Xeros Technology Group (LSE:XSG) — Interim Results Presentation

0:00 Good afternoon, and welcome to the XEROS TECHNOLOGY GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to the team from XEROS TECHNOLOGY GROUP. Class, afternoon, sir. Thank you, Lily, and welcome everyone, to the interim results presentation of XEROS, results of the first half of calendar year 2024. With us today, we have Neil, our CEO, and Alex, our finance director.

0:50 They'll introduce themselves later on. My name is Clarence DeBoer. I'm chairman of the board, and I will say a very few words to kick proceedings off. And the reason I will only say a few words is that, we had a trading update, less than a month ago, in which we, announced, our licensing agreement with, with Tom Lim. I'm sure Neil and Alex will talk about that. And also the delays of our launch with IFB into next year and the delays in legislation in France. There's very little new news today after those announcements. And and, obviously, those delays, were unfortunate, but they're also largely out of our control.

1:36 And what I want to highlight is that we're concentrating very much on what we do control at XEROS. And in that respect, the team is executing extremely well at the moment, and has been. The three points I want to highlight are, very strong cost control. Our cost levels are down to about 60% of what they were when Neil joined us, a little over two years ago. So that's a very strong area of, of focus and and ongoing focus. We're working hard with our existing, licensees to turn those agreements into revenues for both them and for us, in particular, on on KRM Yelmak, Don Limnau, and, and IFB.

2:23 And then thirdly, we're working hard to add new strong tier one, partners, in in laundry. We're working at the moment with three in domestic laundry and one in commercial laundry. These are all, as I said, tier one players. And what I want to highlight in those sort of partnerships as well is the learning curve that we've gone through. The first time we went through one of these sort of technology transfer processes, it took a long time. There was a lot of learning involved. And what you see now is that the cycles are shortened dramatically, and hopefully, Neil can also point towards the things there. But those are really the three areas we're really focused on. And as I said, team is executing extremely well, and Neil and Alex will take you through the details now.

3:11 Lars, thank you very much for those kind words. And, yeah, I mean, without further ado, let let me just kinda build a little bit on some of the points that Lars was making. So so the first is we we haven't really had a a chance to properly explain the real high quality of the the strategic partnership that we have in place with with Dunlimp. Dunlin is a company that I have known for a number of years. They are a colossus, really, of the consumer electronics world. Somewhere in the region about 2,000,000,000 turnover USD every single year. They are number one in pretty much every category that they operate within. It has primarily been what we call small domestic appliances. They have more ambitions for growth, and indeed, they want to grow in a green direction. So hence, the meeting of XEROS is is is very timely for them, and we absolutely want to be able to have an opportunity to be able to grow with them in the future. But for the here and now, it's very much about being able to, execute on the immediacy, which is the external device, which is the XF three external microfiber filtration device.

4:23 The great news is that we had an opportunity literally days just after the announcement at one of the world's largest consumer electronics fairs called IFA in Berlin to to basically start that marketing process in earnest. We have had a very positive response. We always felt very positively about our technology. We've always had very good responses on it. But the partnership of having Don Lim, a company that literally supplies to every retailer and every consumer electronics brand in the world, has been, a significant addition to the strength of our proposition. So, you know, we'll talk a little bit more about that in due course, but the filtration licensing piece is in a very strong place.

5:13 From sales outreach, we'll talk a little bit more about that as well. But, you know, on filtration and on care, we're in a very strong place. And and, indeed, his classes point to that, we continue to take a very prudent approach when it comes to cost control. Since since I joined, it's been something that we've continuously looked to be able to, right size. I just want to highlight, though, that this is more about putting the business focus in the right areas. So we're absolutely not offsetting anything that we want to be able to do in, our sales outreach. And in fact, our sales and marketing team is is larger and stronger, more capable, and more experienced than at any time, I think, since XEROS has been in existence. So so this those are kind of the headlines of what we've really been focusing on in the last six months.

