VIGO Photonics S A : estimates for Q1 2023 – growing sales in the USA and Asia, a significant increase in sales in the military segment

• Sales on North American markets exceeded PLN 3.7 million
• Maintained high sales dynamics on Asian markets, sales at the level of PLN 3.4 million
• Increase in sales in the military segment in Poland and abroad

VIGO Photonics S.A. (WSE: VGO), a global manufacturer of the most advanced photonic detectors and mid-infrared detection modules as well as semiconductor materials, in the first quarter of 2023 achieved PLN 18.8 million in consolidated revenue.

Sales of detectors and detection modules in this period totaled PLN 17.2 million (+53% y/y, -5% q/q), and sales of semiconductor materials PLN 1.6 million (increase x3 y/y, comparable q/q). q). In Q1 2023, the largest y/y increase in sales was recorded in the industrial segment (PLN 11.1 million, +33% y/y, -8% q/q), thanks to good sales in the USA (methane sensors), Europe (semiconductor industry) and Asia (measuring devices) and the segment of semiconductor materials (orders for QCL structures - Quantum Cascade Lasers). In total, Q1 2023 revenues amounted to PLN 18.8 million (+60% y/y, -5% q/q).

We are satisfied with Q1 2023 revenue, which is in line with our expectations. The process of acquiring new orders was a little slower than expected, which was influenced by price increases introduced in 2022. However, we can already see a clear rebound in contracting at the end of the first quarter, which significantly accelerated compared to the level at the end of the fourth quarter of last year. We also see that in April the good dynamics of acquiring new contracts is continued - says Adam Piotrowski, President of the Management Board of VIGO Photonics.

The total value of orders acquired by VIGO Photonics from the beginning of this year to the end of March amounted to PLN 18.4 million (decrease in annual terms by approx. 4.5%, increase in quarter-on-quarter terms by 38%). The company is currently seeing a clear rebound in the trend of acquiring new contracts. In addition, from the second quarter of this year the effect of price increases by 20-30%, negotiated with customers in 2022, will gradually become more and more visible in VIGO's results.

As we informed earlier - from October last year. we have gradually introduced price increases for our products, and negotiations with all customers have already ended. We have successfully introduced price increases of approx. 20-30%, and their positive effects will be gradually more and more visible during the year - says Łukasz Piekarski, Member of the Management Board and Financial Director of VIGO Photonics.

Sales in the first quarter of 2023 generated by the American company (consolidated from Q3 2022) amounted to PLN 3.7 million in this period (x3 y/y). Sensors for industrial applications (mainly methane detection) have the largest share in sales on this market.

VIGO also maintains high sales dynamics on the Asian market, visible from the fourth quarter of 2022. In the first quarter of 2023, sales on those markets amounted to PLN 3.4 million (+40% y/y, comparable q/q), thanks to orders in the industrial, transport and scientific.

Export sales on the US and Asian markets are developing well. In the United States, we are already seeing positive and measurable results from our sales team. Revenues generated by our American sales team exceeded PLN 3.7 million in the last quarter, and what is worth emphasizing, sales are driven to a large extent by our gas detectors, mainly methane, used in the mining industry, which is a very prospective market. In turn, sales in Asia are developing evenly in several segments: industrial, transport and science. The acquisition of the first significant orders (over PLN 1 million) from the Japanese manufacturer of measuring equipment was also a great success, which, after several years of cooperation on product development, managed to successfully commercialize the new solution on the market - adds Adam Piotrowski.

In the first quarter of this year The sale of detectors on the domestic market amounted to PLN 0.9 million (and was 3 times higher both year-on-year and quarter-on-quarter) - this is primarily due to the sale of detectors for military purposes. The total sales of VIGO in the military segment in this period amounted to PLN 2.8 million (increase 10x y/y and +61% q/q).

When analyzing the revenues of the first quarter of 2023, it is also worth noting the increased revenues of the military segment compared to previous periods. Revenues from this segment generated in Poland in the last quarter amounted to almost PLN 1 million, and in total PLN 2.8 million in the entire segment, and were significantly higher than recorded in individual quarters of the previous year. This is the effect of the geopolitical situation and significantly increasing spending on security and defense by individual countries, including Poland. We expect that these expenses, and thus our sales, both in Poland and other European countries in this segment, will increase - adds Adam Piotrowski.

In terms of revenue structure, the following applications had the highest share in the first quarter of 2023: industrial 59%, military 15%, transport 12% and semiconductor materials 8%.

In the industrial segment, VIGO recorded PLN 11.1 million in sales. In the second in terms of revenue in the first quarter of this year. was the military segment, where sales reached PLN 2.8 million. The next segments in terms of revenues are transport - PLN 2.3 million of revenue and semiconductor materials - PLN 1.6 million. The revenues of the comparable first quarter of 2022 were influenced by the start-up of a new investment in technological facilities and a clean room.

In the first quarter of 2023, VIGO signed new contracts, e.g. in the application for gas analysis - FTIR spectroscopy (contract value of EUR 1.62 million), in the industrial application - for measuring the thickness of varnish coatings (value of approx. EUR 0.5 million) and for a supplier of optoelectronic systems (value of approx. EUR 0.2 million EUR).

I am convinced that the constantly growing demand for our products, supported by global technological, geopolitical and ecological trends, will support VIGO to return to the path of dynamic growth in 2023 and in subsequent years - sums up Adam Piotrowski.

CORPORATE AND INDUSTRY EVENTS

• The publication of the VIGO Photonics annual report for 2022 is scheduled for April 18 this year. after the end of the trading session.

• 20 April this year. VIGO Photonics will take part in the 14th edition of the GPW Innovation Day online conference (www.gpwinnovationday.pl)

• In the first quarter of 2023, VIGO Photonics participated in the following industry events: SPIE Photonics West (USA) - the largest industry photonics conference in the world, Smart City Summit (Taiwan), Space Industry Days (Poland)

• Upcoming trade fairs and industry events: SPIE Optics and Optoelectronic fair (Czech Republic, April), Infrared Colloquium (Germany, May) LASER World of Photonics fair (Germany, June)

NEW EPITAXIAL REACTOR

In September 2022, a new epitaxial reactor was delivered to the company for the production of III-V semiconductor materials (chemical compounds from groups III and V of the periodic table of elements). In the first quarter of 2023, production was launched. The commissioning of the reactor will double the production capacity, allow to serve more customers and start more new projects with customers.

DEVELOPMENT STRATEGY - PERSPECTIVE 2021-2023

In 2021, VIGO presented a new, two-stage development strategy for 2021-2026, in which 6 development initiatives were distinguished - technological areas to strengthen the Company's position as one of the most innovative and dynamically developing enterprises on the market. Until 2023, the Company's goal will be to continue R&D projects in the field of photonic technologies, integrated circuits, detectors made of III-V materials, epitaxy of semiconductor materials and infrared source technology. The technological and technical base will be developed. Due to the current market situation, the Company is currently focusing on strategic initiatives that contribute most to the growth of revenues in the short term. The second stage of the strategy will be implemented until 2026 inclusive and will consist in the implementation of selected development initiatives.

Contact for the media and individual investors:

Piotr Piotrowski, cc group

[e-mail], [phone]

Contact for institutional investors:

Malgorzata Mlynarska, cc group

[e-mail], [phone]