Maven Wireless Sweden AB (Publ)

Hello and a warm welcome to today's report interview with Maven Wireless. With us here to tell you more is the company's CEO and co-founder Fredrik Ekström. The presentation will be like this. Fredrik will start by presenting Maven Wireless and a little bit of the development during the first quarter. And then we end with a Q&A session which is led by me. But where you also have the opportunity to use the chat function and chat in questions that you want to ask Fredrik. And with that, I think I have finished talking and hand it over to you, Fredrik, who is the main person and your presentation.

Thank you, Hugo. Always nice to come here and talk about Maven Wireless and what we have had for us during Q1. I'll start a little short with putting ourselves on the map. We are a product company. We develop and sell products for indoor and tunnel coverage for the cellular market, mobile telephony, but also for blue light systems, i.e. for police, fire and rescue services. We sell out over the world, as we see on the map where we are represented. Our main market today is Europe. This is where we started the business, this is where we started the sales. And we sell over 80% here and now. on the European market. This is mainly due to the Middle East and especially Southeast Asia. We have our expansion markets here and now mainly in Australia and North America. We are also looking, of course, at existing regions to grow there as well in the Middle East and Asia into more countries on those markets. Here we have a palette that describes some reference projects. This one also describes verticals. I think this one also describes type projects, so you can understand where our products are used. We can see different types of tunnel projects. There are train tunnels, there are road tunnels. In recent years, we have also started to sell into the railways. I will talk about some news there later in the presentation. We have oil and gas, we have trains, that is, on trains, creating coverage inside the trains, where we also have very good and nice news that we will talk about later in the presentation. We also have a vertical for data centers, where we, as previously announced, are certified for Microsoft Data Center. There is also a sale that goes according to expectations. We invoice and deliver on the vertical. We have also launched a vertical for hospitals, where we are uniquely positioned with our solutions. And when we talk about our solutions, we have complete product families, both for mobile telephony and for blue light radio. And here we see our palette with the families for mobile telephony. The blue-marked products are the products that are the interface to the base stations or the macro network, which also digitalizes the signals to send them further to our radio remotes that are in the coverage area, the yellow units. where we have high-effect products that feed a lot of radio effects out in the tunnels, or the new Nimbus low-effect with built-in antennas for indoor high-speed coverage. We also have these free-standing repeater units, the more green-marked units, train coverage, which is the TOR. We also have free-standing repeaters, which are then installed individually with an antenna outside, take radio signals, filter and reinforce inside-house antennas. It is then the cell product groups. Similar to the blue light radio side with the blue, i.e. the base station interface digitalizer, which then drives the radio remotes in the coverage areas, the yellow ones. Here we also repeat both high-effect and low-effect repeaters for blue light radio. Here is a picture that gives some types of examples for indoor housing coverage. How does it look in smaller and different sizes on projects? If we take the simplest case, where you install one or maybe a few repeaters, then you can imagine that you can cover a building up to 10,000 square meters. It's a small project for us. Eparepitrar. Such a business is typically worth less than half a million kronor. But there are lots of such businesses. A medium project, as we see it, and we have a unique solution with this Cirrus where we can pick up signals from the macro network and build a small DAS network where we cascade these radio remotes. And we sell that in a package like that with a handful of up to 10 radio remotes. And it can be a business per piece for a couple of million kronor. A larger project, a day project, is normally between 5 and 15 million. We see that here. It can be a hotel, hospital, larger galleries and so on. Normally a good bit over 15,000 square meters. There we have that configuration with typical Orion, where you have dedicated base stations on site or a base station hotel where you then build up your day system for that indoor heating. Then we have what we call a megaproject. A megaproject is over 10 million kronor. It is the larger buildings, it can be large stadiums, it can be casinos, it can be airports, it can be tunnel tracks. It is large areas that need to be covered. There you can also imagine that you configure both high-effect