Maven Wireless Sweden AB (Publ)

Maven Wireless and the company's CEO and co-founder Fredrik Ekström. Here we will go through the second quarter, how it has looked and then you will also have the opportunity to ask questions. So please use the chat function so I will try to get as many questions as possible so you can ask them here directly to Fredrik. We will have as such that Fredrik starts with a presentation and then at the end we will have the question time. So you have the whole presentation on you to ask the questions you want. And with that, Fredrik, I'll hand over the floor to you and welcome you. Thank you, Hugo.

It's always nice to be here. Nice to be able to come here and present our Q2 figures. I'm going to start by putting ourselves on the map. And you who know Maven Wireless, you know that we are a product company, that we develop and sell digital products for indoor and tunnel coverage. Vi erbjuder marknaden och våra kunder ett fullt ut digitaliserat system och produkter. Vi är marknadsledare med vår teknologi, som sagt helt fullt ut digitala mjukvarubaserade radio products and a complete product portfolio, both for mobile telephony, 2G to 5G, but also blue light radio, public safety radio for police, fire department and rescue services. We extend ourselves over the world map. We sell the main part still in Europe. About 80% of the time is sold in Europe. We have growth markets. We have established customers in the Middle East and also in Southeast Asia and South Asia with India. The other expansion areas are Australia and North America. In North America we have made some changes during the quarter. We have hired a new sales manager for North America, who is located in Dallas. And Dallas is actually a telecom hub in the USA, where there are many mobile telephone operators, neutral hosts and companies in the industry. So it's a good place to be established and have our sales manager's resources. We also have our office in Los Angeles with sellers. A picture of what type of project we do. We sell out in the world and we focus on product development and sales of hardware and software for that. We sell through system integrators and partners in respective countries who are responsible for the project. Simply to prospect, install, run and support locally. we support customers from the back, so to speak, with all competences and upgrades with more. Here is a palette with completed projects and projects in the pipeline. There are many tunnel projects, road tunnels, train tunnels, tunnel tracks. We have in-house projects and it is typically buildings that need all types of lighting, mobile telephony, but also security lighting, blue light lighting. A number of other special verticals, mining industry, oil and gas, data centers in the growth area as well. The hospital area is relatively new, where we then install both blue light and cellular, a combined system that becomes very effective. So the hospital can optimize its areas for just healthcare, not free up a lot of extra space for a lot of different systems. So very optimized and perfect for just hospitals. From our report, you who are holding the quarterly report in your hands, the front page, you see Dubai goals. This is a project that we have started with a local partner in the United Arab Emirates. to install our blue light radio solution, both for the current Tetra standard, but also for blue light radio with LTE, that is, digital radio, 4G technology, where we have a unique solution on the market where we combine both the old technology and the new in the same radio unit. And that is what is being used here. We have used that technology elsewhere with the same partners in this country. Vi har börjat med partner att modernisera Dubai Mall. Det är en fantastiskt stor galleria. Totalytan är hissnande 1,2 miljoner kvadratmeter, varav ungefär en tredjedel är uthyrbar yta för affärer. Sen finns det parkeringsgarage, supportytor och så vidare, men de behöver också täckning. 100 million visitors per year. And it's not so strange if you think about it. Now it's summer and sun here in Sweden. We like to be outdoors. Down here it's the opposite. Here you fly the heat and the sun and spend all summer days indoors. And then it's just galleries. You live the gallery life. So that's why this super important project is super important with just security. And in the Middle East we have seen that this actually started sales a couple of years ago on this new technology combined with the old one. We have also started with these products in Europe, also specifically for the hospital project that I mentioned then. In Sweden, you who follow the Tetra industry and MSB know that they have decided on the new 4G Public Safety LTE, also in Sweden. The old one is called Rakel, the new one is called Sven, with double V, Swedish Emergency Network. And here we have installed the same types of products that we use in Dubai Mall, also at hospitals in Sweden. This was also just started with this. The challenges for these objects is to need redundant critical coverage for rescue services. Gammal ny teknologi, men även redundans, att om en signalkälla dör ut så vill man fortfarande ha täckning. Det är just det vi också kan erbjuda, både gammal ny teknologi, redundanta system i en och samma produkt. Så det här är ju den optimala lösningen helt enkelt. Jag ska också nämna att det är med samma partner vi också nu har vunnit en helt ny vertikal flygplats. Så jag kommer tillbaka till det lite senare i presentationen. Before that, I would like to present our financial figures for the quarter. Here we have both the quarter on the left side and in the middle to the right we have the first half of the year. Net turnover isolated Q2 is 73 million in turnover. It is a turnover growth of 37%. We make a gross profit of 28 