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Welcome to the CSG's half-year 2026 earnings presentation. Today's presenters are Michal Sternak, CEO and Chairman of the Board, and Zdeněk Jurák, CFO. Michal will begin with an update on the group's strategy delivery and the first half financial highlights. Zdeněk will then walk through the performance in more detail. Q&A will follow the prepared remarks. Please take a moment to familiarize yourself with the disclaimer information at the start of the presentation deck. I'll now hand over to Michal Sternat.

Good morning to all of you and thank you for your interest. The first half was a period of delivery against the commitments we set out. We achieved a strong financial performance across the group. Before we crumb numbers, I want to highlight the strategic progress behind that performance. Let me start with land systems, which doubled revenue year on year. Systems now represent 46% of our order backlog. We are scaling this business exactly as planned. That is changing the shape of the group. The share of revenue from Ukraine is down from 27% at year end to 17%. Europe excluding Ukraine is now more than half of our business. The United States has become our second largest market and we are making significant N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs The market is moving our way. Customers want integrated systems. That is exactly what CSG delivers. In air defense, we own the backbone, critical layers, and the integration. The vehicle, the radar, the command and control system, and the launchers, and other effectors on top. The layered air defense system we presented in June brings those capabilities together into a system we can offer worldwide. The air defense contracts we won in Southeast Asia worth nearly $2.5 billion demonstrate the value of this approach. Also, air defense and related capabilities, CSG became a strategic investor in North Vector Dynamics. This is the Canadian developer of intercepts, precision guided missiles and counter UAV systems. CSG will provide its industrial expertise and commercial network to help North Vector Dynamics access production and gain access to global markets. In armoured vehicles, we have agreed a new joint venture with Turkish company FNSS. Production of the armoured vehicles, which includes our new Carpath tank, will be based at our own facilities in Slovakia. This extends the same integration strategy into a new platform from the group. In medium and large-caliber ammunition, we are delivering on two priorities, expanding production and increasing vertical integration. Our annual production capacity increased to 850,000 rounds at the end of June. We remain firmly on track to reach about 1.1 million rounds by the end of 2007. At the same time, demand continues to shift towards long-range 155mm ammunition. This market has few European producers and offers a longer unit economics. Our investment in securing critical components creates value across the portfolio, more so in long range, where each round requires more critical inputs. By increasing vertical integration, we are taking greater control of the supply chain. This takes costs out of every round, up and forwards margin expansion. I am pleased to report that our German propellant plant, Greek explosive plant and Slovak bimodular charge facility are all on the schedule and on budget. Just this week we also announced the acquisition of the Gnaschwitz industrial site in Germany. At this site CSG will produce nitroglycerin as well as ammunition and components. This is yet another step towards self-sufficiency in energetic materials. It also enables us to sell to general customers. CSG is building an ever stronger presence in the United States, the world's largest defense market. Last month, we broke ground on the future artillery complex in Iowa. designed to load 36,000 artillery shells each month. I am pleased by our success here. No other European defense group has been trusted with a program of this kind on American soil. Our small caliber businesses also won contracts valued at about $100 million with the FBI and other law enforcement agencies. These are important endorsements from different parts of the US government. In addition, the opening of the CSG land systems North America brings our vehicle and artillery portfolio directly to the US Army. Our new Washington office means the US executives are closer to our customers. Very little of this is reflected in today's revenue. We are very excited by the opportunity in the US for CSG. Finally, unmanned systems are taking a growing share of defense spending. CSG is building strong positions in the technologies behind them. Propulsion is one of the most demanding parts of long-range drones and missiles. We are one of only few western suppliers of these engines. This summer we announced a new production plant in Wisconsin that will serve US and allied customers. The first engines will be produced this year and the serial production will begin in 2027. CSG is also developing the digital systems that manage airspace. This includes radar detection and the software that coordinates drones alongside mechatraft. These moves give as early positions in fast-growing markets and we intend to grow with them. Our horizon does not stop there. We are currently exploring further opportunities in autonomy, artificial intelligence and space. While our core businesses We are investing today in what will drive our next phase of the growth. I want to turn briefly to our leadership. We have made major investments here. We significantly strengthened our team recruiting senior executives from the world's leading defense companies. Benjamin Hudson joined CSD as a CEO of Land Systems and Group Chief Technology Officer. He came to us from Hanwha with earlier roles at Rheinmetall BAE Systems and General Dynamics. David Jacobs is President of OSG Defense North America and is building our new Washington DC office. Jason Monahan leads our newly established land systems in North America. Both bring deep experience of the U.S. defense market. They are joined by several other senior appointments across Excalibur, ExpoC, and the group strategy. They come from companies including Rheinmetall, KNDS, Leonardo and RWS. Tires help take us to the next level. They strengthen our team to execute on strategy. That includes scaling land systems growing in the United States and expanding across nation. Let's now turn to our half-year financial highlights. The headline figures demonstrate a strong performance across all key metrics. Earning was up 17% to 3.3 billion euros. This was driven by strong momentum across our core defense systems business, which grew by 27%. Our main measure of profit operating EBIT increased by 13% to 784 million euros. This gave a margin of 24.1%. This margin performance keeps us at the top of our European Defence Peer Group. Our total backlog and pipeline reached a record 46 billion euros. This provides strong revenue visibility and evidences the long-term structural demand we see in the market. The group remains highly capital efficient. Net leverage at period end was 1.6 times. N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs Zdeněk will talk more about it later. Looking at our revenue composition, defense systems drove close to 80% of the group revenue. This segment includes our medium and large caliber ammunition and land system businesses. These made up 65% and 14% of the revenue respectively. Our other business segment, Amoplus, contributed 19%. The chart also shows CSG diversification away from Ukraine, with the revenue share from NATO and other allied countries excluding Ukraine increased to 83% from 73% at the year end. Overall, it was an excellent set of results. Thanks to this strong first half, we remain confident in our full year guidance. Now I will pass to Zdeněk, who will take you through our performance in more detail.

