KebNi AB (publ)

Hello and welcome to Carnegie. My name is Mattias Karlsson and I am a stock analyst. Today we will focus on a company called Kebne. And with me in the studio is my CEO Torbjörn Saxmo. Welcome Torbjörn. Thank you. I have just released a quick Q&A report so I will pass over the words to you for a short presentation and then we will take the Q&A afterwards.

Thank you very much. I'll start by going through what Kebni is. We are a small high-tech company that delivers satellite communication antennas and IMUs, especially within defense and authorities, typically blue light authorities. Examples of customers today are Saab, Epiroc, Indra, BAE. Under kvartalet så har vi fokuserat hemskt mycket på att få våra leveranser att flyta. Fokus på leveranser och fokus på flöden i produktionen. Vi jobbar också starkt med våra internationella affärer och våra partnerskap. Det är viktigt för oss going forward. In the quarter, I can state that we have a revenue of SEK 31 million, which is 185% compared to the previous quarter or the corresponding quarter in 2023. EBITDA ends at SEK 3.2 million, which is a little over 10%. And SEK 2 million in the last row corresponds to 6.7%. For us, this is a big milestone and an important step forward.

Thank you for that presentation, Torbjörn. I thought we'd take a look at the numbers here. The gross margin was very strong. It was at 47% compared to 37% in Q4. You had an EBIT margin of just over 10%, which is impressive. Is this a sustainable level if you look at the coming quarters and given today's production and sales configuration?

Of course, the margin is dependent on our product mix, but most importantly, I would say that we are at a level where we should continue to be. So it feels really good.

That sounds good. And then in the quarter you had a net cash flow of negative 9 million, so now your cash has come down to 11 million kronor. So then I wonder a little bit here now, in order to complete the upcoming growth, the continued growth journey and cash flow, do you need new capital or would you be able to finance it with, for example, bank loans?

We currently have no plans to bring in new capital, but we intend to roll with the bank loans. We expect to get, above all, with this quarter's report in the back. So we have a plan and we follow it.

The backbone of your growth is the EMU deliveries to Saab. You just mentioned that there is focus on that now. How is the ramp-up going and can you tell us a little bit about How does the order book look like for Saab? What is the probability that you will get more orders this year from Saab?

Of course, just like you say, Ryggraden is the supplier to Saab. But it is far from the exclusive Saab. It is a whole lot of other products, both other IMU products and Satcom products that are actually delivered. So it is a nice product mix. Today, we still have an accumulated supply stock against Saab and in terms of size 180 million, something like that. I have no other belief than that Saab will continue to be successful with its sale of Enlo and I hope that that will give rings on the water so that we will continue to produce EMUs for Enloe for a long time to come.

You have also intensified your sales work both in Europe and Asia now that you are done with the development of Saab EMU. Can you tell us a little bit about what phase you are in and can we expect any new collaboration or any more concrete news in the near future?

I think we will see a lot of interesting things in the not too distant future. We are working with a number of cases in India, Singapore, Thailand and Korea. We have projects that we work with in both Indonesia and Malaysia. These projects are in different stages and depending on what type of customer it is, it takes a varying degree of time. Some of them are quite long-term and I expect that we will have fun things to tell in the near future.

Sounds exciting. And then you have a young venture called Skafsens and you have just started pilot testing of the product. Can you tell us a little bit about what is happening in that business?

No, we have not started the pilot testing yet, but we are now completely ready and we are looking for the test object that we are going to run the pilot on. I expect that we will be able to select the test object within a few weeks and then we may have another few weeks before the pilot starts. So everything other than that the pilot is carried out during May would surprise me.

And a commercialization phase after that, how long would it take?

I would not be able to imagine that the first commercial product is a quarter away from the pilot. Then we talk about a product and a product area where The goal is somewhat flexible. A part of maintaining your market share is to be defensively aggressive and constantly develop your offer and ensure that you are attractive in order not to let in other players on the market. We will continue to focus on the offer.

Okay, good. Finally, Torbjörn, what would you like to highlight as the key driver in the investment case Kebni in the coming quarter?

Yes, it is our IMU business above all, and the production facility we have built up in Karlskoga. This is is really a story. We have achieved something and now it is really about telling our story to other potential customers and proving that we are trustworthy. We have done it and our customer is a demanding customer and that gives us credibility and that is actually the same thing on the satellite communication side. So we have two strong stories that we want to tell and we already notice that we are starting to get attention. It's starting to sink in and a lot of potential customers are noticing what we've done. And it's visible in the inquiries and the business cases that we're working with right now.

I'll just think of one final question here. Given that we've gone into NATO now, have you seen any increased interest in just Kevnitz products?

Undoubtedly. Not least in the area of satellite communication.

Very good. Thank you very much, Torben, for today. Thank you to all of you who listened.