GomSpace Group AB (publ) (GOMX) Q4 FY2025 Earnings Call Transcript & Summary

Welcome to today's event, where we have the pleasure to present GomSpace. To help us through today's presentation and answer questions in the end, we are joined by CEO, Carsten Drachmann. . Today's presentation, of course, covering your full year '25 results, fresh from press this morning, but also I think through the questions, we will get through a lot of the news flow you had during the year. As always, there's a box down below, you can ask questions, both in Danish and English, I'll try and translate the Danish one, the best of my ability. There's already a lot of questions in. See if it's asked in some kind of way, but do feel free to ask questions. It's my job to make sure I get them collected. But for now, I will hand the space to you, Carsten.

Thank you very much, and welcome to our Q4 and full year announcement here and presentation. I will talk about, of course the Q4 and the full year results. We'll talk a bit about the outlook 2026 that we have shared with you earlier. A few highlights, maybe a trip down memory lane here, something on the outlook, strategic outlook, some of the trends I see in the market and how we're going to run 2026, where there are some changes that you have seen earlier with more business units. So let's dive into it. Straight into the numbers. Fourth quarter, well, this quarter, we've had so far SEK 145 million in revenue, that's pretty solid. It's up 75% year-on-year compared to the same period the last year. Looking at EBITDA also actually at a record high for the quarter. So very, very happy with that. It's really trending towards where we want to be with the margin levels of this 8%, 9%, 10% that we are seeing. Free cash flow, quite decent, I would say, despite some delayed payments that we're getting back to, so minus SEK 16.5 million, altogether makes this a pretty good quarter, and also helping us to deliver on the guidance that we have given. Let's take a look at the full year 2025. Well, first of all, top line, again, SEK 441 million -- SEK 442 million for the year, great. It's up 72% on 2024. Very happy with that. If you compare it to the market, just to put it into perspective, the compound average growth for the market is 14%, plus/minus for satellites -- companies delivering satellites less than 500 kilos. That's us in GomSpace. So we are well outperforming the market growth. So very happy with that, and we'll keep our eye on that. But further to this, what I think is worthwhile noticing a full year EBITDA around SEK 53 million, that's good. We have actually -- we have not really delivered -- where we delivered close to 0 EBITDA before, but this is the first time we over this level. It's 9% EBITDA if you take the diluted, it's closer to -- sorry, if you take the adjusted, it's close to 12%. But what's remarkable about it is that this is actually pretty well in line with the industry. There are quite many companies, quite many of our peers that are not making money yet. So they don't have a positive EBITDA. They're still investing a lot, and they are not able to make money. So we're on a pretty good level. And if you look out broader in the industry, it is around this 9%, 10%, 12% to 13%, 14%, is that range you're in, the ones that have higher margins, have perhaps been around a longer time and have bigger turnovers. So it's very, very decent. And I think we -- it's a good level for us to stay on also with the growth plans that we're having, trying to keep that level and really focusing on growing. Cash flow, free cash flow, minus SEK 95 million, as you say, at home where I live [indiscernible] that's not, of course, what we had planned for. But it's a very good reason for it that I'd like to take you through. It's a temporary impact. We have a customer who owes us SEK 145 million outstanding invoices. Why? Well, they are in a capital raise situation right now, and this has simply taken longer. We are very, very close -- we have a very good relationship with this customer. I am in contact with them every day. They have a strong business case, I believe firmly in the business case that they're doing and they have a lot of international -- big international customers, including government customers. So I have a strong business case, but there is a delay in the capital raise. And then we can say, okay, what do we do about that? So first of all, this is purely related to the customer in a capital raise situation. We have delivered at GomSpace. It's nothing we haven't delivered. Everything is delivered according to contract and delivered according to milestone. But through our very good relationship and because we strongly believe that the customer is going to be very successful, we have secured necessary collateral for this. We also have a payment plan that's going to help until they have raised the big money that they're looking for. And without being able to say too much, you -- this customer, the amount of money they're raising what they owe us is nothing. So once they get to their fund raise, this is not going to be a problem at all, and we have secured ourselves. Further to this, if you look at, okay, that aside, how we're then doing as GomSpace, we're doing fine. We have more than SEK 200 million in a bank account at the end of the year. So this enables us to continue to execute into 2026, focused on growth, focused on further investments, focused on expanding in the world. We'll get back to some of the points. So altogether, not what we had obviously planned for, but we have mitigated it and I'm very pleased with the relationship we have with our customer. If you do the math a little bit at SEK 145 million to the SEK 95 million, then we actually have plus SEK 50 million free cash flow for the year. It's pretty good. That means everything else has actually played out the way that we wanted it to. Okay. Let's break it down a bit into business. This is also quite interesting, I think. So if you look at our programs business unit, remember the contract business where we built the contracts, it's 12 months, 24 months, 3 years contracts that we're building. So the revenue has gone up more than 100% from SEK 147 million to SEK 300 million. So that's very good. We also see products going up 34% and products, a transactional business where we -- it's not on long contracts, but we deliver products immediately after the customer