Maven Wireless Sweden AB (Publ)

Hello and welcome to this report interview with Maven Wireless. For those of you who don't know me, my name is Hugo Lysjö and I am an analyst and I follow the company. But the main person today is absolutely not me. It's Fredrik Ekström, who is the founder and CEO of Maven Wireless. Fredrik will start this with a presentation of both the company and the fourth quarter. And then we will end with a question time, where even you who are watching have a chance to use the chat and ask your questions. So make sure to do that. And with that, I'll hand over the floor to you, Fredrik.

Thank you, Hugo. It's always nice to be here, always nice to be able to present what we've been working on in the last quarter. So I'm going to dive straight into my performance. Again, I usually start by briefly explaining who we are. We are a product company within Telekom. We develop and sell products for indoor housing and tunnel coverage. We have a wide product portfolio where we can install systems both for cellular, i.e. mobile telephony, but also blue light radio, so-called public safety solutions for police, fire and rescue services and so on. We have a lot of special products to create coverage on the train and our solutions also support this with private networks that are beginning to grow on the market. In terms of the market, our market is the so-called DAZ market, the distributed antenna system market. We saw in 2023 that it was about 10 billion US dollars. The distribution you see here, which also represents where Maven Wireless is represented with sales and sales and marketing departments spread across the world. We see that North America is a large part of the stock market, in principle a third of Europe, shortly thereafter. And that's the Europe we have right now, our main part of our sales, about 80%. The products again, I will not go into the details, we have different product families where we have fiber-mated systems with radii where we can build very large systems. What is also unique with Maven's product portfolio is that we can combine both cellular and public safety solutions in the same system. We also have what we call repeaters, which are radio units that are installed one by one, where you then pick up the signal from the so-called macro network, take it into this repeater, filter, reinforce and shoot it into indoor antennas, where you then want to distribute the coverage. Here we have a palette with a number of reference projects, some examples of verticals, examples of installations. What I want to point out a little more today, up to the left in the picture, close to our logotype, we have Sjukhus Sverige. In the report, we have also mentioned a new business, where we are now also moving further in this vertical, where we in Sweden, together with our local partners, will install our solutions. And it is precisely these combination solutions where we create coverage for both blue light and cellular in the same system. This means that we can make a very compact solution where we do not take up so much space on the hospital. This is important for this vertical. The hospital should be a hospital. They should use every square meter to deliver care, not be an installation center for another type of equipment. That makes us very effective for this vertical. So I'm very happy that we continue to build trust on the hospitals here. Worth mentioning here, if we look further down to the right in the picture, we have an icon for Telenor in Norway, where we have extended the framework agreement that we have delivered for six years. We have made a three-year extension. I will return to that a little later in the presentation. But before that, I would like to comment a little on our figures for the quarter. If we start to the right in the picture, these are the graphs that I usually present every quarter. Here to the right we have order entry and order book. The green numbers are order entries, orders that we have during the quarter. The gray bar is the collected order book that we have left to deliver at the end of the period. Order entry during the quarter is SEK 76 million. So it is an increase of 149% compared to the previous quarter last year, which was 31 million. But what is also interesting is that after Q3 we talked about that we saw a turn and an increase on the market. After the conjecture has been picked up, we have seen interest rates coming down, so then we saw this turning point, I should say. The joy to see now is that this trend continues. We had a nice order entry also in Q3. This continues and we get an even better order entry in Q4, which we can note. And at the end of the period, we have 118 million in the book that we take with us in 2025, which we will then deliver and invoice. Net turnover, if we look at the left part of the picture, we end up with 46 million in the isolated quarter. So we come up a lot compared to Q3, compared to the previous quarter, where we had a good year, we fell. to 46 million. This of course depends on, if we go back to the order graph, we see that we had a weak order entry earlier in 2024. And it is the order entry that we have with us that we will deliver in the coming quarter. So the main part of the answer is that we had a weaker order entry earlier in 2024. That's what we have with us and can deliver in the coming quarter. And that's also back again. Then it is important for us that the order entry goes up and that we have the order book delivered for 2025. I don't usually show graphs on the cash flow, but I think it's worth mentioning that it may be intuitive that the cash flow is improved with increased volumes. So it's good that we get orders that we can deliver. We also make some adjustments to one of the framework agreements where we will also put a warranty bond in place so that we can in a faster pace, which will also take place during the quarter. If we look at the next picture with our graphs, then we have a reduction in where we have deliveries and invoicing during the quarter. We still see that we are strong in Europe. We have been at about 80 percent of the range back and forth during the last few periods, so also this quarter. If we then look at APAC, we have very little invoiced in this quarter. It can change depending on what deliveries we have. On the other hand, we have quite a large invoicing on meat, that is, between East and Turkey. This is due to the fact that we made a number of projects and larger deliveries to our new expansion country, Azerbaijan, where we have made a number of buildings in Baku during the quarter. I will give some examples of this later. If we then look at EBITDA and the EBITDA margin, we see that we are increasing the invoicing compared to Q3 2024. We are going up a bit. We are bouncing up quite simply. We are at 1.3 million EBITDA, which is 3 percent. Back to some highlights during the quarter. I mentioned Telenor, which we will extend with three years. We make a assessment of the run rate. The business on that frame agreement is worth about 100 million SEK for us in invoicing over these three years. It is also worth mentioning, which I find interesting, that we have had a framework agreement to deliver to this customer for six years. If we look at