6:01 From a financial perspective, Alex, do you wanna just give us very briefly some headlines on that? Yes. No problem. Thanks, Neil. Hi, everyone. Just to to introduce myself, I'm Alex from FD here at XEROS. So, yeah, from a from a financial headlines point of view, I guess we we start with revenue. We we're pretty similar to half half one last year when we talk about revenue. We had always expected this year to be back end loaded, so we expect certainly more revenue than than than in the first half and the second half of this year. So that's that's where we thought it would be from an adjusted EBITDA point of view. That loss is down this year, only slightly. That's that's due to the cost control that we've put in place, as Neil mentioned earlier on, and we've we've taken those actions, which we expect to bring down the cost further for the second half of the year. So there was some sort of upfront costs, I guess, in doing that in the first half. So that that cost control is absolutely at the forefront of our minds in doing that.

6:53 And then, yeah, that's the that's that's the flow through into the cash because we we we flow through pretty pretty consistently between the EBITDA and the cash number in in the group. We had 4,000,000 in the bank at the end of August, and that that puts us in a good place to execute on the opportunities that we have, which we'll we'll cover in due course. K. Very good. Okay. So just to give a bit more kind of highlights in terms of initially, filtration. So some of the kind of key points we want to make. So as I said, we had the opportunity to to really kind of showcase the partnership with Don Lim at EFA. The response has been significant. I mean, it's been I won't say it's beyond our kind of wildest dreams, but the level of interest from informed people, I think that's an important way to put it, is people that understand the consumer electronics industry, people that understand the laundry industry, people that understand and whether something is commercially viable has been really strong. This is not something that's necessarily surprised us because as well as obviously answering a consumer need, which we have understood. Yes. We've talked a lot about legislation, but we know from some of our consumer insight studies that people absolutely, when suitably informed, want this product and are prepared to pay for it. So the industry is also very much on the same page with regards to that that kind of demand. Another really interesting dynamic within all of this is that actually washing machine

8:24 sales aren't particularly profitable. So aren't particularly profitable for the washing machine brands or indeed the retailers. So you might think that they would be because they're such a relatively high price, but the percentage margin is very low. So they're constantly looking for and have yet to find an opportunity to make an additional sale, so kind of an upsell or an attachment. They see the microfiber filtration as a perfect opportunity to do that. And indeed, as we've spoken about before, because it is separate to the machine, they also see an opportunity to, address what, in some cases, is quite considerable consumer database. So these are people that will be owning washing machines right now, that they constantly, the brands and the retailers, would like to be able to have an ongoing dialogue with.

9:10 And so this proposition is a way for them to be able to do that. So at this moment in time, we've actually got probably more demand than we can we can deal with. And what I mean by that is we've got competing brands in various geographies that have both made a very strong play to say that they would like to be the first to bring the technology to market under their brand. So the the focus for the sales team over the next few months is to basically settle on the right partnerships for XEROS and indeed for Domlin to be able to get the maximum results and the maximum return upon that. Just to touch a little bit on, legislation. So we, highlighted a few weeks ago that although legislation remains on the statute book in France as the standards have not been set, it's unrealistic to expect washing machine brands to be able to respond in what is now a relatively short period of time. However, that legislation has not gone away. And what's interesting is that moves have continued to, gain momentum in Europe and actually increasingly in North America as well. So just this week, had conversations with a number of different lobbyists about initiatives that are underway in California, Pennsylvania, and Illinois in The US.

10:23 And I know from personal experience of California moves, which it seems as though it's increasingly likely it will do, then very much that sets the standard for the rest of the the rest of the continent. So as I've always said when it comes to microfiber filtration for washing machines, it's not it's not a case of if. It's absolutely a case of when. And to that point about when, a couple of things which will help us in that regard. So the first is that we are operating as one of the, authorities within the space in the IAC working group, which has been specifically established so that standards can be set. And this also includes the major washing machine brands as well so that it's clear that the that the standards will be uniformly accepted. The second piece is that by our launching of our device next year and indeed other microfiber devices being launched next year as well, It means that one of the major pushbacks that washing machine brands have used in the past, which is that no viable technology exists in the market, will disappear.