has ordered has gone up. This is also where we have a very solid margin. So we are happy with that. North America at par. We'll get back to the order intake in a second. I still firmly believe that North America is the right place for us to be. We're not worried about tariffs and all of those kind of things. We are worried about getting more and more traction, and this is what we're working on. If you see where is the money coming from, where programs is delivering about SEK 30 million, SEK 31 million of EBITDA products, '26 and then North America still like a negative EBITDA. That's okay. It will take some time. I'm totally comfortable with that, and this is fine. Jumping into the order backlog. If you break that down, so order backlog means what is in our order book, and we are comparing to what we had in the order backlog -- order book at the end of 2024, so now 12 months later. So if you look at the programs, so our contract business especially gone up about 11%, so we started 2025 coming into that with about SEK 300 million in order backlog. We have then executed and delivered. We have recognized the revenue to bring us up to the very good results we have right now. But through that, we have closed more business also. So the net is at the end of 2025, we have SEK 336 million. So we have more order backlog going into 2026 that we had for 2025. Good. Products. This is at par. And to note here that, yes, it's gone down a little bit, but it's really -- we deliver quickly. We will never have a big order backlog here. Actually, we want to deliver faster and faster. The market is expecting us to deliver not in 3, 4 months, but preferably in a month, 2 months tops even down 2 weeks. So this is -- that means we'll never have a fast backlog. We shouldn't have because then we're not fast enough in delivering. So the reflection here is more or less at par with last year, which is fine. It will go a little bit over time, but it's better -- it's more important that we shifted out quickly. Now coming to North America. They had a great deal coming in at the end of last year. There was announcements on that. So as you can see, where North America last year started at around SEK 6 million, SEK 7 million in order backlog. We are now at more than SEK 22 million in order backlog, obviously, implying that, hey, this is a good start for 2026. Still work to be done. Absolutely. No doubt about that. But of course, it's nice to go into the year with a stronger backlog. If you look at the overall, our backlog has increased 13%. So we do have a stronger starting point going into 2026 overall. Okay. So let's talk more about 2026. What does it look like? This is what we have shared earlier that press releases has been out. So you have this information, but let me repeat it. We believe we'll have a profitable growth. We believe we will increase with -- to midpoint, about 30%. We are giving a guidance of SEK 540 million to SEK 640 million compared to the SEK 441 million, SEK 442 million that we have right now. So about SEK 100 million more is what we are guiding on. We believe that we will be able to do that with a decent margin from 5% to 12%. We are now -- on the EBITDA margin, we are now at 9%. As I explained, this is pretty okay from an industry standard and benchmark perspective. And also, we are quite confident we can deliver that. If you remember last year, we gave initial guidance was minus 2% to plus 10%. We were not sure if we could deliver positive EBITDA in the beginning of the year. We are quite sure that we can deliver it this year. So hence, the guidance here. We are -- we will have a negative cash flow. This is driven, though, by investments, significant investments that we want to do. We simply have to do this to capture the future, to capture the momentum, to support long-term value creation. Of course, I can hold on to the money for a long time, but it's not going to benefit us. It's not going to benefit our investors either. We have to grow and now capture the fantastic momentum that we have in the market. It also gives us the flexibility we need. So we have enough -- we need to have enough working capital to run our projects, but at the same time, to do more developments and do more satellites. So altogether, 2025 highlights. We have a strengthened balance sheet. Remember, we took capital in, in the middle of the year from Peter Hargreaves. We also have a credit facility of about SEK 74 million. We have a commercial momentum right now where we see -- for example, we took a large contract for satellite, 18 satellites earlier in the year. This is -- and we have good traction on the product shares. So this is helping us generating the numbers, the revenue, the EBITDA is all helping us. We are now in a much more stable situation than we've been before. It never ends in terms of developing the business. There will always be things that need to be managed. We always have to look forward and do more and more and more, that's clear. But compared to where we came from, we are in a much more solid position. And we have the strong backlog. We have cash in bank, and we have a market that's growing. So that's quite okay. At the end of the year, you probably noticed we closed a contract with a defense contractor, European defense contractor, one of the bigger ones. We can't disclose the name. But we do see a trend towards more defense contracts. Some of the contracts actually have in Singapore also defense-related, so that's great. We also saw in the first part, remind you, it's just the first part of a contract for Lunar exploration with a North American company. This is about going out to the moon and mapping it out and looking for minerals and water. There's a lot more of that coming and this is a great program that we are starting up now. And as you just saw on the 2026 guidance, we have about 30% year-on-year revenue growth is our expectation. And here's credits to all of you out there listening and buying into GomSpace. Look at this. We are now in First North, 25 index. That's great. So out of about 450, 500 companies, we are in the guiding index for First North growth market. That's great. We were also part of top 10 on Nordnet in terms of most traded share. Great. I've got nothing to do with that. That's all on you. So that's very, very good. So overall, a good recognition in the market as well for us. And I'm obviously pleased with that. And I'm very