Xaar reported a YoY decline for H1 15, but a HoH improvement as sales stabilised and profitability increased. Packaging offers the best potential for near term growth, while development of its next generation Thin Film technology remains on track and should open up new markets and applications longer term. We have increased our 2015 PBT forecast by 4% and note the c.10% EV/EBITDA discount to sector multiples.