KebNi AB (publ)

Hej och varmt välkomna till den här rapportintervjun med Kevni. Vi har med oss Kevni's vd Torbjörn Saxmo som kommer att inleda med att göra en kort presentation om vilka Kevni är, hur Q2 han såg ut och sen kommer vi att avsluta med en frågestund. Så med det säger jag varmt välkommen till dig Torbjörn och så lämnar jag med varm hand över både ord och bild till dig.

Tack! We start by looking at what Kebni is. We are a small company that produces and develops products in the categories of stabilization, navigation and satellite communication. Our product areas are Satcom, where we manufacture stabilizing satellite communication antennas for different solutions, and Inertial Sensing, where we manufacture and develop IMURs that measure relative movement. We are within the defense segment and we typically work with different customers in demanding environments and with high demands for robustness. Typical customers are Saab and Epiroc. Then we go in and look at Q2 and I can with joy and pride note that in the second quarter of the year we close the books with an EBITDA margin of 14% and an growth of 9% compared to the same period last year. The turnover ended at 33.7 million, EBITDA 4.9 million, as I said 14% and the last row 2.4 million corresponding 7% margin. Vi har ett operativt positivt kassaflöde på 16 miljoner. Jag kan konstatera att jag tycker det här visar tydligt på att vi fortsätter vår tillväxt och vi gör det med lönsamhet. Det är jätteglädjande. Vad har hänt som är värt att poängtera under kvartalet? Självklart även om det här inträffade i samband med föregående kvartalsrapport och vi egentligen redan har pratat om det, så är det ändå så påtagligt att vi tar upp det igen. We received the fourth volume order from Saab to manufacture EMUs for the N-lock system. The order was 134 million, the largest order so far. This ensures a continuous production during 2026 and beyond. This is really fun. strengthens the image of our positive relationship with SAAB. Another news during the period was the contract with ESA for our small stabilizing antenna, which we call SOTOM. This is interesting for three reasons, not primarily because it was a large business. As a business, it was small, but it is of interest because it is the first SOTOM-business It is made for a strong reference customer and we are working on using it for LEO satellites. That is to say the low-flying satellites, unlike traditionally we work with geostationary satellites. So for us this is strategist vägval, eller strategiskt viktig punkt att trycka på. Vi kan konstatera då att vi har här också precis släppt nyheten att vi har skrivit på ett samarbetsavtal med Aimpoint. Aimpoint är en in the world leading suppliers of electro-optical sights for different applications. It's a lot of fun and both good for the future. We continue to work with Aimpoint and it will be very exciting to see where this takes us. Vidare, den vakne betraktaren kan konstatera att vi under perioden har gjort en mjukvaruuppdatering på vår IMU-familj Sensation. This update is primarily focused on drone applications, and it is not a coincidence that we choose to focus on drones. The market is super hot right now, and therefore this update. I know that we will make further updates to strengthen the drone applications in the coming period and beyond. End.

Thank you for that presentation, Torbjörn. Excuse me. I think we'll start with a very general question. Are you happy with the development of this quarter? Is there something special that you think stands out? Something that you're not really happy with? How does that feel?

No, but I'm super happy with the quarter. To land on 14% EBITDA, I think is really good. I also think it clearly shows what I said earlier, that we are a functioning organization. The day we achieve the increased turnover, the result will follow the increased turnover. What we are doing is profitable, and we are doing it in a profitable way. And I think that is an important statement. Then I can also note that the cash flow situation during the quarter, I'm not either sad about it. We have worked with both suppliers and customers and that in total makes our situation look really good now.

Yes, absolutely. Let's focus a little more on this 9% growth that we saw. What was it that drove it? Is it increased deliveries of EMUs to Enlo? Is it more sensation tests? Does it also come from the Satcom side? Or how does it work?

It's probably a mix of the most. I would actually say that... We are nicely stable with what we deliver to SAAB, but what in this case drives the growth is the other products. some products to Satcom, some to Sensation, some development jobs that we do. So it's a mix of everything that comes together.

And just when you mention the mix here, then the gross margin was very strong this quarter. Are these price increases or how have you managed to get the gross margin up so much?

It's really a combination. We have the product mix as the obvious answer, but we should also remember that at the end of last year, we cancelled SatMission. And of course, that contributes to increasing the results. And then we work all the time with effectivizations and rationalizations, and that goes through.

Then it's a bit more long-term stuff. A product mix can go back and forth a bit, so it's a bit of a top. But the other things you mention, I think it's long-term improvements. And the cost control is very good. That's why we see this nice EBITDA margin of 14% this quarter. How do you think about the costs in the future? Are you going to invest, or what do you want to call it, hire more sellers and engineers? Or are you waiting for someone to get an order and a little more turnover, and then you do that? Or how are the thoughts in the strategy here?

It's... It is clear that we are in a phase of growth and it is clear that it is not possible to be careless in how you do things and things. You must have an afterthought. We are working and employing because we need to grow. We have more work to do than what we full of our own resources. And that's why we're growing. So we're on our way in that direction.

Then we've talked a little bit about that. For my feeling, I share your opinion that the cost control is good. We also see improved gross margin, so that's the top line we want to see. So I think we focus a little more on what you were also talking about, and that is your new agreement here. I think we'll start with Zottom and ESA. ESA is the customer. We stand for European Space Agency. Thank you. I always forget that, even though it's pretty clear. What kind of project does ESA want you to develop? I assume it's something new that hasn't really been on the market before. Otherwise, ESA wouldn't have had to do this project. Or how should you think?

