Xeros Technology Group plc (XSG) Earnings Call Transcript & Summary

Good morning, and welcome to the Xeros Technology Group plc Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll, which I kindly ask you submit your responses to. I'd now like to hand over to CEO, Neil Austin. Neil, good morning.

Good morning, and good morning to everybody. Thank you very much for taking the time to listen to our update today. With me is my colleague, Alex Tristram.

Good morning.

Apologies on behalf of our Chairman, Klaas De Boer, is usually attendant today, but unfortunately, due to personal reasons, cannot attend, but we'll do our best to fill in for him in the interim. So as is usual with these cases, we will obviously talk a little bit about the specifics of last year, and we will cover the financials. But I think most people are interested in broadly the narrative related to the story and the progression related to that as well. So what we'll do is we'll hopefully skip through at some pace, albeit we also tend to dwell a little bit to remind some of those that are newer to the story of some of the fundamentals related to Xeros and what we're all about. Okay. So very succinctly, what do we do? We are, firstly, a licensing business. We're licensing within sustainability. We are very firmly a green tech business. We have proprietary technology, proprietary IP. And specifically, we operate within the laundry and the apparel industry. So that's the manufacturer of garments and then the cleaning of garments that comes thereafter. What we offer up to those industries are significant savings in terms of energy and water efficiencies, which result in quite significant cost savings and also the reducing -- reduction of pollutants, so whether that's chemicals that are used in that process or indeed capturing them in the form of microplastics, microfibers as well. That's who we are and what we do. Why do we exist? There are 2 very specific problems in our 2 target industries. First is fast washing, which we've talked about on a number of occasions, key stats there, a lot more clothes being purchased, not such high quality and they end up in landfill. And the reason why is because people find that they don't look nearly as good as when they first bought them. So there is a clear problem there in terms of the maintenance of the garment. And then the second piece is when we move into laundry, which is related to that. Is that the fundamentals of a washing machine haven't really changed in some 50, 60 years. It's a large rotating drum with lots of water heated up and then some kind of agent. So fabric detergent is what we use nowadays. It's very good when it comes to cleaning garments. It's the most effective way we know how to do it. Unfortunately, that cleaning process also abrades the garment. So you start to see a deterioration in it as well. So we all know this. We have our favorite jumper T-shirt, pair of jeans or whatever. It breaks down through repeated washing processes. Okay. So what have we come up with in terms of solutions for that? These are videos, unfortunately, we don't have the means to be able to present them. But if you go to our website, you'll see some of this in action, which I think really helps to explain the technology. The first kind of solution is our XOrbs. So you can kind of see it a little bit in the left-hand side caption. These are small polymer beads, which come into contact with fabric garments effectively. And what they do is massively increase the efficiencies of that process. So we reduce the water, we reduce the energy used to heat up that water. And because it's more effective, we reduce the chemicals, the fabric detergents to be able to actually clean the garments as well. And as I said, because it's a gentler process as well, it's much kinder to the garment as well, which means the garment will last an awful lot longer. So in a very kind of conservative albeit it doesn't sound a claim, we can improve garment life by 100%. I mean, in some cases, 200%, 300% dependent upon what that garment is. The right-hand side picture is effectively a still of an XDrum, which is effectively the application of that technology into a wash machine, domestic washing machine, commercial washing machine. And effectively, we contain the XOrbs within that. They are released during the cycle and then captured during the cycle using kind of an Archimedes screw action through the lifters within the process. So it's a technology that you can switch on or switch off depending upon whether you want to use it or not. It's very much a hybrid in that way. Second solution is filtration. So again, apologies for those of you that know the story, but for those that don't, it still shocks me when I say it, that 35% of all of the microplastic pollution, microfiber pollution that we find in the world's oceans actually comes from cleaning clothes. So you might think it's broader, larger plastic waste, plastic bottles, single-use plastic bottles, it's not. It's actually through the agitation of the garments through the washing process, which causes them to shed. And we get these micro in some cases, nanoparticles as well, which are now being released without any kind of capture at all into the world's oceans, and it creates 500,000 tonnes of pollution every single year, really quite shocking. The good news is that we've come up with a solution. This is not Xeros on its own saying that. But actually, this is well recognized that the most effective way to capture is actually by applying a filter to washing machines. So on the left-hand side, we've got it manifest on an external device. And on the right-hand side, you can see a bit of an indication of it on an internal device actually built into the machine. We have made a conscious decision to introduce the external device so that we can get a solution out to consumers without them having to wait for a new washing machine purchase. And it's a pretty significant opportunity, about 1 billion units of washing machines out in the world today and about another 100 million being produced every single year. Our technology is market-leading. So we've got a 98% capture rate, which is pretty phenomenal. So it's 98% of all of that pollution is being captured by our rotating filter. It works with any domestic washing machine, and it doesn't have any replacement parts. So you don't need to replace the cartridge as long as you maintain it and look after it, it will last long within your washing machine. So a genuinely high-quality solution for what's a significant problem. The other key point that we always talk about when we talk about particularly microplastic pollution is legislation. So it has been on the books. In some cases, it's literally -- it's there in the case of France, albeit it's now waiting for a standard to work towards. And actually, Xeros are proud and privileged to have been one of the companies selected to help create what that standard is going to be. So under the guides of the IEC, we believe that those recommendations will be passed on to the European Commission. And we think 2030 is when it's likely that, that legislation will come into effect certainly within the European Union, but also it's highly relevant for a number of states. And indeed, there's even a federal initiative in the U.S.A. and the likes of Australia as well. So it's 2030 for machines being produced, which if you do a little bit of backward working, it means that really by 2028, we would expect people to be coming out with partnerships on that. So those are the problems, and there's the 2 bits of key technology that we have to be able to answer those. Just to talk briefly about the industries that we're working towards. So you can see kind of line draws to represent the 3 key industries. The first is domestic laundry, which you all have heard of. As I said, that's about 100 million per unit per annum industry. It's pretty significant in and of its own right, about $63 billion. Interesting about that particular industry is that whilst there's hundreds and thousands of different brands, actually, they're all consolidated into 10 brand groups, which means actually to be able to get access into it is difficult in the first instance. But once you're in, you've only really got 10 key players that you need to talk to. The bigger brother of domestic laundry is commercial laundry. It's the same idea, wash machine, but on a bigger scale. This is for the likes of hospitality, leisure, health care and so on, a slightly smaller industry, but actually a bigger ticket size. So obviously, the average cost and indeed, the average royalty for Xeros is higher as a result on commercial laundry machines. And it also introduces a kind of razor-razor blade model because the XOrbs that we use in those machines need to be replaced out. So we have an ongoing revenue stream. Finally, if we move to garment manufacturer. So most people don't realize, but every single garment before it is packed and sent out to shops own through a final wash process. In some cases, such as denim, there's actually a process to affect the garment as well to get that kind of tinted look that we like. And we're able to access that as well by -- and improve that particular industry by adding our XOrbs. Slightly smaller again in terms of market size, but equally, again, a larger ticket opportunity for Xeros, both in terms of the royalty per machine and also the ongoing XOrbs supply as well. Okay. So that's kind of us in a nutshell,-ish, 10 minutes, that's pretty good going in terms of what the technology is all about. I think to talk more specifically about what we've done through 2025, which is obviously the key thing we want to talk about. So the first thing we talk about domestic laundry and the introduction of XOrbs within that, and we achieved a pretty significant milestone last year. So we have signed up what's been termed a product launch agreement, so literally an intent to launch this technology with one of those top 10 that I talked about before, a business based in North America and primarily operates within the Americas, pretty significant. They do about 7 million units of that 100 million units per annum themselves and have big plans to be able to grow beyond that, and they see the Xeros technology as an enabler to do that. Key point I just want to highlight here is that as well as being a technology provider, we also have ambitions to be able to create a broader awareness of the Xeros brand. And actually, in service to that, this product launch agreement has specified within it that the Xeros certification mark, which is effectively a stamp of approval from Xeros to say that this uses Xeros technology in the right way will also feature on that machine. So where are we? We signed that agreement probably about 6, 7 months ago. Within the first kind of iteration, we've been focusing very much with the partner on actually the marketing side of the story. So some really kind of very compelling early consumer feedback. So this was kind of online with a larger scale. So this was hundreds of people shown the Xeros proposition using the assets that we have created, so that they could understand what the technology does when it operates and the benefits that they will get from it as well. A very, very high propensity to purchase came out of that. And that has helped us accelerate on to a second stage of that, which is about getting actually machines in the hands of consumers, albeit prototype machines, which is on track for execution within the next kind of couple of months. That will really form out that marketing story, which is fundamental so that, that business can understand how it can maximize the benefit of that technology. So that's very much going according to plan. We don't talk specifics in terms of the financials on it, but what we can point you towards is that our list price, if you like, to get access to this technology. So a combination of the royalty and the supply of the XOrbs is somewhere in the region of about $25 per unit. So you can do the sums yourself about the potential opportunity. The other piece to mention when we talk about this is that whilst we're obviously delighted to have signed up the first partner on the product launch agreement, we've also got live active processes under NDA and in certain cases actually being paid for what we call our tech verification process with 3 more of those top 10. The focus, the goal very much for the business has been about finding lead partners for each of the key geographies, although they are global and they have the ability to be able to sell across the world, actually, the nature of the regionalization of the business means that there are generally -- some of those top 10 are stronger in certain areas. So there will be stronger companies in Europe, stronger companies in APAC as well. And we have very much had that in mind when we have been selecting who we want to work with. So our anticipation very much, which we'll talk about later, is that we'll be able to move towards further product launch agreements within this calendar year. Okay. Alex, do you want to give us a bit of a headline on...

