Unibap AB (publ)

Hello and welcome to the Q4 presentation.

Thank you for showing interest and taking your time. So, let's start. The person presenting today is me, Johan, CEO, and then Emil will help me, our CFO.

Vi kommer prata om finansresultatet för Q4 och året, höjdpunkter under Q4 och sen så kommer vi ta en liten utvikling om försvar och USA med lite marknadsbeskrivningar och tundbeskrivningar.

Och sen avslutar vi med att diskutera 2025 också då, våra ambitioner för 2025.

Varsågod Emil. Tack. Bolaget gör ju sin bästa kvartal hittills omsättningsmässigt och vi kom in just under 90 miljoner på omsättning för helåret. Earlier we said that we would make 80% growth during the year, but it ended at 80% and it is mainly due to the fact that we delivered faster than we had planned in our views on customer projects above all. So that's what drives the additional 10%. And as we said earlier, the majority of our revenue comes from hardware. Earlier we said that the company is in a transformation phase right now when it comes to going over to a product perspective in our deliveries. We are through that now and we would say that the whole transformation of the company in that way is done now. The absolute majority comes from hardware and we will build up a higher share of license income during the coming periods. When it comes to EBIT, we deliver a positive EBIT result driven by turnover, but also that we come in lower on OPEX than what we had for Q4 last year. We get a negative effect of The capitalization from our R&D to the signings, since we have started signings for primarily our ix10 projects that we previously closed the phases in the project and started signing off. The company shows a positive cash flow for the month. A lot is driven by, we have been higher for the quarter, accounts receivable and prepaid income. And it is mainly due to advance invoices against the orders we won in Q4. And during the year we have also built up storage, depending on that we go over just to be a product company instead of a project company. But there we also see a weak decrease in storage during Q4 due to the deliveries we have made and the increased turnover. And as we have said earlier, there will be swings between quarters when it comes to turnover, profitability and cash flow. In the future, we will start looking at a result that we call EBITDA-C, which is EBITDA, where we exclude capitalization and R&D, because it will be closer to an operational result than what we deliver. If you look at the left graph, we can see that the capitalization has decreased, especially during Q3 and Q4, as we have said. We have closed the development phases for the ix10 and ix5. Och vi har flyttat över förstudier för nästa generation produkter som gör att de har gått ner. Dessutom så har vi börjat skriva av på de generationer som har stängt. Och det trycker ner vårt EBITDA-resultat under året. Eller under kvartal tre och fyra framförallt. And if you look at what has accumulated during the year, we came in at a negative EBITDA-C result of 3.2 million. But it is very good that we show a positive EBITDA-C result for Q4, which is very strong. This is the result we aim to improve next year.

Thank you, Emil. Some highlights for the fourth quarter. We carried out the signing of our options. That was a welcome addition to our cash register. We thank you for that. Then we got three slightly larger orders. We got... In order from Moog Space and Defense, it was a second batch. We received a corresponding order in 2022. So it was the second batch. And that was very important for us. Not only because it is a large order, but also because it is a strategically important order. Then we received the first order on free-standing softwares. Vi har ju en strategi att vi ska bygga upp vårt mjukvaruerbjudande. Vi har redan idag så säljer vi mjukvarulicenser till ihop med våra hårdborgar, men vi vill även utöka vårt mjukvaruerbjudande. Det här var den första orden och på fristående mjukvaru har vi sett det som ett viktigt steg. Then we received the first order from Korea. It was from Context-Based Optics for a smaller constellation. This order is an object for export control, so we are waiting for our report on export control. But it is an important breakthrough in Korea. And we also went directly to a constellation without passing a qualification project. And we also see that as a sign of

the credibility that we were building up in the market. If we look both a little backwards and a little forwards.