what has happened during these six years, if we look at the network they have with DAS products, our types of products, they have then exchanged about 60% of their fleet during these six years. So this is the work that will of course continue. What hasn't started yet, which we plan to start during this extension, is to start delivering 5G systems to Telenor. So it will come up on the whole. It is also worth mentioning a large appeal order to Österrike, the Wienerwald tunnel, which was worth 24 million for us. There, the main product is a so-called Pentaband radio product. And what does that mean? Well, we have then phased in a new product that we have talked about earlier and also been involved in some press release, where we then managed to get another frequency band in the radio remote. The early limitation has been that you can make four frequency bands. In this new product, we have added another band, 700 bands. So that means that you can make even more compact installations with five bands. So we see a very nice interest in this product. There are more customers who are ordering it now and we see this as an upcoming high runner product. So it has received a very positive reception on the market. Again, Baku mentioned, here is a picture of Flaming Towers, which is the main installation there. What has been done here is that at a central place, we have also helped customers to run this system, where we have a central place with base stations inside our Head & Orion, where we can then distribute the signals to different buildings. And now it's done in Flaming Towers and also a number of smaller buildings around it. But it is also prepared so that this customer can continue to build on this system and connect more and more buildings. So we see opportunities for us to grow further with this customer in this country and on these types of systems. The newest thing that we actually brought in here during the month of January is from our Dubai office, we have received an order for blue light coverage for a new building that we see here called Burj Azizi. It is not finished, the construction is in full swing, but it is time to order blue light coverage that will be installed before and everything is done before it opens. This will then become the world's next highest building at 725 meters. So this is a drawing from the customer, so it is not completely finished yet. But we have the order in and we will deliver the system and install it together with our partner Echara in Dubai. Nimbus. The Nimbus launch continues. It has very good reception. This is a new type of product where we deliver a product that is usually called fiber to the antenna. Fiber to the antenna. This means that this is our first and only product family that has built-in antennas. This is for high-capacity 5G coverage, where you install this Nimbus product in the roof inside the house. And this can then deliver the entire so-called C-band, which is the 5G band for high capacity for all operators and 4x4 MIMO. So it's really high capacity that makes it unique on the market. As I mentioned earlier, we have had some delays, we have discovered some errors that have been corrected in our R&D department. The corrections introduced, we will now produce, deliver to our factory to produce a first batch of a handful of different variants that will be used in sales testing with customers under Q2, where we also expect to draw in orders and then start to pace up deliveries later this year on this platform. So this is an important product, it is further a product family, the product portfolio, but it is also strategically important in that way that these are the products that are now important for telecom operators to implement 5G. So it is also a product where we can get the foot in with new operators that we have not sold to before. So it's an important enabler for continued expansion of the operator market around the world. In the US, we also continue our marketing of our products. We have a lot of discussions, especially with the so-called neutral hosts. It can be these companies like American Towers, Boingo, Bolding, Chromecastle, Tillman and so on. What we now see is a... is to be able to install effective systems. And what we are unique with, which is also now being discussed in our discussions, is what I talked about earlier for hospitals, where we can combine blue light radio systems, cellular systems in one. And here is an American example. The red radio units here are blue light units and the fact is that in the USA there is a law requiring that all radio equipment used for blue light and first responders must be red-painted. So all of our public safety products are red-painted for the American market. So that's public safety. To the right is then cellular coverage, mobile telephone coverage. And in such a system, we can then use what comes from the head end, the base station side, the entire fiber infrastructure, which is painted yellow here, together with the antenna and coaxial cables, antennas that are painted black on the right. and build a very efficient system, which is much simpler, with less time and lower costs to install. These types of solutions we are now also discussing with getting in place in the USA. I'm going to finish by talking about satellite communication. When I'm out talking to different types of people, I've been asked different questions about satellite communication and how it relates to Maven Wireless. This picture is a picture of how it traditionally works here and now. If you then look at the satellites and look a little more specifically at the frequencies that are used, these frequencies from the ground up to the satellite back and forth are clearly higher than the frequencies that are used for 3G, 4G, 5G. They are roughly five times higher. Thus, it does not work to communicate with satellites with ordinary mobile phones in these systems, but as it works today with, for example, Starlink as an example, is that you then take down these frequencies to the right in the picture with a special antenna and a converter, where you then convert this high-frequency data stream to Wi-Fi. So it's actually a Wi-Fi solution over satellite as it is. But what is now getting interesting and what will now start to be launched this year, 2025, is that you will start to be able to communicate directly to satellite with a completely ordinary smartphone, unmodified, with some on the back, On the back, of course, you have a lot of special softwares and so on. But for us as users, we will be able to use our regular phones to connect us to such a satellite network. It is at lower frequencies, 700-800 MHz. You will probably hear more about this during the year. that this will probably be launched by some larger operators. I have already seen some videos from Vodafone, among others, that talk about this. And what is the relationship now with Maven Wireless? Well, then it is so that we of course have both repeaters and day systems for 700 and 800 bands. So that means that we will be able to pick up these satellite signals on these frequencies and lead them through Maven Wireless products into buildings and tunnels. So this will be very interesting to follow. See how fast this development is going.