Yes. Thanks, Neil. So we've been working with our partner, Yilmak Makina based in Turkey for a number of years now to get the XOrbs technology in the hands of their customers for the processing of denim. And so that's the final wash that takes denim from the raw denim that comes off the mills to the kind of stonewash finishes that you see in the shops and the consumers are familiar with. So a really big milestone with that last year, which was getting the technology in a sort of live-fire production environment with ambition apparel for the first time. So that's a really significant step. This is a technology where we have known the benefits at sort of lab and test scale for a long, long time. Those benefits are significant carbon savings, significant cost savings, less water, less energy, less chemistry and crucially for the industry, the complete removal of pumice stone, which is a sort of a key thing that Yilmak and their customers are looking to achieve. So we can do all of that. We've been able to do it at lab-scale forages. We can now show people that this works at production level scale with Ambition Apparel partners in Pakistan. So that's great. That's a really good first step. But what do we need to do from here? So the plan we've been working with Yilmak, our team pretty closely in the first half of this year to make sure that we've got machines in the key denim hubs all around the world that can connect as case studies really to prove out -- to prove the technology to those partners at the right scale in the right geographies so that we can expand the launch beyond that. So those placements have been agreed. Some of them have been manufactured, some of them are on the way there now. They will be placed to kind of prove out the technology in those hubs and to act as the case studies to get a broader launch in the second half of the year. One of the key things that Yilmak are working on at the moment is to showcase their technology at the biggest trade show really, ITM in Istanbul, that's coming in a few weeks' time in June, so that the technology will be front and center on the stand there ready to be deployed all around the world after that. So just a reminder of the economics of this, these are really, really big business kit across the lifetime of a garment finishing machine, we might look to get about $50,000 from the customers for that over the lifetime of the machine. Some of that's upfront as a royalty payment. Some of that comes through the XOrbs sold on a repeated basis throughout the lifetime of the machine. So because this is a dirty business, they do need to come back to us and get cleaned and replenished. We charge for that, and that means that we can have an ongoing revenue stream from denim as they go. So really exciting progress to have this live and in production, really excited to make our first sales, and we expect to make a few more of those this year as the technology starts to roll out properly. So that's kind of the Yilmak side of things. How can we help? So we have a relationship with a number of retail brands. We have been kind of showcasing our technology to anyone who listen and most retail brands will for a number of years now. The key steps that we've got to take to get into a live production environment. Now we've overcome that hurdle with Ambition Apparel and the other machines that are going out there now, which means we can push forward with our plans on those partnerships over the next few months. So that's one of our key milestones we hope to hit this year is that co-branded launch of denim with a real leader in the sustainability and retail space on denim, and we're excited about the work that we plan to do with those guys. So I look forward to talking about more about that in due course.