We have, since earlier, we started our history at Julmbap with sending up Q4 cards, computer cards, we sent up a large number, over 50 during a period of time. Then we went over to build complete computers. Then it was IX1 first and then IX1. We have now delivered a total of 79 of IX1 and IX10. 24 of them are engineering models that are used on the ground in the lab to develop satellites. Then 55 flight models, they are going up into space. It may take a while for us to deliver until they get up into space, but the purpose of flight models is that they go up into space. Flightborders also has a better margin by having a higher price. We have nine units in the room. Two of these nine came up in January. It was two IX-5s that came up. That was very good. We have had a delay to bring up the first IX-10. The customer that came up first, it came up under 2024, but the customer was delayed. There was nothing that changed. The first EXT will come up in the spring of 2025. We have a large number of units that will be shipped. Since we have delivered well in recent years, they will come up in space now in 2025. We estimate that more than 30 computers will come up in space. If you compare that we have had Seven before 2024, so nine with the two in January, so it's a catch-up effect that comes here now under 2025. So it's an important year for us, 2025 now, in that regard. The annual income during 2024 was a little over 102 million, it's about double what it was in 2023. As you can see from the graphs there, the graphs are based on the number of computers. We do not give a price for our computers, but this is how statistics are built on the number. We see that we received more orders than we delivered to the USA, so the USA will grow. We see that we received more orders than we delivered to defense projects, so the defense share will increase, and we also see that we We got more orders for constellations than delivered constellations, so the constellations will also grow. We got three constellations, that is, larger projects during 2024, compared to one under 2023. So we have a plus two there, we can say, for constellations projects. Our goal is to go from qualification projects to constellations projects. So often first, customers try our computers, maybe send up some rooms and then

Hopefully, we will be indesigned and can get a little bigger business. If we look at the market, we see that it is defense and the US that will drive the market.

This does not mean that commercial customers and Europe are unimportant, but there is a greater growth and a greater market against defense and the US in the future. The difference between commercial or civilian customers, as well as defense or emergency customers, is not really the solution, because we deliver about the same solution, but it is the driving force for the customers. If you think of a commercial customer, most of our customers are doing earth observation. Problemen från kunderna är ju att få till ett bra business case. Och för att göra det så måste de maximera utnyttjandet av sina investeringar. Och då finns det ju flaskhalsar med hur mycket man kan utnyttja satelliterna. Och det är främst på grund av hur mycket data man kan få ner. Både få ner i tid och få ner till en rimlig kostnad. Så det begränsar egentligen det kommersiella värdet eller utnyttjandegraden av de här satelliterna. Lösningen på det här är ju mjukvarudefinierade satelliter, det vill säga att man gör mer processing ombord, det minskar datamängderna som ska ner. Man kan dessutom också ha flera kunder, man kan ladda upp nya applikationer, mjukvaruapplikationer, och man kan dessutom ladda upp de här mjukvaruapplikationerna under satelliternas livslängd over the air. Så det här kan ge en stor effekt på det värde man kan få ut ur sina investeringar. If we instead look at the defense side, it is the spawning satellite in the first hand that we deliver to. There you need to have very advanced sensors to be able to find small objects, all the way from missiles to combat vehicles to ships that pass and connect in the Baltic Sea or the like. What drives the spawning satellite for defense is time. latency. You also want a little latency. The problem is that it takes time to get data down from space. What we can do is that with processing on board, in principle, reach real time. As long as a satellite is over an area, you can get the information down directly. I will describe a little. This means that you can both control the satellites and get the information down in real time when they pass over an area. This increases the value of the information you can get from these sparring satellites. A similar solution with two different angles. What we deliver is high-performance computers. We take earth technology adapted to space. On these you run a lot of machine learning. We help the customers with that, and the customers do it themselves, and there is a large ecosystem that we have been involved in and developed. We have tested around 40 third-party applications in the room, so there is a large ecosystem. Our software goal is to step by step increase our assistance here on onboard processing. But in principle, high-performance computers in the room make machine learning possible. And with this machine learning, you can get As we said, commercial customers can be mule paradefined, you can do overdare upgrades, you can load up new customers during the journey. You can get cognitive satellites, that is, they can make decisions themselves. They can also be autonomous, they can be self-driving. And then you can get real-time insights. Vårt främsta kommersiella exempel är ju det vi kom ut med alldeles nyligen här. Vi fick ju ordrar i två omgångar har vi fått. Vi fick ett ramavtal och vi har levererat de två första batcherna mot det ramavtalet till Eride Hiokor-konstellationen. Det är en konstellation som finansieras av italienska staten. Argotec, vår kund, ska leverera upp till 40 satelliter med väldigt hög, som man kallar revisit, den kommer komma tillbaka över det It's an interesting area often. They have advanced optical cameras. We have our iX5 on board on all of these satellites. We also have our software, our watchgo, which we call our operating system. And the order we got just before our shift was for what we called, this standalone software was for what we call Loom, which is a pre-processing pipeline, that is, we process the raw data that comes from the camera and we package it in standardised format that is suitable for machine learning. The first one has been sent up. It was one of the two that was sent up in January and it will be sent up in total and further 25, that is, 24 more until 2026. These are the first two batches and then there is a possibility for a third batch as well. ArgoTech in RIDE is a commercial and civilian product, which means that you can increase the resolution. We have seen examples on satellites where you can increase the resolution up to 40 times with the help of our computers. This means that the possibility to get a discount on the investment increases dramatically. And this is precisely the purpose of ArgoTech using our iX5 on its satellites. It is to be able to make use of that degree. And more applications, more customers cover a larger part of the globe around the world. If we instead think of defense customers, it is about time. Time is money, time is critical information. Normally, limited space data is a strategic perspective. You can monitor infrastructure, you can see if something happens, if something is built out, an airplane or the like. What you want to do is go to tactical information, that is, real-time information. See what is happening now and get information about when it happens. There are three levels, strategic, operational and tactical. The goal is to be able to go to tactical information, real-time insights from satellites.

