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

Welcome to today's event where we have the pleasure to present GomSpace. As we can see here on the front page, the Q2 and H1 report is in focus. Today, I guess, we will also share some views on the sector, I guess, that where, yes, the world is changing every quarter as I see it Trump decreeing nuclear power plant on the moon and so on and SpaceX. So very, very likely to hear some of your insights in this sector, Carsten. And as always, we are joined by Carsten Drachmann, CEO of GomSpace, to take us through the results, the presentation and answer questions in the end. And as always, there's a box down below where you can ask your questions. A lot have already come in to see if something is answered, but do feel free to ask questions through all the presentation, but we will take it in the end. But for now, I will hand the stage over to you, Carsten.

Thank you, Michael, and yes, welcome all here to our first half report for 2026. Like Michael said, do ask questions. I repeat, I am reading the chat forums. I'm seeing everything that you are writing. And please ask questions. I'll try to answer the best I can. But the picture here, I think, is a fantastic picture. Maybe starting with that, 10 years on Nasdaq in Sweden. It's a long time. It's been a very ambitious time. It's been turbulent times. It's been up and down. I think I hope you'll agree with me the Q2 and the first half result here for 2026 is trending towards definitely in a better end and towards more stability. So 10 years ups and downs, and now we are moving forward to a brighter future, I believe. Let's take a look at it. So first of all, Q2 results. Our revenue compared to same period last year went up 17%, SEK 112 million. We have delivered a positive EBITDA of 13%. It's pretty good percentage-wise because this is significantly better than most of the industry and many are -- please remember, many are still not making any money, but we understand how to make money. Our cash flow is negative. This is according to our plan also. I know there are some questions on what are we doing, where we're investing in developing more technology. We're creating more platforms of different sizes of satellites. And then I thought stepping aside here, you can see that. So this is also what some of your money has gone into, what we have spent. This is a vibration table, a fairly big one. It's much larger than what we had before because we start building bigger satellites. So we have invested in this and the whole vibration is a pretty important part of our process of building and testing satellites. And the vibration is about when you put the satellite on the rocket and it goes up, there's a lot of vibration has to sustain that. Once it's in space, no vibration, but a lot of rules and procedures, and it's much more efficient for us to have it here. So some of the money of the minus SEK 42 million is sitting right here behind me. So it hasn't just vanished into GomSpace. Bank account looks healthy. We have a bit more than SEK 180 million (sic) [ SEK 183.9 million ] in a bank account at the end of June. Looking at the half year summary, we are looking at 30% growth on revenue, also very good. Remember, the market is growing 14%, 15% in average for our business segment here. We're growing 30%. This is well in line with what we have predicted for the year. EBITDA at SEK 25 million, about 11%. So again, I'm very happy with hitting that number. This is where we want to be and still better than the market on average. minus SEK 100 million (sic) [ SEK 102.6 million ] in cash flow expected. And well, the background is the same as the previous one. Also note, the bottom line net profit is positive with SEK 28 million. There's been some transactions, financial transactions that has helped that. So we actually have a situation. We have a positive EBITDA, we have a positive EBIT, and we have a positive net profit also. So that's good. The net profit helps us also adding to our equity value. Taking a look at other events that happened. I wanted to highlight, first of all, Peter Hargreaves. Thank you, Peter, again. He has converted. He's had a lot of warrants in connection with the previous loan agreements we've had. He's converted that to shares. That's good. Why? Well, concretely on the balance sheet, it has increased our equity ratio to 41%. Remember, we need that when we're doing the government business, we need to have a strong balance sheet. And also when we are playing for the bigger deals, we need to be more solid. This is helping us a lot. The other thing is the issue we have with those warrants is that every time the share price goes up and you -- investors are happy with what we're doing, it has a negative impact on the net profit. And when the share price goes down, it has a positive impact. So it doesn't make any sense. So luckily, Peter had no problems taking those warrants off the market and converting them to shares. He's not selling, just converting to shares. This is good. This has helped us. Somebody called it the elephant in the room. It's not an elephant, but we do have an outstanding receivable that's still here. It was from 2025. We reduced it with the customer by simply reusing material. A reminder, they had owed us a big amount of money for some time. We control the assets. We haven't sent anything to them, and we have different collateral agreements in place. In this context, we've simply chosen now to reuse some of the material for other projects and also reduced our exposure. The customer is in a fundraising period. It's taken a long time. I said before, they're playing for big bucks, not peanuts. So it's taking some time. I am in daily contact with them, and I'm confident that they will be successful in the end. It's a question of timing, but we have understood how we manage this situation. Further, after -- it was after the Q2 closing, but on August 1, the agreement we had was that if they hadn't paid at that time, we will take over a significant amount of shares in that company. So we are now sitting on 30,000 shares in that company. It's not a security per se. It's simply now we control our shares, they are ours, and it's a future upside. Obviously, if the company is worth nothing, which I don't think there will be, this is not worth anything. If the company is successful going forward, well, there's an upside sitting here for GomSpace, and we have a right to convert those shares into cash. Basically, it's called a put option. We can put it back to the company, and they will have to give us cash. Once they raise the capital, that should be no problem. So it's a little bit a compensation for annoying clearly that this receivable has been outstanding so long, we have handled it. We don't have to take any write-downs. We have reduced the exposure by reusing the material, and we have a lot more material than controller. We could reuse other places if we have to. And then as a compensation, a future upside on holding shares in that company. You can read in the report, the current share price valuation is about $949 (sic) [ $24 ] , convert that to SEK 250-plus-odd today. There's no guarantee. I'm not saying that's a value in the future, but this is as it's valued right now. Okay. Moving on. So just a repeat, remember, we're executing in the 4 business units here. It's important. I see there are some questions how we're going to make money into the future, how we're going