Thank you for that presentation, Fredrik. We have some questions in the chat. Please continue to ask questions, but I will start with one of mine. And that concerns the order entry, because that is the most interesting thing, because it shows future revenue and potential growth. How intuitive would you say that this feeling on the market is right now? We have seen two quarters with improved order entry. Should we continue to expect more in the third, fourth, fifth quarter? Or is this around 75 million you think will be in place this year in 2025?

That's a good question. It's always difficult to see the future, especially in the world we live in here and now, with the change of power in the USA, with all kinds of worries and so on. So it's a turbulent world. But everything else is the same if we have this slightly more stable situation. We have a better cash flow, we have better interest rates, and it is precisely these factors that we have seen that have improved. And if we do not see any other deteriorations, then we see ahead of us that our expansion will continue with a continued uptick.

And another thought, when you presented this, was this Burj Aziz. It's a building that's 700 meters plus high, so it feels like it's a very large project, in my opinion, because it's such a large building. Then it's worth 8 million. How should you think about the value of the order in the future? Is there a possibility that there will be an order of 50 million? Or is it too big? Or how should you think about the size of the value of the order and things like that?

That's a good thought. We usually talk about the concept of megadeals and what the levels are for us there. I usually say that if the year is below 10 million, then it is quite standard. If it is over 10 million, then it starts to become a little bigger business. Och det finns affärer absolut i 50-miljonersklassen för våran del. Så det siktar vi ju på såklart att ta större affärer också. Det kommer ju såklart också bli enklare för oss ju större vi blir att ta också de här riktigt stora affärerna. The 8 million SEK Börsassist includes strengthening of Tetra, but also Public Safety Generation 2, the unique solution where we combine everything in the same unit. the current generation of blue light, but also Public Safety LTE on the 700-band. And that has been built here in Dubai with Echara as our local partner. We have had that product for about two years and it is the one we resell here. So right now in Burj Aziz, it is that system, so it is only blue light radio that is included in that order.

There were actually two follow-up questions, but we'll try to keep it short as well. The first was, can you give an example of a type of 50 million order? Are we talking about a tunnel network or what type of orders are we talking about? Or projects rather?