Thank you, Michal. I will start on page 8 of our presentation. Growth in second quarter accelerated to 1.7 billion euro according to our expectation. Looking also to the contribution of the second quarter to the full year, that is as well in line with our guidance from last quarter, meaning that first half of 2026 is approximately 43% of the guidance we provide for 2026, so similar to the last year. Total revenue for first half of 2026 represents 17.2% year-on-year growth. At the same time, 90% of the defenses for the second quarter, for the second half of the 2026 is already under contract and thought that they're risking the delivery. Profitability remains firm with margin at 24.1% and within 25% guidance range. In addition, and highlighting here the ammo plus margin, which is recovering according to our expectation in second quarter. coming to 8% from 4% this year. Finally, we continue to diversify growth across our platforms and geographies. Land systems balance medium and large-caliber ammo in terms of backlog contribution, as you will see on the slide. We continue to diversify the end market geography resulting into decrease of Ukraine contribution from 27% as of the year 2025 to 17% including both direct and indirect sales and even though the demand from Ukraine remains strong at the same time as we don't see any change from the last quarter. On page 9 The continued increase in our backlog and pipeline over first half of the year. It reflects strong intake new orders across the period. Total backlog increased to 17 billion euro in 2026, up from 15 billion in December 2025. That means 15% year-to-date growth and represents 2.4 times coverage ratio of our half-year LTM revenue. Together we find increase to 29 billion means 46 billion of total opportunities as of the end of June 2026. Total order intake ratio in first half of 2026 remains 1.5 times similar to what we presented on our previous earnings call for Q1. Sizable and growing backlog gives us multi-year revenue visibility. Our active pipeline combined with our demonstrated record converting pipeline into firm contract drives our long-term growth momentum. On page 10, we are showing that the revenue growth is driven by strong momentum across our defense systems business. This reflects the sustained demand we are seeing both within our core European and NATO markets as well as demand coming from increase and increasing from our global markets. Within our defense systems, medium and large caliber AMO continues with a very high demand, but starts to be more balanced by the land systems at the same time. Group EBIT margin at 24.1% for the half year. Within defense systems, we keep focusing on our vertical integration program and strategy, N V Shs N V Shs N V Shs N V Shs N V Shs At the same time, Amoplus is still improving further on a US market. That is enabling us to rebuild volumes and improve pricing to mitigate majority of the impact from increased copper price and achieve better margins. By the way, the margin in second quarter has been 1,000 on EBIT. At the group level, looking ahead to the remainder of the year, and as typical also for European Defence Peers, deliveries and revenue recognition are weighted towards second half of the year. Our strong execution to date means that we are well positioned for the second half of 2026 and at the same time we've secured majority of critical components needed to fulfil the backlog for the remainder of this year. As a result, all full year 2026 and medium term guidance is reaffirmed. Let me now turn to performance and operational developments across our two corporate segments, Defense Systems and AMOPLUS. Starting with Defense Systems on page 11, which made up about 81% of group revenue and which brings together our businesses in land systems, medium and large and related technologies through aerospace and defense electronics and advanced systems. Execution remains our primary operational focus here. Order intake remains strong and continues to build. At the same time, we continue to effectively manage the supply chain lead times, including, for example, export licensing. All of that means that our backlog is converted into deliverables and revenue. Revenue was 2.6 billion in the first half of 2026. 27% up year-on-year. Operating EBIT increased 22% year-on-year to 754 million and margin of 29%. Continuous work on efficiency and ongoing vertical integration supported the achieved results. At the time, split of revenue by geography continues to diversify, as we have already mentioned. We've seen continuous growing demand from both NATO members as well as from NATO allies countries from Southeast Asia and Central particularly. The revenue contribution from outside of Ukraine now stands at nearly 80%. In parallel, the strong growth of land system means that this sub-segment is now 17% of the defense system business. We continue in our strategy and plans increasing our own production capacity and focusing on automation, robotics, and new production lines. But it all underpins our sustained growth and ambitious to expand the margins. On page 12, I would like to focus a bit on our medium and large-caliber Amosov segment, which delivers another period of growth up 