Hybrid Software Group PLC - Annual Report 2022

Hybrid Software Group PLC annual report and financial statements for the year ended 31st December 2022. The heart of industrial printing

Hybrid Software Group PLC is a public limited-liability company registered in England and Wales with its shares traded on Euronext Brussels under stock code HYSG. It is headquartered near Cambridge, UK. The Company employs approximately 300 employees worldwide and has a pedigree stretching back more than 30 years. Hybrid Software Group develops innovative technology for industrial print manufacturing processes which use inkjet and other printing techniques. The technology is critical because efficiency and sustainability concerns are driving the conversion of manufacturing processes from traditional analogue methods to just-in-time digital production using inkjet printing. Applications for inkjet printing include a diverse range of goods, from labels and packaging, to textiles, tiles, laminates, wall coverings, additive manufacturing and 3D printing applications. Industrial print manufacturing is when printing technology is used in broader manufacturing processes where it isn’t the print itself that is being sold. The Company is the only full stack supplier of all the critical core technologies needed for inkjet printing. Our principal customers are Original Equipment Manufacturers (OEMs) of digital printing equipment, including high-speed digital production presses, professional colour proofing devices, wide format colour printers, and industrial inkjet printers for ceramic tiles, packaging, textiles and additive manufacturing, as well as end users, primarily printing companies who purchase these devices to print and convert labels and packaging materials. Hybrid Software Group has traditionally provided software components and printhead drive electronics to OEMs to enable them to build their own solutions. However, the strategic acquisitions made over the last several years now enable the Company to provide full turnkey solutions for OEMs which enable them to bring new digital printing devices to market faster and with higher quality. These solutions are higher value and provide more revenue to the Company per device installed. Furthermore, the OEM business is synergistic with the Company’s end-user products, accelerating revenue growth and increasing the Company’s market share in the inkjet space. Hybrid Software Group Strategic report Governance Financial statements Other information Hybrid Software Group PLC Annual Report 2022 1 Hybrid Software Group Our investment case • Inkjet adoption is increasing rapidly across multiple industry sectors. • Analogue markets are converting to digital production. • Hybrid Software Group enables customers to migrate their traditional manufacturing processes to digital inkjet. • Hybrid Software Group is the only vertically integrated supplier to this market. • Operating companies are award- winning technology leaders. • Synergies between companies in the Group, following strategic acquisitions made during the past 3 years, will accelerate innovation and revenue growth. Courtesy of HP PageWide Copyright © ABB Company Copyright © Xaar Plc CONTENTS Hybrid Software Group Hybrid Software Group 1 Digital revolution in print manufacturing 2 The year in review 6 Our markets 8 Business segments 16 Company strategic report Company strategic report 23 Chairman’s statement 24 CEO’s review 26 CFO’s review 28 Governance Board of directors 44 Directors’ report 46 Corporate governance report 52 Audit committee report 54 Directors’ remuneration report 55 Independent auditor’s report to the members of Hybrid Software Group PLC 64 Consolidated financial statements Notes to the consolidated financial statements 72 Company financial statements 113 Notes to the Company financial statements 114 Other information Glossary 121

Hybrid Software Group PLC Annual Report 2022 2 3 THE DIGITAL REVOLUTION IN PRINT MANUFACTURING Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information The print manufacturing market is transitioning from analogue to digital at a rapid pace. A number of factors have combined to accelerate this change: supply chain disruption caused by the COVID pandemic, changing consumer demand for customised products, and the growing realisation that the way for manufacturing industries to do business is to go digital. At the heart of this change in the printing market are the innovations taking place in digital inkjet printing. Inkjet printing makes it possible to change what is being printed in real time on every object. It can be inserted at different points in the production process, for instance during product decoration, packaging or labelling. In addition, inkjet can print on any surface, resulting in a revolution in the way in which goods are produced and packaged and the speed with which they are ready for market. Prepress Digital printer O set printer Computer to plate Jobfile THE DIGITAL REVOLUTION IN PRINT MANUFACTURING Printing is part of the manufacturing process for thousands of products that touch our everyday lives as the illustration shows below. Inkjet is the technology driver for digital conversion of these processes and makes it possible to produce products that were simply not possible with analogue processes such as customising vehicles, garage doors, or even jetting onto the side of aircraft. Hybrid Software Group enables its customers to migrate their traditional manufacturing processes to digital inkjet. Specialised software is used to prepare the PDF file for printing. This may include merging a data stream to generate bar codes for product identification or security purposes; colour management to achieve specific brand colours; layout tools to ensure the most economical use of raw materials; tools to proof the artwork on screen; and enterprise software for workflow automation. Other software embedded in the printing process ensures high-quality output through RIPping and screening depending on the specifications of the printing device. As many as 7 colours plus white and clear inks may be jetted with different sizes of ink drops to achieve the desired output. All of these need calibrating with the printing device. A typical labelling workflow Analogue versus digital workflow In an analogue workflow, graphic designs are transferred to a printing plate which is fed to the press to produce multiples of the same item. In a digital workflow, a PDF file created by the designer encapsulates all the data required for printing. The PDF file is submitted to the digital printing press via a digital front end (DFE). Image supplied courtesy of FuturePrint https://www.futureprint.tech/ Photo credits bottom row left to right: iC3D software; Amherst Labels, a HYBRID Software customer; HP PageWide, a Global Graphics Software customer. Photo credits left to right: Vollherbst, a HYBRID Software customer; Mark Andy, a Global Graphics Software customer; Vollherbst.