To get real-time insights, you need to do real-time processing on board the satellites.

Vi har ju sett att mängden försvarsprojekt har ökat, det såg vi också på orderingången. Vi har ju ett antal projekt här under 2024, bland annat vi har jobbat ihop ett franskt mjukvaruförsvarsbolag. Vi fick då den andra orden från MOG här under fjärde kvartalet. Vi har dessutom tecknat en A smaller collaboration with a South Korean defense company regarding the evaluation of our computers and AI solutions. And we received a slightly smaller first evaluation order from an Italian defense company, a little larger defense company, during the fourth quarter.

So the defense activity is increasing.

If you think of an example of what you can do on the defense side, here is an example from emergency or rescue service, but it's completely analogous to how you would think on the defense side. So I can talk about defense and emergency is one category in contrast to commercial and civilian. Traditionally, if you want to be monitored, you need to have a fairly low resolution and cover a large area. And what you can do, for example, is that you can see that it is a forest fire. It is the traditional approach. This information can be downloaded after an hour, at best. That's good. If you have real-time processing on board, with our high-performance computers, you can basically process these images on the fly and make decisions, that is, cognitive abilities. You could then trigger another sensor with a higher resolution to focus on the fire, Then you need to have these real-time capabilities and you also need to have more sensors. And more sensors generate more data, which means that there will be an even greater need for onboard processing. With these other sensors, you can zoom in and see, in principle, instead of seeing that there is a fire in an area, you can see where the fires are. That is, specific points. If you also have a radar, which is a technology that comes more and more on satellites, it's called SAR, Synthetic Aperture Radar, then you can locate buildings and vehicles. And SAR images can also be treated in real time with our computers. So then you can basically pick up the coordinates for vehicles and buildings. Buildings are often on maps, but vehicles are not registered anywhere where they are located. So if you want to make a rescue effort, you need to have both where the firefighters are and where there are risks for personal injury, basically vehicles or houses. This can be done with our on-the-fly computers. You can also handle the data for many sensors and treat them all the way to object identification, that is, run machine learning on board. And the reason why you can also get down here in Raltide is that the data is decreasing so much. maybe a thousand times, so that you can send through very low, slow links, and these slow links can be connected all the time from the satellites, because they then go up to geostationary satellites, satellites that fly much higher up, and these satellites are always available. So then you can basically connect to these geostationary satellites all the time. So as soon as something is discovered, you can act. That's where you can get real-time information. And what's interesting is that we are part of the Bifrost project that the Swedish Defence Force and the Danish Defence Force run. And what's interesting about it is that it has two sensors, as you can see down there. It's a multispectral camera and a radio receiver for signal scanning. Then you can put these data on top of each other. It's data fusion. Both to see where there are objects, for example ships in Arktis, and also to see if they are active and send radio communication. Then there is an IX5 on board Bifrost, which you can use to run AI apps on to find these objects and do analysis. What is special about Bifrost is also that it also has this real-time connection. It has a modem to connect to geostationary satellites, so it will be able to send out information directly if it sees anything. And that is a typical example of what we see will happen on defense and emergency. To go from strategic to operational to tactical information. This is driven by the USA. The USA is investing five or six times more than Europe in total if you put together military, civilian and commercial. So it's 56 more in the USA. A lot of it is driven by Space Force, which has been around NASA when it comes to the budget. Under Space Force, there is Space Development Agency. They order and send about 100 satellites a year. They have just started it, so they will send a whole lot this year. They have a new approach. They buy ready solutions instead of project development. They do not buy at cost plus, which has traditionally been done in the defense industry. They have