8/23/2024

speaker
Mika
Moderator / Investor Relations

Welcome to today's presentation where we have the pleasure to present GOM Space. To help us through today, we are joined by you, Carsten Dagmann, CEO of GOM Space. Your Q2 24 interim report will be the subject today, fresh from the press this morning. and yeah i think uh kind of delivering on all the goals you set out last year so uh but i think that will be probably be the subject where you look back and and take us where you are in that progress as always you can ask questions down in the box down below we have a lot of questions in already but do feel free to uh to to keep asking during the presentation we will take it in the end but for now i think i'll hand the call over to you carsten

speaker
Carsten Dagmann
CEO, GOM Space

Thank you Mika and welcome everybody to our Q2 2024 update. Very happy to be here again. As Mika said, please do ask questions. I'm very happy to try and answer all the questions I can, but let's try and do it. You do it to Michael and we'll take it at the end. So today, I will talk about our reporting, the guidance we gave last time. We just want to repeat that. We'll talk about the journey we are on. We'll, of course, talk about the Q2 results. That's what you're looking for as well. A reminder about Gump Space for those of you who might be new to the share and to Gump Space and have not yet really looked into the details. exciting events we have a couple of exciting events the last two to three weeks that I think is worthwhile highlighting and then a little bit of why would you invest in GOM space but let's first take clarity and communication I said from the very beginning when I started here this is really important to me I believe strongly in this communication and clarity so Let's try and keep that track. First of all, when it comes to reporting, we changed last time and told you that for the first quarter and third quarter, you will have a trading update or trading statements instead, simply to provide a faster service to U.S. investors. So we will keep that up. You also saw for this one where we are a half year report that takes a little bit longer to do. We issued a press release a little bit earlier with the numbers we were certain about at the time. Also as a service to you so we get information to the market as quickly as possible. Okay. Reminder on the journey. 2023, we had a lot of uncertainty. There was a lot of losses. We had to raise capital simply to survive at that time. There's a lot of change and we're trying to clarify the situation. Where are we? Who do we want to be? Where are we heading? That was 2023, which we worked on there. 2024, we are getting into the clarity. We know what we're doing. We have defined our business into our three business units. We know how to track our business. We have more stability. Cash flow is stabilizing. We have a cost that's better matching the current market level we have. Of course, we want to grow, but first stabilize and then focusing on the right sales, meaning we need sales with profitability. In the end, what are we aiming at? Just so you don't forget, product business is important to us. It's good business, different dynamics in terms of closing business, production, delivery, no engineering hours, no complicated contracts. We simply sell what we have. that needs to grow into a business in its own right. We have our program business emissions where we're building the bigger satellites. It's much more complicated. This is also something that we will grow in its own right. We'll have a lot of focus on selecting the right projects and we need to be patient. This takes time. We have good traction now, as you've seen in auto intake, but it takes time. And in North America, Also, capturing market share, the biggest market in the world, we have a very, very small share. There's absolutely no reason, no reason whatsoever that we cannot grow this into something more than what it is today. And this is what we are working on. Also here, it takes patience. It takes time to build a market. It takes time to close business. And it takes time to close business that is bigger. The question, which is very fair, can we afford to be patient? And like I said last time, yes, we can. very, very clear from my side. What are we aiming at? What are we executing on? And I hope you'll appreciate that the results in the second quarter here is delivering exactly on that. So let's let's dive into the numbers. Free cash flow is positive in Q2. Great. This was our really our focus. We're trying to to get into that being free cash flow positive for every quarter. We improved our cash position to 51 million, so more money in the bank basically. That's good. Our order backlog had an amazing jump up to now 299 million from 161 million, so 85% increase. This is really, really good. This is, of course, creating a platform for going forward. We have more certainty about what are we doing, what are milestones, what are the contracts and payments agreements we have in place with customers. So this is really good, a very strong development. On the key order intake side, of course, what has put this up to this level, there's Unseen Labs, where we are now starting a contract building microsatellites for them. This is new. Remember, the microsatellite market is new for us, and it's quite unique that we actually get two contracts at a time. We get Unseen Labs, our dear partner, for a long time. We're very committed to them, and we will continue to grow with them. And then we have a contract from Singapore, which is a new, so this is really, we have done business in Singapore before, but it's the first time we land a contract of this size. They visited us last