million, which corresponds to a gross profit margin of 39%. And we have some initial factors in it that drag it down by two percentages, which I will explain in the coming picture. which is also EBITDA. We have an EBITDA margin of 8%, where we also have some effects that we will come back to. But before that, if we look at the half-year, we have a turnover of 122 million in the first six months, which we can compare to the previous year, we have an increase of 14% in the half-year. We are accumulated on gross profit margin 41 percent in the first half of the year and we then make an EBITDA margin of 7. If we look at the quarterly figures, historically also, with Q2 on the far right. Again, 73, turnover 39. And this gross profit margin of 39, we have an effect, where we have sold a batch of components from our warehouse. till ett lägre värde än det bokförda lagervärdet. Och den batchen av försäljning drar då ner bruttomarginalen, för den effekten hamnar på kocksen och den drar ju ner. Om vi skulle plocka bort den lagerförsäljningen så hade vår normala produktförsäljning givet en bruttovinstmarginal på 41%, vilket är i linje med föregående år. Order entry lands isolated Q2 at 43%. This is an increase of 9% compared to Q2 2024. A certain growth, and if you look at historical figures now and compare how it normally looks in Q2, you see that Q2 has normally been a little lower for us. So we have a certain spring effect in just Q2. The order book, it falls down a notch and is now at 77 million, but it is quite natural when we deliver and invoice and have a high sales in Q2. It is taken from the order book and converted to sales, of course, so it is the connection. If we look at isolated sales during the quarter, then we also have this quarter overweight Europe. What I am very happy about, as you can see in detail, is that we have sales in America and the USA. We have now sold a new product, a high-effect repeater for two-band PCS-AWS. These are the two standard bands that all operators in the USA have, which you most often use for indoor heating. So we have certified and launched that high-effect repeat and we have taken in orders and we have actually also shipped and invoiced the first to the first customer during the month of June. And last week I found out that it is now installed on the site. So it's great fun that the sale has started on that new product. If we then look at EBITDA, the EBITDA margin, again, we have an 8% margin. And as I said, we had the sales of components per layer, which dropped from 10% to 8%. In addition, we also have currency exchange effects. This is a bit of a trend for many companies here and now, which we have also seen in other reports in corresponding companies. We have currency effects. I have actually made another picture to explain exactly how this affects us. So it is clear that we also have a negative impact of the latest currency effects, where the crown is strengthened, the dollar goes down, the biggest effects, so to speak. We also continue to invest in expansion, and as I said earlier, the new areas of expansion are Australia and North America, but we also grow on existing markets where we enter new countries with new customers. Back to the currency exchange effects. We have an effect here on Q2 of almost 2.3 million kronor. It is a mixture of unrealized effects and realized effects. Unrealized effects under the million is about 800,000 kronor. And it is responsible for the revaluation of our account, the currency account, quite simply. And since we have now strengthened our cash position and we have our own money, this of course has an effect when we have our own money in the cash. Then we have both customer feedings and delivery invoices that are revalued on the balance day. We also have realized effects on customer feedings and delivery invoices. And it goes up to almost 1.5 million under the quarter. In addition to that, which is also in detail in the report, I can mention when I was on this slide, so down at Finansnettot we have another post that is an unrealized effect. which is on a slightly longer horizon. We have a debt from Maven Wireless Inc., the daughter company in the USA, to the fashion company in Sweden. That debt is also revalued on the balance sheet, and it is of course unrealized. And there we also have an effect of almost 1.5 million on the financial net. The market. What does the market look like for us? As we have communicated earlier, an important part of the market is mobile phone systems, i.e. 2G to 5G. And what is important for us is to grow even more on this market, because this represents about 83% of the total market. And if we look back, we have sold a little more than half of our sales is actually blue light, which is the smaller part of the market. So we want to expand even more on the cellular to grow even faster. And how do you see the coming years on this market? Yes, it is a clear trend that 5G becomes more and more important. We also see from Ericsson's Mobility Report, it is a market report, they release continuously. In the next five years, the 5G SIM card will increase quite a lot. It will have 6.3 billion 5G subscriptions in five years. And you can see that on the graph to the right as well. It's the mobile data we see there. And it's the orange in the middle that represents mobile data over 5G. The purple one is point-to-point fixed wireless access, and the yellow one down below is all other non-5G technology, i.e. 2G, 3G, 4G, all together. So it drops, 5G takes over. 6G. It is expected now on the market that 6G will be introduced in 2030. Men vad betyder allt det här för mig med wireless då? Ja, det betyder då att 5G har byggts under många år. När man startar 5G så är det mycket fokus på makro, alltså teckning utomhus. To bring 5G into buildings comes a few