or any kind of patent problems to to come in in in in you know, before we get to to to those times. And I guess the one of the things we always try and highlight here is that our IP coverage is is one thing.

40:04 Another thing that that that really is important is the know how, and and we've been doing this a long time. You know, perhaps some people will appreciate, and the the ability to to get our technology to the optimized state that we we've got it takes a lot of know how and a lot of a lot of, you know, the the work we've put in over the years. So there's there's kind of a couple of aspects that that protects us from that point of view. K. Good. Thank you, Alex. Just a question about the question about the revenue that we generate from George's. I mean, I think historically, with George's, we have generated it because we've been on what I guess you could kind of consider sort of service contracts. We we that's a legacy of the old XEROS model as George just continues to grow our support and or sorry. Our revenue very much that we're expecting for them is the same as it would be from from anybody that takes XEROS technology. So we get a we get a royalty for the supply of any new machinery that goes into Georgia's.

41:04 And equally, we we we we make a a good margin in terms of the replacement XORPs that are provided through to to to George's as well. So I mean, for George's, see, that's how we would see, for example, the Ecoprode partnership developing and indeed as the Ecoprode piece continues to bear out, there are other interested parties in at a European level as well. So so that that, I guess, is the more relevant piece when we're we're kind of talking about that. The the fundamental question again that we all get asked is how confident are we that we have no further fundraising will be required. I mean, I I can I can tell you that we are working very hard for that to be the scenario?

41:51 As Alex talked you through on some of the financials, we are very, very considerate with the money that investors have rewarded us with to be able to to to fund this business. We're very careful with the the expenditure of that. And we are focusing very much on commercialization. So re really pretty much all r and d beyond fine tuning of the current technology has been put on hold until such times as we can as we can really break even and and make our own way. So, I mean, the confidence levels are good within the business. The the caveat with all of this is that because we are a licensing business, ultimately, it's not a 100% in our control. So we get very good feedback, very good sentiment from those licensees that we talked about. I've been launching on domestic.

42:38 Gilmag launching this week, with the finished technology and high interest in our filtration technology, and indeed interest in what EcoProduct are trying to do within The UK. So everything is pointing in the right direction, and the models that we look at now are are looking positive. But as I said, you know, ultimately, it is it is out of our hands. It's down to those licensees to be able to to to to follow through on those bits. I I guess kind of maybe slightly connected to that. So going forward, will you be giving guidance for annual revenue and margin? So at this at this moment in time, as I said, our our guidance remains unchanged. You can refer to the Cavendish brokers note on that. The key thing that we are focused on is getting to operational breakeven so that we can generate more money than we spend on a on a on a kind of a a monthly basis and for that to be a foundation for us to build the business on.

43:36 Neil, maybe I can add one or two words to to that question on on guidance because I think that also ties into the early question about about share price. And Mhmm. Obviously, we operate a license model at this moment in time. The relatively small number of licensing partners were also the the terms of those licensing agreements are commercially confidential, which makes it difficult for us as a company to communicate the value of those agreements externally. And I think as we grow, as our licensing partners commercialize and they themselves have better visibility on their their own revenue forecast, we can consolidate that and and start to think about giving guidance. At this point in time, the confidentiality requirements around the individual agreements we have and the small number of agreements we have combined with the lack of visibility through those agreements, individually makes it very hard to do. But I would expect as this business matures, and I'm not going to talk about when I expect, but going forward, there will be a point in time where we will be able to provide sort of ranges around what we think is is reasonable to expect. But today, we're not there. That is one of the challenges we have as a business in the stage we're in. Yeah.

44:52 Yeah. Yeah. Absolutely, class. Okay. Got another microfiber question specific to the Samsung offering. So, yeah, we are very aware of the Samsung proposition. I mean, what what what I would say generally is that, you know, on care and the finished technology, there really is no other comparable tech to what we do. I mean, there are ways that the industry is trying to, you know, reduce water or or reduce the amount of energy. But in terms of the specifics of our technology, there is nothing even remotely close to it. When it comes to microfiber capture, I mean, it it would be nearly impossible to to patent the entirety of a of an industry. So there there are a number of of of different players. I mean, if I can talk more broadly than than just the Samsung proposition, there are a couple of what we would call industry propositions within that. So the likes of Electrolux under the elect Electrolux brand and the AAG brand have got some some pretty basic static filters and indeed also the Beko Europe group under its GROUP brand for sale and curries within The UK.

