Ann: XTEK Provides FY20 Revenue Guidance, page-2

Monday, 6 July 2020: XTEK Limited (ASX: XTE) (XTEK, or the Company) is pleased to
announce that the Company expects to deliver FY20 revenue in excess of A$42m (unaudited). XTEK also
provides an update on its ballistics operations including the recent progress of the optimised XTEK
manufacturing capability (including XTclave™) resulting in an increase to production capacity and potential
revenue generation.

Key Highlights
• XTEK expects to achieve FY20 revenue in excess of A$42m (FY19: $37.9m)
• XTEK manufacturing capability (including XTclave™) optimised with the ability to produce up
to ~A$40m p.a. of revenue, doubling previous forecast
• XTEK is well placed to service growing interest in its ballistic solutions with further orders
expected in the near-to-medium term, underpinning XTEK’s future revenue expectations
XTEK Managing Director, Philippe Odouard, said:
“We are delighted with our strong financial performance in FY20, especially given the increased volatility and
uncertainty in the recent trading period. In addition, we have also progressed the optimisation of the
XTclave™ manufacturing capability, which has efficiently unlocked significant value by increasing our
production capacity and revenue generation potential.”
“We have the key pillars in place internally to build towards a A$100m business in the medium term, with a
growing pipeline supported by our active and advanced discussions with potential customers, distributors and
suppliers. The multiple ballistics opportunities on the horizon in the near to medium term, is further
underpinned by the global market trend towards soldier survivability and expected increase in defence spend
in key markets.”
FY20 revenue estimated to be in excess of A$42m
XTEK is pleased to advise it expects FY20 revenue to be greater than A$42m (unaudited). This represents at
least 10% growth from FY19 revenue (FY19: A$37.9m). FY20 revenue growth is driven by strong
performance in the newly acquired HighCom Armor Solutions Inc. (‘HighCom’) in the US, and ongoing SUAS
supply and support. In addition, a shift towards proprietary products in FY20 has also supported improvement
in gross margins. Given the focus on higher margin proprietary products, further substantial improvements in
margin trends are expected going forward.
XTclave™ optimisation increases manufacturing efficiency
Following the installation of the commercial scale XTclave™ equipment in the manufacturing facility in
Adelaide, XTEK has progressed the optimisation of the XTEK armour manufacturing capability. This
production capacity provides the opportunity for XTEK to generate up to ~A$40m per annum in Adelaide,
which represents a significant increase from the previous production forecast capacity of ~A$20m per annum
revenue. In addition to the Adelaide XTclave™ facility, XTEK plans to install a second machine in the US in
the medium term, which together with other armour manufacturing systems could potentially contribute a
further ~A$40m p.a. Two fully utilised XTclaveTM based facilities provide a revenue potential of up to ~A$80m
from XTEK’s XTclave™ manufactured products alone and underpins the Company’s medium term objective
of becoming a A$100m business.
XTEK in a strong position to service high demand and expected orders
As global defence spending continues to grow with Governments’ focus on soldier survivability, XTEK
remains well placed to capitalise on these market trends. Given the continued increase in demand, both
locally and internationally, XTEK is leveraging its advanced production, its existing domestic and international
orders and market position to further drive ongoing discussions and negotiations with potential customers and
distributors. Further order expectations remain high, with XTEK receiving positive feedback on multiple
products to date.