happy that you trust us and that you're investing in GomSpace. So thank you for that. Okay. Strategic outlook, I'll pause a second. I don't know how well you can see the picture, but this is a fantastic picture that we have up from, I believe it's over green and up here. So this is amazing. So why would you invest in GomSpace? Well, you're investing in the future of space with GomSpace. We're right in the middle of this. We built these small satellites that really makes a difference for environment, for security, for all kind of surveillance. It is definitely space is here to stay for the future. So give me -- I'm going to give you some of my guidance I've given before. There's no doubt that space is front line in defense. Absolutely. No questions asked. It is absolutely there. And we see more and more budgets -- national budgets going towards defense. I know there are some questions on what is Denmark doing. We can talk about that later. Germany is a good example of EUR 35 billion over the next 5 years for space. That is a lot. Governments are shifting from services to sovereign assets. They will still buy the service satellites as a service kind of thing, but there is a tendency towards, hey, we want to control it. Ukraine is a good example of Starlink and Elon Musk okay, then they closed down, so there was no communication then they have a problem. And it's clear and we start to understand that when we can no longer completely trust our neighbors across the Atlantic or to the East, we have to have some control ourselves of those space assets, which helps us with security and surveillance and especially the national interest. So we'll see a trend towards more control from government on that. That's good for GomSpace. End-to-end solutions is important. It's not just here as a satellite. Thank you very much. I don't know what to do with it. There is a trend towards also broader solutions that we are looking at. We will see more of these multiyear constellations coming up. It's always been the dream in industry, big constellations, everybody want them. It's taken some time. There are a few, but we see more and more coming, not just for communication purposes, can also be for surveillance and other things. So we do see a growth driven by more and more satellites going up. Deep Space lunar missions are there. We are closing -- we close the first part of the LuNa mission. We still have our UN's satellite flying out to the asteroid far away. I think it still has another 7, 8 months to go. So that's ongoing. And everything about deep space around the moon is also growing. It's not going to be in huge volumes as such, but it's definitely a lot of money going that way, and we are very well positioned to be part of that journey. We would see an increasing product revenue because the market is going up and the products, the bits and pieces of the satellite that we are selling is required. So even if there are contracts that we don't win on our satellite business, others will win them, we will sell to others. So we will also see a revenue growth here. Stability is important. Ability to scale up the ability to deliver faster. We do see a demand for faster deliveries. We do see a demand for being able to produce in volume. If you look behind me here, I hope you can see a little bit. It's a bit of a mess. We are building more facilities so we can produce more satellites and also bigger satellites. And it simply requires more equipment, and we have a very huge vibration table, as it's called, that has to go in here. So this is what's happening right behind me. It's not because we didn't clean up. It's because we are in a middle of expanding. And then the rollout and consolidation will be there. We have seen it already. There are mergers, acquisitions. There are more joint ventures and partnerships coming in. This is also what will happen in the market and obviously something that we are looking at as well as at GomSpace. Market growth, 14% in average on USD 9.6 billion. This is for satellites, less than 500 kilos. You can research a bit yourself there, there are a number of different reports out there. But the consensus seems to be in that range here. So how do we make a difference? Well, National and Defense Solutions, absolutely working there, marine domain awareness. This also covers Arctic and Greenland, governmental civil agencies, illegal fishing, deep space missions, commercial constellations, management of aircrafts and more security and safety around that, environmental and climate monitoring. Remember, more than half of the parameters we actually want to measure we can only measure from space. So we will see more of that. Wildfire is also a thing that you very, very effectively can not prevent but detect and hopefully manage much better than we have been able to in the past. So forest fires is also very high on the list here. So 4 key focus areas in the market that we have for GomSpace. First of all, product business will continue that. It's a good business for us. We do see a growth and we need to optimize our portfolio, our delivery times, our supply chain, et cetera, that's important. We see satellite operators or constellation operators, if you like. We need to prepare more for volume. We have to get ready for that. We cannot work and then close the contract and all of a sudden gear up to deliver 100 to 200 satellites overnight. It doesn't work like that. So we are gradually preparing so that our supply chain, our production facilities can handle this. National states is definitely growing. Security, unrest. We talked about that before. It's growing. It's higher on the agenda everywhere, and this is something that we are tapping into. And last, all of these national budgets, especially in Europe but around the world, they are going up. There's a lot more funding going towards how do we make space more secure. What about cybersecurity in space. So we are tapping into that and including also the lunar deep space emissions. So there are 4 key market areas that are distinct. They are different and they have different target segments. So it's system integrators, it's satellite operators, national states and, call it, institutions. So this is a key. Okay. If you look out into geographically, how do I see the market here? First of all, in Europe, well, competition is fierce. There's a lot of space companies, but that's fine because there's also a lot