20%. The business here delivers on three fronts. First, our vertical integration and projects are all on track. Second, we are looking at supply and critical components. And third, pricing is holding firm and strong demand as well. Starting with vertical integration, our new facilities and projects are progressing on schedule and each one takes us farther up to supply chain. In Greece, Our Lavrio site is already producing 155 mm ammo, base bleed production starts this year, and TNT production is on track for the end of 2027, as we already mentioned. Our German nitrocellulose facility remains on target for the end of 2027, and our propellant and wind turbine joint venture with Eurenko in Slovakia should start the production by end of 2027 as well. Extended or long-range as we may name it, is where it matters the most now. Demand is shifting very very and we are ready for it and removing bottlenecks to address that. Energetics as well as the propellants, bimodular charges and others which are setting the range of the medium and large-caliber ammunition accounts for around 50% of production costs when talking about 155mm long-range type. Producing such energetics is our goal within the vertical integration programs and we are running it and it's expected to cut propellant costs by approximately half once fully run. This is the main driver behind our margin ambitions beyond the current level. Our own production of artillery and tank ammunition for 2026 is expected to be around 850,000 pieces, supported by approximately another 400,000 pieces from the recommissioning. At the same time, 60% of 155mm production should be long-range as of the end of this year, which will have a positive mixed impact on our financials. Our pricing demands and constraints on critical components continue to support the price levels. We see no meaningful pricing pressure in the current order book. Land system sub-segment on page 13 is showing fast growing with revenue approximately doubled in first half of the year to 445 million. Operating EBIT margin at a healthy 17% remains weighted to the current phase. LAN systems now contribute approximately half of overall group backlog and pipeline. We also launched CSG LAN systems North America, opening up a significant new addressable for our product. On integrated solutions, our vehicles are becoming the foundation for a growing range of advanced defense capabilities, air defense in particular, and our Tatra platform with radars, command control system, and others is giving customers flexibility and complete mission-ready solutions. Aerospace defense electronics on page 14 is where we are building for the next phase of the group. Demand is evolving quickly and we are expanding existing capacities and adding new. Contribution to the group revenue in first half of 2026 was 58 million as a standalone business. But more important is strategically as a part of integrated solution we increase sales. Recently, CSG unveiled Trident, a new modular air defense system combining short, medium and long range together with the ground-based command platforms, advanced radar electronics warfare integrations and protection against drones. This is only one of the examples how significant IntegraPAR defense electronics is into this Lensystem product. We also launched Maestro remote air traffic control tower platform with AI, which should extend our dual use radar and air traffic management portfolio. In advanced systems, we are building a leadership position in travel, which is one of the most demanding part of the long range drones and missiles. Demand for CSG products from Middle East and Asia is a growing driver here. We also secured a strategic partnership with Ukrainian Armor for the development and supply of advanced propulsion systems for guided missiles and unmanned platforms. In the U.S., we announced a new Wisconsin plant to serve U.S. and U.S. customers with first engine produced this year and serial production from 2027, as Michal already mentioned in his speech. While we are confident about our core capabilities, we don't still. We are looking further, not only developing what we have, but also moving into the new fields. Autonomy, AI and space are the areas where we are actively exploring. Amoplus division on page 15. For that, we can see two main positive developments in first half of 2026. The commercial market has turned and our position in the US government and law enforcement is getting stronger. Revenue was 631 million euros or 19% of the group revenue in the first half of this year with EBIT 51 million euros but more important with the EBIT margin improving to 8% back to the 2025 level. On the commercial side We have seen a steady recovery in both volumes and profitability since Q1 2026. Pricing firmed after increase and this has helped us to offset some inflation pressure, particularly when talking about the copper as a critical constituent to produce small caliber ammunition. We also deliver on our strategy to increase defense business and law enforcement business there. We strengthen our relationship with intelligence agencies through approximately $100 million contracts. Also, we will reach an agreement with the U.S. Army to use patented peak alloy