50 million can typically be a railway. A relatively large railway is probably around 50 million. If they are the world's largest, they can be even larger. So it's those types of projects. Then of course it can also be, I can imagine that we will get larger orders in a larger context. We have started writing agreements with train factories, among other things, which we have pressurized historically, if you remember. where we then sell directly to train factories. You can also think that there are also larger businesses to take if it is then train customers who order larger batches of trains where they then want to have repeaters in all these trains. Then there can also be quite large order volumes on one and the same order, so to speak. So there are many types of scenarios for large orders, absolutely.

Exciting, exciting. I thought we'd ask a question here from the chat. And it's about your competitiveness. And in a message or an advertisement, where there are several people who are involved, How many of them do you win? Is it about 50% or do you win 30%? How does it look competitively when you are head to head with others?

In the negotiations we have been involved in in recent years, I would say that we have won more than half of those we have been involved in.

That's how it looks. And is there any meaning here that you want to have a large installed base so that it is worth lowering the price and maybe then sacrifice some gross margin? Or is it more important to keep the price up all the way?

How do you resonate here? We resonate as such that right now it is important for us with expansion. So we have no problem giving extra discounts in order to, for example, enter a new country, enter a new operator and so on. That we can then lower the gross margin by a large step in order to win new markets, new customers. Because then you can get it back in different ways. But to just win a new market, a new operator, It may not be given as many opportunities for that. Because if we turn the wheel, what does it look like on the market, especially on the operator's side? Relate only to our situation with Telenor, which we actually have in our bag. It looks the same on the other side, that is, it is closed or a brownfield market. They have their suppliers and it is not that they have the muscles to evaluate every quarter or not even every year about new suppliers, but then they are in their framework agreements and deals. So if we have a chance to get in, then we will do everything to do that. So that's one thing, and then I'm also back to Nimbus. Nimbus can do that, especially in a 5G scenario when you are going to start building 5G. then there are operators with old contracts, old suppliers, where it is no longer described how to build 5G. And that is why, again, as I say, it is so important to come in with our smart 5G solutions and show that here we have solutions for you that you do not have today in your contracts.

And that's exactly what people are talking about here in the chat as well. It's Nimbus that has taken longer than expected. Is it a technical problem? And also the American market, where it has also taken a little longer than what we might all have expected us to do. Those two questions. Nimbus, absolutely.

We have built a number of test systems. We have done field tests there last year and identified a couple of different technical weaknesses that we see that we have to fix in order for it to work fully. And that is what we have solved in this new version and new hardware. So there have been things we have not been able to solve just with software and fixed, but it is de facto changes in hardware, in component selection and in pattern cards. And that is the adjustments that have been made now. And that is now we are preparing and will build a new set of a number of Nimbus variants here during Q1, which we will then relaunch and test out in the field together with customers. So that's what has happened and that's what we have adjusted, so to speak. And the American market, yes, it has taken time. It also takes time to break into a completely new market with completely new product structures. Of course, we would have liked it to have gone faster, of course. Then we have also had, even on the American market, which has had even higher interest rates than we have had here in Europe. and where a lot of the will to invest didn't really take place last year. Now it also looks different there. There are in and of themselves some questions and challenges perhaps with Trump as the leader. But it is not necessarily negative for us. I see some positive opportunities there. If we look at the public safety market in the USA, it has been dominated by three different players who have had about a third of the market each year. One of those players is a Chinese company, Hör och Häpna. I think this is much more in the loop now. I don't think it will be able to continue as it has done, that now in all buildings you can get Chinese signage of just blue light and police radio systems. I don't see that it will continue. I think that's an example that may be positive for us in such an interruption.

Yes, Europe versus China. It feels like he is more positive towards Europe. Also, how do you work to increase the proportion of recurring revenue, service, maybe a little aftermarket? How does it look on that front right now?

We have such revenue today. They are not very large, as you know. We sell a number of different types of services. We have a license model for our surveillance software that we sell to customers. We also have support services that we sell, third-line support from our technology team. We also sell a part of what is called extended warranty. We sell it to a number of customers where we also make a profit from it. Vi tänker oss också att vi ska utöka vårt erbjudande där, speciellt till små och medelstora kunder som inte kanske har muskler själva att ha de här network operating center, nockar som det heter, där man har personal som sitter framför skärmar och övervakar systemen. We think that this could be something that we could offer to small and medium-sized customers, that we then collect such types of systems in a control center within Maven, so we can sell these services to our customers. We also look over that and it looks positive and has also received good response from customers who actually want such a service. Exciting.