week. We had some milestone reviews. It was brilliant. We have a very, very good connection with our customer here, and this is very much built on trust in both directions. And as you may know, I've lived in Singapore a year also, and it was good to see familiar faces coming last time. So this is very good, and it's really helping us to stabilize the business. And hey guys, IFO approved a government export loan towards Indonesia for a big contract that we have signed the commercial terms, but the contract is still subject to a final negotiation and approval between Denmark and Indonesia for the financing. IFO has approved this. This is great. This is great. If we close this, this is what we want to. Of course, everything is set up. But there's another milestone in this. It means GAM Space is now recognized by Eiffel, by the Danish government, to be a valid and credible exporter of our technology. This is really, really important. That means we can go to other places as well. We have a good dialogue with Eiffel. We are known at Eiffel, and we can do more business like this into the future. So great for the short term. That's what we needed for Indonesia. Equally great for the future. Okay. So a couple of numbers that I usually do, I'm gonna do this a little bit slower because there's some changes here I want to highlight to you. Take a look at the order intake. So order intake in a quarter was 199 million. Very good. Look at the graph and compare to last quarter too. So now we are plus 200 million. Look at the Q2 last year, minus 200 million. What was that? This was, remember what we did? We said we only want to do profitable projects. This is where I canceled a number of orders that we had where we were not making money. We were either break even or losing money. I could simply see we are not going to lose money. So look at the difference now. We now have programs that we are actually making money on. There is profit in these programs. This is what we want. And we let go of 200 million last year where we were not making money. We may even lose money. Imagine if we hadn't done that and even still be successful today, that would mean we would need 50 people more, meaning adding to our cost base, meaning adding to the instability and the constant need of having to close more and more business. Big difference. Good decision. Sorry, I have to say that. Good decision. And now we're on the right track here to profitability. Revenue is good, stable. This will go up. I'll talk about that later. But of course, right now, stabilize the ship, get the water out, make sure that we are floating, we're setting ourselves in the right direction, and then slowly we'll pick up speed. There will be some waves in the process, but we can manage that now. EBIT also a great improvement, minus 8 million. Last year we had minus a lot more. I'm not even going to say the number because I can't read it on my screen, but it's much better. It's still not positive. There's still some way to go, but it's okay. It's not my focus right now. My focus is auto intake, managing the cash flow. Next on the agenda is revenue and then we will move towards a more positive EBITDA and profitability. Employees, we have increased from 132, I think, previous quarter to 150. So we are taking people in. Why? We actually do it because we have more work to do than we have resources right now. So this is, I suppose, a positive thing in the workload going up. And of course, we need to make sure we can still deliver on our promises. We don't want to grow. We are very careful about it. We don't want either to go too happy out on hiring. We really want to take in the good people that we need to execute and then prepare for 2025. Okay. Auto backlog. Another investor service, by the way, because we're not required to deliver this, but I want you to see this because it helps understand the business unit and the dynamics. As I already said, the auto backlog has gone up. 161 million to 299, great. The main change is obviously in the programs section where we build the full satellites. It's gone up a lot with the two orders. Products have gone down a bit. If you look at it, the first quarter, we had 16 million in order intake on products. And then in the second quarter, we have 12. This was somewhat disappointing and less than what we had anticipated. Okay, so they go up and down. It's not an exact science. But obviously it's well compensated by the larger order taking program. So that's okay. And you'll also see that in North America actually was progress on a total order backlog up to 7 million. Closing note on the product business. It was a bit slow in the second quarter, but hey, look, I sent an announcement out yesterday in the first seven weeks. So about a little bit more than halfway into the third quarter, we are at 24 million. Hello, that's pretty good. So we have doubled up already from the second quarter. So there's some fluctuations we don't totally control, but we are trending where we want to be. Cashflow plus seven, or 6.6 to be accurate, a million second positive free cashflow in this quarter. We were a little bit negative in the first quarter. We had a nice positive in the end of last year. But look at a graph here. Look at the last 12 months of free cashflow, plus 10 million. Look at the previous 12 months, minus 164 million. Again, I repeat, this is a focus. get the right business, adjust the cost base, which we have done, and manage the cash, manage the cash, manage the cash. And this is what we do all the time, every day, every week. People are getting a bit tired of me here, but we're not going to stop because this is really important. It also means it creates that stability. Yes, there will be