and low-effect remotes. In a tunnel track, typically how you think right now is that you use high-effects radio remotes for the connection itself into the tunnel tube, where you shoot out a lot of radio effect in leaking cables. You then use this Fibre 2D antenna, low-effects DAS remote with built-in antennas with very high bandwidth, including 5G, to take care of a lot of capacity. Typically on platforms in a subway, where there are a lot of people, especially in rush traffic. There, more bandwidth is needed than in the tunnel pipe, where there is a full-loaded train car that is the capacity requirement. So, some examples of how we configure, how we meet the requirements from there for indoor heating. If we jump into what we have done during Q1, we have a sales during the quarter of 49 million kronor and a gross margin of 44 percent. We have this 49 million in turnover. We could have done more, but we had a somewhat weak start in delivery from factories. We lacked some critical components. There are a lot of components, and some of them are single source, in our solutions. If something is missing, we can't complete production tests and deliver. We had a situation like that, with some critical components that didn't keep up, that the supplier needed to send back. That's why we had a weak start, especially in January. But we have got up during the second half of Q1, so we have a good pace in the factories now. And we have that with us also in April. This means that we land for Q1 at 49 million. Order intake Q1, 55 million. It's an increase of 18% compared to Q1 last year at 47%. If you look at the whole graph historically, 55 million is the highest value for Q1 ever. The Q1 is traditionally a little weaker than the other quarters in terms of business, where the Q4 is traditionally the strongest. Many orders put more in the Q4, empty out budgets, and then it becomes a slightly weaker start in terms of business. This is how it traditionally looks. So 55 million all time high, 18 percent over previous year. If we then look at the isolated Q1, what have we delivered here? There has been a lot of focus on our core market, Europe. Framförallt på våra två stora ramavtal nere i Europa, i Österrike, Schweiz. Mycket leveranser för stora tunnlar under de här ramavtalen. På topp tre leveranser ligger faktiskt också datacenter. Vi har haft många datacenter som har blivit levererade under Q1. EBITDA. har vi på 2,7 miljoner, vilket motsvarar 5% i marginal. It follows our revenue, which of course is EBITDA. We also continue our expansion investments, which I described briefly at the beginning. Especially on our new expansion markets, North America, Australia, where we have extra investments. We have a weak cash position. And if we look back, we can understand a little bit if we look at the EBITDA graph, where that cash position comes from. We also see the turn here on that graph. We also see a turning point in our cash position that we will strengthen during Q2. We are also doing a couple of different measures to strengthen it. We have started up factoring a little bit now during the month of March. Not so much, we have done in the order of magnitude 5 million in the month of March. We will continue with selected factoring on selected accounts and invoices during quarter two. We also have an extended credit time on selected production invoices. We will use this mix over the coming months to strengthen our cash position. We will generate positive cash flows during quarter two. Highlight section. I want to start there with that I have had discussions with investors. I have heard questions about what strategy we have with our press releases. We have always had, of course, an information policy where we follow all the requirements on us as listed companies, all MAR requirements and so on. But until then, we have now clarified how we share business events that cannot be considered as major. And here we have four examples where we want to inform the market about important business events. When we get bigger businesses, and these are what we call megadeals, businesses with a scale of 10 million kronor and bigger, we think that is a big deal and it is reasonable to pressurize it. At the same time, we don't want the press to share too often, so that it becomes flashy, so to speak. But this is a good benchmark. This is a big deal for us. It's still not enough with the turnover we have, but it's also relevant information. Vi är också ett expansionsbolag, därför är det också relevant att vi pressmedel och informerar om när vi då växer in på nya marknader och in i nya länder. Det är också väldigt relevant information. At the same time, new verticals. When we start doing business in new ways, new verticals, new areas. I can take an example. We have not yet made a stadium, for example. It would be typically one of those. It's a completely new vertical. We have not done such a project yet. If we were to take home such a business, it would be natural for us to At the same time, again on growth, a large part of the market is mobile telephony driven by the