Thank you, Alex. And then the final area that we talked about, obviously, is the microplastic filtration. So as I said, we made a very conscious decision that we wanted to be able to get the technology out into market. And there's a couple of reasons behind that. One was in a very basic sense, it helps us to start to generate some cash, which is obviously important to the business and indeed to our investor base. I think the second piece is that we are very, very confident in the performance of the technology as well. And we wanted to be able to prove that. So by actually having a unit, which is accessible really for everybody, we're going to be able to demonstrate that we have that preeminence that we've talked about. And we have it -- we know because we've done significant lifetime testing on the device ourselves. We've given it to third parties such as the Hohenstein Institute, which has given us that kind of certification of 98% capture rate. And then the final piece as well is I talked briefly about legislation. It's interesting actually when somebody like me that you actually read the transcript of Senate hearings and so on in California. And sometimes a lot of the kind of debate is about is there a practical solution out there. Nobody kind of -- nobody debates, nobody really disagrees with the logic of the fact that this is being generated by the laundering process. So the easiest, most cost-effective way is to intercept it at source effectively. But there has then obviously been a question about fine, but actually what is the technology already out there, which proves it. Now there are a couple of players out there already, which we're obviously pleased to see, not to be dismissive, but we think they haven't quite managed to crack it in terms of actually finding something which works for consumers in terms of usability that works in terms of affordability and also, as I said before, actually lasts the lifetime of the machine as well. And it's why we feel fundamentally that if we put our technology out there, we will be able to directly answer some of those legislators queries about the viability of solutions to be able to legislate towards that as well. So long story short, this is why we took the decision to partner up with old friends of mine from my previous life beyond Xeros, which is working with [indiscernible], the world's largest small domestic appliance manufacturer, a colossal business. They are preeminent in terms of the quality of their manufacturer and also their reach. So we partnered with them. We announced that a couple of years ago. And really now we're starting to see that come to fruition. Last year, we announced that Russell Hobbs, so keen to kind of move forward with this, wanted to give us that pre-commitment, and they will launch this year. And earlier this year, we announced that MediaMarkt, Europe's largest consumer electronics retailer, equally have acted with intent as well to say that they wanted to be able to be one of the first people to bring this to market. But this is by no means all that we have in the offering. Indeed, in some of the conversations I've had in the last day or so, the biggest challenge, which is a great challenge for us to have is actually the channel management piece. So making sure that all of the people, whether that's retailers, broader consumer electronics brands or actually washing machine brands, we can manage their want and their need to be able to have a certain area that they can launch without initial competition. So it's a good problem for us to have, but it also, I think, very clearly reflects the fact that there is a want, there is a need, there is a demand for this product, which we knew anyway in terms of the consumer insights that we were able to do upon this.

Yes. The one thing I'd just add on that is there is a steady drumbeat of news and stories the whole time that are just backing up the story on microplastics and why we need to do something about it. The latest iteration of that was a big documentary on Netflix focused on the health risk, particularly about fertility, but it is more and more of that kind of buildup of the consumer awareness, but also the evidence base, which means we know that's something that to be done. There is something to be done about microplastics and we know it's coming.