11:26 So whilst some of the deadlines have been talked about from a US perspective as late twenty twenties, maybe even 2030, the reality is that once the technology is out there and it's working, then I think, lobbyists have told us that they can start to move to be able to lobby to reduce those those those deadlines. So from a filtration perspective, in summary, you know, we're very pleased about the fact that what we always knew to be strong technology now has, I know I keep repeating it, but one of, if not the best partner we could ever possibly have hoped to have in terms of the manufacture of it, and the engagement that we have with washing machine brands, with consumer electronics brands, with retailers in anticipation of our launch in q two next year tells us that there's an absolutely a demand for this product. So we're delighted with, we're delighted with how things are starting to progress.

12:20 Just to click on to the next of our technologies, which is our CARE technology. So just to remind those, kind of newer to the to the XEROS story, this is the introduction of XSORBs, to create a more efficient either, wash in in laundry, whether that is energy and water usage, whether that is, quality of of the the the wash, actual wash performance, but increasingly the fabric care benefits. We talk a little bit about active processes just to add some kind of meat to the bone on that. So as Klaus indicated, we are in active meaningful processes with three of the world's largest washing machine manufacturers, the Southeast Asian, a North American, and a European. And what we mean by that is we have actually had their machines in our HQ. We have retrofitted XEROS technology into them, and we've been able to start to demonstrate those benefits. So effectively, we run a standard wash on their machine, show them the results in terms of water usage, energy usage, wash performance, and, importantly, what the garments look like after 10 washes, and then we show them the same results using the XEROS technology.

13:33 The results are compelling. So we've always said that the XEROS technology is not just lab based. We were very confident that we could prove this out. We're now proving this out on a manufacturer by manufacturer basis so the results are very clear. We're probably most advanced, sorry. I should say more advanced with the Southeast Asian and the North American manufacturers. So the Southeast Asian, we have demonstrated those fabric care benefits. They have accepted them. They're very pleased with them. And we're now in the process of thinking about how we can optimize cycles. So this is the secondary stage of thinking about how we can harvest as many XORPs as possible. So Southeast Asia is moving very well. North America is moving very well. There are follow-up crucial visits due to take place before the end of the year, and we're quietly confident that we will be able to deliver the results to be able to to convert those into actual live engagements and indeed commercial traction. A little bit further behind in the European one, but to be honest, that's as much because, you know, we have the capability that we do. We've had sort of three buses come along at the same time, which is great.

14:42 But we obviously need to be able to, we need to be able to to prioritize those accordingly. And the other thing that I would add on this is that whilst class is correct to say that we're in three active processes, we actually have another two and probably three as of updates from sales team today that are engaged and would like to be able to progress as well. So, again, if we're thinking about industry appetite for what it is that we're trying to do, global players are demonstrating that they have a real interest in what the the the XEROS technology can deliver to them. Just a quick note on the IFB piece. So, again, as Klaus pointed out disappointingly, a delay from IFB. So from an expected launch in 2024, it's now moved into 2025.

15:29 We have, however, continued to to get good levels of engagement from IFB. Indeed, myself and and Alex, had the pleasure of meeting with effectively the owner of IFB this week. He he flew to London so he can meet with us and and personally reconfirmed his commitment to these projects. So we watched this space for IFB, continue to be to be engaged. And the third piece is is, yeah, just to, again, reconfirm those kind of clear benefits. If you go on to our website, if you see any of the social feed that we're doing, we have a new kind of approach when it comes to the marketing of XEROS. We're very much talking about the clear demonstrable benefits our technology can deliver, and that's absolutely getting the traction that we now see in place.

