Gomspace Group (Stockholm:GOMX) Q1 2025 Earnings Call

0:01 Welcome to today's presentation where we have the pleasure to present GumSpace. The reason for today's presentation or the subject is the Q1 trading statement fresh from press this morning. As always, we are joined by CEO Carsten Dijkman from GumSpace to help us through today's presentation, the results and answer questions. We will do the main part of the questions in the end. As always, there's a box down below where you can ask your question. Do feel free to do it during the presentation. But we will keep the main part or the big part of the questions after Carsten has taken us through your presentation. But for now, I will hand the call over to you, Carsten.

0:41 Thank you and welcome to this Q1 trading update. I thought, first of all, I wanted to extend a big thank you to everybody at Gump Space for two years of really, really hard work, which I hope you can, you will see, you have read our statements already and I'll take you through it. But just wanted to show you what we do in the morning. We roll out our sleeves because this is really, it's a lot of hard work and it's starting to pay off. So everybody at Gump Space, thank you very much for hanging in there and for pushing forward. As we say to our customers, we make space yours. With GOM Space, it's possible to go further than ever before. And what we say to our customers, our branding, it's yours to explore, it's yours to innovate, and it's yours to reach. And that's really our mission.

1:27 We are helping companies, we're helping people, we're helping the earth to use space, and we can go further and further. And recently you've seen we have sent a satellite out that needs to fly 200 million kilometers away. So that's GOM Space. Today I'll talk about investor communication. It's a repeat as a service for you. We'll go through the highlights of the Q1 trading statement. We'll dive into the business units. This is new that we are reporting a bit more on those. Now it's in more detail. What are we doing at Gumspace? And then there's a strengthening coming up with the balance sheet with a directed issue. I'll talk about that. I know there are a lot of questions. I'll try to answer the best I can and then we'll summarize it. But first, Clarity and Communication.

2:15 Two key values for me. Things needs to be clear. We need to communicate. We do that internally all the time and we do everything we can externally to keep you up to date. So just to repeat how we do it when it comes to U.S. investors, we send out quality reports as required, as is normal, but we are now doing trading statements in Q1 and Q3. What you see today is a trading statement, so it's a lot shorter. It's really focused on giving you the key messages without having to give a lot of details. You'll get that in a mid-year report and a full-year report. We are guiding now on EBITDA and on revenue as well as in addition to free cash flow. This is new from 2025. We'll dive into that. And also remember the rules. If there's something new that really would impact the share price up or down, doesn't matter. I am obliged and I will communicate quickly.

3:08 I have to do that. So if there's no communication, there is nothing that necessarily we deem will impact the market significantly. There are other press releases that we send out more for information, not because we have to by the rules, but because we think it's good service when something interesting has happened, we communicate about that. And in general, I urge you to check in on LinkedIn, Facebook, Instagram, where we are posting regularly. Many of you are doing that. I have a feeling there are also new investors. We have increased actually. I think there's more than 2,000 more investors on Nordnet. So likely you're not all hooked up. Go into LinkedIn and you'll see more information coming on a regular flow. Okay. However, let's get started.

3:53 So I have some key messages for you today. First of all, we are entering into 2025 with clarity and with strength. As you can see from the numbers, I personally think it's pretty good. I think GAM spaces can be proud of this. We have a strong start of 2025. We're ready to scale up and to capture the opportunities that has arisen over, I would say over the last three to six months with a strengthened balance sheet. It will be strengthened in Q3. We'll dive into that. That's actually really, really a key in order to launch us forward Global expansion continues. I will talk about Indonesia and I mentioned here also Singapore, Southeast Asia, but also North America. Clear message. Yes, there's a lot of tariff discussions and all kinds of speculations.

4:40 We don't care. US is the biggest market. We are full speed ahead. We are not hesitating on that front. I don't see any reason to hesitate. So we are full speed ahead if anybody was wondering. And then we have a really good momentum now towards our strategic goals as well, towards marine domain awareness, towards really building value for the company, for the investors, for the employees, and for our customers. So we are on a very good track. So four key messages for you, strong 25, we're ready to scale with an improved balance sheet from Q3, global expansion continues, and we have a very good momentum according to our plans. In numbers, our revenue went up 77% compared to the same quarter last year. We ended at 89 million SEC. That's a good achievement.

5:27 I think it's the highest quarter we've had in a very long time, if not the highest. EBITDA, positive EBITDA, great. 11.3 million SEC in EBITDA compared to minus 16.6, same period last year. So it's 26, 27 million improvement. That is really, really good. We couldn't put in a percentage because it's minus 177%. That's a joke, but it looks weird when you say minus percent. So this is good. Now we are positive. There's a little asterisk, adjusted EBITDA. It's because we have the share-based program is by rules. It doesn't cost us any cash, but we have to include it into the P&L. And what we've noticed is that many of the peers that we have compared to, for example, Spires and others, you'll read that in the analytics report, they're actually reporting an adjusted EBITDA, but they also take it out.