Yes. So to give some headlines in terms of some of the fundamentals. So we make anywhere between $3 to $8 per unit. It's a royalty flows straight down to the bottom line, which is great. We are, as we all say, an IP-rich asset-light business. So we've done all of the hard work now. Now hopefully, we can sit back and start to see the benefits of it. We have very strong patent coverage on it as well, which we very much mentioned before. So -- the plan, as we'll talk about in due course, is to give the likes of Russell Hobbs, MediaMarkt and a couple more that we will name in the forthcoming months, the ability to be able to push this piece out this year. It will generate income for us, which is great, but it will also start to generate a kind of foundation for ongoing income globally because we do believe that -- we know that there is a want and need for this product, not just in Europe, but in the Americas and indeed in Southeast Asia, and that will come in due course. This is just very much the beginning of what we're going to see in microplastic filtration. Okay. So to kind of talk a little bit more and elaborate on what are we expecting in the next period? I mean I think you might say it's a little bit of a kind of a gel-free for us by talking about a longer period of 2026 to '27, but we think it's important that we want to manage people's expectations. We are a B2B business. We're a licensing business, but we're also trying to break novel and innovative technology. So it is technology which clearly answers consumer needs or indeed industry needs as well. It always takes a little bit longer than people want or indeed that we would want as well. But kind of in a nutshell, what do we expect to see happen. So on the domestic laundry, particularly the XOrbs technology that we're going to use in there on our Care technology, as we call it. Clearly, we're expecting further developments with our North American partnerships. So that product launch agreement has milestones within it. We are working our way through those milestones. And we're anticipating that within this next period that we're very much going to move towards being able to be a bit more specific about when that product will actually launch and what that launch looks like. Now clearly, there's huge opportunity even just with that partner because they, as we said, sell several million units every single year. And they very much see that the opportunity for this is not just as a niche sale, probably they will start at a more premium level because that's the way that all new technology gets broken. So they see very much because there's cost savings for this in terms of the lifetime ownership of the machine that this can cascade all the way through the product lineup as well. So we're expecting to be able to make further progression on that and equally announcements for the market as well. But beyond that, I talked before about the fact that we are in serious negotiations with others as well. We firmly expect to be able to unveil a bit more specificity about that in due course as well. It's always good to have a couple of options to be able to work towards, which is why we've actively pursued a number of different leads. So we fully expect that we're going to be able to make some further announcements on that as well. But the bigger picture on this, the goal is that we do very much believe that this should and has the ability to become a default technology within the industry. As I said, there are 10 big players within this space. We have conversations at a basic level with all of them. And we have -- we've mentioned before that we're in kind of a process with, but we're also in early-stage conversations with others as well. So this tech verification process, as we call it, which is to effectively provide the ability for those other big brands to be able to properly understand what does the technology actually do and does it work on my machine and how can I kind of sell it and so on. We're having those conversations. And I do expect actually that we're going to be able to put more in that sales pipeline in the forthcoming period as well. As I said, the goal is that within an achievable period, we want to see this technology being offered by every single washing machine brand in the world, and I believe that's possible. Just in terms of the Finish, Alex, just want to develop on how we're going to build upon the foundations that we've got.

Yes. I think the thing to kind of point out with Finnish is that this is a technology that is live and for sale. So we're in a slightly different position than we are on the domestic technology in that we've got a machine in the market. We've got a partner that's building and selling. And the kind of the key for us is to execute on the sales strategy with that now. We are supporting Yilmak as best we can to maximize that rollout. We're supporting them with the outreach to the retail brand. We're helping them out with kind of testing and understanding the technology in a bit more depth. And we're kind of helping them out with iterative tweaks, we can make to make the technology benefits even more compelling. So that's -- that's our ambition for the next sort of 12 to 24 months, as we mentioned earlier on, is to maximize that rollout and to get it as embedded within the industry as we can. And we can do that by supporting Yilmak and we could also do that with the brand pull that we're working on. And like I said, I hope to be able to share some news on in due course. Yes.

I mean I'm going to talk about filtration. I'd say kind of thematically, last year was about making kind of agreements, which really position the business very well in terms of having big players, big global, very well-established, high-quality partnerships in place. I think through this year, you're going to start to see more and more brands, names that you will have heard of that we're going to be able to say are either actively working with Xeros in terms of commercialization of our technology or very much wanting to kind of raise their hand and say this is a technology that we feel the world needs. So I think that is the theme that you'll be able to see. I think specific on filtration, I mean, it's a bit more granularity. The key European markets, U.K., Germany, France, Italy, Iberia, indeed likes of Benelux and Nordics as well, we will see full launch of the technology, as Alex has mentioned on a couple of occasions already today. It's pretty exciting for us because although we've had sort of commercial laundry machines out there, this will be the first time that we as human beings as consumers will be able to point towards a store, point towards a website and say, that's my product. That's my product, which is actually for sale and it's going to be available for people to be able to start to use. But as I said earlier in the presentation as well, we know that there is pull in terms of North America, particularly Japan and South Korea and Southeast Asia as well. So again, we are working with -- we're trying to qualify who is the best kind of placed distributor to be able to help us maximize that because we don't want somebody to just take the technology for the sake of it. We want somebody that's going to properly get behind it and really give it the best possible chance to be able to get into consumers' hands within those regions as well. And then the final bit as well, I've mentioned that we are anticipating could be within a couple of months, an agreement with one of the world's largest washing machine brand groups as well, which I think, again, is great for us in terms of, obviously, an opportunity to be able to commercialize because the validation that's going to be able to come from that is significant. I think when we're able to name that company, you'll be able to see the quite significant scale that they've got. And it doesn't put it doesn't take a genius to be able to put 2 and 2 together on this and say, well, if they're wanting to partner with us on a freestanding device, and we know legislation is coming for what's probably going to be an integrated device as well, it positions us extremely well in terms of being, if not the default provider, but very much the preferred provider of that technology for some of the biggest players within this industry. So just remind the quantum of that, 100 million units sold globally, even if it's just Europe, it's about 30 million units every year. I mean this is a massive opportunity for Xeros, and we believe is very much achievable within the next couple of years. I think the final bit, you kind of -- you might not see it, probably we could have highlighted it a little bit more. We mentioned it in terms of the RNS as well that we've released today. When we closed off our funding round last year, it was very successful indeed. And in terms of the price, we were very pleased to be able to get it effectively, not even really a discount versus the kind of average for the, I think, 2 to 3 months prior to that. But also the quantum that we were able to raise as well was more than we had set out to do. That has provided the business with an opportunity, if you like, to kind of take a step back and consider what's the best thing to be able to do with that. We've taken some time over the last 3, 4 months. We have strategized and we've really kind of considered what's the best possible use for that additional cash that we didn't expect to be able to have. And we've made a considered and cautious decision that we want to invest some of that here and now. And that investment is coming very much in the form of upskilling some of the key people within the business here, both from a technical perspective and actually from a commercial perspective as well because these things do very much go hand in hand. It's a commercial technical conversation, particularly as we are getting to the point of working with these really big partners. And we've also made a conscious decision to be able to start to think and put some pieces in place, particularly on the domestic laundry care application to be able to kind of improve that to a certain degree. Now this is not an R&D project that's started that's going to take 5 to 10 years. This is a fine-tuning of the technology that we already have in hand, and it's also finding ways to make it to find multiple ways for partners to be able to work with this as well. So it's offering more flexibility, so that we can more quickly get to that point that I talked about before, which is providing this as a default to pretty much every single washing machine brand, every single washing machine group that's out there. As I said, I want to repeat the words very cautiously and very considered. We are starting that process. We still very much have that additional amount on the balance sheet, but we're making a message. We're sending a signal today to say that it is our intention to be able to take some of that so that we can accelerate and bring forward some of those opportunities that we've had in hand for the last 12 months.

