Good afternoon and welcome to the Kromek Group plc Interim Results Q&A session. Throughout this recorded meeting, investors will be in listen-only mode.

Questions are encouraged and they can be submitted at any time using the Q&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 received during the meeting itself, however, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO Arnab Basu.

Good afternoon to you, sir.

Good afternoon, and good afternoon to everybody that joined us. Hopefully you have all had a chance to see the recorded webinar and which we used to sort of convey the results and the opportunities that is in front of us.

I've got Claire Burgess, our CFO, with us, and together we will try to answer all your questions that you have.

Fantastic. Arnab, Claire, if I may move on to the question.

The first one here reads as follows. You have stated that circa £4.8 million in CBRN orders have been received year-to-date, with half still to be delivered in H2.

Given the H1 CBRN revenue was £4.3 million, can you clarify if the £2 million post-period debt draw was specifically to purchase the long-lead components for this £2.4 million remaining backlog? If so, does the cash from these deliveries settle the revolver by April year-end?

Thank you. I'll take that one.

I at the year-end negotiated a £6 million revolving credit facility with HSBC Bank and that is to support the working capital of the business. The working capital of the business, we've got the advanced imaging and we've got CBRN.

CBRN side is a relatively short working capital period, and although some of that drawdown will have been to support the CBRN side of the business, predominantly most of it will be to support the advanced imaging side, which has a much longer working capital period. The revolving credit by nature is revolving, during the year the facility will get paid down.

I don't expect that to be at the end of the year because as the year goes through, we are ramping up our production on advanced imaging, I do expect some usage of that facility to continue.

Perfect. Thank you.

Next question: Firstly, congratulations on the acceleration of Kromek over the last 18 months. I have great confidence in Kromek over the next 5 years.

I support the underpromise, overdeliver approach. That said, with large deals taking years to mature, investors need some sense of pipeline health to gauge process.

How can you give us a clearer picture of pipeline without compromising your disciplined approach?

I think that's a great question, and we do acknowledge that often it is the type of customers we have and the relationship we have and the strategic nature of product introductions and so forth makes it difficult for us to convey everything that we want to convey in an ideal world. Hopefully the conversations we are having like this is going to help in conveying some of the messages, and hopefully that'll help you understand where we are going from where we are today.

Let me just characterize the broader market a little bit, and hopefully that'll give some context and some understanding. The adoption of CZT in the advanced imaging segment, which is primarily the medical imaging segment, which is dominated by two modalities, CT and SPECT, are accelerating.

That is pretty evident by new product introductions that are happening in the market over the last 5 or 6 years. Certainly we are seeing the acceleration of new product introduction utilizing CZT that has happened even in last year.

Let me talk a little bit about the SPECT market. So, 2018 was the first product that GE introduced in the SPECT market with their 670 NM, and that was really the very first full-body imaging system or the mainstream imaging system with CZT that was introduced.

Since then, both GE and Spectrum Dynamics, with whom we have a stated contract of $57 million, have continued to introduce new products throughout the last periods. Of course, last year, the enablement contract with Siemens is of course for SPECT.

Pretty much majority of the market has now stated their interest and demonstrated through product introduction that CZT is becoming more of a mainstream sort of detector replacing the conventional detectors that exist in legacy systems today. We have seen real, tangible take-up of CZT through GE, through Spectrum Dynamics, and latterly through Siemens' enablement program in that market.

When I look at the CT market, it is going through exactly the same kind of transition at the moment, although a couple of years behind the adoption sort of cycle of SPECT. Siemens Healthineers introduced NAEOTOM Alpha, the first photon-counting system with CZT/CdTe detectors.

That was back in 2023 and then expanded their portfolio over the following year. Now last year, just in 2025, three other companies, including Canon, has come out with either soft product launch or really new product introduction in the market with CZT in their CT systems, photon-counting CT systems.

We are seeing not only one company really introducing product, but a number of companies starting to introduce products. In this market, of course, we are working with everybody at the moment who does not have access to an internal supply chain like Siemens Healthineers in CT does have.

We look at this market as a total market opportunity by 2030 of about roughly $400 million of CZT requirements by 2030. $80 to $85 million of that is required in the SPECT, and about $320 million required in the CT market.

Now, we have access to about 40% of that $400 million CZT requirement by 2030 in these two markets that we can supply into. As the only independent commercial supplier of CZT, we have a pretty good strategic position to really capitalize on that demand that is coming through.

Where we are today to where the market would be in 2030, which is roughly requirements of $400 million of CZT, with us having access to about 40% of that market, we are seeing a real opportunity that'll enable us to grow pretty aggressively over that period. That's where we have set that medium-term target of £60 million revenue with a 30% EBITDA during our Capital Markets Day last year.