6:18 So we thought, hey, let's compare apples to apples also for you investors. And you can see these are the same numbers that you're comparing with. Last but not least, the free cash flow. We maintained a positive free cash flow in the first quarter. It's better than last year, it was minus 12, but Cash always fluctuates up and down. The good news here is that we are on a track to keep the positive free cash flow, which is our goal for the year. We will invest more, so there will be some impacts, but we are still going towards positive free cash flow. But on the other hand, we also want to make sure that we are capturing a growth, which may cost a bit more cash this year than planned, but it's all for good reasons. Nevertheless, we keep our guidance free cash flow positive, and it was in the first quarter.

7:03 So let's dive into how we run our business. So we have the three business units and we lead our business through that. We have vice presidents in charge of each of them. They're mini CEOs, if you like. We are measuring them all the way down to EBITDA, which we're now sharing with you so you can see that. um their programs their products which we will look into there's distinction between those also as a service to new investors and then there's north america which is both but because it's such a big market we have decided to make that its own business unit and we are measuring directly on that business some cool new pictures here i recommend you to read the the annual report you'll you'll see some of this as well but these are the programs so these are the satellites that we're building on contract Remember, we are building the full satellite on customer specification.

7:53 It's typically a contract for one, two, three satellites, maybe 20, maybe 50 satellites. It's a longer time of a contract. So it's a little bit of a different nature. There's risk involved. There's a lot of benefits in having that. And it gives a predictability because the contracts are running longer. Products, these are the insights. So the satellites are the flying laptops. Inside those flying laptops, we have power supplies, we have battery packs, et cetera. So this is the other business unit we have selling those products to universities, to competitors, to anybody who wants to buy. And we have a very strong portfolio, probably the strongest in the world in terms of being able to service a full satellite pretty much with all our own products and components here.

8:41 I think it's just such a cool picture. This is a battery pack that's then packaged here ready to go out to customers. Programs and products, and then as I said, North America more from a geographic perspective. Let's take a look. Here's the revenue, 89 million in Q1. Great. You see the outgoing trend. We were significantly higher than last year, but we also beat Q4 2024, which was quite good. So we're on a good track. This is driven by the backlog. Remember, we built a good backlog last year. So the order backlog is stable, which means we have a fairly stable revenue per quarter that we can rely on, plus minus.

9:27 But nevertheless, there's no particular reason to think that it's going to jump quarter to quarter significantly. You see the little orange one is a 12 months trailing, 12 months average. You see it's trending towards the 300 million K. This is a retail service to you, so you can see which way this is trending. If you break it down into business units, programs is the biggest, 49 million out of that. Not a surprise. They should be. The contracts are bigger. It's the nature of the game. Products coming in at 32 million is actually also a good result compared to previous year. You can see it was 23 million there. And going back to programs, we had 20 million same period last year. So all the business units are improving. There's slight improvement in North America as well. So in general, trending as we wanted it to.

10:20 Programs gives predictability. Remember that lots of contracts is good. They run for one to three years. So we know more about what's going to happen. Products is a higher turnover, so it's a little bit harder to predict, but it's a very lucrative margin, which you'll see on the next slide here. So EBITDA adjusted for a couple of million. It's going up now. It's going in the right direction. It's positive. We had a small positive in the Q2 last year. Other than that, it's been negative for quite some quarters in a row here. So we are trending in the right direction. breaking it down so programs at 5.2 million significant improvement from last year last year remember also we were still sort of closing off the programs that didn't make a lot of money for us and we were somewhat challenged in the past with that I think we've cleaned most of it up there shouldn't be much left and it's also shown here that we're actually able to deliver a profit But look at products, even though they're low on revenue, they give you a higher EBITDA.

11:22 So that's showing this, that you get simply more contribution for your dollar when you sell something compared to programs. There's nothing wrong in that. It's just the nature of the game. So products are actually leading the pack here with 5.8 million in EBITDA. North America, small and positive EBITDA. This is great. Strategy for North America is not to make a lot of profit right now. It is to grow. mainly organically. So we simply need to take more and more market share. We need to close more business and then we reinvest. So we don't have an ambition that we have a huge profit in North America. If you start seeing better profit, we will reinvest it into more resources, go to market system engineers, whatever we need. So all three business units well on track here.