Yes. I think I'd just add to that. We see this as an iterative process. So this is -- we can -- that investment and the progress that we're going to make can go hand-in-hand with the commercial progress that we make and the conversations that we're having with the customers. So it isn't -- isn't stand-alone. It works with the commercial progress we anticipate making, and it's something that we -- I, in particular, keep a very close eye on, and this is going to be an iterative process that we can manage throughout the kind of the coming months and years. The reasons we're doing it is a couple of reasons. As Neil has already mentioned, is to accelerate and make sure we can bring this technology to the market in the most effective way. It's to buttress and expand the revenue portfolio that we already have in place. So I think it's an exciting step we're going to make to try and really get this technology into the hands of the users, which is where it needs to be for many reasons, ecological consumer ones, but also so that we can start seeing the revenue come through that this business has worked so hard to get to.

Yes. Okay.

So from a financial summary point of view, I won't go into too much depth on this one. The indicators, the percentages are moving in the right direction this year. We're happy with the progress that we've made. Last year's revenue was not about shouting from the rooftops that we've got a 50% increase in our revenue last year. What it's about is working with our partners to put the foundations and the building blocks in place for the more significant jump we expect to see across 2026. And as we run you through, we think we're really, really happy that we've got those building blocks in place that are going to allow us to make that step change in 2026. We have had a tight control of costs for the last couple of years, and you can see that in the numbers when it comes through for 2025. When we talk about the investment that we just have, we're not undoing that good work. It is something that we keep a close and frequent eye on and the investment is going to be targeted in the right places, that mean we can we can make them -- maximize the resources that we have available to us. From a cash point of view, the first quarter of the year is always our most expensive. That is not an indicative run rate for the year. I want to highlight that. We are comfortable with the cash we've got, and we're comfortable that we have the resources to maximize the opportunities that are significant that are coming towards us over the next 12 to 18 months.

The only thing I think I'd add to what Alex has said is that I don't -- I'm not disregarding any of the financial performance that we achieved last year or indeed this year. For me, this is very much about us creating the foundations now today within the next kind of 12, 18 months to really give us the opportunity to be able to rock out and to accelerate through. Whether it's on the finish technology, whether it's on the filtration technology or the care technology, it's not really about generating GBP 1 million here, GBP 1 million there. This has significant potential to generate tens of millions of profit for this business. And as Alex has already pointed out, we are a pretty lean business as things stand. So because we don't need to invest in manufacturing, we don't need to invest in multiple additional people. When we reach that pivot point, which is what we're focusing on right now, that's when we see the significant return that I think everybody is expecting. And to be blunt, it's why I'm here as well. So yes, the financials are important to give everybody a level of confidence in terms of what we're doing. It's about those foundations and it's about being able to demonstrate that they are real. Okay. I mean just kind of in conclusion, I think this is a slide that we have used a couple of times before, but I would just remind everybody of the fundamentals of the investment case for this business. We've talked about being market ready and commercial agreements in place. That's never true than it is today. We will see the finish technology, as Alex has said, is there. It's in garment manufacturing facilities as we speak right now and is on its way to further in Egypt, Bangladesh and indeed Turkey. We have agreements in place with some of the biggest players, and we've consciously taken the time to make sure that we can get those the right place of people, the right place businesses to enable us to be able to really pivot out of that. The technology that we're offering as well is offering solutions to issues that are live. They are real. This is not a niche problem that we're going after, whether it's water scarcity, energy scarcity, microplastic pollution. This is something that everybody knows about. So we are pushing very much against an open door in terms of finding people that are interested in the solutions that we provide. We've demonstrated it in terms of third-party verifications, but we are generally market leading. We're market-leading on the XOrbs technology and on the microplastics technology built by people that have spent, in some cases, nearly 20 years of their lives creating it. So it really is market-leading for [indiscernible]. I've talked about the business model. We are lean. It is highly profitable when we reach that pivot point, which we believe we can do. And the final bit is we've got great protection. We are very well covered when it comes to IP, litigation insurance, so on and so forth. We know this thing is going to take off. And when it does, people will try and nibble around the edges. We're very -- we're ready and prepared to be able to fix that off should that happen. Okay. I mean hereafter, Alex has got a load of different financial models as well, which you can see in due course. But I think in terms of the core piece of the presentation, that's just kind of concluded.