some fluctuation. Yes, some quarters will be better than others, but we are not going to lose. What's the lowest bar? 60 million SEC in one quarter. We're not going to lose that. Not anymore. We have stabilized that. And we have a decent bank account. It's about 50 million. So we have some buffer. If things are going up and down, it's okay. We can handle it. And there will also be some fluctuations between deliveries and cash flow from the customer and payment plans. It's okay. It's part of running a business. But I would say we are on a pretty good trend here in the right direction. Oh, and I should also say we are keeping our guidance for positive free cash flow for the second half of the year. Reminder on Gomspace for those of you who haven't been here before or maybe listening for the first time. So we were founded in 2007. We've been on NASDAQ since 2016. We are a global, really well-known brand. We have a lot of mission experience, means we have flown a lot of satellites. One of the biggest satellite launches in the world where customers are launching our technology. We have a lot of products from our products business flying every day. And then we'll get back to that in a second because more went into space recently. We live in Aalborg and we have one of the largest facilities in Northern Europe for building these small satellites. We have a global footprint. We have customers in more than 60 countries. That's a lot. So we are all over the world. We have business in North America and South America, in Asia. We have business in Africa, the Middle East. We have business everywhere. Really good. We are a global brand. This matters. What are we building? We are building these smaller satellites, the so-called CubeSats, which are sort of from five kilos up to maybe 20, 25, a little bit more. And then we are entering into this new business, which are Microsats. Microsats are a bit bigger, 50 to 150 kilos. The first ones we can take up and lift by hand. The second ones, we need perhaps a little lifting device in our AIV room, which you see in the back. This is where we assemble the satellites in a dust-free environment. And why are we moving there? Why is the market moving towards that? They're not leaving the small sets that will continue, but they're moving into the slightly bigger satellites to get more energy, more power, and more room for adding advanced payloads. So it's simply a return on investment is bigger. You get a better performance out of that. We're in that business now. This is good. The products, the product business unit, these are these small components are used to compare it to. It's like battery packs for your laptop. It's a hard disk. It's a microprocessor board. This is what we do just for satellites. Very good business for us. And we also, we're doing this for the CubeSats, the smaller satellites. Our products can be reused in a microsatellite. Hey, exciting events. Let's see what has happened outside of talking numbers, but there's things that are happening which is worthwhile noticing. Two very unique anniversaries we have had recently. We have one which is the so-called GOMX4 satellite. We launched two satellites actually six years ago together with the Danish government and the Danish defense. They have now flown for six years. We've learned a lot. We have done weather observation. We have done imaging. The Defense Department, Danish Defense, has been working with this. Really, really great. We have learned a lot as a company because we've been able to run a lot of tests, verify things, make observations. And the sad story is it's dying. Very sad, actually, because it's a baby for us. It's going through the atmosphere. It's probably already crossed. And it will burn up, as they do when they go into the atmosphere. But we are very happy that it flowed for this long. That was not known when we launched it. So now we know that this is a really, really good platform that we have. And it works very well. There's another anniversary, five years of our first broad satellite. The broad satellite are the satellites we sell to our dear partner in France, Unseen Labs. We have been with them for a very long time. We launched their very first satellite five years ago. Big anniversary celebration, it's still working. And oh, by the way, make the link, market hint, how long time does a satellite work? About six years. When was the anniversary for Unseen Labs? About five years. You connect the dots. I'll leave that to you. We have a significant footprint with the latest SpaceX launch. We launched three satellites on that platform. Unseen Labs had two satellites that are up and flying now. And then we launched a satellite for Indonesia. It's called KAKA-1. I believe KAKA means satellite in Bahasi. We launched that as part of the contract discussion we've had with Indonesia. And here I'll pause and say, this was part of an original agreement that we signed in December as we announced it, that we would launch a first satellite as fast as possible for... It's operational and we will use it, of course, in Indonesia. We'll also use it for learning, for training, for setting up the operational readiness that needs to happen as part of a big program. And this is something that we have agreed also on a side contract. We do this now, even though we're still waiting for the big contract. The big contract needs to have the full financing, including financing from Denmark. So that is still in negotiation. But this first part, we have agreed separately with Indonesia. We need to launch this to keep our timelines. It's flying. We have a connection to it. And right now it's going through the so-called Liobs-phase, it means there's two, three, four weeks, depending