of budgets. So we have very clear goal to, of course, capture more of those budgets coming out in Europe. U.S. continues to be the single largest market. We don't see any trends that we should have any issues selling in U.S. on the contrary. So we will grow with more presence. We are hiring more people over there, and we have Slava now working diligently to bring our business forward. Asia Pacific is actually the fastest-growing market on a CAGR level, different kind of reports are saying that. Here, we clearly have in Singapore, but on the product side, very much so also in Singapore, but in South Korea as an example. Japan is a market that is also possible to enter into. So Asia Pacific is very good for us, and we intend to keep focusing there. You see more evolving markets. The Africa is one dimension Northern Africa, Middle East, certainly something we're focusing on as well. Qatar as an example, is definitely want to be the leaders in the region. There is a lot of activity and investments coming there. Latin America, also growing. You need to look for their own independence and ability to manage what's coming from outside. So this is how we see it. So we see lead development in Africa, outperform in Asia, grow with presence in the U.S. and capture a piece of the pie in Europe. Okay. So how are we going to do that? Well, going into 2026, we're going to add 2 more business units matching the market. We'll continue with products, aiming at system integrators. We will have a satellite systems. We used to call it programs. We call it satellite systems. They're focused on the system or constellation operators, high-volume production of satellites. We have National and Defense Solutions. This is where we go out a bit broader and say, okay, it's not just a satellite. There is more to it than that. And we are heavily engaged in discussing with defense and governments around the world on this part. The last one is the different institutions and funds and these advanced missions. So LuNa mission that I mentioned, again, is a good example, Juventas. So that's also a focus area. So these are 4 business units, and then we have our plus 1, which is North America, which is simply because it is the biggest market, we want to have more focus and we've elevated that. So 5 business units for 2026. You will also see that we will report on those. So you'll see a change going from the 3 business units we've been reporting on to now there will be 5. So looking forward to showing you more on that later. Do we have a team to lead it? Yes, we do, is the executive team going into 2026. You probably recognize me there. We have Troels, who's been around for a long time. We have Thomas Pfister, who is our Chief Commercial Officer. We have Søren Therkildsen, who has been with GomSpace for a long time also 8, 10 years. Søren is our Chief Operating Officer, going into 2026. We have a lot more organization and operations that we need to run. Lars Alminde, one of our co-founders is running the National Defense Solutions. Oliver, who has been running programs before continue, but with Satellite Systems, Slava started last year running North America. A very warm welcome to [indiscernible]. I hope you are watching Jana, starting 1st of April, perhaps before. Jana is a fellow Nokian, and I've been 20 years with Nokia so as Jana. Jana is a home girl up here from [indiscernible] . This is absolutely great. And so looking forward to have Jana on board. And we have Edgar in Luxembourg who's our Vice President for Advanced Emissions and Edgar is very well funded in European industry and also with institutional organizations that are promoting space. So it's a team. We have, by the way, a new website. We haven't seen it yet. I recommend you go look at it. I think it looks great. You'll see it's reflecting a bit our heritage, where we have a really strong heritage as a trusted partner, national security and defense. We are -- have a much better website also for commercial purposes, how do we sell our products, how does our customers find our products and the specification. This is really important. We've made that work very well. And then also more investor transparency, more share information, you can go and read our equity story, so we try to get more out for you, also for maybe more investors that you might know. And we also have a little nice share price running here. So if you haven't seen it go take a look, I'm very happy with the team, the way that we've done the website and we do start to see that is helping us in the market, both towards, let's say, more international customers but also system integrators and engineers to say, "Hey, I want to buy something here. This looks good". So with that, let's summarize it, like I said in the beginning, a short trip down memory lane here. This is revenue on the bars, EBITDA on the orange line there. So for starting at 2020, you can see we've been around the SEK 200 million mark, 2025 is just reported SEK 441 million. That's great. We are forecasting up to SEK 600 million, at the midrange for '26 and EBITDA going now up where it needs to be nice and positive EBITDA, around 9%, 8% to 10%. This is great. We have delivered the year-on-year growth. We have a strong lead investor in Peter Hargreaves. Thank you, Peter, for supporting us. It always makes a huge difference for us. And then thanks to you listening in here also. First North's 25 index, top 10 traded share in Nordnet. And in general, we see more interest from the investors in the market. So with that, I think the road ahead is clear. It's very clear to me. What we need to do foundation for success, I think, has been established. We need to execute the discipline. There's absolutely no doubt about that discipline is required. Grow with ambition. We have to be ambitious. The market is growing. There is an opportunity here. We have the heritage. We have a fairly good financial situation. We have a pipeline, we have a -- we have everything. We will be shame on us if you don't grow with some ambition here also. So we do that. And then we have to, of course, we keep focusing on delivering value for you, for our customers, our partners and certainly for our employees who are the backbone of everything we do and everything that you will benefit from as well. So thank you very much. And I hope this is turning a page to a new chapter in the GomSpace story telling. Thank you for your trust.