years later, after the introduction. So we still have the big wave of 5G expansion ahead of us. And that's where we're going to expand on. And in terms of technology, if you want to build 5G, the rationale for building 5G is to offer more data, as we see in the graph, the need for data increases. And that is precisely why the rationale is to deliver 5G systems that can take care of much more data than 4G. So that's why 5G is built to take care of this whole amount of data. So the conclusion is that it's cheaper for operators to use 5G than 4G. But to get the best band width in an indoor system, you also need to use systems where you pull fiber all the way out to the antenna, so to speak. And this is done with these low-effect days where you then mount active equipment with built-in antennas in the roof and deliver coverage for operators with a maximum bandwidth of 5G. And it is these Nimbus systems that we have also developed. 6G 2030, it is good that we know that they are jumping these technologies with a 10-year gap. But our conclusion is then again Introduction of new technology, macro comes first, in-house a few years later. So now it's full focus 5G in-house coverage. If we look at the public safety, the blue light market, here it is actually also fantastically interesting because large technology shifts are also taking place here. I have been on blue light radio, but first I would also like to describe that a huge technology shift has started for train signaling. Train signaling uses its own band at 900 megahertz called GSM Rail. It will now also be replaced by a more modern digital system called FRMCS, Future Railway Mobile Communication System. And already now there is a pilot system out there, and that is the phase we are in, and here Maven Wireless as the first player in the world, together with our end customer and partner in Switzerland, installed in their tunnels, already now, systems for FRM CS. And this is several years before this general launch around 2030. So we already have these systems, we have them installed in operation with the other bands for train tunnels. So we are ready to grow and offer this breadth on the tunnel market for trains. Tetra I have been talking about, I mentioned it for Dubai Mål. It is the digital system for 700 LTE. There we also have these products, here we have come further. Now this is also broadened in Europe, country after country that are starting to build these systems. And the tetraradio will be phased out after a while. It will take time. So it will coexist for a long time. There are so many of these radio devices that you see the fireman holding in here. But there are also vehicle mounters, there is radio in smoke masks and so on. So this will take a long time to phase out everything. That is why technology will go hand in hand for a long time. And that is why we are now selling these dual-band units that support both the old and the new. We also see as the last point down on the slide, we have a clear demand driven by the military, military of defense, MOD as well. We have started to sell a number of systems in Europe to NATO countries. It is then for permanent installation in military facilities where you need both blue light radio for police fire stations, but also your own specific frequencies for military radio, also on UHF, for example. NATO frequencies, where we have also built in all these technologies in the same order, so that you can effectively get all the technologies out in these military facilities. I also want to make a point here again in the Middle East, so in two different countries, independent of each other, we have now sold to a new vertical, which is airports, which is also great fun. This is also a blue light radio system to have good security at airports with radio communication. In Dubai, it is also the same type of product that we have used in Dubai Mall. And the order that was also press release here during the quarter was an order of 7 million crowns. And that was then the equipment that will for some part go to the airport and the other part continue to build on Dubai Mall. And this project is being done in different steps, so it will continue over time. Vi har också vunnit ytterligare i ett annat land i Mellanöstern tillsammans med partnern Motorola som är en global spelare specifikt för blåljusradio som också är integratör och bygger sådana här system. Så det är jättekul att vi nu har partnert upp också med Motorola för det här flygplatsprojekten och vi har redan diskussioner om att bygga andra system tillsammans i andra länder ute i världen. Den här bilden tycker jag är bra. Den här har jag visat en gång förut. Jag vill komma tillbaka till den för att förtydliga hur vi driver tillväxt. Vi ska driva vår expansion och tillväxt. Vårt strategiska mål som vi har haft under lång tid är att expandera våra affärer och komma över miljardförsäljning. Det är det vi ska göra de kommande åren. And the three main areas of how we will do that is that we will have growth on new customers. And we see here also during this quarter that we have a number of new customers. We strengthen our sales team. We work then out in the regions. We also establish new partners. Motorola again is a good example of that. I have mentioned the growth areas several times during this presentation already. Growth areas, both in existing regions where we go into more countries, more partners, but also geographically, Australia, North America, important growth areas. Now we have started to sell new products in the USA. Very good. Also, I have already mentioned during the previous presentation, grow even faster on mobile phones. Fiber-to-the-antenna is important. 5G is what goes into buildings, and here we are ready to deliver in all these three areas. Now I would very much like to have questions.