Hybrid Software Group PLC Annual Report 2022 4 5 OUR VALUE PROPOSITIONS Hybrid Software Group PLC Annual Report 2022 2. 1. PRINTHEAD ELECTRONICS IMAGE PROCESSING AND DEVICE CONTROL OUTPUT QUALITY AND SPEED FILE PREPARATION AND EDITING WORKFLOW AUTOMATION RASTERIZATION AND OUTPUT Original Equipment Manufacturers (OEMs) Our value proposition to OEMs of industrial digital printing equipment, typically featuring inkjet technology, is to offer turnkey solutions and individual components to enable them to migrate analogue processes to digital and to bring new digital printing devices to market faster and with higher quality. Hybrid Software Group is the only full stack supplier of all the critical core technologies needed for inkjet printing. With a third of our headcount working in engineering and approximately a third of revenues reinvested in R&D, we are dedicated to innovation on behalf of our customers we develop award winning software and maintain a strong IP position with numerous patents. 2. 1. PRINTHEAD ELECTRONICS IMAGE PROCESSING AND DEVICE CONTROL OUTPUT QUALITY AND SPEED FILE PREPARATION AND EDITING WORKFLOW AUTOMATION RASTERIZATION AND OUTPUT Print service providers and converters Print service providers and converters are industrial manufacturers of products, such as labels, cartons, tiles, displays, fabrics, flooring, décor, etc. which are typically produced using digital printers made by OEMs. Our value proposition here is to offer is a complete set of software applications to maximise efficiency in production workflows. Label embellishments are rendered virtually in photo realistic quality using iC3D Software Hybrid Software Group Strategic report Governance Financial statements Other information Courtesy of HP PageWide. For illustration purposes only. DWS Printing & Packaging, a HYBRID Software customer.

6 THE YEAR IN REVIEW Hybrid Software Group PLC Annual Report 2022 Two acquisitions – the iC3D business from Creative Edge Software LLC and the technology and intellectual property of Quadraxis – and two significant anniversaries - Xitron and ColorLogic – shaped the year. We expanded our patent portfolio, overcame shortages in semiconductor chips, and increased the Company’s presence at numerous conferences and trade events to demonstrate the unrivalled potential of our products and technology solutions. Hybrid Software Group PLC Annual Report 2022 7 Hybrid Software Group Financial statements Other information Strategic report Governance Patent successes Global Graphics Software was granted three US patents during the year covering multiple inventions that maximise efficiency and quality for OEM customers, one of which was for technology that underlies PrintFlat™. Meteor Inkjet was granted a US patent for an invention that determines, in real-time, the operational status of a nozzle in a piezoelectric industrial inkjet printhead. Overcoming chip shortages Meteor Inkjet fast-tracked the development of a new electronics platform to avoid reliance on key computer chips that were in worldwide short supply. Their new platform brings with it increased speed as well as the potential for future functionality enhancements. iC3D software acquisition In March the Company acquired the iC3D business whose software generates photorealistic 3D virtual mock-ups, of cartons, labels, flexibles, bottles, shrink sleeves and point of sale displays. Pictured are Trevor Haworth (centre), Managing Director of iC3D with Mike Rottenborn and Guido Van der Schueren. Meeting investors Executive Chairman Guido Van der Schueren and CEO Mike Rottenborn represented the Company at the annual VFB Happening in Antwerp in April. VFB is the Flemish Federation of Investors. 20th anniversary ColorLogic GmbH celebrated its 20th anniversary in March. Starting out in a basement, ColorLogic is now a global leader in colour management technology. Teamwork on show! Ready for action, Hybrid Software team at LabelExpo Americas. Global Graphics’ Hagiwara-san presents the Company at the Japan Inkjet Technology Fair, Tokyo. New CFO Joachim Van Hemelen was appointed CFO and Company Director on 1st September. He was formerly the CFO of HYBRID Software. Quadraxis acquisition HYBRID Software closed the year by acquiring the technology and intellectual property of Quadraxis, a French company which developed pioneering technology in 3D scanning and image processing. Xitron celebrates 45 years In 2022 Xitron celebrated 45 years of supplying innovative tools to the printing industry. Xitron started in newspapers in 1977 and evolved to develop solutions for almost all printing markets, including RIPs, workflows, computer-to-plate interfaces, DFEs, and machine controls for high-speed inkjet presses.

Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information OUR MARKETS Innovation It has been observed that the packaging industry seemed to use the pandemic as a platform for growth and innovationa. There have certainly been many exciting developments in recent years with water-based inks, paper pouches, flexible films and recycled materials. One such is Direct-to-Shape printing which prints the product “label”, including full-colour images, text linework, and other special effects directly onto cans, bottles, sleeves and other shaped objects as an in-line step in the manufacturing process. Flexibility Whilst packaging produced by the flexographic process accounts for the largest share of the market in Europe and the US, the share of digitally printed labels and packaging is rising significantly. This is due to a number of factors, not least its flexibility whereby short runs can be produced quickly in response to changing consumer demand. Most packaging in Asia is still printed with gravure cylinders, but this is also migrating toward flexographic and digital printing methods. Asia is projected to be one of the highest growth areas for digital label printing in the near future. Sustainability The rising prominence of the ESG - Environmental, Social and Governance - agenda, new legislation, and consumer pressure are fuelling practical measures to reduce environmental impacts. One of the first steps towards sustainability is the reduction of waste, and since digitally printed packaging can be produced in very precise quantities, the digital conversion of packaging will continue to be driven by sustainability initiatives. Smart factories As more consumer brands seek to incorporate inkjet printing into their production lines, the Company has developed SmartDFE TM a solution to add print into Smart Factory and Industry 4.0 environments via a Smart Digital Front End. This solution went into full scale production with a number of OEM partners in 2022. The Company operates in all digital printing and manufacturing segments, but sales and marketing efforts target four strategic growth markets: packaging, ceramics, textiles, and 3D printing & additive manufacturing. In each of these segments, inkjet technology is giving brands the flexibility to respond to changing customer demands by just-in-time digital production, and to create products that would not be possible using analogue production methods. Set against the transition to digital printing, another trend is at play: manufacturers of digital printing devices are looking for turnkey software solutions that are fast and flexible enough to power the next generation of digital inkjet printers at blistering production speeds. The Company’s software engineering expertise allows us to develop solutions to meet and exceed these requirements. a. Dave Zwang https://whattheythink.com/articles/113241-time-thrive/ b. https://www.smithers.com/services/market-reports/ printing/the- future-of-digital-printing-to-2032. c. https://www.smithers.com/ en-gb/services/market-reports/printing/ the-future-of-package-printing-to-2027. Hybrid Software Group PLC Annual Report 2022 9 8 Our markets continued... iC3D software generates photorealistic 3D virtual mock-ups for labels and packaging applications. According to “The Future of Digital Printing to 2032b, in 2032 digital print will account for almost a quarter of the global value of all print and printed packaging by value, worth $230.5 billion. The same report indicates that inkjet accounted for 61.4% of digital print value with 62.4% of volume in 2022 and predicts that this will increase to 74.1% of value and 77.5% of volume in 2032. Packaging will see the biggest change, with digital print gaining traction in corrugated, cartons, flexible packaging, rigid plastics and metal. In 2022, Smithers estimated that the overall package printing market was worth $473.7 billion; and would reach $551.3 billion by 2027 (constant 2021 prices), with a growth rate of 3.1%c. Packaging This market requires specialised knowledge and advanced software solutions to provide the speed and precision required for high-volume production. Hybrid Software Group offers OEMs and print service providers the full gamut of expertise required, from 3D visualisation of packaging designs, the faithful reproduction of brand colours, layout and proofing tools, to the high-speed processing of variable data for personalisation.

Hybrid Software Group PLC Annual Report 2022 10 11 Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Inkjet becoming standard Digital printing has revolutionised the decoration of ceramic tiles. Industrial inkjet systems are now considered to be the industry standard and have rapidly replaced more than 90% of the screen printers worldwide printing applications for ceramic tiles in most worldwide markets. The ceramics market is heavily dependent on regional economic conditions and trends for new construction and renovation projects. As residential or commercial construction projects spring up around the globe there is more demand for ceramic tiles for interior and exterior decoration. China is a key producer and consumer of ceramics although there is also a dynamic industry in Europe, and growth opportunities in many other regions. Economical and flexible Digital printing of ceramic tiles offers significant cost advantages over analogue screen printing. Short production runs become economically feasible due to lower set-up requirements and reduced stock of finished goods. Other manufacturing benefits include less breakage/waste due to non-contact printing and ease of colour matching for repeat orders. Inkjet-printed ceramic tiles offer attractive design benefits including the ability to produce realistic images of marble and other natural materials and to print large quantities of tiles without repeating patterns. Our markets continued... d. www.grandviewresearch.com/industry-analysis/ceramic-tilesmarket The global ceramic tiles market size was estimated at USD $355.31 billion in 2021 and is expected to witness a CAGR of 7.1% from 2022 to 2030, powered by demand from construction projects in emerging economies of Asia Pacific including China and India. Although ceramics enjoys the highest percentage of digital production of any industrial inkjet segment, it is forseen that new printhead designs and ink formulations will enhance market penetration even further. The use of inkjet will also increase for tile decoration in the future as it will be used not just for printing designs but also for simulating textures and highlights on ceramic tiles by applying glossy or matte finishes in precise patterns. Finally, ceramic tiles comply with green building standards* and are gaining traction in flooring and walling applications,but the majority of tile usage is still in flooring applications d. Copyright © Xaar Plc Ceramics Dedicated features The Company’s software and electronics solutions are compatible with all the leading printheads used for ceramic tile decoration. Meteor Inkjet’s printhead drive electronics and software provide scalable, customisable solutions for systems of any size, speed, or complexity. Special features for ceramic tile printers include recirculating printheads and ink systems to prevent the sedimentation and nozzle blocking to which heavily-pigmented ceramic inks are prone. The Company’s products fully implement the control functions required of such systems.