The time is running out, so if you have any more questions, feel free to ask them. I'm shooting in between here now and thinking about the cash register. There was zero kronor in this quarter. I sat in my throat. How are we going to think? What does this have to do with it?

Yes, of course, and we have seen in the figures here as well that we burn cash when we have a low turnover, especially as we had in quarter three. But I feel safe that we have the liquid funds that we have today. We have a Czech credit to work with, which we have re-formulated to Euro during the previous year. Re-worked in SEK, it is at about 17 million. So we have the opportunity to work with that. And now when we see that the order intake goes up, then we will build up more cash when we deliver on the order book we have. So we do a lot of such measures. We also see that we still have 20 million kronor of components and modules on our balance sheet. There is a plan to use it in production all over 2025. We will not use up all 20 million, but there is a plan to use a part of it. So we will also drop money when we use those components and modules. Then, as I also mentioned a little short here, when we look at the financial figures, we do a lot of other activities to improve the cash flow even more now under Q1 already. On one of the frame agreements where we will then get payment faster quite simply. So we will get money in a faster pace on one of the frame agreements now with the start of Q1. So I feel safe with the liquid funds we have available. Yes, and how much do you have left to make use of the Czech credit? We have barely 15 million left. Yes, brilliant.

Then I also think about the duration in the order book. Right now it says 118. How much of it will be delivered here during Q1, Q2, Q3?

I would say that the main part of it will be delivered Q1, Q2. It's just a few single orders that are after the summer. The main part of it will be delivered Q1, Q2. That's right. We've come back to the classic duration in the order book. Yes, that's right. We're talking about from order to delivery for standard products. We're talking about the fact that it's standard now, which is three to four months for standard products. But then it's always like that, especially in our blue light radio system. så säljer vi en del skräddarsydda lösningar så då kan det vara variantbildningar och då kan man kanske behöva addera en månad, kanske upp till två månader för att göra variantbildningar och optimeringar av de här systemen. But that's when we need to skreddasy, and that's far from the main part, but it's a special case for Public Safety that we do that. But it's a way to win such businesses from other suppliers.

And a pretty direct question. Should you expect that there will be orders for Nimbus here under Q2 when it launches? And is it also the case in the USA that you might get an order from the USA here now under Q2 as well? Or how do you think about the timing? Well, Nimbus and

I commented a little, maybe someone who has already read Perm to Perm in Kommuniken. I write a few comments about Nimbus and as I said, we are printing out a handful of variants now as a next step. The main purpose is to be able to go out now and re-test this together with operators and integrators to enter orders. But as it normally works with such new product families, it does not go from zero to max at once, but normally what I expect is that we can confirm that it works as well as we say and And the customers see that with these tests we want to start during Q2. And then that we will get a lot of smaller projects and start-up orders later this year. So it will start a little carefully. So I don't think we will have massive volumes at Nimbus this year, if I may say so.

And finally, I'll interpret it a bit like that you see more positives on the market. A little careful to promise too much. You know what's going on with the environment and so on, but it still looks better. So in here for 2025, the year-end starts in both Q3 and now Q4, so that there will be a slightly better turnover. Do you agree with that? And number two, how should one think about the cost mass and EBITDA margin during 2025?

That parameter should also be strengthened compared to what we have seen with Q3 and Q4. It is of course very negatively affected by the volumes we deliver. So when we now have a strong order book with us to deliver on, we will also strengthen the parameters of course. So it will also climb up in our plan.

I think it sounds like we might have a little twist here now. That's my interpretation at least.

Yes, absolutely. What we see and what I have talked about both after Q3, where I was also careful to speak too much, but now we also see confirmed with the order figures of Q4 and what we do on the market, what we see on the market is very positive, that it is going in the right direction, which is good for us.

Wonderful. And with that, I thank you so much, Fredrik, for being here and presenting for us. Thank you, Hugo. I thank you so much to everyone who has watched and asked good questions. If you have any further questions, you are warmly welcome to hear from me. Thank you very much. Thank you very much.