What we can say here is that we are working with all our customers. Our customers are either really accelerating their products and getting better market share, like Spectrum Dynamics, with Siemens Healthineers in the SPECT market, and our stated customer that we announced, the Tier 1 customer in 2023 in the CT market, and also the other players that we are working with.

We are going to see continuous introduction of new products, continuing that journey of adoption of CZT in this market hereon. It's not a question of if, it's a question of how fast in terms of CZT adoption.

Hopefully we would be able to come back to the market on a regular basis over the next few years to provide a more clearer picture in terms of as and when products are launched, as and when that ramp-up happens, as and when we are expanding in this markets. I understand the challenge.

I understand the information gap that some shareholders are feeling in terms of where we are today to how we are going to achieve that growth. We will be looking at every possible ways of conveying and addressing that information gap that we understand investors feel we have.

These conversations are important and we'll be continuing to have that so that we can paint a picture, we can articulate, we can frame the opportunities, and we'll be continuing to do so going forward.

Fantastic. Thank you, Arnab.

The next question has two parts to it, the first one being: How much spare CZT production capacity does Kromek currently have left to service new Tier 1 OEMs without requiring significant fresh capex? Second part: How does the board view Kromek's role in the ongoing consolidation of the medical imaging supply chain?

Is the priority to remain independent?

Look, I think the capacity question is a very relevant question. If you recall, back in 2019, when we announced the Spectrum Dynamics contract, we actually invested £10 million in expanding capacity.

Today we run 174 CZT production furnaces, that's our total stated capacity. We don't, of course, run at 100% utilization of that at the moment, but so we do have some spare capacity to start to service some of the early contracts during the ramp-up, the early phase of the ramp-up of the contracts we already have from new customers, such as the supply contract we have with Siemens Healthineers on top of the enablement contract we have, which was the $37.5 million.

The contract which we announced in April 2023, which had a sort of a development phase and then a commercial phase, we are rapidly approaching that commercial phase, we'll be able to start serving some of that contract with the capacity we have got. If I go back to my numbers of that 40% of a $400 million market requirement in 2030, we will have to go through a pretty steep expansion of capacity.

We have made it very clear, and we have demonstrated within the structure of the Siemens contract, that as we need capacity to facilitate and supply into this market, we wouldn't be stressing our balance sheet or asking our shareholders to really fund that. The capex will be structured within supply contracts such that the funding actually comes through that supply contract rather than us having to bear the burden of the capex that is required.

I say these numbers and so to get to that market demand, we would be looking at between eight- and tenfold increase in furnace numbers over the foreseeable future, over the next medium term. It is a significant expansion, but we also have a plan of how to fund that growth, both from a working capital needs through debt and the revolving credit facility that Claire has put in place, but also in the capex form of within the supply contracts how we are structured.

To answer the second part of the question in the consolidation in the medical imaging, we have seen that this market has acquired, if we go back to 2008, GE acquired Orbotech, which currently is their internal source of supply for their SPECT detectors of CZT. Acrorad, the Japanese company, was acquired by Siemens in 2010, 2011.

That really is the primary source for CT detectors, photon-counting CT detectors, for Siemens Healthineers. At the same time, Siemens licensed technology from us for their SPECT detectors, which are two slightly different flavors of CZT.

Then Canon acquired Redlen in 2021. This has been a market which has been acquisitive, and we have remained independent in there.

We have remained a player where we are able to serve 40% of the market and go through a tremendous growth phase. Our focus is very much to serve that market as an independent listed business in the UK, to grow and capitalize on that significant market need that is articulated and visible to us in the current year in the future years.

That growth ramp will be actually reasonably going on for the next 10 years as the market reaches maturity in terms of adoption of CZT. We have got a long way to grow.

We can build a really, really interesting and long-term growth business in Kromek here in this particular market segment alone.

Fantastic. Thank you.

Next question is: Administration costs at circa 50% seems high. What is the breakdown of these costs?

The company has done well to achieve the Siemens contract and other potential areas going forward.

Okay. First and foremost, admin costs, I believe, are about right for the future growth of the business.

As we grow and as revenues grow, the administration costs will not grow in line with that growth. We're at a stage now where we are fully focusing on value from our overheads, making sure we've got the right overheads in place to sustain the growth.

Within that, we've got a lot of valuable people. The majority is people, I think, as we go forward.

The business is well-placed to grow. What I'm not going to do at this stage is cut those admin costs any further.

I think they're at an appropriate level. As we grow the revenue, those admin costs as a percentage of revenue will start coming down.