Hybrid Software Group PLC Annual Report 2022 12 Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Copyright © Forest Digital Many facets The global digital textile printing market is segmented into clothing/apparel, home décor, soft signage, and industrial. Clothing & apparel was the largest digital segment and made up of more than 53% of digital textile production in 2021e. Digital textile printing processes include either Direct-to-Fabric where the design is printed onto a roll of fabric that is later made into a garment, and Direct-to-Garment such as the printing of designs onto t-shirts or promotional merchandise. The disruption to supply chains caused by the global pandemic has led many to believe that a systemic change to the textile supply chain has begun and that transformation is underway towards an increase in digital production. In any event, the benefits of printing on demand using digital inkjet are increasingly appreciated by textile manufacturers. Smithers’ data show that as more print service providers invest in dedicated inkjet textile presses, equipment sales will pass the €1 billion per year mark in 2026f. A key driver Sustainability is a key driver for digital inkjet production because it reduces water, energy usage, pollution and waste. The latter is of special interest: the amount of textile production ending in landfill is a particular focus for brands who are increasingly aware of their consumers’ demand for environmentally and socially responsible business practices. It’s not only in retail where sustainability is a factor; there is increasing demand for green credentials in the use of textiles for public sector spaces. Shorter cycles benefit fashion Digital inkjet enables brands to respond to changing consumer behaviour as fashion cycles shorten and more goods are purchased on-line with scope for personalisation. In 2022, additional supply chain disruption and increasing de-globalisation has accelerated the trend towards producing closer to the consumer. Digital production provides more control over inventory shortening supply chains and facilitating smaller and more flexible production runs. e. Grand View Research. https://www.grandviewresearch.com/industry-analysis/ digital-textile-printing-market-report f. The Future of Digital Textile Printing to 2026, Smithers. https://www.smithers.com/ services/market-reports/printing/the-future-of-digital-textile-printing-to-2026 https://www.graphicdisplayworld.com/categories/business/world-inkjet-printed textile-market-to-grow-from-3-82-billion-to-6-95-billion-in-2026 Recent forecasts indicate that the global digital textile market will see a compound annual growth rate of 12.7% by 2026, pushing global value to €6.95 billion in 2026f. This will see inkjet’s share of the total printed textile market – 52.7 billion square metres (2019) – rise from 6% to 10% over the forecast period. This represents a significant opportunity for digital textile OEMs: Smithers’ data shows that as more print service providers invest in dedicated inkjet textile presses, equipment sales will pass the €1 billion per year mark in 2026. Dramatic increases in energy prices have only served to highlight the efficiency benefits of digital printing and reduce the payback time for new investments in digital textile printing. Our markets continued... Textiles This steady transition to digital production is resulting in many new digital textile printers coming to market. The Company’s reputation for high-speed software, colour management technology, and expertise in inkjet drive electronics enables us to respond quickly to manufacturers’ demands for turnkey solutions to drive these machines. 13

Hybrid Software Group PLC Annual Report 2022 14 15 Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Our markets continued... Beyond prototyping Inkjet 3D printing is one of the most flexible additive manufacturing technologies, supporting applications that range from robust metal components to co-moulded parts fabricated from multiple materials, including cutting edge “functional” printing for manufacturing electronics. This ability to create radical new products is helping to drive 3D printing adoption in the traditional manufacturing space. An industry that used to produce only prototypes is now shifting to volume production. Agile and just-in-time There are two types of inkjet additive manufacturing. The first type is known as binder jetting - using inkjet printheads to jet a glue or binder on a bed of sand or powder. The powder bed means there is less need for adding supports to overhanging structures. The second type is materials jetting - heating polymer filaments to a liquid state so they can be deposited in layers using inkjet printing technology, then cured with UV light. Materials jetting using UV cured polymers has excellent detail and accuracy and a unique capability for combining multiple materials and colours in a single print job. Materials jetting is also the only additive manufacturing technology capable of functional printing for applications like printed circuit boards, embedded electronics and batteries. Inkjet additive manufacturing has all the benefits of digital printing. It is Industry 4.0 compliant, makes hardware development agile, enables just-in-time manufacturing for minimal inventory cost, and is inherently low-waste with more opportunity for sustainability. g. Extrapolated from “https://www.grandviewresearch.com/industry- analysis/additive-manufacturing-market” Additive Manufacturing Market Size Report, 2030 h. “https://www.fortunebusinessinsights.com/industry-reports/3d-printing- market-101902” 3D Printing Market Size, Growth | Global Research Report [2029] (fortunebusinessinsights.com) i. “https://www.grandviewresearch.com/industry-analysis/additive-manufacturing- market” Additive Manufacturing Market Size Report, 2030 Copyright © Xaar Plc The estimated global market size rose to USD $17 billion in 2021 compared with USD $13.8 billion in 2020g. CAGR estimates are quite optimistic, ranging from around 21% to 30% over the next 7- 8 years. Key drivers for growth are aerospace, bio-medical/healthcare and automotive applications. Additive manufacturing for production applications represents 38% of the total additive manufacturing market in 2021h, a significant shift from the predominantly prototyping use cases where additive manufacturing first gained traction. Inkjet 3D printing is expected to grow from about 2% to 10% of the global market by 2027, driven by consumer electronics, functional printing, biosensing and a government drive to adopt digital printing policiesi. 3D/Additive manufacturing Through its subsidiary Meteor Inkjet, the Company helps manufacturers harness the power of inkjet for additive manufacturing applications without the distraction of having to design electronics and software solutions inhouse. Meteor can radically simplify the path through development to production for 3D inkjet printer manufacturers and integrators.

