Unibap Space Solutions AB

Welcome to Unibab's Q1 presentation. As usual, we will record this and post it on the web after the meeting.

We are presented by me, Johan, the CEO, and with me is Henrik, our CFO.

The agenda today is to go through The quarter's finances, a little about the highlights during the quarter and after the quarter. Then a special section about how we see the situation and forward. And then at the end with our ambitions for the year. Then we start with the finances. Here you go, Henrik.

Yes, thank you. The net revenue reached 34.4 million kronor for the first quarter. To compare with 36.2% in the same quarter last year, a decline of 5%. Last year, we had an order from Moog, or a delivery to Moog, of 31 million kronor. This year, in the first quarter, more part of the turnover of revenues was made from an order and a delivery to the leading European defense companies we have a collaboration agreement with. So a small decline in revenues. As for the moving results, we reached a positive one, 3.7 million kronor for the first quarter compared to 7.2 million last year. And the drop of about 3 million is comparable to half from the slightly lower turnover. And the other half is somewhat higher costs, mainly related to our USA business, which opened during the second quarter last year. But we have also had slightly increased costs in our research and development and our commitment to defense and security. And as we have said before, these are the three areas, USA, product development and defense, where we see our costs as investments in future revenues. But as I said, a positive turnover of 3.7 million for the first quarter. If we look at the last picture, the operating cash flow or the cash flow from the ongoing business, it was also positive, almost 7 million. And we have seen a positive trend in the last quarter. We have also strengthened the cash flow with 10 million through a bank loan during the quarter. Värt att notera när det gäller just kassaflödet är att orderingången för första kvartalet uppgick till 56 miljoner, vilket är betydligt mer än orderingången av första kvartalet förra året. Det är ordrar som genererar kassaflödet de kommande kvartalen. Som jag sagt många gånger tidigare så har vi relativt stora variationer mellan kvartalen, både när det gäller omsättningsresultat och kassaflöde. Det är någonting vi fortsatt kommer att se framöver.

Tack. Let's move on to our highlights. We received an order from what we call a leading European defence company. It was iX10, our latest data solution. It was one of our larger orders. Maybe even the single largest order. I'm not 100% sure, but it was a big one. Then we also received another call-out during our framework agreement that we signed with Lofthorpe under 2025. It was also after the EX-10. So that's good. We get deals here now for our EX-10. After the quarter, we have gone out with that we won, or we were part of two winning consortia for two EDF projects. We will talk a little more about that later during the presentation. And then it was worth about 30 million kronor together. Then we also went out here very recently, last week, with that we signed an agreement with a leading space communication supplier to participate in a mission, a project that will come up in space during 2027. We will also talk a little more about that later during this presentation. But we will deliver both We are also involved in the development of services for this mission. The purpose is to be able to demonstrate these services together with this leading supplier. If we look at our way forward and where we are right now, Vi har jobbat målmedvetet under ett antal år för att bygga upp bolaget. Den första byggstenen är att ha flight heritage, kvalificerad hårdvara. Det har vi haft sen 2021 med IX5. Vi har fått det med IX10 under 2024, var den kvalificerad. Den kom upp i rymden under 2025. As we have said, we are in the middle of the next generation. Our goal is to have a cycle of two to three years. I will come back a little bit and talk about where we are with the next generation. Then we have as a goal to increase our software part and build software on our hardware. We have our operating system that we introduced as annual licenses. The operating system was introduced in 2021, but we went over to annual licenses in 2024. Since then, we have added to Loom, which also has Flight Heritage, and we will now launch another program package during the year, and that has to do with cybersecurity. I will get to that a little later here. Vi har ju etablerat egen produktion sen 2023. För vi har ju just nu kapacitet på 100 som vi säger är skalbart till 200 med utan större investeringar. Det behövs några personer till anställda i så fall. Förra året så investerade vi i ytterligare lite utrustning så att vi har mer redundans. Vi flyttade också in några av processerna in-house. We see all these things as a building block to be able to be leading on the market. We entered the USA in 2024. Last year was the first year of Up and Running. We managed to take our first order through the USA company last year. We have two people right now, but we intend to increase the number. something in the USA. We have also seen this clear shift and it has set new requirements for us. We were on the move quite early with this shift and especially when it comes to these EDF projects. EDF projects are interesting because it is a way for us to get in touch with the leading defense companies. So we actually see it as a strategical approach, perhaps more to build our network in the industry than the specific development work. The development work is also interesting, but even more interesting is actually to get into these defense networks. And we have also received further business from defense related projects during the year. So we see a clear shift and we need to make adjustments and we think we have done so in the form of att satsa på de här IDF-projekten och liknande. Men vi har även mer som vi behöver göra där. Jag återkommer lite till det också. Det första grejen var ju att ha kvalificerad rymdårdvaro. Det som är kanske mest intressant nu är ju då nästa generation. Vi har ju tidigare sagt att den ska upp i rymden här under året, och den ska faktiskt upp i rymden i oktober, är planen nu. Sen vet man ju, det kan ju alltid vara dåligt väder och liknande, men planen just nu är att den ska upp i rymden i oktober. Vi kommer att gå ut publikt med till kunder och sånt i augusti i år, men vi har ju redan pratat med utvalda kunder, så vi har ju fått våra första ordrar, det gick vi också ut med i kvartalsrapporten på Nästa Generation, så de ska vi faktiskt börja leverera på redan i slutet av detta år. Det som är intressant med Nästa Generation är ju att vi har ju för varje generation så utökar vi också, vi höjer vår kvalificeringsnivå, men vi utökar också scope på våra produkter. So there will be more functionality and more features on the next generation that we may not be able to talk about right now, but we will talk about it later.