12:07 EBIT for the full company, slightly positive, 0.8. Great. This is really good. I didn't expect it would come here in the first quarter so soon, but it does. Obviously, I knew a few weeks ago, but I didn't expect it in December. So this is good. And we are net profit positive even. And why is the net profit is more for tax reasons and some other offsets that we have. But actually, we are positive 1.3 million SEG net profit. That is probably close to a first time in the company history. And it's adding to equity. So whereas we'll be eating away at equity over the years, now with a net profit positive situation, we are actually starting to build a little bit of more equity. That's good stuff.

12:55 Free cash flow, as said, it's stable. We are still positive here as planned. Q4 is actually slightly higher than what we had reported earlier, but it's correct in the annual report, so at 36 million. The note I want to make here is that just wrapping up 2024, When we started in March 23, cash flow was not at all at that level. EBITDA was not at all at this level. We set ourselves a target the first two years in 23 and 24. We want to be cash flow positive, free cash flow positive. And we achieved that last year. So I'm not going to show you the past anymore. Those of you who follow for a long time, you know I like to show that. But we're beyond that. We hit our mark. And now the focus is forward also on free cash flow.

13:41 Last but not least, auto intake, indication of what may come into the future. I saw there were a couple of questions on auto intake. We're sort of at par a little bit more than the first quarter last year. So you can say, hey, it's low. No, it's okay. We had a very good Q2 and Q4. Programs is really the reason where we have the big contracts and we didn't close any major contracts in the first quarter. As stated, and I have stated already, I certainly expect that to recover in Q2 and Q3. The nature of the orders from programs is that they are relatively big, 20, 50,100 million SEK at a time. So, of course, you have these jumps and we don't get a lot of them. Whereas on the product business, we have a lot more orders coming all the time.

14:26 Product business unit, though, take a look. 44 million SEC in the first quarter. That is a lot. That is really, really good achievement. So we would expect, and I can see there's not a comparison to last year, but the order intake there was probably about 20 million in that range. So we have a significant improvement compared to last year. A couple of big orders coming in to hit this number, but that's fine. That's the nature of the game. That's what we want to do. And then North America is steady, slightly growing. Reader service here, it's always good that if you look at the revenue for the quarter and you see an order intake is bigger, because that means you are, if it's the same level, you're sort of stable, you can expect that you get more or less the same results for the coming quarters. If order intake goes higher than the revenue that you had in the quarter, it means you have a chance of growing compared to what you have.

15:23 So you can see we're slightly down here. As I said, I'm not concerned about it because we have a really, really strong product business unit result, and the program business unit will pick up for sure. So all in all, good. We should be stable from where we are now, and we keep focusing on strengthening our order intake. Okay, let's change gear. So Let's go through what GumSpace is, also service for new investors here. We are world leader in satellite solutions. Yeah, we have a lot of technology, but what we're really delivering is solutions. We are enabling governments, commercial organizations to reach goals that they can only reach through space and not in any other way. And we are a world leader in this area here.

16:14 We are transforming space capabilities into operational impact. We know how to put things in space. We know how to make it work. But in the end, it has to have a function, has to have some kind of operation, be it for military operation, early warning surveillance, or be it for commercial services for environmental monitoring or imaging or what it could be. So GAMSpace is really redefining how nations and industries leverage space. We are really getting there now where we are very confident in how we do it. We know how to make it work every time and we understand how we can start helping the different companies achieve a lot more. We have close to 20 years of flight heritage, one of the oldest in this new space industry and very much also critical space-based infrastructure, for example, for early warning and surveillance.

17:07 We'll get into what's happening in Denmark later. I see there's a question so we can talk more about that. So there are a couple of key areas, trends in the market today that we tap very well into. One of the key areas we have focused on is marine domain awareness. So what's happening on the oceans, which ships are there, what are they doing, and are they supposed to be there, and what they're doing, is that okay? So really monitoring that. We're very strong in that area, and that's also, you'll see a number of the cases we've closed recently are in that direction. Secure communication is a key, not only via Starlink, for example, and Elon Musk providing data services. There are other examples that we are working on.

17:53 Secure communication to ships, as an example, is important, and also secure communication with airplanes. What is characteristic of ships and airplanes, it is that the bridge on the ship or the cockpit on the airplane are not connected to the internet. They have to communicate via other channels for security reasons. This is why you heard recently, yesterday in New York, there was a big fuss that had no radio communication anymore. And then that actually was a very dangerous situation. So some of the things that we're doing, we started building a communication network that would cover all airplanes globally. airplanes disappear. They disappear into the water. We don't know where they are. Why? Because when you're sitting in the back of the plane, you have data connection. You can do streaming.