Thank you, Claire. Next question we've got here is: It is great to consistently hear about progress, but over the 5-year period, the share price is down.

Why is that?

Thanks for the question. Of course, 5 years back we had the whole world went through COVID, and that affected large number of businesses, overwhelmingly large number of businesses in UK and around the globe, and we were no exceptions.

We had a pretty difficult time around COVID. What we have continued to do through that period is really focus on the areas that matters: focus on development of CZT, winning those customer contracts, getting embedded within their customer supply chain within the CT and the SPECT market.

That's what is coming through in 2023 the Tier 1 contract, the 2025 the enablement contract with Siemens. We have continuously developed that business.

On the other side, we have developed significantly on the CBRN side as well as we have won very important framework contracts within the UK Home Office frameworks, within our relationship with Department of War, our relationship and the contracts with Department of Energy, and our presence in Ukraine is a testament of how we have continuously building building blocks as we have gone through that last 4 years. As a business and as a management team, we are focused on building the business.

We achieved profitability, we delivered profitability, we said we are going to grow sustainably in a profitable way over the next years, and we are focused on delivering that. It is also pleasing to see that the share price has moved in the right direction, and over the last 6 months or so, it certainly has moved up.

As we say, there's a tremendous growth opportunity on a profitable basis for this company in the coming periods and years, and we will continue to execute, and hopefully the market will recognize that value and deliver value to our shareholders.

Thank you very much. The next question is on dividend: When will the board look to a dividend?

Look, we are a technology company and part of our stated strategy, on top of the mainstream strategy of really focusing on organic growth and delivering organic growth both on our AI side and on the CBRN side, we also have stated that we would look at bolt-on M&As. All those bolt-on M&As will have to be done based on a self-funded basis.

As and when we have got spare cash and capacity on the balance sheet, I think we will invest in building the business and building the value within the business. That's where our money is going to be focused in the foreseeable future.

Thank you. The next question, they note: I'm a non-scientist.

Does CZT ever lose its potency?

Interesting question. [laughter] I don't know what exactly the potency bit mean, but I'm guessing the question is about what's the expected lifespan of a CZT detector.

A CZT detector is a room-temperature semiconductor which doesn't degrade with time particularly. It's a very stable detector, and that is one of the advantages of CZT detector: a robust, solid detection system, works at room temperature, unlike what is there now.

The general life expectancy of a medical scanner where our detectors go into is roughly between 7 and 10 years, the replacement cycle is roughly 7 and 10 years. We serve that market, and so effectively you can say the expected useful life of our detectors is roughly in that order of magnitude.

Thank you very much. Next question we've got here is: We have recently seen significant investment from high-profile City veterans on the open market.

While the management recently exercised options, we haven't seen an open-market purchase from the executive board in some time. Once the current closed period ends following these results, should shareholders expect to see the board's personal skin in the game increase to reflect the inflection point you have described?

I'll start with this one as it does involve Dr. Basu kind of directly here.

I think, first and foremost, as most of I joined the company in May this year. The executive directors on the board have never taken any money, they've never sold any shares in this business.

They have been diluted over time, but they've never sold any shares. In terms of share investment, Dr.

Basu exercised some options, I think, as the question refers to, last year, but also the exec team at the time both were entitled to cash bonuses and the execs remaining in the business both invested those in options over shares. That's beneficial to the business because it retains cash in the business.

They could have taken cash and gone out into the open market, but this twofold keeping the money in the business kind of is beneficial. Then the other announcement that we did around the time of the AGM that both the executives and the non-executive directors who took wage increases took those in options as well, they didn't actually take the cash benefits.

I think as an outsider coming in and new, the executive board and non-executive board are putting skin in the game and investing in the business alongside other shareholders. Don't know if you've got anything else to add.

Just to add again, this is primarily about the executives rather than the non-execs, but if you go back, there's been investments from the non-execs and share buying by the non-execs on a reasonably regular basis. Execs have also bought shares in pretty much every fundraising that has happened.

I and whoever the other execs at that time has purchased shares. There is an ongoing commitment.

I've been in this business for 23 years, and as Claire rightly points out, I have never sold a share, but we have continuously put our money where our mouths are, so.

Perfect. Thank you.

Moving on to another question we've got here: Kromek has transitioned from a cash-burning, R&D-led business to a profitable, licensing-heavy model in H1. How should investors think about the long-term balance between high-margin licensing, scalable product sales, and internally funded R&D as business matures?

That's a great question, and allows me to explain how the business is moving forward. We completed the Siemens enablement contract, which was a $37.5 million licensing contract.

