VIGO revenue estimates for Q2 2024

● PLN 22.7 million – the highest level of quarterly revenue in history
● Revenue growth of +24% y/y, primarily due to constantly growing revenue from the military segment
● Development in the USA: sales growth in the industrial segment (+48% y/y, PLN 3 million), continued efforts to obtain the first contracts from the American arms industry
● Obtaining a concession from the Ministry of Internal Affairs and Administration, allowing for the development of product lines intended for the Polish army

VIGO Photonics S.A. (WSE: VGO), a global technological manufacturer of the most advanced photonic mid-infrared detectors and detection modules and semiconductor materials, achieved PLN 22.7 million in consolidated revenue in Q2 2024 (+24% y/y). The level of revenue achieved in Q2 2024 is the highest quarterly level in the company's history.

VIGO’s order portfolio at the end of Q2 this year amounted to over PLN 55 million, which means an increase of approx. 3% y/y.

Sales of detectors and detection modules in Q2 2024 totaled PLN 20.4 million (+19% y/y), and sales of semiconductor materials PLN 2.4 million (+100% y/y).

In total, in the entire first half of 2024, VIGO revenues amounted to PLN 38.6 million (+4% y/y), sales of detectors and detection modules amounted to PLN 34.6 million (+1% y/y), and sales of semiconductor materials PLN 4 million (+45% y/y).

In Q2 2024, the largest increase in sales was again recorded by the military segment (PLN 7.9 million, +124% y/y), which reflects trends visible for several quarters. Sales in the segment grew thanks to orders from regular customers from Poland and Europe, including Safran Aerospace, PGZ and other European contractors.

The industrial segment recorded a decline in sales in Q1 2024 (to PLN 8.1 million, -12% y/y). The segment's result was primarily affected by lower demand for detectors used in the semiconductor industry and a weaker economic situation on industrial markets in Europe, which was already visible in previous quarters. In turn, sales in the industrial segment in the United States in Q2 2024 increased by almost 48% year-on-year, reaching PLN 3 million (in the US, VIGO currently sells mainly detectors
for gas analysis, including methane).

Sales in the semiconductor materials segment are growing thanks to orders for QCL structures - Quantum Cascade Lasers, structures for the production of semiconductor energy storage devices and for the production of edge lasers. Sales in the segment amounted to PLN 2.4 million in Q2 2024
(+100% y/y).

The total value of orders and contracts at the end of Q2 2024 amounted to over PLN 55 million (including PLN 39.1 million in confirmed delivery orders, compared to PLN 37.6 million at the end of the same period last year and an additional PLN 16.4 million in contracts remaining to be
implemented for the years 2023-2025). This amount does not include the contract with an entity from the PGZ group signed in August 2023.

The share of applications in the revenue structure in Q2 2024 was as follows: industrial application 36%, military 35%, semiconductor materials 10%, transport 14% and science and medicine 5%.

Sales by application (in PLN thousand)

The second quarter of this year brought a significant increase in VIGO sales both quarter-on-quarter and year-on-year, reaching a record quarterly level in the company's history. This is the result of several factors: constantly growing sales in the military segment, a rebound in sales in the industrial segment and dynamically growing revenues in the semiconductor materials segment. The constantly growing sales in the military segment are the result of already known trends - increasing defense spending by countries. VIGO provides detector solutions for customers from both Poland and Europe, this year we also expect the first contracts in this segment in the USA, where we are currently finalizing the acquisition of the necessary certifications - says Adam Piotrowski, CEO of VIGO Photonics.

In our second key segment – ​​industrial, we see an improvement in sales quarter-on-quarter, but year-on- year sales are still lower, and this is primarily due to weaker demand for detectors from semiconductor production equipment manufacturers and the generally weaker economic situation on the European industrial market. However, we expect orders from the industrial segment to accelerate in the second half of the year - says Adam Piotrowski.

In turn, in the semiconductor materials segment, sales gained momentum and doubled year-on-year in the second quarter, thanks to the development of cooperation with acquired customers and the transition to the next phases of product development and implementation into production - adds Adam Piotrowski.

Prospects for the next periods

● Sales development in the United States

The company is intensively developing its sales force in the United States, identifying a very large potential of the military and industrial markets.

In May this year, two new people joined the American team. Currently, a team consisting of 6 people with knowledge in the field of industry and military, as well as meeting the requirements for access to classified information and cybersecurity, is employed in the USA.

In the second quarter of this year, VIGO obtained ITAR Registered status in the USA (International Traffic in Arms Regulations) and DD2345 certification (Handling of Unclassified Technical Information certification), which allows for registration on American government portals for suppliers and access to information from customers. By the end of July this year, it is planned to obtain full CMMC certification (Cybersecurity Maturity Model Certification) issued by the US Department of Defense, which is necessary to carry out deliveries for American companies from the security and defense
sector.

''Potential contracts with American military contractors require a lot of time and effort. It's not just about a product that meets customer requirements, but also all the formalities and security certificates in a market subject to strict regulatory restrictions. VIGO already has ITAR Registered status, and we are now finalizing the acquisition of full CMMC certification, which will enable formal and detailed talks with contractors from the American defense industry and will accelerate the acquisition of orders. I am convinced that this year we will be able to inform the market about the first contracts obtained in this area,'' says Adam Piotrowski.

Additionally, the company plans to strengthen cooperation with the American scientific community and launch joint development projects, which should accelerate the speed of developing new products for American customers, especially for the defense industry. Cooperation with technology
partners is also planned under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs in order to obtain grants for development activities in the USA.