16:15 Okay. If we click on to the third of our technologies, which is Finnish, Alex, if you'd like to give us an update on that. Yeah. No problem. Thanks, Neil. So I guess when we talk about finished, we're talking about the the same process the same sort of being applied to a garment finishing process. So so in the first case, denim denim processing and the and and effectively the making of jeans and and other denim garments. So this is a, I guess, a bit more of a straightforward conversation in that this is this has progressed how we expected it to, and then it's just really pleasing to be able to to report that. So we signed a deal with KRM, TECHNOLOGY GROUP PLC in Turkey in the middle of twenty twenty three. They previewed their technology at ITM last year and launched it fully at ITM in Istanbul, a major global garment garment processing equipment show, and they they launched that. That was in middle of this year.

17:09 And they are working through the the significant leads and and interest generated at that, and we expect to be seeing sales and revenue within 2024. This is a really important piece of technology for Yulmak. It's a really important, you know, really important piece of technology for for Yulmak and for the industry because it's a, you know, it's a genuinely new technology that answers a lot of questions that the industry is asking. So they see it as as a key plank of their commercialization strategy as they move forward, and that's something we're we're trying to support in in, you know, in many ways, but including in the way that we we work with the brands. So we are in discussions with a number of of high street and and other brands that are are leaders in this space. And the way that works is actually quite similar to how how it works when when Neil was talking about the laundry OEMs earlier on in that they send us a pair of jeans. We and the recipe to do it. We match that recipe with the XEROS technology show show that we can produce the same finish, but with the benefits that that come alongside that in terms of reduced cost, reduced energy use, reduced inputs, and all those kind of things.

18:15 And we are progressing very, very well with with at least two of those brands with more in the in the background. The kind of key strand that we've got now is that we can pass them on to. So it's all very well us proving it in in a lab, but we can prove it in a in a live demo now and are doing so. So that's that's really, really important, and and that work that we can do with the brands is is something that are very keen for to do because it just it just anything we can do to support the market launch and build up an installed base within the within the government processing industry is is really important. So that's, you know, something we're very pleased that's developing in the right way. Okay. Thank you for that, Alex. I mean, just just to kinda jump on a little bit to the to the to the summary piece. I mean, Alex has kind of mentioned it, but, you know, we we worked hard, have been in the last two years under my stewardship to try and get ourselves those kind of what we call tier one global partnerships.

19:09 Yelmak was the first of those to to land. We're delighted that that that they've done so. They recently told us actually that going from probably number three globally, they now believe that they're number one in terms of machine, manufacturer numbers. So that's a great validation, again, that they are the right partnership that that we want to be able to have. And as Alex said, you know, we are very confident that they'll start to generate those kind of meaningful revenues. As we always say, what's great about the denim pieces that whilst it's a bit of a longer term play because the unit market is smaller, every installation that we get will generate ongoing revenue in the form of recurring, XORP supply. We've also mentioned about the high quality of the Don Limb agreement. So another really genuinely tier one global partnership taking place from a manufacturing distribution and brand perspective.

20:01 And, absolutely, we will be in a place to be able to launch that with success. I have no doubt come to q two of next year and moving beyond that. We mentioned a bit about the encouraging pipeline on domestic laundry. What I didn't mention is that the commercial kind of, industrial scale laundry, which I think, you know, people will probably have known XEROS for historically, those continue to to to progress as well. We have, obviously, our partnership with IFB in India and Sea Lion in China. We have, in the same vein, wanted to pursue a tier one North American European partnership. The good news is that as we as we speak to you today, again, we have, a live process in place with a very well placed, North American European manufacturing group.

20:51 We have their machine in our HQ, and we're doing the same process as we do on the domestic machines. So we are retrofitting the XEROS technology, and we will show them the benefits that they can get from using it. So delighted delighted to be able to to to progress on that. And then not least, even with our partnership with IFB, we continue to show some really good progress as well. So some of you may have noticed that we have installed an IFB machine into a Marriott in, London Heathrow, a really kind of pivotal piece, not least because the facilities manager at that site is also in the sustainability committee for the Marriott at large. So it's kind of a proof case for us to be able to push out into the rest of the Marriott group. And also because of its geographical location is really helpful for global partners to be able to fly into London and to be able to see that technology, that technology in in in action.