cellular market. It is important for us, we are talking about an important growth area. It is also natural that we get sales directly to operators, carriers, it is important information. So this is how we think, this is our guide on how we share business news about exciting events. As previously announced, we have done business in Azerbaijan, where we have installed, together with local partners, Public safety signage in some government buildings in Baku, also in what we see here on the left, the so-called Flaming Towers. Vi har nu också under kvartalet tagit hem en ytterligare order genom samma setup, samma partner. Vi har fått en order om en handfull remotes som en första del att komma in i Baku's tunnelbanan. There is a system in the entire railway that gives Tetra coverage. They want to start by replacing the system that does not work fully. This is the first trigger in this exchange work. So we have then taken home this first order is about one million kronor. There is now a potential to maybe tenfold that deal in terms of size if we can then secure up and replace all tetra systems in this railway. And if we are in place, there are all the possibilities to discuss, to get in on the cellular side and so on and grow on the technology side, of course. So this is a very fun step forward in this market with this customer. Jag är väldigt nöjd och glad över vårt avtal i Storbritannien, där vi har signerat ett avtal direkt med en tågbyggare, där vi då är indesignade för att montera in vår nästa generation av tågrepeater direkt i den här fabriken för höghastighetståg. So that means that we have started the development of a variant of the train repeater that will support not only four cellular bands, but all six cellular bands. All legacy bands in Europe. So this will also be a step forward. It is a revolutionary product. There is no other that can support all these cellular bands for the European market. So this will be unique. And it is one of the factors why we were chosen. There are plans for trains. where this product is to be used. And with the plans that already exist, this business is worth about 200 million kronor. Det är ju väldigt bra för oss att komma in och bli indesignade redan i tågfabriken. Vi har ett motsvarande scenario med Stahler idag, så det här är också ytterligare ett steg att komma direkt in i tågfabriken, vilket vi tycker är väldigt bra. Är man indesignad där så finns man som en option för ytterligare fler kunder framöver. Det här är vi nöjda med. Sjukhusvertikalen nämnde jag kort inledningsvis. Vi har då under Q1 vunnit ytterligare ett sådant här i Sverige. And here we are also uniquely positioned because we combine both cellular protection and Tetra, Rakel and the next generation of public safety protection in a combined solution. It's unique for Maven Wireless. And we do that for hospitals. And why is that important for hospitals? Well, because hospitals want to operate as hospitals. They have enough equipment, they don't have a lot of extra space. We can then offer a compact solution to still distribute all the technologies that are needed for staff, for employees, for visitors, for the rescue service. The second shot we make, there is a lot left to do. The conclusion here as well, I want to mention activities, the most important activities. We are doing a lot of other things, of course, but how do we drive growth? from here and forward. What is absolutely most important for us to drive growth here during the year is this. Top three activities. We will secure and win more new customers. And we do that with our existing sales team. We create new interfaces, we pick up new contacts, we do new marketing campaigns, we establish new partners, but we also find new customers with existing local partners. All these things are important for us to win more new customers to drive growth. To drive growth, as I mentioned earlier, is to enter new markets. North America, Australia, new countries in Asia. There are many more countries we are looking at. It can be Malaysia, it can be Thailand, we are looking at Mongolia, we are looking at new countries in the Middle East, Qatar and so on. There is a lot, a lot left to do. The last important point that has been discussed in previous presentations, we are going to make more growth in mobile phone systems. That is, the cellular market. It is actually the largest, absolutely largest part of the market. It represents 83% of the market. And there we are underweight, we are going to grow more in cellular. And there we have the Nimbus platform, which is also a bridge into that. And that Nimbus we have now produced a new revision of the hardware that has been released to the factory, where we are now waiting for a new revision of the hardware, where we will continue with field tests together with customers during quarter two. So it is also unique in that it covers the full high-speed 5G band on the 3.5 GHz band. For all operators, it can also cover legacy bands. It is an important component to integrate directly into the needs of operators. There I stop and open for questions.