Hybrid Software Group Strategic report Governance Financial statements Other information Hybrid Software Group PLC Annual Report 2022 16 17 BUSINESS SEGMENTS Hybrid Software Group PLC Annual Report 2022 Enterprise software Under the HYBRID Software brand, we offer specialised production software designed primarily for labels and packaging, including native PDF workflow and editing, variable data embellishment and imposition, enterprise cloud and SaaS solutions, scalable technology with low cost of ownership, and direct integration with leading Enterprise Resource Planning (ERP) systems and output devices. HYBRID Software’s products are based on the company’s extensive experience in the labels and packaging industry as well as their commitment to industry standards: no proprietary or legacy file formats are used by HYBRID Software’s products, only industry standard formats like PDF and TIFF™. Our products are used by more than 1,000 customers worldwide in all areas of pre-press and printing, including labels and packaging, folding cartons, corrugated, and wide format. HYBRID Software’s products are used both for conventional and digital printing processes. Although HYBRID Software does have OEM customers who manufacture equipment for package printing, most of its customers are end users: companies who print and convert labels and packaging to support brands and consumer product companies. Selling directly to end users requires specially trained employees in all major markets worldwide to provide sales, support, training, installation and integration services, and these employees are critical to the success of HYBRID Software. The Company’s business segments are: Enterprise software – file preparation and workflow automation for print manufacturing Printhead solutions – electronics and software for industrial inkjet devices Printing software – graphic processing engines for fast and high-quality digital output Enterprise software continued... Executive Chairman Guido Van der Schueren joins the team on the booth at Print4All, Milan. HYBRID Software’s iC3D Suite was updated with new features and enhancements including an optimised shrink sleeve template. The award-winning iC3D Suite was the first all-in-one design software specifically developed for packaging designers and converters. HYBRID Software created a unique gateway to cuttingedge solutions through access to the PACKZ and STEPZ in-app solutions store. Available solutions enable users to build prepress services quickly and more accurately with ready-made dynamic marks, augmented infopanels, swatch libraries, and colour books. In action at Gulf Print & Pack 2022 in Dubai. Getting down to business at ExpoPrint, Sao Paulo, Brazil. HYBRID Software’s booth at Graphispag in Spain was printed entirely on corrugated board. Key Products • CLOUDFLOW: A modular production workflow suite for file processing, asset management, soft proofing and workflow automation. It is a flexible application platform specifically tailored for packaging graphics with support for, among other things, PDF colour separation, trapping, layout, and variable data as well as rasterisation and screening using the Company’s leading Harlequin Core RIP. CLOUDFLOW can run on physical hardware as well as in public or private cloud computing environments. • PACKZ: The professional PDF editor for packaging and label production using any printing method: flexography, offset lithography, gravure, as well as digital printing. PACKZ operates on native PDF files and utilizes 64-bit multi-processing and multi- threading facilities for high performance. PACKZ provides a “Swiss Army Knife” containing a full set of tools for packaging pre-press, and its support for native PDF eliminates the need for file conversions or proprietary file formats. • STEPZ: A specialised production tool derived from PACKZ but with a feature set aimed specifically at digital printing of labels and packaging. STEPZ contains the same powerful tools for layout and variable data as PACKZ but drops functionality such as trapping which is not required for digital printing. • iC3D is a full software suite that generates photorealistic 3D virtual mock-ups and offers a large library of modelling templates for digital packaging design and prototyping.

Hybrid Software Group Strategic report Governance Financial statements Other information Printhead solutions Under the brand of Meteor Inkjet, we develop and supply printhead drive electronics, software, tools and services for industrial inkjet systems and printing devices. The industrial inkjet market is very broad and fast growing, and includes ceramic tiles, flooring and décor, wallpaper, labels and packaging, functional and 3D printing, product decoration, and textiles. Our software and proprietary drive electronics send data to printheads inside inkjet devices to control the output produced by these printheads. Printheads are a critical component of an inkjet press and generally contain multiple nozzles for jetting ink or other fluids onto substrates. The major industrial printhead manufacturers are our route to identifying inkjet development projects around the world. Consequently, we work closely with all leading printhead vendors, including Xaar, FUJIFILM Dimatix, Kyocera, Konica Minolta, Memjet, Toshiba TEC, SII, Ricoh, Epson, and Xerox. We continually develop hardware and software drivers for new printhead models and partner with printhead manufacturers and OEMs to accelerate their route to production. Our solutions are modular, scalable, and production-ready and are supported by a world-class technical team, based near Cambridge, UK as well as in key markets including China and North America. 18 Hybrid Software Group PLC Annual Report 2022 Business segments continued... Customers Our solutions reduce development risk and time to market for manufacturers building new industrial inkjet printers. Among our customers in this segment are Mark Andy, a leading label equipment manufacturer in the US; Hymmen, a leading printed laminate equipment manufacturer in Germany; and China’s leading ceramic tile decoration equipment manufacturer. Key Products We support the leading printheads demanded by OEMs and print system integrators worldwide with solutions that provide high speed output, unmatched quality, and rapid time to market for new product launches. Meteor Inkjet collaborates closely with printhead manufacturers to support the launch of new printheads with custom drive electronics and software. Our products comprise: • Electronics: powerful, flexible and scalable drive electronics for all major industrial inkjet printheads; • Software: OEMs can license an application-tuned Meteor Digital Front End or develop bespoke software using a Meteor Software Development Kit. Optional integrated Harlequin RIP and ScreenPro Advanced Inkjet Screens are available, along with NozzleFix™ and NozzleMask™ to compensate for missing nozzles that cause artifacts in printed output as well as the award-winning patented PrintFlat™ software for output uniformity; • Tools and services: DropWatcher™ for analysing and tuning ink drops in flight, as well as waveform development services for optimised output quality of any ink and substrate combination. Printhead solutions continued... Hybrid Software Group PLC Annual Report 2022 19 During the year Dyndrite™added Meteor Inkjet to the Dyndrite Developer Council (DDC). Dyndrite provide GPU-accelerated computation engines used to create next generation digital manufacturing hardware and software. The collaboration was expanded with the announcement of Meteoryte, a 3D software tool that simplifies the development and adoption of inkjet technology for additive manufacturing applications. Tracey Brown, Meteor’s Director of Strategy & Marketing, spoke about the latest industrial inkjet print quality innovations for textiles at the ESMA Print Textile Printing and Sustainability Conference. Meteor Inkjet launched its new web site in 2022 in Korean, Japanese and Chinese as well as English, reflecting the growing importance of these markets. Meteor Inkjet is collaborating with Core Technologie GmbH on solutions for additive manufacturing. Core Technologie is a global provider of 3D CAD data conversion software for additive manufacturing. Inkjet is developing printhead drive electronics and software for the new T3200, T1600 and D3000 printheads announced by Epson. These solutions join Meteor’s existing products to drive Epson S3200, S800, I3200 and I1600 printheads. Meteor continues to provide the most complete range of Epson industrial printhead driving solutions on the market. Meteor Inkjet was granted a US patent for “Inkjet nozzle status detection” by the United States Patent and Trademark Office. The patent covers a system and method for determining, in real-time, the operational status of a nozzle in a piezoelectric industrial inkjet printhead. Matthew Pullen, Product Manager, runs a practical demonstration of the Meteor DropWatcher with the Seiko RC1536M printhead on the Inktester from People & Technology at the People & Technology Technical Conference Europe 2022 in Castelló, Spain. Photo credit: Nessan Cleary Clive Ayling, Managing Director of Meteor Inkjet.