Thank you for the presentation, Fredrik. And I think we'll jump right into the questions. And we'll start with that you have announced that you will resign as CEO. What led to this decision? Do we know anything about when and how the process goes to find a successor?

That's right. It has been press release and we went out with it immediately after we started this discussion. And this is something, first and foremost, that should not happen halfway through. This should be structured, controlled, planned. So this is not something that should be fixed immediately. This has to take its time. It is important that we find the right VD-person som kan ta tag i den här stafettpinnen och göra den här fortsatta tillväxten, skala upp vårt fina bolag. Vi har ju faktiskt satt det här på kartan. Jag har stått vid rådet nu i snart tio år sedan jag var med och grundade det här. We are established, we are stable and safe. Now we will continue the expansion. And it is also a craft in itself, where I and we believe that it can also be done by another CEO, just as I could do it. I have also come to the conclusion that I want to change What I do day by day in my daily work, and I believe that I can support the company's continued expansion very well through the board work. But we have also agreed that I will be available to the company for specific strategic issues. And what can that be? Since I have very long business knowledge and detailed knowledge here, it could be M&A issues, for example, acquisitions, strategic investments, evaluation and strategy choices, and so on. Så jag kommer absolut inte släppa det här, jag kommer stötta det här, men det dagliga expansionsarbetet i en vd-roll kommer då vartefter här tas över av en annan person. Så det är det jag har kommit fram till och det är så förändringen kommer ske, kontrollerad.

And what kind of characteristics are you looking for in the successor?

What I see as important here, again, we come back to the expansion, we are a public company, we are established. The important thing is that it is a person who has experience of this. Det behöver inte vara en telekomnörd, om jag får säga så, men det bör ju vara en person som har viss teknikkunnande, men framförallt kunskap och erfarenhet att skala upp och växa. product companies that we actually are. These are the most important characteristics. Also to have an understanding of a global organization, understanding and knowledge of the strategy we have had with outsourced production, slimmed partner sales, and so on. So those parts are also important to trim this even more and scale it up in a good way and get up to billions and several billions of revenue.

So a little global experience of growing companies. I think if we look a little more generally now and much broader on the market, how do you feel that What is the strength of the market right now? And what do you see ahead towards autumn and winter?

The market is definitely there for us. We have had questions earlier about the turbulent situation, and we write some opinions about it, the report also specifically here, how the USA acts with the threat of theft and all that bit, so to speak. So there are many question marks and some concerns. We also have Anxiety in other places. Lastly, these are factors that can affect us in different ways. We have seen an impact here, which I have talked about quite a lot, currency rate differences. This is an impact factor. Just tariffs, since we do not yet have a lot of sales to the USA, it has a limited effect in the short term. But in the long term, it is important for us not to pay unnecessary expenses. But there we have the strategy that one of our EMSs is established in the USA. So that when we raise the flows, we start up a production line there to avoid such expenses. All in all, I would like to say that our main sales are in Europe. And it is not affected by these concerns, it is rather the opposite, I would say, that we see some effects of our European customers becoming even more inclined to have local supply. So we get more and more questions that say that, oh my God, we have realized that we cannot buy as much from American companies or from Asian companies when the world order is changing and there are a lot more risks. We now want to make sure that we have more local supply, European supply. So that plays into our hands where we are the only Europe, which offers a complete product for cellular blue light, digitized. There we stand as the only European alternative. So this is, then it will be positive for us.