21:48 And and I guess the third piece which we shouldn't forget is that, you know, there are very clear environmental imperatives. There's clear global demand for the technology that we have. Legislation in in France is the first, stop which we had hoped would come into place for 2025 is is delayed. We know this. But just to repeat, as I said, there are a number of initiatives across the world, and it's clear that when it comes to microfiber filtration, it will happen. So it's definitely a case of of of when, not if. But, actually, interestingly, we started to have conversations about how we can really ram home the benefits, not just of the energy and water savings on our care, but actually the fabric life benefits as well. It's becoming ever clearer that people want to be able to keep their clothes looking as good as they were when they first bought them. They don't really wanna have to throw them away, and there is the potential that we can maybe tap into, a longer term play on legislation within that as well.

22:44 So in in a nutshell, I mean, from a kind of a a progression, I I look back over the last two years, and we're probably a little bit ahead of where I thought we would be from a tier one global global partner. It's very much in our hands now. The team understand that. And the work that we do over the next six months in particular is really gonna highlight if we can if we can walk the walk, so to speak. So that's it. Alex, if you wanna just give us a a quick headline on some of the numbers. Yes. I have to don't propose to go go through it in a huge amount of detail, but this is just to highlight the the progress we're making on the cost control and the and the opportunity we have. Once we have, you know, we we we have those costs in a place that we're happy with, which we we which we believe we will do sort of certainly this year, it it gives us a base to to go out and win those contracts and to to sort of generate the kind of returns that that that we want to. It's it's an important part part of the building blocks of the strategy we have is is to be in a place we're happy with from a cost point of view. So that this the the p and l and the and the cash flow statement just kind of give a bit more depth to that.

23:53 And then the other thing I'd I'd highlight is the the changes to the share register following the the the placing that took place earlier in the year. So we have a group of supportive shareholders who who have been reengaged in the story, and we we you know, we're we're we're pleased to be working with. So I think that's just something that we wanted to to highlight. Yep. Okay. Good stuff. And we have we have a few questions that have come through, which we're happy to kind of address. So specific somebody well informed to a specific question about microfiber filtration. So one of our our colleagues, if you like, one of our our competitors within the space company called a startup called Matter have recently signed a cooperation agreement with BSH group on filtration. So the question is how will that impact, XEROS moving forward?

24:55 So, I mean, we actually see it as very good thing. I I should say that we by giving too much away, we we let let me put it this way. We've had conversations with a number of different washing machine brands. In fact, probably pretty much all of them. Some of them asked for specific things, which maybe we as a company have decided is not right for us. So, yeah, I think I think if if I kinda leave it there in terms of that that particular partnership. The second piece I would say is that, actually, the longer term play on on microfiber filtration is that the market needs to be established. So we need to remember that there apart from a few kind of really not up to standard products that have been out there, there haven't really been viable solutions in the market.

25:42 I think the the apparent launch, early early twenty twenty five, which will come for the match of the X products and indeed for our product in in q of twenty twenty five, we'll absolutely demonstrate that there's viable technology there. Once that, has been established, then the bigger the bigger kind of battle, if you like, which is about, as I said, proving to legislators and taking away some of the arguments that washing machine brands had about there not being viable solutions in the market disappear. So we absolutely see this as a as a very positive thing for the overall growth of demand for the, for the technology. We've got a second question, which is about the concentration of our revenue across our base, and steps that we've taken to diversify that.

26:30 And so I I mean, that's exactly what we have been doing. So in the last kind of two years effectively, in particular, in the last eighteen months, we have been taking those exact steps. So when I came on board, we we really we had IFB, we had Sea Lion, and we had a couple of component manufacturers. In fact, we had one component manufacturer licensing on filtration. I mean, since then, we've we've kind of nearly doubled the licenses that we've got in place. And I think as we've discussed through, the session, we continue to make those steps on the on all of the technology propositions that we've had to ensure that we've got multiple partners to take it to market, but actually not just for the sake of it, high quality global partnerships. So, I mean, without going into too too many specifics, I mean, we're we're kind of in terms of our projections for next year and indeed the years beyond expecting commercial laundry, domestic laundry, filtration, and and indeed finish to be kind of equally contributive to to the numbers.