Perfect. Thank you for your presentation this morning. [Operator Instructions] For your reference, a recording of today's presentation will be available on the Investor Meet Company platform shortly after the meeting has ended. But for now, guys, as you can see, there are a number of questions which have been submitted. Can I please ask you to read out the questions and give your responses where appropriate to do so, and I'll pick up from you at the end.

Excellent. Okay. Thank you. So the first question is quite detailed. Broadly, it's addressing the product launch agreement with the top 10 OEM. So it's asking for a bit more specificity on the 12- to 18-month schedule, which we've talked about before. So what's the next milestone? When does it trigger? And is that related to kind of early payments as well? So I think I talked today a little bit about where we are with that particular agreement. So just to reconfirm some of the fundamentals of that agreement has those milestones. That's quite right. Those milestones go from the theory of doing something together right the way to the very end, which is literally a product with the Xeros Technology coming off a production line. There are off the top of my head in this, I think there's 7/8 key milestones. And the first milestones that we talked about are very much focused on the marketing side of it. So I think quite rightly, this particular business has a -- has a sufficiently high level of confidence in the technical feasibility of the technology that actually they want to focus more on, okay, but how am I going to sell it? So which of the features and benefits resonates most with the consumers? What are going to be the key kind of incrementals in terms of price points? Is there a regionalization piece because primarily, we are talking about North America, which is, yes, technically, if it's just the U.S.A. one country, but there's massive kind of regionalization between the West Coast, East Coast and Middle and South and so on. And we are very much on track with what was agreed last year. So as Alex has always pointed out, there are payments related to that. This first stage that we talked about does have payments related to it. That would be right. And we're expecting that to come through in due course. So I think broadly, the question is about will we get some money? Are we going to start to see some money back from that agreement? The answer is yes. Do we expect to see some more within the year? The answer is another yes. Are we trending in the right way or progressing in the right way with that? The answer is absolutely 100% yes as well. Second question, [indiscernible] penny, but I think it's fair is whether we anticipate another fundraise before we break even. I think we just talked a little bit through the presentation about the fact that we had a to be honest, more successful fundraise than we thought that we had intended to be able to go out with. So the business is very well funded at this moment in time. Speaking on behalf of the Board more generally, we're very happy with the level of funding that we've got. We overlay that with a very tight and stringent approach we've taken to costs, which has been a feature of Alex and I at the helm for the last couple of years. I think it gives us further confidence related to that. Plus the other very important bit, which is obviously the part of the bigger picture is whether it's on those partners we talked about, MediaMarkt, Russell Hobson Filtration, whether it's the installations that Yilmak are now achieving with the Denim technology or indeed the North American and indeed others on the care technology as well. All of these are opportunities to be able to generate revenue in a way that we haven't been able to do before. So we combine all of that together, and I would say we are in a very -- not comfortable is the right word, but we're in a good position. We're very well placed to be able to accelerate through in terms of what we want to be able to do. So yes, I think that probably best characterizes the position of the business. I don't know if you want to add?

Yes. I think Neil's got it right there. I think what we need to see a step change in revenue. That's what this business is here to do, right? We are here to start generating some returns on the funds that shareholders give us over the years, and we're here to get our technology in the hands of consumers and use us to generate revenue. We expect that to happen across '26, '27 and beyond at a much, much more meaningful way than we've ever seen it before, and that gives me the confidence that we are in a really strong position when it comes to...