18:38 You can even do calls if they allow you to pay enough money. But the cockpit, you don't want to know where the plane is. But that's because the cockpit is isolated. And when you're over vast oceans, there is no connection. But via satellite, we can do that. So these are some of the things. These are real issues that we deal with on Earth that we can enable via space. And GAMM Space is right in the middle of that. In general, Earth monitoring climate, it is here to stay. Climate, it will be on our minds for a long time. And there are a lot of things we can measure from space. More than 50% of the parameters we are measuring ourselves against for the 2050 Accord is, Climate Accord is measurable only from space. Now, let's take a real example of ship sailing. I showed it last time also. I think it's such a great example.

19:25 It's done together with our partner, Unseen Labs from France, that we proudly support. We have been delivering technology for them since the beginning, and they have an excellent system for monitoring the oceans for ship traffic, and including something that we can use on Friday in Greenland and in the Baltics. We just need the government to start buying something. We are ready to go and rock and roll. So what does it do? Hey, this is the Baltic Sea. Orange one on the sea cable. One was caught not so long ago. Remember outside of Bornholm and there was one damaged up by Finland. The white one is a ship transmitting its ID. It's done via something called AIS, a transponder.

20:10 So this is me, here I am. This is my intentions and I'm okay. The red ones are the ones that do not transmit that information, but we still know they're there because we, via the satellite systems, can see their radars, we can see their walkie-talkies, we can see what they're communicating or how they're, not what, but how they're communicating So we know who they are and where they are. So if I remove all the white dots, it's interesting and not surprised if you get up to St. Petersburg, there's a lot of red ones, probably ships, the dark fleet from Russia that doesn't want to be recognized or known. But you see there are a few up in Kattegat and there's one down close to Poland. These are the ships that are not necessarily coming with good intents and good intentions.

20:55 And I want to show you one which is a similar picture from around Bornholm. But we have identified this ship. The white line illustrates how the ship is sailing. It's a Chinese vessel. I think it's called a Yangshuo, number two. It was a ship that actually broke the cable outside of Bornholm not so long ago by dragging an anchor. And they say, oops, we didn't mean to do that. Sorry about that. Oh yeah, right. But it cut 25% of our data traffic. That wasn't good. So let's not do that again. But the ship was sailing in an erratic way. Those ships sails like that. And they did the same thing. This is straight of Gibraltar. You see the Africa on the lower side. You see Spain on the other side. They sailed in the same way. And there's a lot of cables going across here. So it's very interesting. We know that. We can see that in real time.

21:42 So when a ship starts sailing like that, something is wrong. That's not how you do it. And if it's at the same time, it's not identifying itself. You know it's wrong. Better get your jet fighters or your patrol boats out there and stop them. It's possible to do today. We know how to do it. So let's get going, Danish government. So let's change gear here also into strengthening the balance sheet. It will happen in EQ3. Why and why not? repeating from last time. Well, the market is changing. So since we did our budget in December, Trump has been in, he's been in for more than 100 days now. The whole threat level across the globe has gone up big time. We no longer know really who's friend or foe, can't rely on the Americans anymore.

22:30 There's unrest latest now in India and Pakistan this morning, not good. So we, in general, there's a heightened threat alert. It has increased the defense budgets, also in Denmark, you're following that yourself, and across Europe, and there will be more spending coming in that area. And there's a much greater sense of urgency where procurement cycles were very, very long. They're gonna get shorter for sure. So that is why we're acting now because we definitely, with the satellites, we have something that is very useful to understand what is going on, national security, how do we protect ourselves? How do we get early warning if somebody is trying to do something that they shouldn't be doing or we do not like? You need a satellite network for that and you will be so much more efficient. So that's why we say, hey, this is a good time to do this.

23:18 So what are we going to do with the capital that we are raising now? Well, first of all, it's strengthening the balance sheet. That's important. It's a permission to play because the more government contract we will be looking for, you need to have a fairly stable company, which we indeed have as it is right now. But we want to reduce the time to market. We see an increased demand on the program side. We anticipate a bigger demand. And because there has been a lot of hesitation in government around Europe in particular to invest in satellite networks once they get going now, they're probably not going to wait a long time. They want to have it faster and sooner rather than later. So we need to be ready for that. The other thing is illustrated by the product order intake we have is that we see a demand going up and we need to be ready. We could have stayed with a lower inventory.

24:11 We've been very rigid on not spending more cash than we needed because cash was king. However, there is a limit to how tight a ship we can run. We need to unleash it a bit. We need to have more of our critical components, long lead items on stock so we can act quickly and capture opportunities and not lose them. Number two is accelerate solutions for defense. We already have solutions for defense. There's a lot more to be done. So there's a question about, can we do something beyond oceans and maritime domain awareness for surveillance? Absolutely. Absolutely. We can build solutions for Ukraine. We can build solutions for air defense radar systems that are mobile. We can track them in the jungle. We can track them in the deserts.