Hybrid Software Group Strategic report Governance Financial statements Other information Printing software continued... Printing software Before graphic designs can be printed or displayed on a monitor, they must be broken down into vector data (mathematical drawing algorithms), raster data (image pixels), and/or screened data (calibrated areas of ink or pigment representing image data). Our Global Graphics Software brand is one of the world’s foremost developers of the graphic processing engines, known as Raster Image Processors or RIPs, that are used for these tasks. Colour management is also required for high-quality output, a task which is especially difficult for digital printing where the inks supported by the printer may not be capable of exactly matching brand-specific spot colours used for packaging and corporate branding. Our ColorLogic brand provides a full set of products for these demanding applications, as well as a Software Development Kit (SDK) which allows OEMs to produce their own customised colour management tools. We develop software components and workflow solutions for the high-speed digital printing of photo books, labels, packaging, interior décor, textiles and ceramics. The company’s combination of software and first-rate engineering skills enables it to help press manufacturers to respond to technical challenges with innovation, meeting their speed and quality requirements, and getting them to market quickly. Hybrid Software Group PLC Annual Report 2022 20 21 Hybrid Software Group PLC Annual Report 2022 Business segments continued... Customers Customers include Group companies HYBRID Software, Meteor Inkjet, and Xitron plus OEMs such as Hewlett Packard, Mimaki, Mutoh, Canon, Durst, Roland, Agfa, Kodak, Kirk-Rudy, Postmark, Ryobi, Mitsubishi, Memjet, Presstek, Printware and Neopost, as well as many others who embed our printing software solutions into their own branded Digital Front Ends (DFEs). Licensing Solutions are typically licensed under technology agreements and reseller agreements. We are noted for our flexible approach to licensing technology and pride ourselves on being a trusted commercial and development partner. This is facilitated by a Technical Services team who work to accelerate each customer’s time to market, and also by an experienced product support team. Key Products The product range includes: • Harlequin Core: A Raster Image Processor (RIP), specialised software that converts text and image data from many file formats including PDF, TIFF™ or JPEG into a format that a printing device can understand and output. It produces unmatched quality without sacrificing speed, which means that printing devices which incorporate Harlequin can be kept running at full rated speed, even on the most complex jobs, without incurring high costs for computing hardware; • ScreenPro: Software that converts continuous tone image data into ready-to-print halftones (dots of varying size and spacing) in real-time with no compromise on quality; • Colour management software: colour accurate matching of brand colours for digital production using four or up to seven process colours. Products include CoPrA, ColorAnt, ZePrA, as well as a full SDK for OEM licensing; • Mako SDK: Software that creates, rasterises, converts, analyses and optimises many different page description languages, allowing print software developers full control over colour, fonts, text, images, vector content and metadata with precision and performance; • Harlequin Direct™: Software that drives print data directly to the printer electronics instead of buffering them on mass storage devices, allowing the development of faster, wider and higher resolution printing devices; • SmartDFE™: A turnkey Digital Front End (DFE) based on Harlequin Direct, CLOUDFLOW, and Meteor for digital printing of labels and packaging within Industry 4.0 automated manufacturing environments; • Navigator Harlequin RIP and workflow: Software that provides prepress environments with fast, predictable, and reliable interpretation of PostScript, PDF, and EPS format files; • Navigator DFE: Software that helps prepare jobs, manage colour, and control digital output devices built with Memjet or any standard inkjet printhead; • Output device interfaces: hardware and software solutions to connect RIPs to Computer-to-Plate devices, imagesetters, proofers, digital presses, high-speed copiers, and inkjet printers, extending the life of legacy equipment. Xitron was selected as Memjet’s exclusive Digital Front End developer for new print engine systems. Global Graphics Software launched SmartMediaTM at Labelexpo Americas. It’s a major upgrade to the SmartDFE digital front end for label and packaging presses and removes complexity from the process of colour profiling to ensure the best quality and colour output. At Labelexpo Americas Xitron launched its new Navigator Flexo Suite for end-users, designed as a powerful workflow for flexo label printers who have outgrown basic RIPs and need more automation. Xitron completed the installation of the Navigator DFE at IGT’s principal instant ticket printing facility. IGT boasts the newest and largest presses in the instant ticket printing industry. Global Graphics Software partnered with APS Engineering to create an OPC UA-enabled ink delivery system to communicate with any aspect of an industrial inkjet ecosystem. OPC UA is the standard for the secure and reliable exchange of data in industrial automation. ColorLogic’s Product Manager, Dietmar Fuchs, moderated a session “Multicolor Packaging Implementations” at the FOGRA Colour Management Symposium, the world’s international day event for color management. ColorLogic released upgrades to CoPrA, ZePrA and ColorAnt 9 bringing enhanced automation, new workflow features and additional efficiency to customers. Industry standards Hybrid Software Group plays an active role in the development of new industry standards. PDF, for example is the most commonly used file format for printing in all our strategic markets. On behalf of the Company, Global Graphics’ Distinguished Technologist (Consultant), Martin Bailey, is the primary UK expert to the ISO committees working on standards for PDF, PDF/X and PDF/VT. He is co-chair of the PDF Association’s PDF Technical Working Group (TWG), the international organisation promoting awareness and adoption of standards using PDF, and the PDF/VT TWG. The Company is also active in the Ghent Workgroup and the PDF Association.