Okay. We've got a very specific question related to the XOrbs and whether they present a choking risk. So this is -- you'll not be surprised to notice something that very early on in the process, there was an awful lot of research done on. I think the first thing to point out is that although they are made of plastic effectively from PP or nylon, they're not actually toxic or chemical, chemically enhanced to a degree that they are in any way a danger to people. There's a slightly amusing anecdote we have that at one particular trade show, an individual mistook them for mints as an M-I-N-T-S, and started eating them. And we can report that they suffered no effect. So firstly, they're not toxic in any way. The specific size has obviously been generated with a consideration of efficacy in terms of how they can benefit, but also in terms of choke hazard as well. So we're very touched. I don't take it too lightly, but we're confident that they are in no way hazardous or choking hazard. But it's a fair question because clearly, when this gets into the hands of individuals, we want to take the due diligence and have done to make sure that there is no harm and no potential harm to anybody as well. Next question, I guess, is kind of related to an earlier question, which is the specific conditions, what specific conditions must be met for the largest OEM partner to move from testing to full-scale rollout who controls the time line us or them. So again, I'm going to presume this is the North American domestic laundry partner. So I mean, the specific conditions are -- I can probably sit here and talk about them for an hour. They are market sensitive. So I can't get too specific about it. But what I can say is more broadly, they are milestones related to, as I said, the kind of marketing side of it, which from us is quite straightforward. We've had to provide some prototype machines. It's very much down to the partner to then do the next steps on that, albeit we will collaborate with on that. From a technical perspective, there are clear goals that we have agreed that we want to be able to reach, which is in terms of fine-tuning of the hardware and hardware I'm talking about is XDrum. So these are the lifters that go over the -- this is the harvesting construction that goes over the lifters within the machine. It's also the containment area at the back of the drum. To a certain degree, it might be specification of the XOrbs, albeit as unlikely. There's also an awful lot of cycle development that goes with that as well. So this is obviously making sure that we get a really high level of wash performance and also a good level of kind of fabric care benefit as well. So all of those have got specific goals related to them. They do unlock further payments as well to kind of preempt any question related to that. The piece about who has control, I mean, I have had experiences from previous companies about these kind of development agreements. The reality is it's called a joint development agreement in most instances for a reason. So it's for both parties to be able to do it. Clearly, we can't compel somebody to bring a product to market equally, they can't compel us at the same time as well. So what I can say, hopefully, to give people a level of confidence in this is we made 2 conscious decisions. The first one was deciding to partner with the North American business. We were very much satisfied that they had a very serious intent. They had a very clear idea of how they would use the technology as well in terms of commercialization. So are they serious about working with us on it? The answer would seem to be very much yes. However, clearly, putting all our eggs in one basket is not necessarily the right way to go about it. And that's why I refer back to the conscious decision to embark upon developments with others as well. So it's not just the North American guys. We've got 2 European, and I can probably say now 2 in Southeast Asia as well, one that we've referenced before. And this is because we need to be able to offset any risk that we've got. And that might be because who knows they might really like the technology, but for whatever socioeconomic reasons relative to their key launch markets, geopolitical issues. We do live in turbulent times, unfortunately. All of these can affect. It's got nothing to do maybe with our development program, but maybe things relative to that business as well. So -- it is B2B. We never have full control over this process without getting into too many specifics, that's part of the reason why we've made a conscious decision to invest in certain areas as well so that we have multiple ways that we can partner or we can work with these groups as well. So that if there are reasons why they can't progress in the way that we want them to or the pace that we want them to, we've got further solutions to be able to provide relative to that as well. So we got answers. Next question is, given the capital-light model, how dependent are you on partner execution? I think what control do you retain if a partner delays? I think I've answered a big part of that. I think maybe why I can talk about which gives a little bit more of a sense of the partnership relative to it as well as I've talked in the last few hours about the importance of the product certification mark that we bring. So the product certification mark is not just us trying to get our brand on it for the sake of it. There will be an authentic benefit to being able to have that for the partner brand as well. Some of those benefits will come in terms of we provide highly accurate terminology, highly accurate illustrations, both in terms of static visuals and indeed video so that they can properly explain how the technology works. That's really very important indeed because, firstly, they might get it wrong, we left it in their hands, but also because -- the reality is we've spent years working to get this technology to a certain point. We feel it's important that we have a level of ownership beyond that. And also, we feel that we should get a certain level of awareness relative to that as well. So I mean, if the piece is relative to the level of control that we've got, we've got control in terms of the messaging and the marketing that goes related to that as well. That's why we've insisted in product certification mark, which is on the agreement that we've got with the North American partners. It is in the agreements we've got with Russell Hobbs and with MediaMarkt on the filtration piece as well. And also, as Alex talked about before, we have one garment retail brand, which is very, very keen to get hands on the denim technology as well. they don't just want to use it on their production of the denim. They also want to be able to do a PR campaign. They want to be able to celebrate the fact that they're using Xeros' technology and all of the benefits that go with that as well because it will be -- it is the greenest way to be able to produce a pair of jeans in the world as well. So we hold our own, I think, is what we can say. And actually, I think the manifest some of the elements of that agreement with a North American partner shows that. We do not get pushed around. We never have full control upon this piece, but then the only way that we could do that would be if we fundamentally change the commercial approach for the business, and then we would be a lot more expensive to be able to fund, which I think is not the right thing to do. And I don't think fundamentally, that's what shareholders would want us to do either. Okay. If we move on to the next one. So have any water companies shown any interest in supporting your work? I mean it's an interesting one. We have had conversations with people more broadly within the water space, I think you could term it. There is always the question we get asked, which is particularly when it comes to microfiber filtration, would it not make more sense to do that at sewage treatment plants and so on. I mean, you could do, and there is some level of filtration that works there as well, sometimes even down to kind of nanoparticles. It's hugely expensive. It's hugely expensive in terms of the implementation of it, and it's also extraordinarily lengthy as well. So we maintain a dialogue with some of the key players within the U.K. But actually, if it comes down to microplastic filtration, the community, if you like, at large, legislators at large, NGOs that work within the space, everybody is in agreement. It really needs to be a point of production of that pollution, which is the washing machines themselves. Next one is -- do you want to pick that one up, Alex?