a bit of setting it up, folding out the wings, getting connection, and then before it starts becoming operational and we can start taking pictures with it. great achievement, but wait, there's more. It's not only three satellites that successfully were launched. We actually had, it's close to every satellite. You can see it here on the picture on the right, how many different satellites from other vendors that were there, competitors, other partners. I believe there is a piece of gum space in almost every one of those single satellites. So not only did we launch three satellites, but our product subsystems, the hot disc, the battery packs, were somehow included in all of these other satellites as well. So from How much technology flew from GOM space? The answer is a lot. So this is really good. Very good news. Now, why invest in GOM space? We've been through that one before and I will do it again because I think it's important. First of all, there's a demand. Very clear. There is a compound average growth of 19%. So it's a growing market. Check. The demand is evolving. It's starting very much from NASA, ESA, the space agencies funding this for science and research, where we've also been involved, remember, and the hero mission that's going to fly for two years beyond the sun and more. But we see more commercial applications coming in and even more, even more so now the government, the sovereign state, the desire for every government to actually control and own the assets that are going to monitor what's happening in Denmark, what's happening around Greenland or if you're ukraine what's happening in ukraine what's happening everywhere we want to be somewhat independent in states even though we're together in eu and nato and we believe in being together we still want to have some control that is a driving factor that we see we have in the lower right hand corner the existential societal issues as we call it global climate infrastructure redundancy we can go space we can go fiber there's a need for that and like i said the national security is a big trend here So market trends are good. Customers are there. The business cases, the use cases are there. Why are we competing? Okay. Well, we've been here for a long time. We've been around for 17, almost 18 years. We're one of the oldest companies in new space. And we have a very strong technology platform and flight heritage, which I just shown you how much technology was actually flying. So it means we have a lot of experience with having technology in space. I can tell you it's not the same as building it on ground and thinking it works. It's not until you launch it that you start learning. Last one, journey to profit. This is what we're talking about here. I told you what we're focusing on. We have done, we started a turnaround in my book, in my timeline, beginning of last year. We have stabilized the cashflow as I have documented to you. Our market cap has grown. That's up to you, what you think we deserve or how you value the company. We have strengthened our leadership team and we have a very strong structure in place to execute. Market is good. Trends are good. We have the experience and heritage to do it, and we are on a very good track in terms of executing. Revenue and EBIT, new little service announcement here. So you saw the revenue was for the first half 116 million. I am expecting that we will deliver for the full year more than what we did last year. Last year was a record year of 236 million. With the order backlog we have taken in now, we have a more certainty that we believe we're going to do better than last year. Profitability, it will also come. But like I said, first, order intake, cash flow. Now we start turning to revenue. And as that starts growing, the EBIT will follow. So it's not a focus in and of itself. But we need to manage the first three ones first. A summary here. Cash and profitability first. I can say it seven times and then you all remember it. So this is what we're focusing on. Product revenue, expand North America, profitable programs. We keep that focus. We need the clarity and we need the accountability. Do we have the accountability? Yes. We have skilled people with industry knowledge. We have our founders are still here. So we have this whole accumulated knowledge since 27 actually goes even back to 2000. So our founders has been in this for 25 years. So we have that. knowledge, we have the heritage, it's still here with us. And we have very strong executives now in place that has executed before in similar environments. And they are accountable. And we have really clear accountability. Frank Tobin is responsible for North America. Oliver Schieve for our programs and Henrik Kallstrup for our products. So for me, it's very easy to follow up because I know exactly who needs to do what and they know what they have to deliver good stuff. All right, trying to wrap it up here as a summary. Positive free cash flow, check. Very, very strong order intake. I'm very happy with that in the second quarter. It was not easy. It's a long, long process and we are prevailing here. We're expecting the revenue for 2024 to surpass that of last year. IFO has acknowledged Gump Space as a worthy company for export credit and help with financing. That's great. We have the first satellite launched for the Indonesian customer, Czech. And, okay, you want to know more, I will give you an update at the end of the quarter, as promised before, on a bigger contract. And we maintain our guidance for positive free cash flow for the second half of 2024. With that, I'll repeat for you the question that you might ask me, but can we afford to be patient, Carsten? It takes time. And yes, we can. Thank you.

