Commercial Update

Nanoco Group plc (LSE: NANO), a world leader in the development and manufacture of cadmium-free quantum dots and other specific nanomaterials emanating from our technology platform, today provides the following update in relation to the Group's materials for use in infrared sensing applications in electronic devices with its European customer.

In July 2024, the Group announced that it no longer expected to receive a further production order for its validated first generation sensing products during the financial year ending 31 July 2024 ("FY24"), and that the Group was working with the European customer to understand the range of possible outcomes and any potential impact beyond FY24.

Following further dialogue with the European customer, the Group now no longer expects to receive further orders for its first generation sensing materials. In addition, the European customer has served notice on the Group's two year Joint Development Agreement for second generation sensing materials that was previously announced in January 2024.

Nanoco had achieved all of the required development milestones to date and had received positive feedback on the performance of the new material. Nanoco understands that the European customer's decision has been based on its own strategic priorities and not as a result of concerns with the performance of Nanoco's materials.

The Group will be negotiating end of project terms with the European customer. Amongst other matters, Nanoco will be seeking the removal of any obstacle to its direct pursuit of already identified small scale market opportunities. These opportunities include sectors such as industrial, defence, agriculture, security and surveillance, healthcare, and automotive.

Outlook

As a result of the above, the Group expects revenues for the year ending 31 July 2025 ("FY25") to be approximately 25% below consensus forecasts1.

The Group continues to work well with its Asian customer on its Joint Development Agreement for second generation sensing materials, with the potential for production orders in the medium term, subject to end user adoption of the technology.

As per the announcement on 2 July 2024, the Group also continues with other, small-scale commercial engagements for customers interested in display materials, alongside additional new business development activities and outreach.

Christopher Richards, Non-Executive Chairman of Nanoco, said:

"This is obviously disappointing news and reflects the nature of high technology supply chains for consumer electronics. It is noteworthy that our customer has taken these decisions based on its own strategic priorities and not on a lack of belief in, or the performance of, Nanoco's technology. Smaller scale opportunities are available for this technology in the short to medium term and we aim to address those niche markets directly and in partnership with other companies.

We also continue to work with our Asian customer in developing our second generation sensing materials, with commercial potential over the medium term. The Group's strong balance sheet provides us with the financial stability to continue this development work and our new business development activities."

1The consensus revenue forecast for FY25 is £9.5m, being the average of forecasts from Cavendish and Edison.