KebNi AB (publ)

Hi, and welcome to this interview with Kebni. You reported your fourth quarter for 2024. And with us to tell us more about this is our CEO Torbjörn Saxmo. Welcome, Torbjörn. Thank you. Torbjörn will start with a short introduction and tell you more about the quarter, and then we will end with a question time. With that, I hand over the sound and picture to you, Torbjörn.

Thank you. We will start by taking a short look at what Kebni is. We are a company that focuses on stabilization, navigation and satellite communication. We have two product areas, satellite communication where we manufacture antennas, satellite antennas for use during movement and we have inertial sensing where we manufacture IMUs, a kind of sensor that measures relative movement. In total, our focus is to measure traffic and build stabilized platforms. We do this mainly to customers in the defense segment, where there are high demands on performance and where the environments are often difficult. Examples of customers are Saab and Epiroc. If we start by looking at the end of 2024, the fourth quarter, we sum up a turnover of 40.4 million. This means that we are increasing by 8% compared to the corresponding period last year. EBITDA falls to 5.2 million, which corresponds to 13%, and the last row 1.6 million, which corresponds to 4%. In total, an operational positive cash flow of 10 million. With that, we can also sum up the whole year 2024 and then we end up with a total of 130.6 million, which is 99% compared to the previous year. A adjusted EBITDA of 14.1 million, which corresponds to 11% and the last row 2 million corresponding 2%. Last year an operational positive cash flow of 7.7 million. If we summarize this and look at the highlights for this year, I think that to begin with, we do not reach the goals we set up two years ago regarding the revenue. But on the other hand, we show that in terms of results, we exceeded the goals we predicted two years ago. And in total, I think it is very positive, because it means that despite the fact that we do not get up in the turnover that we had intended to do, we deliver a result that is better than we thought. And I think both have gone before 2025. Then it is also nice to be able to note that the operating cash flow ended at a positive 7.7 million. During the quarter, we have also started the serial production of Sensation. This is an important step because it means that we can now predict deliveries, we can predict quality and we can take care of the customers in a good and reasonable way. Vi har dessutom skrivit ett avtal med Ace Antenna i Korea där de har valt Sensation som IMU för en Future Soldier lösning som man jobbar på. Det är fantastiskt roligt för det visar också att Sensation är konkurrenskraftig prisprestandamässigt. Finally, we have put down our business in Calix and that will probably strengthen us with 1.8 million per quarter when that cost disappears from our cost. So in summary, I think we are now summing up a strong 2024. End.

Well, I can only agree. It's the first year when you really sell and deliver and you show direct profit. So I think it's exciting. We'll talk more about scalability here in the business later on. But I think we'll start on the revenue side. How did the sales mix look here under Q4? Did you sell any antennas or was it mostly IMUs? Was there any sensation or how did it look here?

The lay-on part of the turnover is made up of deliveries to SAAB. But there are a lot of, or a whole lot, there are large inflows of Sensation and there is certain work and deliveries on the satellite communication side as well. But in comparison with the deliveries to SAAB,

And in Q3, we talked a little bit about that some orders were a little bit too small. And that was one of the reasons that you didn't reach the sales target. During Q4, we haven't seen any news that concerns the turnover for just Q4. Are these orders won? Are they lost? Or are they still ongoing discussion?

They are absolutely still ongoing discussion. Jag ser framför mig att fokus under det första halvåret kommer till stor del vara att landa ett antal ordrar. Flera av dem som vi kommer börja leverera på under 2025.

And how should investors think if we continue to 2025? It was a little calm on the news front during 2024. You do not report any order book or order entry. So how much do you have left to deliver from the orders that you have received so far?

Vi har att göra en hygglig bit in på hösten och vi ligger fortfarande på rätt sida om ledtidsgränsen så jag är trygg i där vi befinner oss nu.

Med bakgrund utav de här frågorna, nu ger inte ni prognoser men ni har ju mål. Hur känns Outlook då för att nå målen för 2025 med din omfattning?

Jag tycker att vi vill vara betraktade som ett tillväxtbolag. Vi har absolut ambitionen att växa. Det innebär att 2024 är startpunkten för oss. Det är första året då vi levererar kontinuerlig omsättning under ett år. Så det här kommer vara ett avstamp och jag förväntar mig att vi har en högre omsättningssiffra 2025 än vad vi hade 2024, tveklöst. Och med det så följer ju också naturligt en ökad lönsamhet.