speaker
Mika
Moderator / Investor Relations

Perfect. Let's jump into some questions, Carsten. The first one is around one of your big owners, Peter Hartwich. When he invested in GUMX, he stated that GUMX was well in line with some of his other business. Does he have a part in decision making or does he have a positive impact on order intake? Does it mean that some of his connections can have actually helped you? So it's a little bit of a comment on whether he's how active he is in the management of the company and whether you can use some of his network.

speaker
Carsten Dagmann
CEO, GOM Space

Let me put it this way. I'm very pleased that Peter Hargreaves is here. I've run listed companies before. It's very unique to have Peter Hargreaves. When I speak to him, and I think you can read some of the articles, he's a very wealthy man. He's up there with Sir Richard Branson and some of the others. So his approach to this is more from a philanthropic perspective. He wants to do a good business, but he feels because he has made all of this money, it's a very unique thing, and he started with nothing. He feels an obligation to invest. So that's why he's in this area. Is Peter involved in the daily business? No, he's not, because he's an investor like you are. So he cannot be involved. And the other thing is, guys, he's pretty busy. He's not going to spend time here. But what is a positive side on this is that Peter is always there. So when we had the ship is starting to stabilize and we're sailing in the right direction and when we are ready and we need to move on, Peter Hargreaves is there. This is very unique and actually you should be happy as the rest of shareholders that we have this very unique investor.

speaker
Mika
Moderator / Investor Relations

And the next question is that you have been in public companies before, you know, when you hit a new milestone and deliver them, we want more. So and I know, of course, you can't probably tell us much here because you are not allowed to guide into the future before you have. told the market but great you have achieved positive cash flow but it's difficult to maintain but it's difficult to maintain if the earnings are negative and that's that that i will agree on when do you expect positive earnings

speaker
Carsten Dagmann
CEO, GOM Space

So I told you the story of what we're focusing on. First, it's stabilizing. We're stabilizing the ship. Look at it as a ship which sails. It's going down. It's sinking. If you go to the captain and say, so give me an STI I made on when we're floating again. I don't really know. But what I can tell you we need to do is get the water out. If you started that, then that's good. Somebody needs to row so we can glide over the waves and not take in too much water. And others are looking at the sale. So I can tell you what you need to do. And this is what we're doing now. We need to focus on the cash flow. We are. We need to close more business. We are. Now we're turning to revenue. And once we grow the order backlog and the revenue comes up, profitability will come. So I think I have laid out for you the track we are on. And I think rather than asking when, I think it's more question of saying, are we on the right track? And the answer is yes, we are.