Shall we jump into some questions, Carsten? You already touched upon that. There's a little bit of questions around how do you handle this expected high growth? What if customers demand at the same time? Do we have talks with your customers? So maybe you can balance that and see if you can balance theirs. So a little bit -- yes, if you can give some color on how you're thinking about this one?

Yes. We do talk obviously a lot with our customers. There will also be new customers coming in that's going to need to drive up the demand. But that's why I chose to stand here. So you can see we are gradually working on expanding our capacity here at the current address. And of course, we're looking at opportunities, which we know might come that are bigger and how do we deal with that? It's a competitive factor as well. We can't just go to our customers and say, "This is great. So if you can give us 4 years to deliver, we would be very happy". It hasn't really worked like that. So we are all the time looking at diligently as saying, what do we think it's going to be in the next quarter, in the next 4 quarters, in the next 8 quarters and then we are gearing our supply chain and capacity according to that. I think one example that you have seen is that we have outsourced some of our electronic production. So the products are bits and pieces to a local manufacturer here. This is helping us with peaks. So if we have a big peak, we now have a partner that can also produce for us. So that's a good example of how we do this.

Perfect. And then I think a follow-up question is that there are some questions. You talk about investments in '26, can you split it between R&D and actually maybe production capacity that you're going to increase? I guess that's the 2 big parts that you are investing in. I think I know the commercial side is probably more hitting your P&L, but here, R&D and increasing production capabilities, where are your investments the biggest right now?

No, I would say the R&D investments usually take off a large piece but it will be distributed evenly. And we also play it by year in terms of what is now coming in the market. Do we need to accelerate our capacity, then we'll put more money there. If we say no, it's a little bit further out, we will continue with our development projects and keep them on plan. So I think we are agnostic to how it's evolving. But we have -- if you noticed, we actually have gone up. We have almost doubled compared to 2025 or we intend to spend on improving the company in 2026. So it's certainly going up. And yes, there is more R&D than what we've had before.

Okay. And then regarding that question, I don't think you have guided on it, so I'm pretty sure I won't get an answer, but I will ask you, you expect the cash flow for operations kind of so we can split it how do we expect cash flow from operations and then we can also deduce then probably the investing part. I don't know whether you want to be so specific.