24:56 We know where they are. We can do all of that. And this is coming. And therefore, we also want to make sure that we are not falling behind on that. We are up to date and we want to stay up to date. And there are more demands coming. So that's also a focus area. And last is to capture the new market opportunities. There's a lot. Coming up, there is a question also on FMI or the Danish logistic procurement. They're having a lot of meetings. What can you do? More meetings to attend to. We simply are running low on sales capacity and business development. So we also want to have more people, not only around Denmark and Nordic, but certainly globally we see a trend. And in order to keep up with that, we want to make sure we have enough sales and business development people.

25:44 So these are the three more operational, actionable things, if you like. And then beyond that, as I said, we also wanna make sure that our balance sheet stays strong. It's important in order to win contracts. Okay, so let's do a summary of the directed issue. It's the same information I've given you before, but I have noticed one thing that people have been puzzled about, but let's just start first. Peter Hargreaves today owns just below 30%. For newer commerce, Peter Hargreaves is a British, a very wealthy man who has made his money on a trading platform, selling and operating a trading platform. So he invested two, three years ago. into GOM Space. And he came back when we started talking about we need more cash.

26:31 And he said, this is really good. I am so happy with my investment in GOM Space. You've done so well over the last couple of years. I am very happy to help you get even further. So we did a directed share issue, a directed issue to Hargreaves. It triggers then that he hits 40.1% ownership. So that has some consequences, but we agreed a share price of seven, which was about the market price at the time. And we will bring in, it will bring in about 196 million SEC. Sometimes in Q3, there's some administrative processes. But because he is now going beyond the 30% mark, he needs to make a mandatory offer to the market. This is a legal formality. It is not an indication or intent from Hargreaves to do that.

27:18 He just wants to support the company. Nevertheless, he has to do that. You are under no obligation as shareholders to take the offer. It's completely your choice. And the offer price, let's get to that. The offering price will be the 20 days volume weighted average leading up to the final approval. So when the final approval comes sometime in Q3, hopefully early Q3, we calculate backwards 20 days and you say that average price is the price you will offer in the market. I've seen there's been some speculations on is it the seven kroners or what is it? But no, it is the 20 days weighted average price at the time. Okay. So coming to an end, building momentum.

28:05 I really truly feel that we are building momentum. The teams here are working very well. We have a lot of energy. There's a lot of opportunities coming in and we are trying to keep up. And looking into the building momentum, we are keeping our guidance unchanged for the year, 320 to 340 million SEC in revenue. We stick by that. Adjusted EBITDA is a little bit different from before with minus one to plus 11 and continued positive free cash flow. I would say it's unchanged and we put it again here with confidence. Now, other indicators for you, sometimes I'll be asked, so what are the indicators? How can you help people? Well, obviously we have a lot of operational focus right now that's delivering our results. So the discipline and execution is a key and you see the results in the first quarter. We had a pretty good product order intake during the first quarter, which is helping us to get to a really good start of the year. We already have surpassed what we were expecting for Q2 by having such a strong first quarter. So that's good.

29:17 It's the best ever. And there's good contribution margin in that, as you know. Program business is executing with discipline. We were able to execute on the contracts. We delivered a very good revenue. No, auto tech didn't come in the first quarter. It will come later. I'm not worried about that. But we are really increasing our focus on discipline and execution. As the volumes are going up, we are strengthening our supply chain. We are strengthening our ability to put together the satellites faster and more cost efficient and with higher reliability. This is an absolute key because I'm confident that we will close more business, but we also need to be able to deliver. So we have a lot of focus on that in particular in the program area. Last but not least, I said North America is full speed ahead.

30:04 We have no particular reason to change the plans as it is. If you have to pay a few tariffs, fine. It is what it is. I want to capture a market share over there and I want to build a GOM space brand because it will generate volume and it will generate a profit over time. So that's the momentum we are building. So let's close it off. Great revenue for the first quarter, up 77%. Positive EBITDA, fantastic, 11.3%. Our operation is paying off. We are delivering positive results. Free cash flow is there and net profit also happened to be positive. Fantastic. So we entering 2025 with strength and clarity. We know what we're doing is we have a very clear roadmap ahead. We are ready to scale. Our balance sheet will be strengthened in Q3.

30:54 Global expansion continues North America and Southeast Asia. dwelling a second with Southeast Asia. Yes, I went to Indonesia with Lars Lykke. We were out there to discuss how to continue with our joint effort. I don't know if you're aware that Lars Lykke was actually the one that signed this government-to-government financing almost four years ago. So he was there to help to progress it. We have a commercial contract. I was there to reconfirm the content of that. Some of you saw the pictures. We are still waiting, the blocking point, we're still waiting for the financing from request from Indonesia to Denmark. The money's on the table, everything is ready. The new government with the president is still working through their policies.