Hybrid Software Group PLC Annual Report 2022 23 Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information 22 The economic downturn following the outbreak of war in Ukraine affected our business in 2022 after what had been a very strong start in terms of software sales. We were disappointed that total revenue fell slightly to €46.7 million in 2022 (€48.6 million in 2021) with net profit from continuing operations falling to €1.3 million (€4.9 million in 2021). We immediately took steps to manage the situation. Fortunately, we are a resilient company. Product innovation continues, and investment in R&D remains a top priority. We occupy a unique position in markets that are predicted to grow significantly. Two further strategic acquisitions in 2022 – iC3D and Quadraxis – filled gaps in our technology portfolio and strengthened our product range in both packaging and additive manufacturing. We have broadened our potential customer reach by offering successful products for all digital printing applications. KEY FIGURES (continuing operations) COMPANY STRATEGIC REPORT Image courtesy of Meteor Total revenue (thousand euros) G&A Sales, Maintenance & Support R&D 102 146 41 Sta numbers as at 31st December 2022 0 10,000 20,000 30,000 40,000 50,000 46,693 48,562 2022 2021 0 1,000 2,000 3,000 4,000 5,000 48,562 2022 2021 4,914 1,300 Net profit from continuing operations (thousand euros) 2022 2021 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 10,895 12,211 EBITDA* (thousand euros) * For the EBITDA calculation see page 31

Hybrid Software Group PLC Annual Report 2022 24 25 Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information CHAIRMAN’S STATEMENT 2022 was a year of mixed results for Hybrid Software Group. From a financial standpoint we fell short of our growth projections in both revenue and net profit. As both the Executive Chairman and the majority shareholder of the company, I must look at this situation from two separate and unique perspectives. As a shareholder I expect year-overyear growth in revenue and profitability, but I must also take a longer-term view toward maximising the shareholder value of Hybrid Software Group. Perhaps it’s appropriate to call this a “hybrid” view of the company. The year began with strong sales in most of our business segments, but things changed quickly when the invasion of Ukraine and rising energy prices in Europe triggered rapid inflation in most worldwide markets. Printing companies faced energy prices that tripled or quadrupled in just a few months, which dampened their investments in software and new printing presses. Even the label and packaging industry, which weathered the pandemic with relative ease, was finally affected by rising prices for energy, paper, ink, and labour. Our business model has a degree of built-in resilience as we sell both to OEMs who manufacture digital printing presses and to end users, the printing companies who buy those and conventional devices. However, the economic downturn that started in 2022 impacted both our OEM and end user revenues. We acted quickly in response, tabling M&A activities and taking prudent steps to conserve cash and reduce our cost structure, especially external spending. We also slowed the pace of hiring while accelerating the consolidation of order processing, invoicing, and bookkeeping across our six operating businesses. But we never sacrificed the long-term value of Hybrid Software Group simply to deliver short-term results to the market. We did not cut any of our key personnel or reduce R&D spending, and if anything, we stepped up our sales efforts and increased the company’s presence at key trade shows and industry events. We gained significant market share during the pandemic, especially in our core label and packaging sector, by leaning into the challenge and partnering with our customers, and we intend to continue this approach in the challenging environment of today. Guido Van der Schueren, Executive Chairman “One of our key initiatives in 2022 which continues today is the “One Company” concept embodied by our name, Hybrid Software Group”. While nobody has a crystal ball, I predict a relatively short and shallow recession in most worldwide markets with a recovery starting in the second half of 2023. With our end-user customers facing heavy price increases in everything from energy to paper and packaging substrates, we have decided to support their businesses by not increasing our prices for software or maintenance in 2023. We’ve also increased our focus on SaaS-based production workflows which allow our customers to significantly reduce IT spending and capital investment. One of our key initiatives in 2022 which continues today is the “One Company” concept embodied by our name, Hybrid Software Group. Although we have six separate businesses in the group, we are not a holding company. We are a single company with a simple objective: to provide the core technology at the heart of digital printing for all applications. We have the right technologies to deliver this and are adopting a more streamlined structure to help us achieve it. In closing, I would like to thank the stakeholders of Hybrid Software Group: our shareholders, our nearly 300 employees, our Board and management team, and last but certainly not least, our customers for their continued support. We are ready for the challenges of 2023 and beyond, and I anticipate a much higher level of growth and profitability in the very near future. Chairman’s statement continued... Guido Van der Scheuren Executive Chairman Hybrid Software Group PLC is headquartered near Cambridge UK. Photographed by Leathon Lagerwall, Software Test Engineer.