Yes, thank you for a very good presentation, Fredrik. And now it is also like that for everyone who is listening. If you have questions, ask them in the chat and I will try to answer them with Fredrik as well. But I think I'll start and that we start a little more comprehensive and discuss a little more annual income, market and so on. 55 million annual income now in Q1. Is that something you are happy with? And what is your opinion that the market feels like right now?

The market, I still have to comment on this with the money, which is probably the elephant in the room when we talk about the market here and now. It is turbulent, but so far there has been no direct impact, but it can Vi följer det här väldigt noga. Det kan ju bli direkt påverkan på oss, det kan bli indirekta påverkan. Vi måste se, men jag tror inte på att handla i panik. Here and now, concretely, we don't see any directly disappointing trends or any such type of impact. It's generally turbulent, but our businesses are ticking. But we have to follow this carefully and act where we need to act. That's probably the first thing to think about, and that's how we reason.

If we continue with the tulls, you have a contractor that has production opportunities in the USA. If this continued in the long run, you could put the production in the USA and thus not have as much of an effect. Or how should you think here?

Yes, that's what I talked about earlier as well. We have... Keytron is a good example. It's a global EMS supplier. They have factories in the US. We have also started a factory with Vexos. It's also an American company that also has factories in both the US, Mexico and so on. So we actually have two alternatives. So we can do that, and when we have an existing contract, and we have an existing flow with a contract manufacturer, then it is a relatively quick process to start up a new production line, because we have those contacts, they have our design information flows and this information exchange, and we have flows into other factories. So it's relatively easy to create a new production line. So yes, we have that in the back pocket.

And then I think that we also connect it back to the last slide here. Growth drivers, because then the USA is one of them. So I think we stay in the USA now. How do you feel otherwise, if you don't feel a lot of influence from the stocks there? How does the market feel otherwise? Are there any other dynamics that occur there?

It's actually interesting. Other things are happening in North America, especially in the USA. Traditionally, in recent years, in-house coverage in the USA has been built very much directly from the so-called neutral host companies. Those who do not own the spectrum, but invest in this infrastructure and sell services. And that can be American Towers, Cron Castle, Bouldin, Boingo, and so on. Some examples. What is happening right now is that the telecom operators, AT&T, Verizon, T-Mobile in the USA, driven by AT&T, I would say, have now discovered that But wait a little bit, this is a good business with in-house coverage. Why do we give all this away to others? Why don't we do this business ourselves? That's the reasoning going on right now, where you want to handle and do these businesses yourself. So there is now a lot of dispute, I can almost call it, between some carriers and some of the larger neutral host companies. So there is a little turbulence in that discussion here, right here and now, for these housing development projects in the USA. What do we do here and now in North America? We continue our discussions. We have discussions with AT&T. We have continued them and we have deepened that discussion, where we have also expanded it within AT&T, where we also widened that discussion to one of their base station suppliers within their slightly larger paraply agreements. So we have a good dialogue with them about what they need and what they want to do and what we can contribute. We have also connected to Verizon during the quarter, where we have also identified together with Verizon Enterprise What solution and exactly what configuration do they need in Enterprise for indoor housing? Do we have an exact Nimbus configuration that is highlighted that we will go ahead and systematize for Verizon? So there are a lot of things happening there, so we are actually playing on both horses. We have also had good discussions with Neutra Host, but we continue with Carriers as well. If there is a shift there, who will take the lead in the domestic market in the USA, I think there will still be inomhusprojekt som de stora carriers ändå inte tar, men det kanske blir lite mindre beroende på hur diskussionerna går. Men vi pratar med alla parter, vilket är bra. Samtidigt vill jag också säga då as stated in the report, is that we have completed the development of a public safety product, where we run blue light public safety in the USA at 700 and 800 megahertz band. That product is available. It is now sent for type approval according to the Public Safety Standard in the USA. This is now done in Q2. We start the sale of that Public Safety product in Q2. This is a repeater for Public Safety. It is a simpler business. We see that it is relatively easy to catch up with. So we will now connect it during quarter two for the North American market.

So you should see the first piece in the cake when we look at geographical revenues from North America in Q3.

Yes, we expect to have the first piece of cake here this year.