Yes. So I mean there's a question again about cash on the balance sheet and getting through to breakeven. I think we covered a little bit earlier on why we're confident that we're in a really strong position at the moment. So yes, we think we're comfortable having answered that one. There are 2 questions at the moment about the installation of our microplastic filter and how straightforward it is. I can take that one, having that one myself, our engineering team when they were looking for -- to check how foolproof their installation guides were and to test it in a real-world environment came to the finance team as perhaps indicative of least set of people within the business. My team all managed it, no problem. I took one home, plumbed it in a home, no problem. It is no more complicated than 2 Jubilee clips. And yes, and it worked very well. So yes, very happy with how straightforward that is. It may be something that some people will get installed alongside a washing machine when they -- if they have someone to come in and do that. That, in many ways, is one of the selling points for our customers because they then have an extra point to sell in a new product with additional margin in the way they haven't done before. When your washing machine installation company turns up, they will have some on the back of the van and they will say, "Oh, while I'm here, would you like to buy a washing machine filter " because it's another selling point to one of the reasons they like it. So...

I would really highlight what Alex has said. I mean, firstly, the key point is it is very easy. But yes, Alex is right. I mean there are multiple points at which -- so the retailers or the brands very much like this technology because they see it as an attachment sale, as Alex is alluding to. Part of the reason why it's so interesting to them is because actually, although the ticket price is pretty high in washing machines, much higher in Europe and the U.S. than it is in the U.K. Actually, the marginality is not great. So they're constantly trying to look for ways to be able to improve, if you like, the overall margin that they make on a machine. The only real way that brands, in particular, or indeed, the likes of Currys can do so is by the selling of warranty. So it's very much an ongoing revenue stream for those guys, that attachment rate is not there. I mean if you look at something like computing or photography as it was back in the day, the attachment rate you can get, in some cases, like 56% on the sale of core, whether it's a camera or a laptop or whatever. On appliances, there's definitely a huge opportunity for them to be able to do that. Something I would have worked on as myself personally, while I was at the Whirlpool Corporation. I mean there are multiple ways that they can influence that opportunity, whether it's point of sale of the sale of the machine, whether it's then a point of purchase, maybe it's at till or indeed, if it's an online journey as well, it can be a other people bought this as well, whether it could be a bundle, which is you get money off if you buy the 2 together with the final bit as well, which Alex said, which is I think what a lot of these guys see is that when the machine is being installed, you've gone to the cost of having an engineer install that. It's a very easy thing to be able to then also, if you like, give them the opportunity to be able to buy the microfiber filtration as well. And actually, an engineer is a figure of real authority to the consumer within their home, not just in terms of the technical elements of a washing machine, but actually how it works and what's good and what's bad. And so them fully kind of armed with the specifics, the features and benefits of the technology, there's a sense very much from our partners that they could be very effective in terms of parsing that to the consumer. So there is a real opportunity for the experts, if you like, to be able to help with the feasibility element of installing it, but also in terms of just broader awareness piece as well.

And then I think final question, just do get tangled up in the washing. Well, that's part of the magic really and why we've worked so hard to get our cycles right over the years. So we probably have the world's experts on washing and how -- what happens to pockets during the washing process within our staff, particularly when it comes to denim as well. So we know how to make it work in the most effective way possible. So it's about how you spin it, when you wet it, what you do with it during the process, which way you're spinning it, which way you spin it back. So the idea is we are seeing on a very regular basis, no XOrbs left in the cycle after the work has been done.

The interesting bit on that is that a lot of machines are sold on capacity. So if anybody has had the joy of buying a new washing machine recently, firstly, you've probably been quite underwhelmed by the experience. You'll have been sold probably on capacity or indeed spin speed still seems to be the way, maybe to a certain degree on efficiency of it as well. But the reality is that the machines are actually getting slightly bigger in terms of their capacity. But actually, the amount of washing that people are putting into it has not increased. So you -- there's actually an awful lot of space, if you like, for the movement, which is great because it gives us a really good opportunity to be able to influence that process and get the benefits of the XOrbs technology, but also there's an awful lot of space for them to be able to be captured as well. So yes, I mean, we've said on a number of occasions, we've got people within this business that have been working, fine-tuning this technology for decades in some cases. It feels a bit like alchemy, a bit like magic, but it works, and we prove it out time and time again.

That's great. Thank you both for answering those questions. Before we ask investors to share their feedback, which I know is important to you, Neil, if I could just ask you for a few closing comments to wrap up with, that would be great.

Yes, sure. I mean I've kind of mentioned this, so maybe I'll repeat it a little bit again as well, which is the business is actually in a really, really good position at this moment in time as well. So we have good cash in the bank. We have some really, really high-quality partners, which has been -- honestly, that's been a really hard work over the last 2 years, 2.5 years since we kind of got our ducks in row under my leadership. That's really starting to come to fruition now. And then we've also got just ever, ever greater awareness, either of the benefits in terms of fabric care or indeed when it comes to microfiber filtrations. The industries that we're targeting really want solutions to the problems that we're addressing with our technology. So I mean, look, I'm confident, Alex and I sit here today and I feel like we're in a good position. We have got work to do. I constantly say that to the team. We are by no means there. And it's because for me, success is not just about having a couple of partners launch our technology and there we go well, it's done or getting to a point where we break even. We don't take that for granted. I'm very much focused on how we can get this technology into the hands of the right partners and as many partners as possible so that we can really kind of take this thing off. And I very much see that as probable at this moment in time. So I think, yes. with ongoing support from the likes of our loyal investor base, I very much feel like we're going to do it. So thank you.

Thank you both once again. Ladies and gentlemen, can I ask that you don't close the session just yet as you'll now be automatically redirected to a page to give your feedback, which helps the company better understand your views and expectations. On behalf of the management team, we'd like to thank you for attending today's presentation. I wish you all a good morning.