Hybrid Software Group PLC Annual Report 2022 26 27 CEO’S REVIEW Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Hybrid Software Group entered 2022 with bullish growth projections as the pandemic receded as well as significant hiring plans to support that growth. In March, we completed the all-cash acquisition of iC3D, a long-standing partner of HYBRID Software with products for 3D modelling and photorealistic ray tracing of labels and packaging. We sold an old and unused intangible asset (a large block of IPv4 addresses) for net €3.3 million, which covered the cost of the iC3D purchase. The only headwind in early 2022 was the fact that the global shortage of semiconductor chips was beginning to affect the Meteor Inkjet business as a key chip supplier failed to meet their delivery commitments for longstanding orders. Meteor Inkjet had a stellar year in 2021, growing revenues 42% from the previous year with most of that growth coming from ceramics production in China. But Chinese market demand was much weaker in 2022 after two years of pandemic lockdowns, and the chip shortages widely affected Meteor as well as their customers. By the first half of 2022, Meteor’s revenue had fallen short of projections by more than £4 million. The team quickly redesigned a critical circuit board using a chip that was more widely available and continued to build inventory in anticipation of market demand, but the lost first-half revenue was not fully recovered in 2022 and Meteor’s results were well below expectations. On a more positive note, 2023 has started very strongly for Meteor, with revenues recovering to healthy levels and demand from China increasing rapidly. We see the chip shortage receding and expect good results from Meteor in 2023. HYBRID Software continues to perform well, delivering the bulk of our revenue and operating profit for 2022. Two smaller businesses also deserve special mention. ColorLogic GmbH was acquired in late 2021 to provide software for colour management and matching of custom brand colours with the fixed ink sets used in digital printing presses. ColorLogic delivered the highest profitability per employee in 2022, and their software is currently being integrated into all of Hybrid Software Group’s products. Also noteworthy is Xitron, which grew revenues by 17% over the previous year with strong demand for their software solutions for both digital and conventional printing. Mike Rottenborn, Chief Executive Officer CEO’s review continued... “There’s no doubt that Hybrid Software Group is a stronger company as we enter 2023. We have a strong cash position, a leaner and more well-organised R&D structure, and successful products that are helping our customers every day.”. Mike Rottenborn Chief Executive Officer With more than one hundred software and hardware engineers on board, all the operating divisions of Hybrid Software Group are continuously innovating to improve our products and develop new ones in response to market needs. We make a concerted effort to announce new products and patents through frequent press releases, and this letter is not the place for a comprehensive summary. However, I would like to highlight a few significant events here. In late 2021, Global Graphics Software was granted a US patent for compensating for printer density and stability, the basis of our award-winning PrintFlat™ software. This is a broad and important patent which was quickly challenged by a competitor. We responded to their claims and defended it successfully, with the final re-examination certificate issued in September. In the fourth quarter, Meteor Inkjet was awarded both US and UK patents for a very innovative invention to detect clogged nozzles and impending failures in inkjet printheads during normal print operation. This was the culmination of almost three years of R&D and has broad applications for Meteor Inkjet and their customers. One of our objectives in 2023 is to monetise our extensive patent portfolio for the benefit of our company and shareholders. On the product front, I’ll highlight one new product that pulls together the best technology from all our operating divisions: SmartDFE™. This product is an intelligent Digital Front End—software and hardware to translate graphic designs into droplets of ink on a substrate—which targets the challenging label and packaging segment. By integrating printhead drive electronics together with automated workflow software, fast rasterisation and dot generation, and precise colour management for critical brand colours, SmartDFE™ allows manufacturers of digital presses for labels, flexible packaging, folding cartons, and corrugated boxes to accelerate their time to market and provide greater functionality to their customers, especially in automated production environments. We made one more small acquisition in late 2022, purchasing the intellectual property of the French company Quadraxis. Their software for mapping graphics to thermoformed plastics and die-formed metal products nicely augments the iC3D products we acquired in March and will be integrated more deeply into our packaging software in 2023. I’d like to close with a statement on sustainability. We’ve been carbon neutral since 2021 by planting trees to offset our carbon footprint, and inkjet print manufacturing is itself a sustainable activity offering reduced waste, less pollution, and just-in-time manufacturing. But sustainability is much more than that. True sustainability begins with the sustainability of the overall business: our financial health as a going concern, our sales activities to increase market share, and most of all, our investments in R&D to make sure that Hybrid Software Group remains the technology leader and “go to” company in each of our operating segments. This commitment to investment and profitable growth has never wavered, even in the challenging conditions of 2022. There’s no doubt that Hybrid Software Group is a stronger company as we enter 2023. We have a strong cash position, a leaner and more well-organised R&D structure, and successful products that are helping our customers every day. I have deep confidence that our business plan is sound, that our technology is best-in-class, and that Hybrid Software Group is the only company that can deliver comprehensive software and electronics solutions for all digital inkjet applications. With 2022 in the rear-view mirror, I anticipate higher revenues, greater profitability, and increased market share for Hybrid Software Group in 2023 and for many years to come.