46:04 That theirs is integrated. The Electrolux electrox product is external and effective. It's a static filter. The water pushes against it. It technically captures a level of microfibers for a certain period of time. But it's it's a kind of a sales and marketing message. It it blocks. And I think both of those companies would be honest enough to say that it blocks and then activates the bypass. So the machine continues to operate, but but but effectively it's not capturing microfibers anymore. There are some better propositions out there from an industry perspective, and and we would probably say Samsung is is among the better ones. It the reason why it's not as good as it could be is because they've actually had to work around the XEROS IP. So they they have a rotating filter with a bezel to to clear it out. But because they've had to operate around the XEROS IP, it's not still as effective as it ultimately could be.

47:01 The interesting bit as well is thinking about the ambitions of companies like Samsung. So again, the benefit of having worked within consumer electronics for a long period of time, I can tell you Samsung have zero interest in selling accessories, which is what they see this this device as to anyone other than Samsung customers. So they only want to offer up as a as an attachment to Samsung washing machine sales. And actually, even then, as as we have seen operating within the market, the availability of the product is very scarce. So it's nearly impossible to get your hands on one in The UK as an example. And again, objectively, I can tell you that if you go on and you see reviews of that product, they they aren't great. So we think the Samsung product has the right kind of idea because it I mean, how can I put this a nice way? It it it's quite similar to the XEROS technology, but it's not quite as good as the XEROS technology.

47:58 So, no, we're not we're not concerned about it. And indeed, we're talking about trying to break a whole new technology, trying to break a whole new industry effectively for for for an industry with appliances, which again, as I know, is very conservative. So it's actually good for us that that people are other other companies are playing within the space. It raises awareness. We are up an r and d company in the North Of England at the end of the day. We don't have the we don't have the marketing budgets of the likes of of the Samsung product, but it's good that it raises awareness of microfiber captured washing machines because we feel very confident that that will then lead to people ultimately doing their research and seeing that the XEROS product is is is the best one out there. So yeah.

48:46 I think that's okay. Could you a little note to agree with the lack of availability. So, yeah, I think that's pretty much pretty much it in terms of questions. So, Jake, maybe can I hand back over to you or do do we need to wrap up there? Absolutely. Neil, class, Alex, thank you very much indeed for being so generous for your time and addressing all of those questions that that came in from investors. And, course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review, to then add any additional responses, of course, where it's appropriate to do so, and we'll publish all those responses out on the platform. But, Neil, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that would be great. Sure. Okay. I I mean, I think it's kind of kind of a bit heartfelt, but it's it's it's it's honest and it's true. I mean, when I I joined this business in August 2022, I saw just a significant opportunity, a huge opportunity for for a technology that the the world needed.

49:49 So whether it was the microfiber capture, whether it was the care tech care of the finished technology, the industries that we are targeting want and need this. So I've seen a huge opportunity for it in terms of what the industries need. I think consumers want it. And I think actually the industries are now coming, becoming aware and seeing the benefits of the technology. So the demand, if you like, that I had hoped would be there. I can tell you that having worked here now for just over eighteen months, the demand from the industries is really, really strong. I am very confident in the technology. It is market ready. The industries are ready to be able to take it. And, you know, we have made some really significant progress.

50:36 Maybe for sure we don't see it in the share price. People would like to see it in in our nests and news flow, but we are probably actually slightly ahead of where I thought we would be at this point. So the vision, if you like, that the business had and I shared and I joined in with, you you know, we are living that and I really very much see that that coming to coming to the fore in the next kind of twelve to eighteen months. So I just want to thank those people that have supported and invested in the business. It means a lot to all of us and it continues to give us the opportunity to deliver this, which we're very confident we will. So thank you. Neil, that's great. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations.

51:27 This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of XEROS TECHNOLOGY GROUP PLC, we would like to thank you attending today's presentation. That now concludes today's session. So good afternoon to you all. Thank you. You.