You were also talking about Nimbus and that it is also for the USA, especially for Verizon, you mentioned. Let's continue with that. How is the development going when you have a new variant?

When do you expect this to be sold more widely? We will continue field tests with customers later this spring when we have the new revision of the Nimbus platform. So we continue with that. It has very good feedback now, even from North America, where you have exactly pointed out which band configuration and exactly how you want to use it. It has very good feedback. Now we are going to test it on the market together with the end customers, so we will now connect it. where we also see that we can take in and win business later during the year. And then typically how it goes with such new product families is that, just as we do now, that we launch it, we do field tests, then typically you get Some first test orders, probably not in these largest mega projects directly, but you start in a sensible pace to grow further. And that's what we expect from the sales as well, that we test it, we start with a little smaller project and then scale it up.

We will stay on the last slide with the growth drivers, because you also mention new customers. How has it looked with new customers during the Q1?

We also have new customers during the Q1. We don't show exact details there, but we do. We lift in new customers. Vi har också plockat upp nya dialoger med ytterligare nya kunder som vi förväntar oss nya affärer under året. Vi gör aktiviteter för just den poängen här, att vi ska vinna nya kunder även på nya marknader. Det finns många aktiviteter som görs där så att vi uppnår de här målen.

We have previously talked about Rakel and radio systems in Sweden, and MSB has been out and said that they should invest in this. Is this something that you are starting to see the effects of now, and is it something that you are involved in? How does this look? Is there any additional potential for you in this?

It's good that MSB and that you have decided, you have even decided the name. It's called Sven, with W-S-V-E-N, Swedish Emergency Network. Previously, the working name was Rakel G2. Now it's called Sven. So that's good. And we've actually included that, Sven, in this hospital project. So what we've done with our partner, together with the hospitals, is that we've designed it already before this came, so that it's already prepared now that it's coming. So we're completely prepared. I think I've mentioned it several times before, that it's exactly the same types of Public Safety LTE solutions that exist in other countries. We have shipped this to several other customers. In the Middle East, we have shipped this combination solution for several years with Tetra Rakel and Rakel G2 Sven, combined in the same series of units. So we have that since earlier and we also connect that locally.

So Sweden is not at the forefront of what you say? No, not in this case. And I think we should talk a little more about this UK and train order. Because it has an estimated value of about 200 million. And it runs for 10 years. And then you as an investor should think that this is divided into about 20 million per year. Or how does this look? What are you going to do with the deal, with the deliveries and so on? What are you going to think as an investor?

You should think like this, that it is a product, a new product variant, as I mentioned, six bands. We have started that development with our R&D department. And that product will not start to be delivered this year, definitely not. Leverages will start according to plan in one and a half years. Maybe a little over a year. There is some room for change in that. But imagine one and a half years of start-up delivery right now. But we will deliver those 200 million during a number of years, but it will not take 10 years to deliver those two. Those 200 million are two larger projects. So about 50-50. The first part of the project is a little smaller, the second part is a little larger. When it starts, I would say that the deliveries are probably made in the first part of the project for a couple of years and maybe a few more years for part project number two. Then there are a lot of service parts and so on. But then there are also inbuilt extensions, additional deliveries and orders, of course, as I said. These are already identified projects with end customers and delivery of specific trains. This is the estimated value of what is planned together with the end customer.

Let's take a look at a question here. How many Nimbus installations have you delivered under Q1?

None. No Nimbus installations have been done under Q1. And Q2, we will not actually invoice Nimbus, but it is field tests. And we do that together with partners and end customers. Then we test together, we approve and make configurations. So in terms of invoicing, I don't expect to get a Q3 on Nimbus.

Then we're in. Otherwise, I think we'll go over a little more on the numbers and the financials. And there it was clear in terms of revenue that it was a little weaker in the beginning. There was also a little problem with suppliers. Instead, let's look at the gross margin. A year ago, it was 47%, and a quarter later, it dropped to 41%, and now we're at 44%. How should one think here? What is it that affects the gross margin? Why do you get these shifts between quarters?