31:39 One of the key policies is actually self-sustaining food supply, including protein. And guess what? 85% of the protein consumed in Indonesia is coming from the oceans. It's coming from fish, seaweed, and other things. Our satellite system is exactly that, to protect that sovereign national resource as it is. So we are continuing. The government is making their decisions, not as fast as we want to. It's OK. And Lars Luecke was out there also to restate together with me that our intentions from Denmark and what we're doing. So that's the best I can give you. Things take time in Indonesia. And actually, it's OK for us because we've got a lot of stuff to do already. Oh, and I wanted to say also Singapore. I also visited Singapore.

32:28 Very good traction for us there. We closed two important contracts last year, as you've seen, and being there is just reconfirming that we have a good relationship in Singapore. They're building a space, their space industry, and we are definitely right in the middle of that and a key partner to important players in Singapore. so very encouraged about that and in general we see southeast asia activities are increasing philippines vietnam all all the countries have a need for supporting their national interests via satellite networks so it's coming so clear strategic momentum we are moving forward uh we are it's aligned with our guidance for the 2025 and i strongly believe that we are on a very good track towards our strategic objectives and building long-term value for everybody you perfect let's jump into some uh question carson i think there was a lot about indonesia i don't think there's any more to cover you're told where you are in the process you're told what you did out there with our foreign minister so i think no matter how i ask we will not be much wiser than what you have already told us there so let's go to uh statical and this IOD satellite, two prone questions.

33:43 One, have you gotten any feedback data or something like that from the launch? And secondly, how many of the satellites potentially could you build in this? There's a mention of a number of 287 on the whole constellation. So the first launch, any feedback from that launch of the first satellite? And secondly, how much do you expect to be allowed to build off that?

34:09 Yes. So let's take the first question first. It was launched. It was a live event. It was on TV2 as well. Some of you saw it. The big antenna, it is a very long VHF antenna. I think it's three, three and a half meter long. It has been unfolded and all the tests and so-called commissioning work is ongoing. So Statical is testing. We're not directly involved with that. Statical is testing and running their processes right now. But the antenna is unfolded and everything looks fine from a mechanical release perspective. And now they're conducting the test and verifications and also starting to look at how to use it, because this is also about understanding how to use a satellite for the communication with airplanes. In terms of volume, hey, you know, it's a Spanish government with Indra and others who are putting the money into this.

35:01 They will need at least, I believe it's 288, you can calculate that quite precisely, satellites over time to have global coverage. And the point with this is that you can't start and say, well, we just have 12 in the beginning, because then you don't cover everything. So you have a limited capacity. So you need to get to plus 200, probably closer to 300. There will have to be funding coming for that eventually. It's not going to be cheap, of course. It's not going to be for free. So we'll see how fast Static Health verifies what they need, how they put together the specification. I expect it takes at least a year, probably two years. But are we well-positioned from ground space? Of course we are. We did build the first satellite that they launched. But we'll see how it plays out over time.

35:48 In the question lies, can we build that? Yes, we can. I'm standing right here. We can do one satellite a day if we really have to. So yes, absolutely, we can build those quantities. That's not a problem. So we stay in there. We stay close to Statical. We stay close to the investors who's going to finance this eventually. So we make sure that once they're ready to go, we are also in that discussion. Perfect. Then about the Danish defense organization, I'm very grateful that the one asking have helped me translate this to English also. I think we should break the question in about this Danish defense acquisition and logistics organization. Have you come with a proposal to suggest a solution for surveillance of Arktis?

36:36 Have you suggested a solution for the surveillance of the Danish What other suggestions could Gomspace make for Darlo?

36:47 Well, the answer is yes. But to elaborate a little bit on that, of course, it's the first time that the Danish government and military start showing some kind of interest for buying satellites from Denmark, which is to me still bizarre that Denmark is not investing in their own industry. having traveled the world and seeing how other countries are doing it. But now it's coming. So, of course, we are in there. We are discussing with all the appropriate authorities on the military and defense side. We're discussing with the politicians. We are also on our own accord putting forward proposals. I think we have a pretty good idea of what is required. So, yes, we are in the middle of all of that. Of course, we are. And remember, national security prevails here, which means Denmark doesn't have to do a public tender anywhere.