That revenue is going to get recognized over the 4 years of the contract. The majority of that recognition happened in the first year, financial year 2025, which was $20.5 million, about £16.5 million.

We've recognized about $11 million, £8.3 million, in the first half. From here on out, I expect that licensing revenue to be spread relatively equally up to the end of those 4 years for the balance.

As that tails off, the underlying business will grow in line. Market expectations are set very carefully as we work out, and as that licensing revenue tails off, the underlying business grows.

I think the growth prospects of the advanced imaging business is very, very strong. I think there's still growth prospects of the CBRN business to go through as well.

The business overall, we don't disclose margins at the individual division levels, but on a balance, historically, our gross margin is about 55%, I think we've got a healthy business to go forward as both segments of the business grow going forward. Don't know if you've got anything to add to that.

No, not really. It is going to be a product-led business.

The licensing revenue has given us the bridge from where we were in 2024 to where we are today, but ultimately that underlying business is growing and that'll continue its growth journey. As I said in the medium term, when you look at just the advanced imaging segment opportunities, that alone is sufficient to really drive that growth on a profitable basis going forward, so.

Thank you. Changing topics here: Airports across the world are installing luggage scanners, including Heathrow recently.

Are you supplying any of these, as you have mentioned this scanner product before?

Look, we are working with baggage screening companies, multiple baggage screening companies. We cannot confirm or we don't disclose where our technology goes into, but although that's an very rapidly changing market, our overwhelming focus at the moment is capitalizing on the medical imaging market, where we have got a very good, firm strategic position on the supply chain in the SPECT and CT.

Our growth sort of strategy is not based on the luggage screening or the baggage screening market. Our growth strategy is firmly footed in the medical imaging markets, which is sustainable, predictable, month-on-month growth over the next 10 years.

Fantastic. Thank you, Arnab.

Next question here: Over the years, Kromek has required additional capital raises that have diluted existing private shareholders. Is Kromek now at a point where you are cash-generative, negating the need for future share raises and dilution?

Yeah. I think we've been very clear about this.

Yes, the business has raised money in the markets historically. There is no intention to do further capital raises.

We've got debt facilities in place, we are talking with customers around structuring of contracts as we go. The M&A will be structured in a way that allows us to grow over time on a managed basis, but there is no intention to come back to the market and dilute shareholders further.

Thank you. Next question: If the addressable SPECT and CT markets total £400 million, how much is Canon, GE, and Spectrum?

How much for Kromek? What is the competition in the remaining market?

Firstly, by 2030, the CZT detector market is $400 million. We have, as I said, we have got access to 40% of that market.

Remainder would be supplied through internal supply chain, through the acquisitions that Canon made, through the acquisition that Siemens made, and through the acquisition of GE makes. We'll have roughly access to about $120 million, and again, that $120 million sorry, $120 to $160 million is actually a market where we're not competing with anybody.

It's because we are the only independent player of CZT who can commercially supply that product in the market. It's a big growth market for us.

Globally we have got a very strong position, and as the market grows, that'll be reflected on the business itself.

Fantastic. Thank you.

Next question on production: Do you have plans to move production to the United States?

We already produce in United States and in the UK. We have got two manufacturing facility: one where we are sitting today in the North East of England, and the other just outside Pittsburgh in Pennsylvania.

We have got a production footprint on both sides of the Atlantic.

Thank you. Sticking to the US, given the higher valuation of tech companies in the US, have you considered listing on a US exchange?

Look, I think the very short-term and medium-term plan is to be where we are. We understand the valuation challenges that we have faced in the past.

I think we need to build scale. We will be demonstrating the profitable growth path, and as we scale, we will continue to explore opportunities which will be aimed at returning shareholder value and creating shareholder value.

At the moment, we are firmly an AIM-listed company and we have absolute commitment to grow as an AIM-listed company in the UK.

Thank you, Arnab. Next question here: I'm worried that Kromek has given away its intellectual capital to Siemens.

Will it continue to trade with them?

Look, if I just take a step back in terms of the structure of that deal with Siemens, Siemens has got a non-exclusive license to produce CZT for use in SPECT only, and of the two markets, SPECT and CT, SPECT is the smaller of the two markets. As I said, that total detector requirement in 2030 in SPECT would be about $85 million, in CT would be $320 million by then, and CT at an earlier stages of adoption at that point.

Yes, we have licensed our technology and we'll be teaching Siemens to produce CZT as good as we do. I don't think that means that we have given away our IP.

We got significant value in return. We also have a supply contract with Siemens, at least for the next 4 years, and we hope that that supply contract is going to extend beyond that 4 years, supplying products to Siemens for SPECT.