case technology across multiple cartridges and weapon systems. On page 16, it is worth spending some time and moment on working capital, its shape through the year and what drives it. Networking capital at QN stood at about 2.9 billion euro, representing about 40% of LTM revenue. The build is deliberate. We are investing ahead of the production ramp up to address the demand and growth. It follows the pattern we described at Q1 and follows our expectations. We are pre-stocking key long lead time components to secure our supply position ahead of accelerating our deliveries in second half of the year. This sits mainly in medium and large caliber ammo through both direct purchases and advances given to the suppliers. Second reason is that first part of the advance payment received has been converted into delivered revenues. This represents a mechanical reduction and it reverses to new advances in second half of the year. This seasonary has been expected and mirrors year 2025, when a comparable first half build was followed by a material unwind during the second half of the year and for the fiscal release. Decrease of the networking capital by 20% to reach guided 20% networking capital level at year-end 2026 represents in number approximately 1.5 euro. That is the amount which should be released as a cost of production and finally will be converted together with the margin into the revenue in second half of 2026. Resulting revenue to go to meet the year and 2026 guidance such 1.5 billion of networking capital to be released represents approximately 35% of the production costs. Taking into consideration fact first majority of debt is medium and large caliber ammo and majority of debt will be long range production where the components and energetics are approximately 50% of the production costs and second that we expect other advance payments from the customers in second half of this year are coming. I'm confident to confirm our guidance of net working capital level to be below 20% of the revenue at the end of this year. On page 17 and on the next slide, we are giving more clarity to the drivers. We have broken the working capital build into five components. N V Shs N V Shs N V Shs N V land systems delivery, long-range mix and our own production confirms my previous comment about cash to be released from the networking capital and our confidence about this. On page 18, our cash flow and CAPEX funding strategy. Operating EBITDA less CAPEX was 740 million euro in first half of 2026, up 54 million or 800% year-on-year. That's a strong underlying cash result. Free cash flow reflects two things. First, 1.2 billion deployed into the working capital to address the ramp-up. And second, higher tax payments, which are weighted into the first half of the year, particularly in second quarter, are not linear, but rather one-off for only second quarter. CapEx was just below 4% of revenue with cash conversion at 80%. That's the pace of investment so far in capacity expansion and automation as we've guided. Free cash flow is expected to be according to the guidance by year end 2026, mostly through release of the networking capital. At the same time, we expect the CapEx intensity to end up at expected level of 8.5% of the revenue as of the year end. Connecting cash free flow to the debt position and capital allocation on page 19. Here I would like to highlight steps we have taken to optimize our financing profile. Last month we announced refinancing of certain senior facilities. That reduces our cost of debt by approximately 125 to 150 bps per annum and extended the maturity profile to 6 years without impact on leverage position. also includes new sizeable committed RCF and this gives us a flexibility in financing networking capital versus free cash to be used for the investments and capexis. Net leverage 1.6 times is according to expectation copying the same trajectory as in year 2025 And we expect to reach our year-end leverage target of below 1.3 times the guide. To summarize the key takeaways on the page 20. First, I would like to highlight that the revenue momentum is strong with a record backlog in defense systems. Second, we are winning in our core markets and diversifying beyond them, both in geography and byproducts. N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs US market has recovered and we are investing to make sure capacity matches the demand. And finally, we are making strong moves into high growth air defense and counter UAS market. We are very active in this area today and we intend to increase our role there. And that brings me to the page number 21 where I would like to reaffirm the guidance as we've provided at the IPO for the revenue to reach 7.4 to 7.6 billion as of the 2026 with the operating EBIT margin range between 24 to 25% capex intensity 8.5% of the revenues net working capital as already mentioned below 20% of the revenue and the net leverage below 1.3 times All the mid-term guidance is also reaffirmed that we will be growing mid-teens organic kegel with the margin to be up 26-28% minimum with the capex intensity 4-5% in the mid-term. And then brings us to the end of our presentation and we are now happy to answer whatever questions you may have.