speaker
Mika
Moderator / Investor Relations

Yeah. And then there was also a question about the gross margin, because people can also do their own calculation. They can follow your order intake, they can start calculating your revenue. I know it's not that easy. And then if we have an idea about the gross margin and some of the fixed cost base, then that will be the indication. And it's not directly asking what targets you have for the gross margin, but what do you see this business being able to deliver in gross margin? And I know it's not easy because it is actually not been a very profitable business, this one. So I think it will be hard to probably pick something out. But thinking of gross market in a high tech business, you know, with a lot of knowledge incorporated in the products, what are the levels you are you should see in this industry, if you can give some indications.

speaker
Carsten Dagmann
CEO, GOM Space

Well, first of all, job number one, make sure that it's positive, which we did over this year because it was minus 5% compared to last year at the same time, right? And now we are plus 31%. So it's going in a right direction. I would maybe look at it a little bit differently. Of course, I have a good idea what I think we need to make. But if I tell you that, then our customers will know how we're pricing things. So that's not a good idea for you either. Having said that, If you look at the industry, and I know some of you are doing a lot of analysis, look at the comparable companies around the world. We are probably, and I say probably, we are probably the nearest to profitability company in the space that we are in. There are others that might be bigger, might have some bigger market shares, et cetera, but nobody's making money. Go look up Terran Orbital. They were just bought by Lockheed Martin. They've been in chapter 11 for a long time. We're not. We are okay, right? So profitability is there. I think a couple of things I've given to you. The product business is a good business. There's good margin, right? The program business can inherently be larger. It's more complex. So you have a higher risk also. It takes longer time. So it's a different service kind of margin. So research a bit. What should a service margin be when you do this kind of thing? And then you have some ideas. But step number one, the current gross profit needs to be positive. That's number one. And we're trending in the right direction there.

speaker
Mika
Moderator / Investor Relations

Perfect. I know I couldn't ask you to guide into the future, but I try. uh there's uh with the order intake you have reported the forthcoming growth looks just substantial that's for the uh ask us own i'm not putting that on you are you able but a very good question are you able to finance that growth from from operations is there a big enough prepayments and and so on so that you're able to finance this

speaker
Carsten Dagmann
CEO, GOM Space

Yeah, so that's a very good question. And so let me divide it up into sort of two sides of that question. There is, are we getting sufficient cash from the contracts we sign to run those programs that we commit to or the product sales we commit to? And the answer is yes, because let's think to the profitability. If the programs or the products that we sell are profitable, inherently the cash is there. Then we need to manage the cash flow, which can be a little bit different from the revenue you see. So the answer is yes, everything we take in, we can sustain. Then there's another question of growth. Often growth is associated with I take 100 million SEC in so I can build a new satellite kind of system because I think this is going to be the great future. That's a different thing. And I think that was the other side of that question. We'll get to that. So is there sufficient cash from what we're closing? Yes, because we're closing profitable business. Do we need more cash if you really want to step into another area? Yeah, we probably do. It's not the focus right now. We're stabilizing the ship. We want to be able to sail before we're jumping to the next stone and we're heading in the right direction.

speaker
Mika
Moderator / Investor Relations

Yeah, I think the question was the first part, you know, whether you can finance the growth part, you know, sorry, the bigger the contracts are financed by themselves.

speaker
Carsten Dagmann
CEO, GOM Space

Fine, fine. That's inherent part. Yes. Perfect. Yeah.

speaker
Mika
Moderator / Investor Relations

And then there's a very direct question. I don't know if I can answer that. Is there any plans of a targeted, what do you say, mission to put your satellite into surveillance of Ukraine? Are you targeting anything to try and get directly into supervising that area?

