Gapwaves AB (publ)

Hello and welcome to today's webcast with Gapways, where CEO Jonas Ehinger will present the report for the first quarter of 2024. After the presentation, there will be a Q&A. And with that said, I hand over the word to you, Jonas.

Thank you, Martin. And it's very nice to join you again to present our first quarter this year, 2024. And I will have a short presentation on the Q1 report and also some highlights from it. as well as addressing some questions that we have received ahead of this report's publication. So, just to recap on GapWaves. It's a company focused on high-performance antenna solutions. The technology was incepted at Chalmers Technical University, and the company was founded in 2011 by Professor Per-Simon Kildorff. Nowadays, we're focused on radar and wireless communication applications, and especially in the automotive segment, as well as mobility segments or vehicles outside passenger cars that can also be automated or use our antenna technology in advanced radar sensors. The company has a very strong technology, of course, in the antenna field, waveguide antennas. And we have a strong focus on continuing our innovation and also applying for patents. We have a very strong patent portfolio today, and it is also growing. Currently, we're at more than 44 patent families. The company was listed on Nasdaq First North in 2016. Now, moving over to the first quarter of this year, I'm really happy to communicate a very strong quarter for Gapwaves. It's been a busy quarter for the entire company, and it's also nice to see that this is being displayed in the numbers. Our net sales this quarter was 15.6 million. compared to 4.9, same quarter last year. Our EBITDA was minus 13 million as a group, including our holding in Sensrad, which is an associated company of Gapwaves. Excluding associated companies or Sensrad, our result was minus 8.8 million Swedish kronor, compared to 16.1, the same quarter last year. We have a strong cash position at 69 million or almost 70 million. We're currently 42 employees in the company. And during the quarter, of course, improving strongly on sales, more than 200% increase, and also gross profit has a significant impact on the EBITDA. uh we're still investing in gap waves we're still on our scale up journey to scale up the company towards a full fledged supplier position to our customers in current contracts and the current order book the cash flow was affected by increased working capital And we also, which is fairly normal when you grow strongly in a quarter, we also have a fairly significant account receivable position. The FlexLine investment in a location adjacent to Gapways headquarter is moving forward as planned. And we also expect significant growth in the rest of the year as per current outlook. Some of the highlights during the quarter. Of course, I want to emphasize the strengthened partnership with Franken. Franken is a key partner of Gepways, producing the antennas. And they've also placed a large order for additional production equipment for the automotive antenna, which will be produced at the Franken facility in China. Furthermore, we have also received additional orders from the undisclosed European tier one that we have been working with for around 15 months. And this is important because it also shows that the project is progressing and that the tier one customer is continuing its effort together with Gapwaves to finalize the development and design of an antenna that later can go into production. Right now it's a development project. And I'm really happy to announce that we are entering into production with the first automotive antenna that we designed for Hella in 2021. And now the large-scale production is starting, obviously in a scale-up phase, but right now the production is running at around 6,000 antennas per month. And the scale-up phase will continue well into next year, where the plan is to reach a million units per year in volume. SOP, startup production is really important for our automotive customers and this is a clear sign and proof that GapWave's antenna technologies and antenna products meets the requirements, the very strong and tough requirements of the automotive industry. So let's take a quick recap of the market. It has not really changed for Gapwaves. We're still in a very strong market position, where the market is driven by legal as well as technical regulations in the marketplace. And we still expect to see more than 25% growth of radar sensors for automotive use and driver assistance systems in the coming years, in fact, throughout the decade. And of course, there's a need for higher resolution radar sensors in the 77 gigahertz band. And this is a perfect spot for waveguide antennas, especially gap waves, because our waveguide antennas have several very significant advantages, such as more effective and scalable production methods, as well as more cost-effective materials that can be used in the antennas. We also have two different GAP waveguide antenna technologies that both have their unique set of advantages catering towards the automotive industry. So it's safe to say that we can see significant market growth in the coming years in this industry. As I mentioned, SOP is really a key moment in this industry when it comes to automotive products. And you can see here on the slide, which we have shown and communicated before, the planned start of production for several of our communicated and announced partnerships and projects. And SOP in 2024 will happen for several of these customers. In fact, I already mentioned Hella, which we're very excited about to finally have entered into the production phase of that automotive antenna, but also smart micro antennas will go into production, serial production this year, as well as for sensored, obviously. And of course, there are more projects that will enter into this production phase in the years to come. You can see some examples here. And obviously, the company has a very high priority and focus in adding more customers to this list moving forward. As I mentioned, Forvia, which is now Hella is part of the Forvia group. SOP has taken place as planned in 2024, in early 2024. So it has started now. We'll continue to scale up well into next year. Smart Micro will start also this year in 2024. And then obviously Sensrad, which is all about to commercialize and launch their first commercial version of the high, very high resolution or 4D imaging radar sensor. So that's not less than three projects coming into production this year. And again, looking at this list is probably the most important piece of information in this presentation and other presentations that we've made before. That's the timeline of the SOPs for these customers and the projects. We expect to add more customers and more very large and significant contracts to this list. So to summarize here before we move into the Q&A part, Gapwaves is very well positioned for very strong growth. As I mentioned, we have a strong technology and we can now offer a complete antenna solution for our customers. Technology, design, industrialization and management and high volume production for our customers. And we have also strong partnerships with production partners, which means that Gapwaves doesn't have to build its own factories in various places. We can partner, qualify and certify certain companies that already have these infrastructures. And our customer relationships with these customers such as Hella, Bosch and Bionera and others are very long term and are also including or will mean that the antennas that we design and develop will be produced during a very long time in very high volumes. Thank you so much. And I think it's time for the Q&A.

Thank you so much, Jonas. We jump straight ahead to the Q&A here. Under is an old customer who has now launched a partnership with BitSensing regarding 4D imaging radar. Is Gapwave's first commercial customer a closed chapter who has chosen a different path here?