Yes, but they were looking for a single antenna for tests that they should do. Our antennas followed their taste. We could do the work of delivering something that matched their needs. For us, it means, as I said, the first deal on SOTOM, it means that we will handle the low-flying satellites instead, which means that it is not one satellite that stands stationary that we only communicate with, but there are several satellites that continuously pass over. So it's another game plan we're getting into, and it's exciting. We as a company haven't done that before. So it's fun. So the first business, ESA, and then Leo Satellites, that's what makes it a small child's egg.

Is this already delivered? Or when will the delivery take place? It will take place during the autumn. During the autumn. And such an antenna, does it not sit on a ship? Or can it sit on a ship as well? What is the application for such an antenna?

It is typically intended for landing applications, but it would work great on smaller boats. One of the advantages is smaller boats. Fast-moving boats, small fast-moving boats that need satellite communication. So it is a possibility. But basically it is intended for vehicles and in this application it will be a land-going vehicle.

Exciting. There is a lot of talk about satellite communication also within defense, but also broadly. So it will be interesting to see where this can go. And then you had a South Korean visiting, who is an expert in the drone area, as far as I understand. Can you tell us a little more about this person, and what did it do for you, and what can this lead to?

No, but we have had... He is active in an organization called KAIST in South Korea, connected to the university, or to one university. They work very focused on different drone applications, AI in combination with drones. We have met him earlier and now he came to Sweden. Vi fick möjligheten att visa vad vi håller på med faktiskt i Karlskoga. Det var ett jättespännande möte och han uttryckte sin tillfredsställelse över att se vad vi håller på med och sin tillfredsställelse över det vi har levererat till KAIST tidigare. Så det finns alla anledningar att tro att det här kommer fortsätta på ett positivt sätt. I would say that he, with what he works on, is an authority within the area. After he visited us, he went on to the University in Linköping and met a colleague there. So it is a community that He works with different drone applications and controls and logic for drones. He is an authority in the area, so it was great to be able to be of value to him in Karlskoga.

Exciting. You have some other contacts in South Korea, so I can imagine that there are some more common names over there. Yes, that's right. Aimpoint is a very nice Swedish sighting company. They actually provide sightings. I went directly to their website and looked, and you can see that in general these sightings are quite small. Do your IMUs have a place in these prospects?

How does this collaboration work? Our IMUs, what you're thinking of is traditionally the IMUs that are made for some kind of environment where we deliver a a rugged IMU, built into your own house, stable for moisture, mechanical recognition, etc. But if you integrate yourself into someone else's house, So it's really just a very small card that's needed. So you don't need the whole house around it, but it's possible to remove the house and then you just put in the card. And then we are much smaller. So it can be done in many ways.

Otherwise, you were a bit cryptic about what you were going to develop. It sounds like something new could come up here.

We will probably tell more in the future that we know more about and in the future that we can be more clear. Yes, absolutely.

We look forward to that too, because it's a really nice company. And then you mention in the VD-word that the relationship with Saab is very good. Is it just for these Enlo IMUs? Or do you dare to dream that you have several and other projects ongoing as well?

Saab is a huge company. Even if Dynamics in Karlskoga is warm in my heart because I have worked there, there are many other parts. We are talking with several parts of SAV.

There is some other potential there as well. We have talked about an antenna order, so that is something I can wait for. I have only assumed for myself that if there is an antenna order, it will be announced. Is it going to be announced or is there any update on the antenna orders?

Of course, an antenna order would be announced. I don't see anything other than that such an order would be a waste and thus be a requirement for immediate announcement. So an antenna order will not come and be announced, but of course we will tell you about it. I can state that it is extremely difficult to predict when things will happen. I know what I have said and I know what I have believed. In this case, I can state that we have not lost any business. No business has disappeared. But it is difficult for us to say for sure when it will happen, because it is simply things that are beyond Kebnings control. We continue to work on those business opportunities. We believe in them. But I have to make sure that I give some reinforcements again, because it's hard, it's really hard.

Yes, but that's a trend you see in the industry, in the industry in general, that it just takes time and you don't really know, because there may be last-minute changes. But when we talk about antennas, how long is it between getting an order to deliver an antenna? Is it a quarter or three quarters before you can deliver? Or how long is the production time normally?

Normally, the lead time is nine months. But when I looked at it, I remember what we said in Q1. We said that we had bought slung-laid items, so the production time now is essentially shorter than nine months. That's right.

Then it will reach this pretty soon. Can you deliver already this year, I think? In conclusion, if we look forward towards the last half year, what is your feeling then? What do you see ahead of you? What should we as investors expect?

No, but I see... We have set the tone for the first six months. Our ambition is to continue on that journey for the next six months. We still believe in what we are doing. We have... Masses of exciting things that are boiling, that we can't talk about here and now, but that we will talk about as soon as we can. I look forward to an exciting autumn, and I look forward to... En del av dem eller många av de frågetecken du ger uttryck för idag att de kan besvaras och rätas ut under hösterna.

Spännande. Jag tänkte säga att ni bevisar ju de här senaste kvartalen att det är ju kassaflödes och resultat positivt. Ja. Så det känns som att man ändå har tiden på sin sida här. Tack så jättemycket Kevning. Tack. Torbjörn. Thank you very much to everyone who has watched!