Yes, I expect you to deliver as much to Saab and about the same number of antennas and then add Sensation. There you have an increase compared to 2024. In my opinion, quite simply. You say that you have a lot of dialogues going on. Can you mention some specific areas that you think are a little extra exciting? Not a specific customer, but is it the airport? Is it land-based? Are there other specially developed IMUs? Is there any specific area that you find extra interesting here?

To begin with, I would like to point out that we have a number of very interesting satellite communication businesses that I hope will materialize here in the first half of the year. When it comes to IMU's, we work with a lot of defence related projects. In Sweden there are some projects we are working on. We deliver test orders in Europe. Drone applications. We have customers who are active in Ukraine. We deliver to a number of projects in Korea, where we are also very strong right now. There are several applications, many of them are drone related. Exciting.

And you were talking about this in the beginning, that increased turnover should also be visible in the profit. And then I think, since you have the production on third-party producers, You shouldn't need to increase the sales power very much to sell to more customers. So I think you should get pretty good scalability here on profitability when you grow. Or how should we think about margin and profit development in the future?

Absolutely. And also, I would like to say that We also take advantage of the fact that we have a number of positive stories to tell. Saab is one such story about a good project where we have scrapped a solution, but what we have achieved with Ace Antenna is another such example of Att vi har tagit oss in, vi har konkurrerat med stora namnkunniga företag och vi har vunnit på prisprestanda och tillgänglighet i relationen med kunden. En förmåga att göra vad kunden vill och vara lyhörd för deras behov.

Yes, yes.

Basically, I see in front of me that the area of defense will be a powerful growth market for a guaranteed 10 to 20 years. For me, it is impossible to see that we would put ourselves in the situation we were in ten years ago, in a predictable time. And that means that we are in a growth market. We will continue to focus on the defense segment. I see ahead of me that defense is a segment where there is a possibility for higher margins. So we have that with us into the future. And then I see in front of me that if we want to be a growth company, then Kebni will be a completely different company in ten years or five years than we are today. Our product mix will certainly look different. We will have other projects we work with. If we are still within the defense segment, which I see ahead of me, then profitability will be very good.

Exciting. You also mentioned that the start-up of Sensation is going well. How big volumes can it produce? Is there a limitation in that? Or can the counterpart produce a high volume?

Yes, we can tackle the Sensation production quite seriously before we need to make any investments. This applies to both our production partners and ourselves. Again, the investment needs are relatively marginal to double the production capacity. So that's a nice, good journey to do. I'm not worried about it.

And then we will also talk about that there have been news that ISP has an additional view. Can you tell us a little more about what this means?

ISP is the authority for the supervision of companies that are active and deliver war materials and products with double usage areas. ISP regularly provides recurring supervision of those companies. ISB started a visit in December and of course it was partly a temporary return and partly a result of writing during the autumn. But I see it as positive because this gives us the opportunity to work with our processes. It gives us the opportunity to ensure that we do the right things, that we work with our export control in a correct way. Det ger oss också en möjlighet att stämma av hur vi förhåller oss till de förändrade lagarna som finns i Sverige och i Europa, som vi då måste förhålla oss till. Så det här är för mig inget konstigt, utan någonting som är naturligt och sker regelbundet.

Yes, I talked to other colleagues in the defense industry and they also said that ISP has a dialogue with to be able to export. And then finally, it feels right now, with Q4 as well, you have really proven that with revenue, you have profit, you get through it with nice cash flows, so that part feels check right now. So it is the order entry that I feel is essential for 2025. We have already talked a lot about it and I think you feel positive, to put it that way. Have I interpreted it correctly? How should we think as investors in 2025?

Absolutely. To start with, I think we deliver result-wise a good 2024. Are we satisfied? No. We will continue to work with cost reduction. We will continue to work with efficiency. It is a continuous work. based on what you learn about what kind of bottle caps you have in production, where your costs are and so on. You naturally work with suppliers in the same way. But the focus during the first half of the year, as I said, will also be to set a number of businesses that we will deliver during 2025. With these in combination, I see ahead of me a strong 2025 that will be essentially better than 2024. And I think 2024 has been a good year to be the year of the start. Really.

Exciting. Thank you very much for being here and presenting, Torbjörn. Thank you. Thank you very much to everyone who has watched. If you have any other questions about Kevni, you are welcome to contact me at hugo.lijo at kanegi.se. Thank you, Torbjörn. Thank you to everyone who has watched.