Trading Update

Xeros Technology Group plc (AIM: XSG), the creator of technologies that reduce the impact of clothing on the planet, announces the following trading update ahead of its results for the year ended 31 December 2025 ("FY25"), which will be published in May 2026.

In the Group's Laundry Care technology, we are pleased to report excellent progression on the Group's breakthrough Launch Agreement signed last year with one of the world's largest, branded washing machine manufacturers. The partner's initial consumer insights surveys have indicated better than expected consumer demand for the benefits of the Xeros technology. This has further strengthened our partner's conviction that our technology is the only real solution to stop the damage to clothes caused in the conventional washing process.

Three other leading global OEMs remain in technical verification, and we continue to anticipate further significant commercial agreements in Laundry Care within 2026.

Interest in our market leading external Microfibre Filter, XF3, shows no signs of abating. With life-time testing now in the rear-view mirror, we are imminently expecting our first two purchase orders for production runs, and expect wider roll-out of these filters to follow in the current year. We look forward to providing updates as these and other material purchase orders arise.

In the Group's Garment Finishing division, very pleasing progress is being made with Xeros' partnership with Yilmak Makina ("Yilmak"). Yilmak's first Xeros enabled machine has been delivered to Ambition Apparel in Pakistan ahead of schedule. On conclusion of commissioning and initial production runs we expect Ambition Apparel, which is a prominent Pakistan-based manufacturer producing over nine million pairs of jeans a year, to place orders for further machines for delivery this year. Yilmak is also in the process of finalising machines for deliveries to sites in Turkey, Egypt and Bangladesh.

These installations, once in full production, will provide real-world proof points of the benefits of Xeros' technology and feed into discussions we are having with a number of leading garment retail brands, who have shown interest in a possible brand partnership, that would see their jeans marketed as having been made using Xeros' Technology.

Revenue for the year ended 31 December 2025 will come in below market expectations. This is for two reasons: a second batch of XOrbs to Yilmak did not ship before the year end as had been anticipated; and as the Group's commercial agreements mature, revenue recognition is becoming more complex, as a result revenues from Yilmak's initial machine sale to Ambition Apparel, alongside an early milestone payment on the recent Laundry Care Launch Agreement will now fall into FY26. In addition, the Group's SG&A is slightly above market expectations due to higher than expected costs of the fundraise in 2025, and some additional staff expenditure. These deviations from market expectations do not impact the outlook for the business for 2026.

The Group still expects to follow on the foundations built within 2025 to deliver commercially in 2026. Revenue in 2026 will predominantly come from royalties for Yilmak's denim processing machines and XF3, and from technology transfer fees from Laundry Care partners.

The Board is pleased with the continuing commercial progress in all areas, and we look forward to sharing further updates soon.