Thank you. Maybe a couple more questions: How material will the sales of bio-detection consumables be?

Great question. We haven't talked about bio-detection a lot, but we are developing a unique capability with funding from the US government, initially from DARPA and now from CWMD, Department of Homeland Security, and with the US government agency, and several contracts from the UK MOD.

We have extracted a significant amount of funding to develop a pathogen detection system which doesn't rely on having one targeted pathogen or three targeted pathogen that you're looking for. This is a agnostic system where we are able to detect any pathogen present in a sample, and that is very important.

That's a unique capability globally. This is a portable system.

This is going through the rigors of customer testing, and because the two customers on both sides of the Atlantic are the main customers who are paying for the development for their use, and that use then goes beyond those two customers, it's a global opportunity. The business model, as you have rightly pointed out, is a consumable-driven business model.

We sell a equipment, which is the base, but every time you do a test, we get revenue out of consumables and usables, so. It is a consumable-driven business model.

Thank you very much. Next question: You mentioned last year and repeated £60 million turnover in medium term.

Is medium term now 1 year shorter?

No, medium term is medium term. Generally, you're looking at medium term between 3 and 5 years.

If we look at it, we are kind of aiming towards that 2030. That's how we define that's medium term.

Understood. Thank you.

Arnab, Claire, perhaps one more question here: If there is no competition in the remaining 40% medical market, what is the scope for price and margin increases?

It it is a great question. Let me let me have a swing at it to start off with.

These are The medical imaging market has got very it's a very well-established market for SPECT and CT. If you look at the CT market stratification, you're going from the the premiere in CT to mid mid, mid-section CT to value CT, and and similarly in SPECT, it's digital SPECT and and then lower-functionality SPECT.

It is important to understand that the adoption of technology that is happening is not happening just because, it's vastly superior. It's happening because it's vastly superior in in terms of detection capability and the diagnostic capability and the clinical benefit it brings, but also it brings at a commercially viable price point.

Because these are not niche markets, these are absolutely mainstream medical imaging markets. When we talk about price and margin, there are established price points, a price brackets within these medical imaging segments.

It is it is absolutely crucial that the that the end user are are able to live within that price segment of say premiere CT or mid mid-section CT. That what the detection system or the sensor prices needs to be are well-established for a very long time.

The the adoption rates and and the timing of adoption are on based on two things: one is the technology being ready, absolutely crucial and fundamental, but secondly, the technology is deliverable at the right price point. The margin question comes from operational efficiency, from yield improvement, from all the things that we need to do internally to to really get to improve the margin year on year.

That is exactly where the money is being spent at the moment. When you see the R&D money being spent, it is being spent in exactly those things, so that the future margins are better, future margins are sustainable, because we know what the price needs to be in this market for this market to expand very rapidly and have that complete conversion from current detection system to the photon-counting detection system or the digital SPECT that is happening.

That trend is, that that trend is already inside.

That's great. Look, you have covered a lot of ground there, guys, and thank you for addressing those questions from investors today.

Of course, the company can review all questions submitted today, and we will publish those responses on the Investor Meet Company platform. Arnab, before I redirect investors to provide you with their feedback, which is particularly important to the company, could I please just ask you for some closing comments to wrap up?

I just see another question pop up. Is that correct, Alex?

I'd rather

Go ahead. Go ahead.

Could you read out the question?

Yeah. Of course.

I wonder if you could give us

a Oh, hold on.

Sorry. Someone's just moved that.

I wonder if you could give us some insight into the shareholder rotor. Who is Graham Spier, and do you know his intentions?

We know Graham Spier very well. He has been one of the most supportive shareholders of this company.

His first investment was made in 2005, and since then, he has invested in every fundraising, private or post-market, and during IPO. Graham is an entrepreneur, a businessman himself, and he also, through his company, Polymer Holdings, provided the sort of debt when we needed the debt pre-Siemens Healthineers enablement contract.

He's a very stable, supportive, solid investor and shareholder that we have got who has been through the entire journey of Kromek or a very significant part of the journey with Kromek. We expect him to remain on board as a stable shareholder.

Thank you very much for listening, and I hope our answers, Claire and my answers, gave you a little bit more insight into the business where we are, what the growth potentials are. We hope to update you as and when there is things to update, and we'll be catching up again on a regular basis in the general Q&A sessions during results.

Thank you very much.

Thank you.

Fantastic. Arnab, Claire, thank you very much indeed for updating investors today.

Could I please ask investors not to close this session, as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure be greatly valued by the company.

On behalf of the management team of Kromek Group plc, we would like to thank you for attending today's meeting, and good afternoon to you all.