27:35 Sounds about right, Alex? Yeah. I mean, there's there's there's timing impacts across all of it, but the reason we pursue all four of those technologies, you know, when when we talk about managing the costs, it won't surprise anybody to know that we have to consider the, you know, the costs and the benefits of of pursuing all of these areas and and ways of bringing them bringing the the technology to the market. And the reason we pursue all four is because we believe there is a significant return to be made across all four. And it's that diversity that gives me confidence, I guess, to say that, you know, if we see if we we that we've got a lot of options to where up where that significant revenue can come from is is is is one of the things that's important to me. Yep. Okay. I mean, kind of building upon that is, again, a more specific question about, you know, revenue forecast for the next three financial years.

28:26 Some frustration I I I take as well in terms of the sales not coming as quickly as we as we as we would have liked. I mean, what what I would say to that is that, I mean, the the first goal has always been for the business to get to a point where it can stand on its own two feet. You you know? And that's why we've taken a very, very clear approach when it comes to cost, which is that we manage it very, very carefully, and we focus it in the right areas. The second point is that, as we've just mentioned, we're trying to diversify our, possible sources of revenue as well so we are not as reliant upon one or two contributory factors. And I think in terms of where is this all gonna come from, I I mean, my expectation is that we will very much be reaching a tipping point in the next six months.

29:12 Maybe not necessarily an immediate generation of the large scale revenues that we all we all want and anticipate, but I think a much greater clarity on the fact that how many, which is how I view it, how many of these, meaningful engagements that we're in, particularly on care, how many of them will be land? Because we'll have a very clear idea of what that means in terms of revenue forecasts. And and then I think I think, hopefully, that should provide some of the confidence for for investors that that indeed we all want to be able to have. I I would just add to that, though, that we are a b to b business. It's the very nature of what we do. We cannot control when our licensees go to market. Trust me. Nobody is more frustrated or disappointed than I am when we have these delays.

29:58 But that's why we have to diversify, and that's why we have to put the right processes in place so that we are not as reliant. So I'm confident that we're doing the right things. I'm extremely confident that we're doing the right things. We have very high quality processes. We've got a very engaged we've got a very capable team in place right now, and we're seeing some of those benefits and seeing some of those results start to come through. But as as I said at the the end of the presentation, we're keenly aware that it's down to us to be able to deliver on this now. So that's what the focus of the that's what the focus of the team is. Just one final question, which is, okay. So there's a couple more. So variables that could impact the timeline to reach cash flow breakeven.

30:44 I mean, I'll give a first first thought on that, and maybe you can jump in, Alex. But, I mean, the the the variables will ultimately always come down to launches, which as I just pointed out, we we cannot control. If we did control it, then, clearly, our our overheads would be significant significantly bigger because we would be directly launching products ourself. That's why we have so many processes in place, but we have tried to build in as much contingent contingency within that. The broker's notes that talk about numbers that we would for for foresee next year, I mean, there is obviously contingency built within that as well. There are a number of different ways that we can generate further income if we need to. There are commercial decisions that we can take so that we can maybe bring forward some revenue in the short term as well if we feel as though that's the right thing for the business to do.

31:38 At this moment in time, we're trying to very much ensure that we have the best long term solutions, the best long term partnerships in place, which will, you know, which will deliver the the the the many multiple, levels of profitability, which we feel is absolutely achievable and and obviously are we know as investors is what you would like to see as well. Alex, do have anything to add to that? Yeah. I guess the bits that that I that I tend to focus on are, as Neil says, those things we can control. So we have we expect it to see, we will see this year with with with sales to and. We're gonna see some lumpiness in terms of XSG deliveries, and it's how we manage that working capital cycle and how we manage our our partners so that they're buying in a quantity and a cadence that suits us.