No, I can refer actually to our guidance, where we are at, we said negative free cash flow, but the free cash flow is everything flowing in about -- you can do the math if everybody is paying on time and within plan, a positive EBITDA for the most part, it also means a positive cash from operation, which is what we have indicated. So we should expect that if we have a positive EBITDA, we also have a positive cash flow there.

Perfect. And there's a little bit of question, of course, on this customer outstanding. I think you covered it pretty good. There is maybe a more broad question saying, how do we mitigate this risk at other customers? So is this a specific customer? Are you hinted to customers really needing to fund themselves, if you understand my question. I think you answered very well how you mitigate this customer. But generally, how do you mitigate this risk that maybe someone needs funding out there that you're delivering to?

Well, we are evaluating. And like I said, this is a great customer. We have such a good relationship. We have a fantastic business case. So we're quite comfortable with all of that. But we are, of course, evaluating who we want to work with. It is a new space industry. It's a very good question because there is a lot of start-ups. There are a lot of people right now who has a business case. They are in the process of raising capital. If you look out in the market, and I know many of you are, you'll see somebody did Series A, somebody did Series B, they took SEK 10 million, took SEK 100 million and this is how it's going right now. So of course, there's always an element of risk. But we look at it what we do through contracts is that we secure that we always [indiscernible] for free cash flow positive or cash flow positive on the contracts. We have learned that over the years, so we understand how to manage that. And then, of course, occasionally, if a customer runs into trouble, we're looking at how to handle it and in this given case we found a solution, we have a good solution with a customer, and we're very happy with that.

Perfect. And then turning back to this National Defense NATO Greenland, you show it up there. Anymore you can elaborate on probably many talks with the Danish government, I guess, it's high up on the agenda, and that's a little bit question. How much are you actually sitting in sales force, sales force is being directed to kind of doing this. And maybe also a little bit in the NATO part I guess, right Denmark, NATO seems to be one more involved, and we have big budgets also on the nature side. Is it more like you're seeing that maybe we are trying to create a big surveillance network over Europe. So a little bit about your conversations, you're thinking on NATO versus Denmark standing here alone with this Greenland. I don't know how much you can elaborate on it, Carsten.

No. Well, we can talk a bit more in broader terms. If you go back to my statement about defense space is definitely a frontier of defense. It is very clear to everybody. Now nations are waking up and learning, including Denmark, realizing maybe there's something that we should do here. So of course, there's a process, which is a mix of a political process. It's a mix of defense strategies towards how do we use space and how do we take it into account? And how can it help us with our national security. So that is ongoing. If you look at the bigger organizations, for example, European Space Agency are right now driving a program called Iris Square, which is a communication platform in principle, an alternative to Starlink. This is a European-driven initiative that's going on. It's going to be more on earth observation. So looking at intelligence, through imaging. So all of that is ongoing. And I think what we'll see and what I feel we'll see is there will be some nations are going to buy for themselves and say, this is what we do. There will be -- my guess is for Scandinavia that Scandinavians are coming together, and we'll agree on something. But we probably from Denmark, we're contributing from that, from Sweden will contribute with this, and then we'll have more muscle to build it. So it will be a mix of things. But take Germany, for example, they definitely decided not to wait for a long discussion with others. They say, here's SEK 35 billion, dear defense and space industry let's get going. So it will vary. In terms of NATO, let's see how NATO is evolving. That's...

But I think as you also allude to, I guess, then there will be other constellations like you said here in the Nordics, they have Svalbard and all that issue to be so like we have Greenland. I guess, that's also what you might be seeing moving around.

Yes, for sure. And I think the questions on what are we doing in Denmark or you can go to questions for and ask questions. So you should ask them the question, not me. I'm all in. I know what you need to do. So I think it's more ask your questions for your politicians. And hey, there's an election coming up soon. So maybe you should ask them how they feel about this and then put your vote in that direction.

And then there's actually a very good question regarding you being a Danish manufacturer. Germany, SEK 35 billion is probably going to be spent -- more in Germany, if it gets more broadly, you might on a bigger scale, how do you actually fit in there as a Danish company. That's the first part. And then I think it will follow should you be a constellation of some bigger military companies that know more globally. But let's start with the first part. Do you fear being a Danish company and being let out?