We have in our plan to expand the software environment, the basis is our operating system, we call it Skoos.

Then we have put on Loom. Loom now has Fly Territories also up there. the Italian Iridi constellation, as well as the Bifrost project together with the Swedish and Danish defense. And during the year, we will also go out with a cyber security program package. We see this, and this is driven by the growing need for the defense market, of course. So this, that we are going out with cyber security now, is actually a response to the shift towards the defense market. Then we see that we have good opportunities there, especially with the next generation of products. Production, up and running. Last year, we took another process step to be able to work with our short lead times and we also found some redundancy. We are not limited by equipment or premises. If we needed double capacity, we would need to hire some more. In the USA, step by step, since 2019, we had our license and distribution agreement with Moog. We converted that in 2024 to non-exclusive. It is also limited to the EX10 technology. MOG and, as we see, will continue to market this. So we absolutely see that we have the opportunity to do more business via MOG on this. We have had two bachelors here who have gone into important American defense projects. So they have been, of course, important references for us. Last year, we decided in the context of... The purpose of the renegotiated ICA was to set up our own business. We saw that we also want to work on the market ourselves, especially now when we are going to come out with next generation products. So I managed to bring it together with both product development and our investment here in the USA. We got the first order last year via our American data company. It was to a leading ISR companies, that is, defense-oriented sparring satellites. We see that we will be able to win more deals through our American DOT companies in the future.

And also, in parallel, continue to work with MOG.