32:25 I I sort of I'm trying to to to drum home every time we talk about about this internally because I think that's you know, as Neil says, managing the things that we can manage and making sure that we are doing everything we can to to to to bring that that cash into the business as soon as we can. Okay. We've got one further question here as well. So it's it's so what pushback do we get from potential customers in the sales process considering the ESG benefits? Kind of my interpretation of, I I guess, what this question is is trying to get to is do people feel as though it's it's worth it to have ESG benefits alone? As in, can they make money out of that? And, actually, my response to that would be no.

33:12 So we've always been very clear upon this, which is that whilst we as a business, as an individual, feel very passionately about ESG in a in a broader sense, as the custodians of this business and indeed of, the kind of salespeople of the benefits of the process, we very much highlight, yes, ESG benefits, but we also highlight how the licensees that we work with can make money out of this. Let's be clear. That's why they want to do it first and foremost. You know? And and across the board, we're able to demonstrate that. So we will have spoken before on the denim side of the business. Yield Mac have decided that the the best initial approach is to basically market the technology as a, pumice stone replacement.

33:58 Pumice stone is, a problem environmentally, but it's also a cost. Right? So every manufacturer that has to process denim pretty much whether they admit it or not has to use pumice for for most of those cycles. We demonstrate that whilst it's better for the environment to use XSORT, it's actually better in terms of the cost of the production of the of the garment itself as well. So we don't get any pushback on that. It's the same when we talk about the care technology. So the benefits that we can deliver in terms of the water saving, the energy saving, the chemistry saving, never even mind the indirect savings that that that can come from the garment life extension means that even if there's an initial additional cost, for having XORBs in it, and quite often, the entirety of the machine can be paid back within twelve to eighteen months. And, again, this is not theoretical.

34:52 We have seen this. We we often refer to the laundromat in France, George's. He's got the contracts, the likes of Air France and SNCF. They have proven this out. You know, they're saving about £10,000 a year on every single wash every single XEROS machine that they use versus a conventional cycle. And indeed, their customers, SNCF, reports back to them are seeing significant benefits in terms of the garment life. So the the the actual the actual uniforms lasting 30% longer. That's a that's a saving for them whilst doing the the right thing from the ESG perspective. And even on microfibers, although there is, one might say, no discernible direct benefit for people putting this into their washing machine, we know from the consumer insights studies that we've done that people are absolutely prepared to pay more for it. And as I discussed when we went through the filtration side of things, the industry, the retailers in particular, but for sure the washing machine brands as well, are looking for an opportunity to to make an accessory sale as well. So it's not just about solving an environmental problem. It's about offering them the tools to be able to to actually, make more money as well. So that that's how this thing is gonna succeed, and and that's why we're getting some of the really strong responses that we are today.

36:14 Okay. I think that's probably everything from us. Class, Neil, Alex, thank you for answering all those questions you can from investors. And, of course, the company can review all questions submitted today, and we'll publish those responses on the investor meet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Neil, could I please just ask you for a few closing comments? Sure. Yeah. I mean, I'll I'll kinda repeat something that I've already said, but I I just think it's really important for people to know where I I sit on this thing. When I joined the business two years ago, I didn't join it to to get the company to break even. I didn't join it to have some regional licensees that inherited launch their product, which, great, would've would've would've been a benefit. I joined because I felt that there was a unique opportunity to be able to break some really significant technology with global brands, with global manufacturers.

37:07 As we sit here today, we're absolutely delivering on that, whether that is Donlin, whether that is Yulmac, or whether that is the, you know, nearly half dozen global washing machine manufacturers that we are engaging with on the care technology as well. We have every confidence. I wish I could bring all the investors, maybe we should do, to our HQ in in Sheffield, and you would see the energy from the team. The people believe we believe we can do it because we're we're living it on on a daily basis. And and, equally, that's what gives me the confidence that we will be able to deliver within a relatively short period to give confidence back to investors. Class, Neil, Alex, thanks for updating investors today. Can I please ask investors not to close the session? It should now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations.

37:55 This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of XEROS TECHNOLOGY GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all. Thank you.