No, not really. I think we are an international company because we never really had a whole market. We're actually really good in export and closing business around the world and some of our competitors are also good at that. But we are actually better than the average European supplier of satellites, I will claim to export. So that's fine. Do you need to have some local presence in Germany and other countries to get national budgets? Probably some. But it was interesting about the German budget is that the current estimate is that the current German industry can really only deliver between 30% and 40% of that budget, which means that Germany has to buy outside or they have to buy via German companies who has to buy outside. So now of course, we are working -- trust me night and day. I went to the Munich Securities Conference by the way last week, I'm sure you're all following that. So we are, of course, working on how do we position ourselves here. And this is not just a question of technology. It's also a question of political interest. It's a question of who do you partner with. There are many things are coming into play here, and we are working on that, not just in Europe but globally.

Can I also read a little bit in your guidance when you say you want the higher margin, which I think maybe is the products that you have good expectations for your product business due to that reason. Or am I reading too much into that sentence?

Yes. We may be reading too much into it. But what I want to emphasize is the -- if you look at the industry, like I said, many of our competitors are not making money. Many of our peers are not making money today on EBITDA. Those who are who have some more control of their business are in that range from 8% to 12%-ish. So we are quite okay there. But we do see, of course, our product business is a good business because it's a quick turnaround. And yes, you have a different kind of margin when you get that compared to a long complex contracts. But on average, we want to be around the level that we are now.

Yes. I'm also more talking about that if it goes that is more national the budgets, that's your way of getting part of that order by delivering products. Is that...

As well. Yes, as well. We have customers. We have an Italian customer who won a large contract with European Space Agency to launch dozens of satellites and then buy a couple of components for us. Great. It works.

So ending the questions, and I think you get them a lot. Do you need to be part of a bigger constellation like with which big military [indiscernible] such one who maybe are looking into these areas to really scale up and so on or can you do it on your own and which could be interesting. I don't think you want to comment on who could be interesting there. But you're thinking, can you stay alone? Or would it be better maybe to be a part of a large military complex with a lot of knowledge to sell into military in the future?

I think let's turn the question a bit around what is happening in the market right now, which you do see joint ventures if you're following it. So there are companies going together, is maybe what you're implying. We're being part of something larger. So we are, of course, looking for which partners can we find, which partners can we find in Germany, which partners can we find in other parts of the world. North America, we talked about that before. It's unlikely that we will hold a contract directly with the Department of what I call it now instead of Department of Defense, but we will hold that via local primes -- prime contractors. And then we'll have a piece of supply there. So that's probably -- that's how it's going to go. I did say grow with ambition. To grow with ambition also means I certainly don't have the intention to sit back and just see what's happening as CEO comes along, we will be actually pursuing to be part of the -- either the right collaborations or making sure that whatever happens, we are certainly growing.

Then there's a little bit more now down to question. And I don't know whether you want to give that specific. But that's how much of the '26 guidance is covered by the backlog and how much do we need to go out and pick up? I don't know whether you want to give us some indication.

No, but you -- the backlog is there, that's about SEK 400-odd million, and then we are projecting say, up to SEK 600 million. So obviously, we need to close more. But I'd say the product business is transactional. So that will come as we go along. And then of course, every year, we do need to close so much of contracts as well, which we are working on. I think the message there, I think we share very well the different backlogs, which remember, we don't have to do, but we are sharing it. So you can follow that.

Perfect. And then a little bit about the bottlenecks. Where are you seeing the biggest bottleneck? Is it that in your production capacity? Is that maybe out by customers sending it out into space? But -- do you see any bottlenecks in the supply chain? I think everybody is talking that especially in the defense industry, that you know what, there's a large, large demand, but can it actually be met. So more specifically down to you and maybe into the supply chain in general in the business?

Overall, when an industry like ours is growing, and I'm talking about the whole space industry, of course, people start looking for more and more of the same. So it's a whole industry that needs to grow, which means our suppliers are also having success. We do buy components from suppliers that are also delivering to others. So, of course, there's the general pressure in the market. I don't see any specific bottlenecks I want to highlight here, but saying as the industry growing, as we are growing, of course, supply chain becomes a more critical part. And we do see that we as GomSpace and the industry is moving from let's test this out, let's do a satellite here and there to an industrialization situation. So we are looking at industrializing what we are doing. We're starting to think differently about that. It's not just technology and some engineering and somebody can solar it over here. We're really looking at how do we manage our supply chain, how do we put this together in a smart way? How do we scale out quickly? And that's about a lot more than just having technology. This is a trend in the industry and the GomSpace is going through that as well.