The EDF projects are important, as we see, to be able to build networks and It was established in the defense sector. One of the projects was called ASIMOB. It's about autonomous operation. Autonomous operation requires fast data processing, a lot of real-time processing to be able to make fast decisions in order to take measures, such as avoiding a hostile satellite or the like. This consortium is led by Leonardo, but in the consortium there is also Thales Aligenia, Airbus and many other larger companies. And we have one of the larger roles, not the largest roles in the consortium, but one of the larger roles in this consortium. Then we are also part of this consortium that has been awarded for 5G for defense. It is a safe 5G communication from space. It's led by Integrasyst, a Spanish communication company. Maybe not one of the biggest, but well-established. This aims to demonstrate, and to be able to run 5G, if you want to run 5G with high bandwidth, you need to run it regeneratively, and then it takes a lot of data power to be able to do that. Vi deltar i båda de här projekten, både med vår hårdvara, mjukvara och även med tjänster, det vill säga utvecklingsarbete. Det som driver hela marknaden nu, det är ju ISR. ISR är ju Intelligence, Surveillance and Reconnaissance. Egentligen kan man säga att det är strategiskt, operationellt och taktisk information. Det finns till och med en del som pratar om IST, Intelligence, Surveillance and Targeting. The goal with tactical information is to locate interesting objects, movements and the like, and to be able to act on them directly. This is known from experience from the war in Ukraine, where they talk about the transparent battlefield. Much of it is actually space-based, the transparency today. Vår väg framåt då? Jo, hårdvaran är ju viktig, det är ju grunden för oss, men det är ju inte vårt slutmål. Vi vill ju bygga på med en mjukvarustack och vi har ju tagit steg för steg med SKOS, Loom och nu kommer vi även komma ut med Cyber Security. Nu ser vi ju också då, baserat till exempel på det samarbete som vi annonserade här nyligen, att det finns möjlighet för oss att göra mer avancerade applikationer baserat på det. So we also see it as an interesting opportunity. We think we should try to explore it, especially through this collaboration that we announced recently. This collaboration is about low latency ISR, to be able to get information quickly from spawning satellites. It is a demonstration mission, where two satellites are going up, Prove that it works, or show that it works, we can say. And why is this interesting? Well, it's to move more functionality up in space, to become more resilient. Now we're not dependent on ground contact in the same way anymore. It's to be able to do things faster, to be able to do things autonomously, and that being able to do it autonomously It can be thought of as a kind of orchestration of satellites. So if there are satellite constellations with many satellites, or maybe there are several different satellite constellations with different types of satellites, then maybe you should be able to get them to collaborate. And that individual satellites can send information via this communication warehouse, which it then processes quickly, and then you can send it to other satellites. Maybe based on what you have seen from the first satellites and get these constellations to act as autonomous systems. It opens up great opportunities. This is what you are trying to achieve with missile defense, but it is also very interesting just for spawning information. So for us, this is a way to test and be involved. i ett konkret projekt få utveckla en del sådana här funktionaliteter och kunna demonstrera det. Så vi ser det här som ett bra första steg för oss. Det är ju ett konkret och relevant steg på att utveckla vårt skåp något. När vi ser ambitionerna framåt, samma som tidigare, vi vill ju ha tillväxt. We want to increase in the US. We want to take advantage of the opportunities in Europe right now. And I think we have done that in the last quarter. Here we ordered from the head of the European defense company, from Europe, from Lotto Orbital and the EDF project is an example of that. Then we have added that we will increase our microsoft range. It is based on the recently announced collaboration where we will test a number of new applications, but also that we will now go out with this Cyber Security Suite, which will be applied to our computer rooms. So that was our first quarter, so now we open up for questions. And the questions should be written in the chat, and there have been some questions here, so we can start. The first question is about Storleken på orderboken. Vi går ut med affärsuppdateringar strax efter varje kvartalsslut. Då pratar vi om kontraktsvärde eller kontrakterat värde och orderingång. Kontrakterat värde kan vara typ EDF-projekt, finansierade projekt, eller det kan vara garanterade minimumvolymer. Ordrar är ordrar. Ordrar är faktiska avrop. We usually differentiate between orders and contracted value. Contracted value also includes the order input. But a contracted value is not here with the automatic order, but it will be later when it is cancelled, for example. We got another question here about the waiting time from order to delivery and revenue delivery. Yes, we have a standard delivery time three months. In some contracts, we have contracted a little longer, but that is if the customers want to be able to order a little larger volume at once. But then maybe it can be another month, if you can be a friend of Matias, we can deliver very quickly. And this is perhaps also unique so far what we have seen in the industry. It depends on how we have set up our supply chain and production So it's part of our strategy. Then it's like with revenue management. Hardware takes the revenue from delivery. Softwares are always annual licenses. They are spread out. That's why it can be, and we usually say that the mix can be a third, maybe a fourth, a third is usually software worth right now. Our goal is to increase the share over time by launching these new hardware packages. When it comes to gross margin, we have gone out with it earlier. We have relatively high gross margin on our aircraft hardware. And when we get bigger deals, we see that it becomes more aircraft hardware and less what we call EM Engineering models, lab hardware. So the hardware margin itself is good, but then we also have these annual hardware licenses that are on top of with an even higher margin. Our services have a slightly lower margin, but it is a smaller part of the mix than it usually is. And that went out earlier in the quarter's presentations, so if you look back, you can see it. The next question was about the ESA budgets that are increasing. ESA got about 20% more for this coming three-year period than the previous three-year period. Now, of course, inflation has been adjusted and so on, but it was still an increase. Now, unfortunately, which unfortunately does not play such a big role for us, was that Sweden was one of two countries that chose not to increase, but rather to reduce its contribution. But that's perhaps a detail in the context. We have very few deals with ISA projects. We have finally chosen to stay away from ISA. Again, we have invested in commercial customers and defense customers, and that's because Egentligen är det där som tillväxten har funnit. Nu, det som händer nu med ESA är ju, men det här kan svänga runt, för ESA kan bli mer intressant, men då är det ett speciellt perspektiv. Det verkar som att det finns en drivkraft mot att använda ESA som en projektsamordning för pan-europeiska försvarssatsningar. Man kallar det, eftersom ESA inte får vara försvarsorienterat egentligen, så kallar man det resilience. There is a programme called European Resilience from Space, or ERS, and it will be administered by ESA. We see those ERS projects as interesting. But otherwise, pure ESA projects are really not our main market. We focus on commercial and defence, and that's where we see that the market exists as well. The customer profile, yes, but it has changed dramatically. We saw that when we went out with Q4 reports earlier this year, we showed how the mix of deliveries was. It had shifted from 2024 to 2025, dramatically towards defence. We see that this shift will continue. We see that the proportion of defence will increase further.