37:36 They can actually invest directly into Danish industry. So there you go. How long time will it take? I don't know. I hope it goes fast. Our Prime Minister says bye bye bye. So not bye bye, but bye bye bye. So so hopefully that people are listening to them. But we are we are ready. We are geared for that. And the response part of the investment I talked about being ready because it's going to take a lot of resources for some time in a sales phase to specify this. And I guess building satellites in Denmark, which we already are doing a little bit easier than building the big frigates that we want to build in Denmark.

38:12 Yes, the satellite networks makes a frigate a little bit more productive, effective because I figured a ship, a patrol boat can only see about 50, a little bit more kilometers with a radar. It's not very far when you're sailing up around Greenland. So with the satellite network, we can tell them, as I showed you earlier, where to go, who's okay, who's not okay. Go there where there's a trouble instead of just sailing randomly. It's probably not what they're doing. But anyway, the satellite network will definitely help. And then to stay in kind of that, there's a question here. You have a strategy on domain or marine domain awareness, but I think you already touched upon it. There's a question here. Could you build something for land surveillance in GOM space?

38:58 Yes, absolutely. Absolutely, we can. We provide the satellite. We have the payload, which is specialized for marine radars. But if you go land, it's other types of radars that are being used, other frequencies, but it's the same principles. So we do see an increasing need in Ukraine, but also in other parts of the world. So absolutely, we can deliver that. We are not the limiting factor here. It's the demand, and we do see that the demand starts to grow. Then a little bit clarification. I think you gave us the, but there's a question here around the price Hargreeves has to offer. As you told, it's a weighted average pricing around the offer. But there's also a question about the seven. Is that a minimum, the seven? And then the new minimum will be this weighted average price if it's higher or else it's the seven.

39:49 So I don't know whether you can comment more on it regarding the seven, the original offer, whether that creates a button.

39:56 Yeah, I heard that question. I took legal advice just before to make sure that what I'm saying, I believe, is correct. No, the seven Kronos is not in play. The rules are that Hargreaves, whatever Hargreaves has traded the last six months, it's not just Hargreaves, but those are the rules. The previous six months trading, but on a stock exchange, would have set a lower price, if you like, or an upper, well, it would be a lower price. but the rights issue is not counted as a trading on a stock exchange so it is actually not relevant for this therefore the default is the 20 days average weighted volume weighted average price leading up to the approval uh so that should be quite clear so no the seven the seven coronas that's actually got nothing to do with this uh and well as things are going right now it looks looks okay Yeah, but that was nice to get that cleared out.

40:51 Will it change in the timing of the capital raise? I think the FID process was delayed. No surprise. But does that actually affect your ability to go in and invest into this future to start to build up to this one?

41:06 No, not at all. As I said, we did not actually plan to do the capital increase right now, but because of the way things were developing, we realized we needed the money. Not at all. Look at our cash balance. We are fine. We had a positive free cash flow in the first quarter. I have the money I need to execute right now. So we started executing the plans. It's not going to delay anything. The delay to the third quarter, well, what can I say? EU and a lot of administration, etc. It seems a bit silly, but it is what it is. So hopefully we have it in place in Q3 and early Q3. But we'll see. I can't control it. I'm trying. Believe me, I'm trying.

41:48 I'm trying to control the Indonesian president, but somehow he's not always doing what I tell him to. So sorry about that. You must be Elon Musk or you must create such a big company. Maybe there you can get the seats there. No joke. There's a little bit of questions, actually two questions, but they are around the surrounding. What is making you confident about this Q2 and Q3 better order momentum in the programs business? This is something you're seeing in your pipeline. Just some comments about why you are a little bit more optimistic about Q2 and Q3.

42:22 No, I say that because, of course, if you look at the first quarter order intake for programs, it wasn't a lot and it was less than the revenues. As I said, that is indicating your backlog is declining. Of course, we are working all the time. We have a large pipeline, as we should have. So that pipeline just leads me to give you the investor service that I'm not worried about it. And if I'm not worried, it means something will come in Q2 or Q3. So that's why I'm saying it. Of course, we have pipelines that are running for one, two, three, five years. Look at Indonesia. We are running now on year four, four and a half since we started. That's the time it takes to close this kind of deal. So we are already looking at things that will maybe close in three, four, five years from now. So of course, we have a long pipeline.

43:09 And when I'm looking at it, I'm looking at what I think can close reasonably in the next six to nine months. starting from almost zero in the first quarter, I'm fairly confident we'll have more than that. So that's the background. Perfect. Maybe a little bit of a question. I don't know how much you want to go into details. Is it improvement in OPEX or gross margin that positively impacted your EBITDA in this quarter? So is it the cost side or is it all our costs? But is it the gross margin you're really seeing going up with the top line, better utilization, or is it also the OPEX line that is giving you this?