And I guess, seeing on your guidance, you're pretty comfortable that there might be bottlenecks but you are pretty well sourced or you might say, able to deliver on it.

Michael, it's a difficult world we are living in. So we have a really good forecast and hey, who predicted a war in Ukraine, who predicted COVID, I think things can happen. But listen, I think we have a fairly solid balance sheet. I think we have a good opening backlog. We have a good name and traction in the market right now. So I think we've given you a fair view into what I believe that we can do in '26.

I'm also more -- maybe you're talking about you're confident in your supply chain and in your own production capacity to deliver on that. And the first 3 -- you can also get across in the Suez Canal. I know everything, but generally, you're confident that you have secured your supply chain.

We are constantly working on that and making it better and better anticipating that we need to grow. That's what we are guiding. So therefore, our supply chain needs to grow as well. Yes.

Perfect. And then there are some questions about the UASat. There has been some news I don't know whether you want to comment on single projects and so on, but maybe a little bit in general. Maybe a little bit on the security issue here around projects now, you're going into defense.

Yes. So in general, I see it came out last night. We are working all over the world right now. And of course, we are working in Ukraine as well. Happy to see that as such, our name is coming out there. I have nothing more specific to comment on that. But it's a good example of we are working in many places and things are gradually moving going forward. What's interesting here is going back to this government owning assets rather than having a service. It is the interest from different governments also for the Ukrainian government to say, "Hey, we need to be able to do some of the stuff ourselves". In principle, Zelenskyy is telling Europe, you should probably get more involved. I'm not going to get political on that. But how could Zelenskyy take services for a European organization if other countries. If you can't rely on that, are there all the time. And this is what many countries are asking themselves saying, "Who do we trust and how do we make sure that we are not certainly left out, and we have no control? " So this is what we are working on all the time. And yes.

Perfect. And then let's go a little to Asia. You mentioned that as a big playing field and that's actually a question. You attend a lot of fairs, I guess, also in that region, picking up there in sentiment and then -- of course, let's touch upon Indonesia and Singapore and see if anything has changed in your normal comment, I don't expect that Carsten will be very clear on those countries. But a little bit about what are you meeting out there at fairs and interest in that region?

Well, lots of interest everywhere we go. I went to Singapore a couple of weeks ago for a space symposium there I was invited to speak on a panel, always great to be with friends in Singapore. Singapore just created a space agency. What does that mean? It means actually politically, strategically have now an organization who is forming a strategy and actively investing on behalf of the Singaporean government to develop their space strategy. That would be great if we also move forward in Denmark and other places in Europe for that. So we do see that trend. We see a lot of interest in Asia for our products. Remember, I told the story before, we do have a really good brand out in Indonesia. South Korea is a great example where I think we have 13 or 14 customers. That's a lot. Why do we have that? It's because our 2 founders, Lars and Morten. They were teaching the students back in the day and now these are the decision-makers. So there's a lot of direction there. It's very clear when I go to Singapore, listen to what is being talked about. Singapore is trying to be the hub for Asia for space. The Asian countries, Southeast Asia, in particular, are asking themselves, what do we do with space, where do we need to be, what do we need to be able to do? This is a big discussion and they're looking -- while we are looking from Europe to U.S. and saying sh** we are behind. Excuse my French. They're looking from Asia and saying, sh** we are behind? What do we do? Excuse my French again. So it's -- that is definitely the talk out there and a lot of focus on which kind of capabilities do we have, who can help us and GomSpace comes up in many conversations. And we're also now providing by GomSpace Academy, we are providing training services as well. So that's what we see there. Indonesia bustling with a lot of discussions on how they do more around space, the Philippines, Taiwan, Thailand, everybody is talking about space right now, and this is what we're hearing, and I'm heading to Washington end of March to the -- one of the biggest satellite shows over there, and that's going to be super interesting as well.

Perfect. And Indonesia, I guess -- no more comments.

No, no. We keep working. And like I said, there's a lot happening all the time. It's definitely the interest and will to invest in space, and we are right there every week. So yes, I'll tell you more when I know.

You know what, Carsten, I think we got a pretty brought around all the questions. We covered not specific questions, but I think, in general, we got them covered most of the questions. So thank you for taking us through your results and of course, openness to answer a lot of questions. I think we got a good way around all the different parts of your business. And thank you for the audience for listening in.

My pleasure. Okay. Thank you. Bye-bye.

Bye-bye.