To ask a question? Please press star 1 1 on your telephone and wait for your name to be announced. To answer your question, please press star 1 and 1 again. We will now take the first question. From the line of Ross Law from Morgan Stanley, please go ahead.

Good morning Mikael, Zdenek and Peter. Two questions if I may. The first is on your ML ammo division. You continue to invest in vertical integration here, most recently with the nitroglycerine site. How close are you now to being fully vertically integrated within this sub-segment? What more needs to be done? And the second question is on the ammo plus segment. We saw a very strong recovery in margin in the second quarter. How sustainable is this and how should we think about the AMO Plus margin for the full year? Thank you.

So I will start with the medium and large calibre. AMO overall, we are more or less done. We have invested into all the necessary strategical components so as we said by the end of 2027 we will have all the strategical components under one roof so we will not be missing any of the strategical component including propellants propellants different times barrages TNT nitro and other components which are needed for the short range and mainly long range ammunition and on the ammo plus margin let me answer that how sustainable is that in the second quarter as I mentioned the margin reached 11% on it

And we feel this is the sustainable level and it should even improve slightly throughout the year. I was mentioning on the last earnings call that we expect this year the EBIT margin to reach a double digit. We can reaffirm now this is the trajectory we can see. The demand is there and we don't see any signals that it should be otherwise.

Great, thank you very much both. Thank you.

Thank you. We will now take the next question. From the line of Chloe Lemarie from Jefferies, please go ahead.

Good morning. Thank you for taking my question. Uh, I would start with a follow up on, on this question on the, uh, naturally through insight acquisition, actually, uh, does that create new cost saving opportunities, uh, from your perspective from vertical integration of triple base for parents, or is it more so that you secure your production needs, uh, going forward? And the, um, the second one, I wanted to ask about the own production indication on your medium-large ammunition slide. I just wanted to understand why H1 went down to 500,000 versus the end of 2025, or if it's really the half-year production, why wouldn't you be able to reach... Thank you.

Answering to your question, the first part is the answer is both. So it should first increase our vertical integration as such and secure our supply. And the second it's a part of our vertical integration strategy in terms of the cost savings and the ramping up of the margin. So it should be both. And the second one the 500 not sure where this is coming from it's a production but the capacities are 850 as we stated at Q1 and it is expected to reach 800 pieces our own production this year as I mentioned so the capacities are elsewhere 500 is now currently being our own production roughly plus minus okay thank you so much pleasure

Thank you. We will now take the next question. From the line of Sebastian Groh from BNP Paribas. Please go ahead.

Good morning. Thanks for taking my questions. It's three overall. And the first one would be on land systems. So you mentioned that land systems already contributes half to the group order backlog. And now you've also launched the CSG land systems North America business. So my question is that you could comment on the opportunity that you see there and which programs are you targeting and how should we think about product certification, etc. Maybe we can start there and then ask two more.

So I will maybe comment on opportunities. So as you know, US defense market is the biggest N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs We don't need any special certification. Our products are certified. What we need is the localization on which we are working on through the partnership or through the possible acquisitions. We are currently running more than three programs in the land systems which are worth of billions of US dollars. I think that that's all what we can say now because we are obviously in some kind of confidential mode there.