Om vi har fått några nya oväntade marknadskrafter, några game changer på marknaden.

Alltså vi brukar ju tänka att den största game changern som har kommit nyligen, det var ju den här tyska jättesatsningen i november. På 35 miljarder euro över fem år, så det är 7 miljarder euro per år. Det är ju lika mycket som ESAs budget per år tror jag också. Så det var ju... Unproportionately much against what Europe has done before, but still after what the Americans are doing relatively. So there is more to do for Europe. And the Frenchmen also went out and increased their budget. It was from 6 billion euros to 10 billion euros over a few years. So we see what has been a game changer in recent times is actually the change in Europe. The USA continues. They are investing in missile defense. with Gov&O. Then what happens with Gov&O, we want to see, but they absolutely focus on missile defense, or at least missile tracking, missile detection seems to be an important ability for them. So of course, when you can ask about this increase in Europe, does it still mean that we will turn our strategy towards the USA and just focus on Europe? No, we see that we need to do both and. The US is still the largest market, but Europe might be the fastest growing right now.

So they are both interesting for us. The question about the communication work that we went out with this week.

Det kommer ju komma ut mer information om det här under året räknar vi med. Det kommer bli publikt vad det här rör sig om under året så då kanske man kommer kunna förstå lite mer om det. Just nu så kan vi inte säga så mycket mer om exakt vad det innebär. Mer än att vi ska samarbeta med det här bolaget och utveckla tjänster som ska gå på de här satelliterna. Det är ju någonting ändå som vi är What do we see on which markets that are at the top and so on? Yes, first of all, generally speaking, there is a shift towards defense and civil defense. I can say defense and emergency, which you can basically put together. That's the most important trend. It is clear that commercial markets are still there. But civil and civil defense is the most important. Then, which markets, if you think geographically, the USA is the largest, important for us. That we will continue our intervention there. We see ourselves as a challenger in the USA. Then, of course, to maintain our leading position in Europe. And we also think that we have good opportunities in some countries in Asia and maybe the Middle East. I would say Japan and Korea we have got projects in.

Det är viktiga länder för oss också. Då ser vi om vi får in fler frågor. No.

We got a question here about how many we will release. We don't usually say that, because we don't want to reveal exactly how much we pay for each computer and software and such. But we won't go up to 200, maybe. We'll see towards the end of the year. We have to wait with that. We have to get back to that. Den här frågan om rekrytering, ja, det är klart att vi har ju haft, det har ändå varit, det har varit bra för oss att rekrytera ändå relativt sett, tycker jag, det senaste året. Det är väl också lite grann det, vi har väl en bra ställning, vi har väl kanske ett intressant bolag. Så att vi har väl, det har ändå varit bra och jag tycker ändå att Uppsala, northern Stockholm, our recruiting area is roughly Uppsala, maybe Västerås, northern Stockholm. It's still good, there are a lot of big companies there, Saab and Ericsson and stuff that we can recruit from, we can say. So it still looks pretty good, I think, for us on the recruiting side.

Mm. Yep.

Då får vi tacka för intresset. Tack för att ni tog er tid. Som sagt, det här spelas in och kommer läggas upp på webben efteråt här. Så tack för idag och på återhörande.