43:48 Yeah, I understand the question. No, I would answer it this way. It is certainly a better profitability on the revenue that we are getting. Going back a couple of years again, we were running a number of projects where we were making no money. So even I could have made 100 million SEC in a quarter, but I wouldn't make any profit still. There would be actually no contribution. So all the overhead costs would be negative. So we have a better profitability on what we are selling. As you can see, the product business unit is trending upwards. There we also get good coverage. So it's definitely a more solid profitability on the revenue we get. And the other side is that, yes, we are managing the cost all the time. We will keep doing that.

44:33 We're very rigid. We need to grow, so we have to invest more and we have to increase capacity. Nevertheless, we are monitoring it tightly and we're not going to let it go out of control. So it's a combination of things. And we also had some projects that had a fairly high margin that we're closing in the first quarter, which is helping here. And I think maybe you answered, but let's still dive a little bit into it. Have your US business been impacted by the trade war turbulence?

45:00 No. I was there in Colorado Springs a couple of weeks ago, meeting with our customers and partners over there, including SAIC. I see no wavering from our customers. Will there be an impact for tariffs or not? Who knows? I mean, the whole world is speculating and nobody really knows what's up and down. So we've decided we're just at full speed ahead. Our partners, our customers want to continue to work with us. Nobody's indicating anything different. Will there be a bill to pay? I don't know. We'll see. But it doesn't matter as long as we keep growing our market share, because eventually we will be nicely positioned to make money there. What would you say are the key areas to where you can improve your EBITDA in the future? Product optimization, better contracts, material prices.

45:50 So a little bit of thoughts about what you could work with on your margin in the future.

45:55 Well, the answer is yes, yes and yes. Of course, we're running a professional business, so you need to monitor everything. We are honing more in on supply chain now as volumes are going up. We need to have better contracts and a better flow with our partners in a win-win situation so our suppliers understand what we're doing a little bit further ahead. And then also that we have good prices. from them and also things are delivered on time. So certainly we'll focus on that. We are focusing on efficiency in the room here behind me, that as the volume is going up on satellites that we can build them faster, more repeatability in what we're doing. So that will also help the EBITDA. In general, I would say we will keep growing the top line and we will do that with focus on decent profitability.

46:46 It will vary a little bit which kind of projects you take. But growing the top line, I think, is a key thing. But in order to optimize your processes, supply chain, and also production speed, you need to have a certain volume. It's very difficult to do on a low volume. So volume is important. And I think the trend you see right now that we have close to 90 million revenue in the first quarter with quite decent profitability is giving you a hint on which direction we are going and what we need to do. And there's also a question there, but you are also ambitious, not only growing top line, but also your margins in the future. Is that correctly understood?

47:22 Absolutely. I'm really very focused on, first of all, the EBITDA. Love to keep doing a net profit positive, but right now the EBITDA is the expression of our operational capabilities. Very focused on that. There are not that many companies of our type, I've said that before, in the world that are making money. Some might be a lot bigger in terms of top line, but they're not making money. So we have a very clear ambition that we want to be one of the first companies to really start making a profit here. I don't care that we are not the biggest, that doesn't matter. But I want to make money because from making money, you can also build a much more healthy business for everybody into the future. And then let's end with a question I think you often get. Is it your ambition to move from the first NOC to the main market on NASDAQ Stockholm? It was once mentioned in the past.

48:14 So a little bit about your thoughts. And I know, of course, it's not you to decide. It's your board to decide that. But if you have any comments about it.

48:23 Yeah, I will... like you say it's not really my decision i would say no why would we there's absolutely zero benefit from from going there my focus is building the business for you as investors we're going to keep going out into the world closing more orders more profitable orders we will make gump space a significant brand it already is we're going to make it even bigger and based on the volume growth and a tight operational efficiency we will make revenue That's all we need to do. The rest comes by itself. It really doesn't matter which storage stage you're on. When we are big enough, you can move to New York, but we have to be much bigger. Otherwise it doesn't work. So no, absolutely no speculation in that because it really doesn't matter for our share price and our access to investors. And there's one question more, but it's more like an inspiration to maybe you should invest more into your website. I don't think that's so investor related.

49:18 That's fine. I can answer that. I agree. I absolutely agree. And we are. And I hope you see that we have a little bit of a different layout in our annual report and the slides here. So hint, hint, we are certainly moving in that direction. Perfect. Then I was too short of the head to not ask you this question. But that was the last one. Thank you, Carsten, for taking us through your results and answering questions. I think we, again, got very far and around in the case. So that's very good. And thank you to the audience for listening in.

49:50 Yeah, thank you. Thank you for investing in Gump Space. Thank you, Gump Spaces, for really sticking with us and taking us to this level. Now momentum is building and we are ready to move on. This is very good. Thank you.