Okay, that is helpful. And the other question is just a quick follow-up to the comments that you made before and also around the N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs

somewhat longer. So in terms of transferring from production to revenue maybe a little bit longer than it used to. So the swing of the margin by one person we see as a technicality rather than whatever else behind its material. The prices are stable. We don't see any price pressure, as I mentioned, on our backlog.

And then for the effort required in Germany, the other one?

For the N Shs? Exactly, yeah. I don't know if we can... It's been several dozens of millions of euros. Okay.

We cannot comment it at this stage, but it is the same like we still

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Thank you for taking my questions. I have three actually. The first one is regarding Ukraine. Evidently the share of Ukrainian revenues has been declining. Given that now the country has access to 90 billion euros of funding from the EU, do you think there will be a reversal in this trend? That's the first one. The second question is regarding U.S. market opportunity. as you know there is the software palco with the modernization program where some of your competitors such as LDA and how are already pitching the prototype testing has already started do you think is it too late for you or do you see yourself as the lucky given your expertise in mobile officers that's the second question and the third one is given the recent trend in affordable mass and Okay, so let's start from the last question regarding the turbojet engines and then I will

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during our previous earnings calls so the Wisconsin one should be an integral part of the overall capacities and backlog and pipeline so if you are asking me what should be the contribution that should be in a mid-term several hundreds millions of euro equivalent coming from that what is important to say that this Wisconsin facility will mainly

supply to the US producers of unmanned solutions and missiles because of the localization and because of being closer to the customer if it is ok I will go to the next one so MTC Mobile Tactical Canon just for your information we are in we are in with our system our complete howitzer and we are there also as a chassis supplier to the our competitors so we have basically much higher probability that we will get at least the part of the business if not the whole mobile tactical cannon then at least the which we can possibly supply as a chassis provider to our competitors.

Does that mean you'll be producing Catra in US?

There is such a probability, yeah. Regarding Ukraine, we can see some significant movements in Ukraine now. There are the new tenders coming out. We are participating in these tenders. So if we will be successful, if we win some of those, obviously the possibility that we will N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs

so it was very valuable and decreasing in a time if I may ask just one final one given that I'm Turkish I'm really curious about the JV with FNSS when do you think you'll be starting producing the medium tank the like the process already

So we are preparing this facility. We are preparing all the steps which needs to be done, but the production itself should start in Q1 next year.

Perfect.

Thank you. Thank you.

Thank you. We will now take the next question. From the line of Pavel Ryska from JNT Banka. Please go ahead.

Good morning to everybody. First, congratulations on the very strong set of results that you posted. I have a couple of questions. The first one, yet one more about Ukraine. Recently, there have been statements by senior military officials in Ukraine that the intensity of fight along the front line has diminished this year. N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs N V Shs

First of all for the Karpa tank we have not received any order yet we are in the negotiations with several European customers and that's why we have created such a JP order to serve to the NATO European customers but there is no any signed and funded order yet regarding the Ukraine we don't see any change we see demand still the same still the strong what we can see is a shift from the short range ammunition to long range ammunition mainly because of the longer distance of the kill zone I see thank you and maybe one last question

There is already building, there is already

The facility we are installing now, all the machinery, all the testing benches and the basically necessary machinery to be able to produce propulsion systems there.

So in a nutshell, we are just bringing the technology.

Thank you very much. Pleasure.

Thank you. We will now take the next question from the line of George McWhither from Bar and Bar. Please go ahead.

Good morning. Thank you very much for the questions. I've got two, please. Firstly, on AMO Plus, you highlighted that 70% of expected HD revenue for the group is under contract, with 30% still to be booked. Can you just comment on what the N V Shs

with the coverage of the second half revenues you can see 70-30 split but that's for the total group so 90% as you can see also in the within the comments 90% of defense systems revenues is already under the contract and the remainder is mostly the US civilian market which is NFC type if I'm not mistaken approximately 500 million is a backlog coming from the Amoplus so that's the number you were asking for the second one the copper price the copper price has been mitigated through already two price increases we've done on the US market N V Shs N V Shs N V Shs N V Shs thank you very much pleasure thank you we will now take the next question

I would like to ask about the share of long-range ammunition in the large ammunition segment.