And I think then we jump directly into the order entry. It was about 43 million. It rose by about 9 percent. Sales growth was 37 percent. This order entry figure of 43, is that something you are satisfied with? And how do you think about the order entry into H2?

No, I would not say that I am satisfied with the order entry figure. We can and will do even more. On the other hand, we deliver growth, just as you say, it is 9% up with the comparison. So in that way, there is growth, but I'm not satisfied with it. We will do more, and just as I have also talked about in the presentation, we will work more with our sales team. We will reach out to more new customers in new countries with new partners. Here we can work much more and I see that we have the opportunity to grow faster in those areas and work better there in the future.

If we then look at the order book value, it was 77 million, if I'm not mistaken. And if we look at the turnover in the coming quarter, this figure corresponds to about two quarters of growth, a little less. Is this a duration in the order book and visibility that is common in this industry? And is this something that you are a little worried about, or as I said, is this common?

Right now, it looks like this. This has changed radically compared to a few years ago. When we had our record order book, which was just over 200 million orders, orders in it were expected to be delivered in about five quarters. nu order vi får nu är i princip alltid vi vill ha leverans omgående så det innebär ju What we take in is delivered in 12 to 16 weeks and sometimes even faster if it is a flow we have, so to speak. So there is a huge difference compared to a few years ago with pandemic effects and so on. Now the main part of what we take in is delivered as soon as you can. It is the main part of the business. So there is a pretty big difference in how you looked a few years ago and how you look now.

It's the fast pucks that matter now. And what is it that has made this difference? What has driven this difference, that now we're going to have a quarter delivery time?

I think there are many different combined factors. One obvious thing is of course that we have come away from the pandemic years and the supply chain problems there and shortcomings in components and so on. It's completely washed away. But then there are other challenges. We have had uncertainties, low rates in countries, high interest rates. You have drawn on decisions, and when the decisions come, then you want to repeat the slowness in the decision processes and get the deliveries as soon as possible. I think there is also a lot of that in that area. So there are many factors.

I want to talk a bit about the market. You were in the presentation with the USA. There you now have approved products, you have a new sales manager, you have customers. Can you tell us a little more about why you have brought in a new sales manager? Can you even hint about what type of customer it is? Give us some more information about that.

We have hired a new sales manager. We have seen that we have had to change sales leadership in the USA and also centered more around Texas and Dallas. There is an established telecom hub in the US. It is not directly in Los Angeles, where we have been before. So it has been important. In fact, there are quite a few companies that are moving to Texas and even from California, where it is very expensive to operate as a company. But that's where a lot of decisions are made, and there are a lot of potential partners and customers, and we have the dialogues there with the operators in the USA. So we needed more new young blood in sales management. Joe Altadana, who we have recruited, he has very good knowledge. He has the tools for this. He has worked both on the mobile operator side, but also on the neutral host side, so that he has the mixed network and competence for this. This is the right step for us to make sure that we can really grow in the US.

Can you give a little hint about what type of customer you have ordered now? What kind of area are they in? Is it a neutral host or a hospital?

It's a building that needs mobile coverage for all operators. This is a high-effect repeater. It can cover a couple From a few thousand to around 5,000 square meters, just to get a feeling, so to speak. You can use it to run a day system, so to speak. But it's a quick way to come in and create coverage. So that's probably how these products are used. Either it's a gap filler for a place that is completely missing, a blind spot, then you need coverage. Eller en byggnad där man snabbt behöver bara etablera täckning, då är det här ett väldigt snabbt sätt. Du behöver inga basstationer. Du tar signalerna utifrån makrot och leder in i byggnaden. Det är snabbt och enkelt att få täckning med just den här produkten. Det låter effektivt.

And this was the first quarter in a while when we saw growth, and also extremely high growth. There were probably no low growth rates here, it was 37% at once. Is this a sign that it's turning up in terms of revenue? Should we expect this to happen in the future? Or how do you see this quarter compared to the coming quarter?