a two-year development cycle, that is, every other year a new batch of satellites will be built and they will be better. And then there are very short delivery times. From contract, it is two and a half years until the satellites are in space. And that means, in principle, that everything must be pre-developed, which means that there must be standard products available to use. De har också en tydlig process för att introducera utmanare- till de traditionella försvarsleverantörerna. Det finns ett on-ramp-program för att få in nya leverantörer- just för att de vill hålla uppe det här tempot i teknikutvecklingen. Det är den trend man ser, till exempel, med att man kan ta en analogi- att använda kommersiella drönare i Ukraina och liknande. Man måste få in ny teknik fortare i försvarstillämpningar. Vi har anpassat vår strategi precis efter det här- Vi har ledande teknik, vi har korta utvecklingscykler, vi har korta leveranstider, vi kan leverera en flygdator på en månad. Och vi levererar ju då till, i första hand då kunde vi ha fått, så vi har fått direkt, inte via Moog då, det har varit de här utmanarna i USA. Traditionally, the market has been divided between new space and old space, or traditional space, so to speak. We have had a technical license agreement with Moog, so we have been able to get license income when Moog has used only technical solutions for this traditional segment. What has happened is precisely this, that we call it a hybrid market. You want the technology from new space, but you need a little better reliability. than what we've had in new space. Maybe you want a lifespan of 53 years instead of 57 years. So you need to meet in the middle between traditional and new space, and that's the hybrid market. It's being developed very strongly in the US, especially by Space Development Agency. They buy 100 satellites a year. We have been able to deliver parts of our computers, not only technical licenses, but also parts of the computers into these solutions. So it will be a hybrid between Moog's technology and our technology. Our goal now, when we establish ourselves in the USA, is to address this hybrid market. We can already address Commercial and civilian customers are more NewSpace oriented. And we have some challengers that are more defense oriented. But our goal is to move upwards to cover this hybrid market. And we need to do that by having higher presence. We also need to see that we will need to do more in the USA. So we expect to need to do more customer adaptation and software work in the USA. And we will also adjust our future product generation a little more towards the US market and the requirements that are set there. To do this, we have started in the US here at the beginning of the year. We have set up a holding company, but the business is run by an LLC called Unipop Space Solutions. Right now, we are starting with sales activities, but as I said, we have a plan that we will also increase and be able to do more locally in the USA in the future. We will continue to support from Sweden, but we will put more and more of our business in the USA. Vi räknar med att vi anställer några fler i år och det kommer att kosta 10-15 miljoner under det här året. Vi ser det här som en viktig och strategisk kritisk investering för oss för att vi ska kunna fortsätta ta marknadsandelar. Målen för 2025. På tekniksidan så är det ju många uppskjutningar planerade. Det är ju väldigt viktigt för oss. Det kan man säga en sorts genombrott. Vi kommer ju också skicka upp vår första standalone-nyggvaran i den här IRIDE-konstellationen. Och vi kommer även nå TRL 9 för IX10 här under första halvåret. Det räknar vi med. On the operational side, we have built up good product quality and good production capabilities in the last two years. We need to work a little more on redundancy and we have some process steps that are outsourced during this one-month delivery period. We don't do our own circuit boards and we don't do circuit board montages, we don't have a good plan to do that either, but we do a final assembly and test and there is some process step there that is external. under this month, and we plan to move that in, so we have total control over this last month of deliveries. We want to win more customers. We expect that we will have to do it through a smaller project, such as a qualification project. Some of the projects we are working on now, we expect to be able to convert to a consultation project during the year. And we will grow in the USA, grow our business there, and then also be able to take more customers. Vårt mål är ju fortsatt att växa med genomsnitt 30-50% per år. Nu har vi vuxit kraftigt under två år så man kan säga att vi ligger lite före planen på något sätt. Så i år så sätter vi målet till minst 30% tillväxt.