We expect 50% for this year. Could you provide an estimate of what you expect in the mid-term, where the share could grow? And also, what is the margin in the long-range ammunition versus the standard? Is it the same or slightly higher? And what would be the mid-term impact if it grows further? And my second question would be regarding the new factory which you are planning for N G in Germany. If you can provide any details regarding timing, expected cost savings, etc. Thank you.

Okay, starting from the first. So the split between long range and standard range. Going forward, we would like to reach a minimum split 70-30 long range. That's the minimum. That's what we currently see as a split of demand. So this is why I am confidently saying that. The second was the margin. The margin is better within the long range. Coming to your third question, we expect the improvement of these margins throughout the vertical integration. I was mentioning during the presentation that approximately 50% of the cost of production is driven by the components and the energetics whereby our nitrocellulose, nitroglycerine, bimodular charges production and all of it is the production of the energetics which are the highest cost there. So saving a 50% of that should significantly increase the margin. coming and connecting this to the guidance 26 to 28 percent in the mid-term that is a product so we will be significantly increasing the margin in medium and large caliber ammunition but as you can see in the land systems we are currently at the 17 percent of the e-dit margin which is then diluting is bad so throughout the product mix we will be increasing the margin significantly in medium large ammo more moderate in the on the group level because of the product mix

Thank you. Thank you. We will now take the next question from the line of David Perry from JP Morgan. Please go ahead.

Yes, hi. I hope you are all well. A few questions, please. First two are on ML ammo. You just talk a little bit about the order pipeline discussions or having with customers and any contracts that we should keep an eye out for. Secondly, I think that the q1 call the slide said you expected 50% of 155 to be long range this year. Now you're saying 60% I'm not sure if that's production or sales. But given this huge price difference, just wondering why you haven't raised the sales guidance given that mix shift. The third one is just on the engines that you're developing for drones and missiles. And you talk about, Michal, targeting several hundred million of sales, which was about, I think, also what you said at the IPO. I'm just wondering why it's not much, much higher than that, because it seems to me the demand would be almost infinite. Is there a production ramp issue, or am I misunderstanding the potential? I think you signed a deal with Ukraine at your office. If you just talk to that. Thank you.

Yeah, so I will... Hi. I will start with the last question regarding the budget engines. There is much higher demand. The issue is basically a ramp up of the capacities and also the certification of the new platforms. Because every time... You are basically, you would like to be used by the new unmanned or the new missile system or systems you need to be certified which should take some time. So that's the one thing, but an issue N V Shs N V Shs N V Shs N V Shs N V Shs

You were asking also why we are not increasing our guidance. I was mentioning that during the call. This is because of the long range and the land systems is slightly longer lead time. So meaning N V Shs N V Shs N V Shs N V

And please remind me what was your first question about the... Yeah, the last question is just I haven't seen any sort of big orders for ammo from new customers. I just wondered what the pipeline was like and you just talk about any discussions you're having and potential big contracts that might be on the horizon.

There are many contracts in the pipeline under the negotiations. You could see that just few weeks ago Croatia joined the procurement of medium and large Libra Amo with Slovakia so there is this like a 58 billion euro framework agreement which is kind of like a European platform which other countries can join so N V Shs N V Shs N V Shs And I think that soon you will see a few announcements about the large Calabramo.

It's pretty much, David, copying the faith as it has been, for example, last year. So the first quarter, first four, five months, we are announcing the new deal. The coaches are there. The orders are coming. Then there is a N V Shs N V Shs

Hey, thank you so much for the opportunity. I just have a couple of quick questions, if I may. The first one is actually on the recommissioning part of the MLMO business. So pretty helpful that you provided that 30% of FY26 revenues on MLMO could be from recommissioning. Just wondering how should we think beyond that? I mean, how quickly is the recommissioning revenues N V Shs

business is from 85% done it means that 85% of the portfolio is certified because you have types of small caliber ammo so 85% is done some of the models or the types are missing but it will be within the weeks

And in terms of the differentiation between the revenues coming from the own production versus recommissioning, it's pretty much the same. You have to consider if you are recommissioning, start delivering long range, but the lead time is almost the same.

Okay.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.