● Infrared detector array project

At the end of June this year, VIGO also announced that it had obtained a concession granted by the Ministry of Internal Affairs and Administration to conduct business activities related to the production of equipment dedicated to the needs of the military. By receiving this concession, VIGO will be able to implement a development strategy that responds to the growing demand of the defense sector in Poland, including the development of the infrared array project. The matrix project is being implemented in accordance with the assumptions. The company plans to start producing prototypes
for military tests in the second half of 2024, and serial production in 2025, with a gradual increase in production in 2026. In 2023, VIGO signed a letter of intent with PCO regarding the implementation of infrared arrays for mass production and use in combat vehicles of the Polish army. The project is
currently in the R&D phase.

● HyperPIC Project

In February 2024, the company's project ''HyperPIC - Photonic integrated circuits for mid-infrared applications'' was placed on the list of projects selected for funding under the FENG (European Funds for Modern Economy) call. The project will be implemented as part of the integrated European IPCEI ME/CT (Important Projects of Common European Interest on Microelectronics and Communication Technologies) project.

In May this year, the Company signed an agreement with the National Center for Research and Development for co-financing the project. The total value of eligible costs in the project is PLN 853,117,563.35, and the maximum amount of public aid is PLN 440,535,480.00, which corresponds to the amount of the so-called financial gap in the project. The eligible costs in the project are expenditures on research and development, expenditures on the construction of a new production line and operating costs after launching the new production line.

The implementation of the project will accelerate the development of photonic sensor technologies and, as a result, enable the delivery to the market of a new class of integrated photonics systems for sensor applications. As a result, it will be possible to use single chips with advanced sensor functionalities in everyday objects (smartphones, wearable devices, household appliances, vehicles).

INDUSTRY EVENTS

● In 2024, VIGO Photonics participated in the following industry events:

o January 27–February 1, 2024 (USA) - SPIE Photonics West (San Francisco)
o January 23–25, 2024 (France) - International Symposium on Optronics in Defense & Security OPTRO (Bordeaux)
o March 13–14, 2024 (Poland) - TEK Day (Wrocław)
o March 28–30, 2024 (USA) - Global Force Symposium & Expo (Huntsville)
o April 15–19 (USA) – Analyzer Technology Conference
o April 23–25 (China) – National Academic Forum on Laser Spectroscopy
o April 21–25 (USA) – SPIE Defense and Commercial Sensing

o May 6–9 (USA) – OffShore Technology
o May 6-10 (USA) – SOF Week
o May 21-23 (USA) – Border Security Expo
o May 28-30 (Finland) – Optics and Photonics Days (OPD Finland)
o June 11-13 (Germany) – Sensor + Test
o June 17-21 (Germany) – Eurosatory

• Events scheduled for later in 2024:

o July 12-16 (USA) – QSIP
o September 3-6 (Poland) – MSPO
o September 4-6 (Taiwan) – SEMICON Taiwan
o September 2-6 (Slovakia) – 23rd Slovak-Czech-Polish Optical Conference on Wave and Quantum Aspects of Contemporary Optics
o September 9-13 (Poland) – Laser Technology Symposium
o September 11-13 (China) – China International Optoelectronic Exposition CIOE
o September 16-20 (Italy) – Field Laser Applications in Industry and Research FLAIR
o September 24-27 (Germany) – InnoTrans
o October 3-4 (Poland) – Optoelectronics Conference
o October 9-10 (Germany) – Photonics Days Berlin
o October 9-10 (England) – AQE - Air Quality & Emissions
o October 14-16 (USA) - AUSA
o October 21-24 (France) - ICSO International Conference on Space Optics
o November 5-8 (Sweden) – Optics & Photonics in Sweden conference 2024
o November 18-21 (Germany) – Semicon Europe + Electronica

Contact for media and individual investors:
Piotr Piotrowski, cc group
piotr.piotrowski@ccgroup.pl, +48 697 613 010

Contact for institutional investors:
Małgorzata Młynarska, cc group
malgorzata.mlynarska@ccgroup.pl, +48 697 613 709

VIGO Photonics S.A. (WSE: VGO) is a global manufacturer of high-tech solutions - the most advanced mid- infrared photonic detectors, dedicated modules and semiconductor materials. Innovative devices have been
recognized and used by numerous international customers from the industrial and transport sectors, environmental protection, medicine, defense and security. The quality of VIGO Photonics detectors was alsoconfirmed during NASA's mission to Mars (including in the Curiosity rover) and their detection of traces of methane on this planet.

VIGO Photonics is successfully developing its activities in the field of semiconductor materials production. For this purpose, the Company has improved and uses the epitaxy technique (deposition of layers of selected crystals on a crystal substrate) using elements from groups III-V of the periodic table. In its development strategy, VIGO Photonics intends to supply the global market with photonic integrated circuits PIC (Photonic Integrated Circuits) based on semiconductors produced in this way. These systems will find numerous applications in the consumer electronics industry. The Company's goal is also to achieve a leading position in the emerging European silicon chip market.

VIGO Photonics (formerly VIGO Photonics) began its operations in 1987, and since 2014 has been listed on the main market of the Warsaw Stock Exchange. VIGO Photonics is headquartered in Ożarów Mazowiecki and has a subsidiary in the United States. The company employs approximately 200 high-class specialists and scientists. In August 2022, the Company changed its name to VIGO Photonics, previously known as VIGO Photonics.

More information:
vigo.com.pl
linkedin.com/company/vigo-photonics
twitter.com/systemvigo (@SystemVigo)