And then I would like to say directly that the spike we had at 47 was and is unique. We have never been over, I don't think even over 45 times. 47 was unique and absolutely It can happen here and then. Normally, what affects the gross margin fluctuates a little bit. We can actually go back to it and talk about that picture, which may be even easier to explain. If we look very far back, then we have the Covid-defect behind us. But I usually claim that the gross margin should normally be a bit over 40%. And as it starts to get closer to 45%, we are very happy. So we are where we expect to be here and now. 47, yes, it can be that we have a very profitable product mix in that quarter with deliveries. We have some products that have better gross margin, some types of segment, verticals and so on. So it can be very beneficial with such types of deliveries.

Can you give an example so investors can keep an eye on it?

If we generalize a bit, the gross margin is better on the blue light side than on the mobile phone side. And why is that? Well, the blue light side, the market for it is smaller, there are fewer players, it is a little more complex, you could say. Therefore, you get more paid and also less competition, so to speak. So there are better gross margins. And of course, there are different things within Blåljus. There are many different technologies and products there, where we actually do everything. And then when you move on to Cellulärt, there is typically a slightly lower gross margin, but there are much larger volumes, so to speak. There is more market, but also more competition. So here you can imagine that we had a lot of maybe exclusive public safety for certain types of systems, which means that we had a spike up to 47. But I don't think so. But that is perhaps due to more rare events. What we present here with Q1 today, we are satisfied with.

And if we then look a little bit forward, because that is important when we talked about the cash register, then you have a few different solutions that I think we will return to. But I think we start by looking forward, because then the gross margin is important and the turnover is important for us to get a high margin that also falls through the cash flow and strengthens the cash register. How do you feel about Q2, Q3 and Q4, purely turnover and above all turnover-wise?

I mentioned a little weakly here when I explained the figure of 49 million in turnover is that we have timed with the markedly higher pace in the second half of Q1. We continue with that pace in Q2 and I expect that this higher pace continues through Q2 as well.

Let's talk a bit more about the specific parts of the cash register and what you're doing around it. We're going to focus on factoring, because you said it was about 5 million in Q1. What opportunities do you see and what effects can this have? How should investors think? How big could it be in Q2, for example?

I see that there will be more than 5 million in Q2 that we need to put on factoring. But we don't want to put everything on factoring and just outsource that whole piece and take it home. We want to do this in a controlled manner. We don't want to make the most of it. We want to do what we need to do, but not more than that. And that's why I mentioned in that picture that there are selected production invoices that we can also increase the credit time on. So we have control over the situation. We choose what we want to do, we strengthen the cash flow, we generate positive cash flows in Q2. This is how we now strengthen our cash position in order to get out of the dip that started with this low EBITDA Q3 previous year, where we also had low turnover figures. This is what has affected all of that. If we then look at the trend, where we are coming from now, now everything points up during several quarters of time. And the cash is what drags after all the curves, of course. It's quite logical, and that's what we're strengthening now. This is no wonder.

And now we're getting close to the end here, so if you as a viewer have any questions, be sure to send it now. If we look into 2025, we will see the delivery of Nimbus. We will also start to see US sales, especially on the blue light side first. A little more trouble on the cellular side still. Europe, toughen up well. Is there anything else you expect to happen here under 2025 that is revenue-driven above all?

Yes, that's what I was talking about in our top three, if we go back to them. I think this is a good summary. As I said, there are several other activities as well. But we will also look to get new customers, new countries. new markets. And apart from those countries, new markets that are at point two here, I'm thinking of other countries in Asia, other countries in the Middle East and so on. We are also working hard with that. Then we will grow with existing customers on existing markets as well, so we should not forget them either, of course. And with that said, we haven't even mentioned a very good thing that happened at the beginning of the quarter, which is that we actually extended our framework agreement with Telenor for another three years, so that we will continue to deliver to existing customers and grow with them as well. And we do.

That was brilliant. No more questions. I think we have gone through a lot. I want to thank you, Fredrik, for being here and presenting. And thank you to all of you who have watched. Thank you very much.