Det var därmed slutet på vår presentation så nu öppnar vi för frågor. Frågorna skriver ni In the chat, we pick them up and answer as best we can.

I probably forgot to say that the presentation will be recorded and will be available on the web right after the presentation is over, so you can also check it out afterwards if you want. Vi har fått en fråga här om bruttomarginal, hur den kommer att utvecklas. Det har vi ju för 2025 jämfört med 2024. Vi beskrev tidigare ena kvartalsrapporten av förra året. Om jag minns rätt så kan det ha varit kanske Q1-rapporten. Då pratade vi om marginalutveckling. Vi ser ju det att Vi har högre marginal på flygdatorer än på FMR än vad vi har på EMR, Engineering Models. Så när kunderna går från kvalificeringsprojekt till konstellationsprojekt så ökar andelen flygdatorer. Det kommer att förbättra våra marginaler. Den omställningen kommer att fortsätta. Därför ser vi att marginalerna rimligen borde kunna förbättras framöver. We also see that we have started with softwares, so when we sell a flight computer today, it always includes an annual software license. And some customers then choose to maybe just buy the first year, which means that they will start buying again later. So it was, for example, with this Korean business at the end of last year. So we are also building up a software business step by step, so that we get the opportunity to run forward. Så vi ser väl att vi har möjligheter att, och vi räknar också med att kunna förbättra våra bruttomarginaler framåt. Om ni vill hitta mer om det så tror jag att det var i Q1-presentationen som då borde även ligga upplagd på webben. Yes, vi fick en fråga här om det var en I got a press release from a Polish company, Kriotech, about an MOU. We chose not to release it ourselves, because it was so early and uncertain about what it would lead to. But Poland is an important market. They are one of the countries that invest most in Europe. There is also a great defense interest there. It is close to Ukraine and Russia. So it's an interesting market for us, but it was a very early stage.

You mentioned three things about choosing us.

If you think from a customer perspective, we are... We usually say that we have high performance. We are at the forefront when it comes to performance. And then we have easy to use. We have a very simple computer to use. It's fast to program. There are many third-party applications. So when we talk to customers, we talk about high performance and easy to use. To get into the hybrid segment, we have to add trust and reliability, we can say. And we have worked hard with that in recent years. High performance, easy to use and trust. Short delivery times, high delivery precision, good quality. There was a question about the long-term softwares. It will be built up step by step. We haven't really said anything about the pace. What we can say is that for a flight computer, over the lifespan of a flight computer, about a third will come from softwares during that lifespan. So we have moved a relatively large amount from hardware income to softwares. Even now with our flight computers, about a third of the lifespan of a flight computer will be softwares.

Beyond that comes the standalone materials that we build up step by step. Vi väntar en liten stund och ser om det kommer fler frågor.

We got a question here about that 30% growth was a little careful and we have as a goal this year to grow, or ambition we say, to grow more than 30%. In the long term, our ambition is to be between 30 and 50 percent per year. If we are above 30 percent, we expect to increase our market share. That is our goal. Apart from that, we are not really talking about whether we should be careful or not. We have the ambition to grow by more than 30% this year. We have had this goal of 30-50% for some years now. We have delivered over that. We are a bit ahead of our plans in general.

We got a question about batch 3 for the Iridie constellation.

We are not talking about the timing for that. Det gör inte.

I have a question about whether EBITDA-C will improve in 2025. The goal is to improve the operating results, so that we aim to get a positive operational cash flow. We will increase the cost base, as we have said, in the USA, but we aim to improve it this year anyway.

Ja, jag tror det verkar som att frågorna verkar avta här. Så jag tror vi tackar för oss nu. Tack för att ni har intresse och tog er tid att lyssna. Så hörs vi igen. Tack ska ni ha. Tack så mycket.