speaker
Carsten Dagmann
CEO, GOM Space

Yeah, so what's important to understand is that the GAMS-based business case is that we deliver technology and satellites for service providers or nations. So we are not in and of ourselves launching and running a service on a satellite. That's not our business case. Others are doing that. Are we engaged in conversation? And I think especially, I'm assuming this question is tied to the funding that the Danish government is given. And yes, of course, we are being asked and we are engaged there. We are not a company to launch ourselves, but we will definitely partner up with companies who are then operating satellites. We'd love to help. I think, again, here the government are doing a great job. We need them to be a little bit faster. You can't call on a Friday and say, I want a satellite on Monday. That's not how it works. So we need to have this more long-term plan, and we're definitely engaged with that to make sure that the same thing doesn't happen in two years to say, oh, shit, would have been, excuse my French, would have been nice if we launched that satellite two years ago or started it, right? So this is what we're working on.

speaker
Mika
Moderator / Investor Relations

And then there's a question I can't remember whether you actually mentioned this is the Indonesian satellite in the Friday the 16th launch and and when is the expected final signing on the Indonesian agreement? I think the latter part you have kind of indicated the timeline on what you should expect. But the first one was the Indonesian part of this launch.

speaker
Carsten Dagmann
CEO, GOM Space

Well, it's an Indonesian satellite that we have launched, which is now flying and it's owned by the Indonesian state. So this is up and flying. And as I said, it's the first part of our strategy to launch one satellite quickly so we can use that for learning and preparation. There's a whole Imagine a lot of people sitting in a room with a lot of screens, seeing all the ships sailing in the oceans around Indonesia with little dots on them, understanding what they're doing. All this needs to be built up and we can use this first satellite to setting that system up. So when the remaining 19 are launched in some years down the road, then they're ready to go. So this is the first part that we had agreed with Indonesia in terms of signing or, well, we've signed a commercial agreement, but in terms of the final financing, I will give you an update at the end of the quarter.

speaker
Mika
Moderator / Investor Relations

Yeah, perfect. I think I will let you do that on all the Indonesian questions. It is a fact that Onsen Lab will watch the critical infrastructure in the North Sea and Arctic. In general, any communication with the Danish Defence? Will you have any open communication with them?

speaker
Carsten Dagmann
CEO, GOM Space

Yes, yes. Yeah, quite frequently. So there are a lot of discussions, etc. Again, I'll just say speed is of essence and we are here, we are ready. I know our different companies in the industry and the network are ready. So it's really a question of the Danish defense and the Danish government to move this faster. The funding is there now, but we need to make a decision soon. Are we engaged? Yes, absolutely.

speaker
Mika
Moderator / Investor Relations

And then a second question about the Arctic. As we know, we have a We have a goal of surveilling Arktis. And with this, and I don't pronounce this satellite name, but you already talked about it. Does that open up for closer cooperation, the satellites, or maybe it will affect your cooperation with SAIC in the United States?

speaker
Carsten Dagmann
CEO, GOM Space

No, the two things are not related. SAIC is a service provider to the US government who is building a technology arm with satellites as well. They want to deliver those services and technology to the US government. It's got nothing to do with this other satellite. Have we learned from the satellite, the Garmix 5, which is the , which is, and I was not correctly pronounced, but that's a Greenlandish for satellite, I believe. And I might be corrected and I stand corrected if it's not. We have learned a lot and it has been flying over arctic and the Danish defense has learned. So this has been a pre-runner for understanding what do we need to do? And now it's time to plan that network and start putting some actions in place by the government and by the Danish defense. We are not. We are not the stow factor here. We know how to do it and we are ready.

speaker
Mika
Moderator / Investor Relations

Yeah, perfect. Any update on Project Statical from IN-AIR and INDRA on the progress for the first satellite to be sent up in the first part of 25?

speaker
Carsten Dagmann
CEO, GOM Space

Yeah, I will answer on that we are executing on that project as planned in terms of what's the startical business case. I think you can read in the news how that's evolving and definitely on track for the ambitions to launch this network of monitoring airplanes for safety and also for fuel efficiency. But we are on track with the customer right now. So there's nothing more to report there.

speaker
Mika
Moderator / Investor Relations

If the contract on the satellites from Indonesia is not signed yet, who pay right now for the cost of the ongoing work and the satellite who was sent up there? Have you covered that part?