It's great growth, but again, in the big picture, we're going to deliver growth in the coming years. That's what we're going to do. But what I have also talked about with you and the market many times is that we have season differences. You have to take it out on more than one quarter often to see trends. So you have to keep that in mind and not be afraid of seasonal variations. But it is clear that we will deliver continuous growth in the future. And we have the tools, we have identified exactly what we should do. We have also seen, as I have also described, the technical areas. We have the platforms to deliver that growth. And we have already established the organization where we should have it, so that we have We already have the tools here and now and the organization to get up to billion sales. That is what we have established, that is what we have invested in the last few years. We have taken parts of our profits, we reinvest the profits in this growth. We have already prepared it, now we are going to execute.

You were talking about geographies, and as we saw in the presentation, this quarter was all delivery to Europe. But then we see orders coming in from the Middle East, and things are starting to happen in the USA, so it's happening in other areas as well. What we don't have as much of now, as we saw earlier, is Asia. Is there anything special that has happened here?

No, it happens there too. And during the quarter we have, for example, taken in a new order for those called Konkan Railways. So we continue to build for the end customers, the Indian Railway. So we have taken in an order there. I think the value was one and a half million kronor. We do not share everything that happens, of course, especially not when the order volume is lower and it is in the existing country. But it continues here as well, so it will also be delivered in the coming quarter. So things are happening in Asia as well.

I was going to say, that's what we'll see later, that there will be no deliveries this quarter. And then we have been talking a lot about growth and order entry. How should one think about the cost part? Now we understood that there was an organizational change in the US as well. So that may not be another person, but how should one think about the cost mass here in the future?

We have continued to establish an organization about the cost mass that will support this growth and this increase in revenue. It is clear that when we continue, we will need to make additional additions and adjustments to certain areas in order to perhaps get a little more meat on certain legs create a little more strength in some areas, but there are not any very large cost increases, but some adjustments. So when we scale up, we will come back and really see this setup, what profit multiples we can actually deliver. Now we see that it is on the way here in Q2, we are doing 73 million in revenue. Now we have a lot of effects on EBITDA margins, both when it comes to currency and the sale of bonds. But if we neutralize those effects, then we would have had an EBITDA margin of perhaps around 14 percent in this quarter.

That's exactly right. If you erase it, you get the damage that you saw earlier when the turnover really increased. And something we talked a lot about earlier this quarter is the cash flow. Now the cash flow was clearly strong. What are some keys that you have written down here to make such a quick improvement?

Yes, we have worked on this quite simply. At the end of the period, we have about 6 million kronor of our own money. In addition, we have a cheque credit of about 17 million kronor. So this is good. And that was actually the message I gave when I talked at the Q1 report, that we are doing measures to strengthen this and we have the tools for it. And now we have proven it too. So there are a number of different things we have put over the cost side so that we do not spend unnecessary money. So there we have adjusted something. We have extended credit times as well. So that has also made a difference, so to speak. We have also continued to work with QFO, i.e. customer feedings. Make sure that we get paid, that unpaid customer feedings we are really making sure that we get paid, which has also been a contributing factor.

Finally, if we had adjusted for... I think we should talk about the split between blue light and cellular. It can be good to set the setting before I continue here. Because that can have a certain impact on the gross margin as well. How did it look here during the Q1? Was it mostly blue light, or mostly cellular, or was it a 50-50 split?

It still looks like it did in the previous quarter, that we are selling almost 50-50 split. We still have a little more, a little more overweight on blue light. So that's how it looks for us here and now, and that's why I'm also talking here in the presentation about how it is important for us to expand more and faster on cellular, because there we have these 83% of the world market that we can address. So there we have the opportunity for faster growth.

This is actually a final question, because I know that many are wondering, and it is the launch of Nimbus. Earlier, we talked about coming here under Q3-Q4. Is this plan still there?

It is still there. We have from our factory, which we have informed earlier, we are doing a upgraded hardware version of Nimbus that goes into production. And it goes well where we will get new Nimbus's delivered here to our office in Kista. Here is the month shift, July-August, so that we can start taking care of the first weeks of August. Here we will then prep them and then we will continue these tests that we have done earlier, with earlier hardware versions of Nimbus, where we have done field tests. We will continue with that in the fall, to then start up the sales, simply later this year.

Thank you very much for being here and sharing information to Kvartalsrapporten. Thank you to everyone who has watched.