speaker
Carsten Dagmann
CEO, GOM Space

We have an agreement with the Indonesian government for that satellite, which means we have an agreement for how they're going to pay, etc. So, yes, there is a funding for that. We have covered some of the costs ourselves initially. And now that it's launched, then, of course, we are expecting the Indonesian government to pay as per agreement.

speaker
Mika
Moderator / Investor Relations

And then a question. Could you face capacity challenges when the Indonesian deal goes through? Will it cause prolonged delivery times for other customers? And could this impact your potential maybe for taking in new deals?

speaker
Carsten Dagmann
CEO, GOM Space

No. It's right behind me here. We have one of the biggest assembly sites. We have all the capacity, everything we need in terms of the material. As we grow and we see business coming in, we are expanding our very skilled staff for these assemblies. So we can gear up accordingly. So we are not in a situation, we are limited by physical surroundings that we can only have three at a time. We could have 10, 12, 15 at a time if you wanted to. So it's a staffing situation and the staffing like for any other activity that we do, we will gear up as a business is evolving. So the answer is no, that's not a problem.

speaker
Mika
Moderator / Investor Relations

And something I actually asked about the financing part when that was asked, the staffing, we are talking about a tight labor market in Denmark. And I know this is a very, very specialized labor force you are looking for. And I think you are lying in a very good area for that. But your feel of the potential for staffing up and and and and being able to to get the right people i guess that that must also be something that uh after the stabilization you you would need to to look at whether that's whether that could be a something that could be as a as a roadblock to you

speaker
Carsten Dagmann
CEO, GOM Space

Yeah. So we're doing a couple of things. We are hiring internationally. So actually you've seen, we've grown 18 people since last time we reported. They come from all over the world, come from Latin America, Southern Europe, Central Europe. We also remember we have an office in Luxembourg, so we're also hiring people there. So it's not just about hiring in Olpo. I will say, though, as a service information, it's very interesting to see that a year or more ago, I know the reputation around GAM space. Let's be honest, it wasn't great in a local area. What's going to happen? Of course, there was uncertainty that was understood. that has changed. We are on the right track and actually people want to come work for us. So we are getting surprisingly many applications right now for the open positions. We have much more than we did earlier. So I think the positive trend, the communication here, we're giving a service to U.S. investors. We're also giving a service to future employees saying, come work with us. This is a fun place to be. And actually we are okay. We're on a good track. Perfect.

speaker
Mika
Moderator / Investor Relations

And the last question is a little bit broad one. Can you tell anything about the cooperation with SAIC? I now soon need to learn to pronounce those four words. It's a pretty open one.

speaker
Carsten Dagmann
CEO, GOM Space

It's just four letters, Michael.

speaker
Mika
Moderator / Investor Relations

I'm very, very sorry that I'm not good at that. Can you talk a little bit about this cooperation? Is there anything new or maybe a little bit in general terms?

speaker
Carsten Dagmann
CEO, GOM Space

Yeah, what I want to highlight is an announcement that was made some months back where SAIC signed a contract with Pentagon for their AI platform. So SAIC is working on creating ai platform processing platform for space they signed an agreement with pentagon and in that headline it wasn't our announcement it was actually saic's it says together with gum space saic has won this contract with pentagon and i think this is what i'm going to say about this of course the the collaboration is continuing this is not a short game this is not it's not a game for friday we go into these contracts it's a long game But we're playing that long game as well. And it's definitely I've worked in the US market before. It's worthwhile playing the long games over there, because once you get a hold of some of those contracts, it might take you some years. It can be very lucrative. Perfect.

speaker
Mika
Moderator / Investor Relations

I think that was the last question. I will let you off the hook. And thank you to everybody for listening in. And thank you to you, Carsten, for taking us through your results. And again, congrats with those and answering questions.

speaker
Carsten Dagmann
CEO, GOM Space

Thank you very much. Thank you for listening. I appreciate it. Always fun to tell you where we are. Thank you. Bye-bye.

Disclaimer

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