to grow. So I just want to do a little recap on these business units. If you start with product, Industrial Scale Engine, the revenue come by high-volume sales, so thousands of products of standardized products and subsystems to different kind of integrators. The profit is driven by our manufacturing efficiency, supply being able to scale supply chain and repeatable production. So we keep doing more of the same. So this is good for us. I've said to you before, the margins here are good. And the cash flow is really -- it's driven by inventory turnover. So this is also a business where we have to have fast delivery times. We really need to manage our supply chain and inventory, and then we can turn it quickly into revenue and cash. Products is a baseline for everything we do, and you will see that also in a later slide. It's really a core. This is all a core technology sitting here. Satellite Systems is about putting together satellites on contracts. The customer wants a satellite or wanted to be red is big and do this or that. This is what we do. We have to do that efficiently. This is amongst others where this vibration table comes in. And once we put the satellite together, it goes on this table, and we have to check that nothing falls off and everything is okay. Revenue will be the growth come, of course, from a number of deals that we can close, but also driven by constellations. We are working towards getting larger program contracts that will run over a longer period of time. We're not in a service business. We are in a hardware software business. So our repeatable revenue over time is getting bigger contracts, which, of course, we're working for. In order to do that, we need to be able to do repeatability. We need to standardize our platforms more so that once we get the larger deals, we can also execute efficiently. Cash flow here is much more driven by milestones. Contracts have a certain lifetime, 12 months, 2 years, 3 years, and then they are paid by milestones. Our job is to make sure that we're always cash flow positive, which we are in the majority of the contracts. National and Defense Solutions, this is where we see the pipeline going up a lot. We'll talk a bit more about that. It's really driven by multiyear mission-critical programs and contracts, very much focused on sovereign customers. So different nations, Denmark, Germany, Indonesia, France, U.S. So very much driven also by defense. The profit is coming from -- we do more value-based selling. We're not selling satellites, we are selling solutions to troubles or problems, challenges. Our Indonesian project, which is still alive, is about protecting the fishing industry. So we are selling protection of fish and information about Chinese trawlers. We're not selling satellites to different things. Same thing with the opportunities in Ukraine, I'll talk a bit about later, is also about solving a specific problem, not just selling a satellite. Also here, the cash flow is driven by payments where we are looking for -- to have advanced payments which is normal, so that we're always cash flow positive on these programs, provided obviously the customer is paying. But this is how we drive it. And this is where we see the pipeline. If I look into the pipeline, it's growing for all the different business units, but this is where we see by far the largest deal sizes. And this is also a part of the strategy from last year that we said, okay, we're going to focus more on this, and we are getting better. We are recruiting more people. We have more skill sets in doing these solutions. And eventually, it will pay off. Advanced Missions, remember our innovation and capability engine here also revenue driven by securing strategically important, high-complexity missions, something new, something more difficult, tapping into the European defense fund budgets, ESA budgets, looking at things that are becoming the next big thing into the future. It can be lunar missions. It could also be this very low Earth orbit or it could be other technology that we see becoming dominant into the future. So North America, this is about market presence. This is about tapping into that enormous budget that they have in the U.S. and really focusing and hiring. We're hiring more people. I think we have about 10 people now in the U.S. working on capturing initially some smaller midsized deals, getting some product sales, which is a bit easier to get and then working towards booking into some larger programs, be they commercial or government. There's also much more commercial activity in the U.S. and Silicon Valley is booming with money right now and everybody who wants to do a new service in space can get money. They are our customers, and we are focusing on that. Business unit numbers. So on the back of that, let's dive into it. Well, first of all, revenue, SEK 112 million, up about 17% from the quarter last year. If you look at the distribution here, products came in at about SEK 40 million of that. Satellite Systems, SEK 50 million; and Advanced Mission SEK 22 million and North America SEK 11 million . This is zero, and I get that question, why do you have a business unit that has zero? Well, the explanation is we are really focusing there, and this is where the pipeline is driving. And I am cautiously optimistic about that stay there very long. Once we start getting some of those contracts in, the numbers will be quite different. But we still keep it on this level here. But as you can see, all the units are actually growing compared to last year. What's the EBITDA? We are measuring each business unit per -- as a stand-alone entity. So we're also measuring and sharing EBITDA with you. We are at SEK 14 million overall. And you can see here that the vast majority is actually coming from products. It's not a surprise. We're also doing so that our Satellite Systems actually have to pay something to our product business unit, which is only fair because if you don't buy it in-house, we buy it externally. So that is why we structured it like this. So I've said before, remember, products is that's a higher margin. It's a different kind of business. It's customer see customer like order, production, ship, collect cash, maybe collect cash first is a good idea. We do that as well. So a very different animal where we have different margins. Satellite Systems is contract business, you can have certain margins there. They're not as high as in products, but the volume is here -- you have quite a big revenue to get that. You will see better EBITDA once that volume goes up simply by the scale of things. National and Defense Solutions right now not making money, obviously, since they have no sale or revenue, we see that changing also. We're also expecting to see better margins here compared to Satellite Systems. And it's okay. It's a different game, and that's how we see it. And Advanced Missions margins will vary a bit with what we are entering into. But overall, I'm satisfied with the EBITDA here. It's in line with what we have projected and also what we are trying to keep a profitable growth, which we have succeeded with in this quarter. Looking a bit at order intake went to SEK 140 million. Yes, it's less than I saw there were some comments on Q2 last year. That's also where we had a large order intake. So not surprised. What I'm more looking at 2 things, it's better than it was in the first quarter this year. And also, it is higher than our revenue, which means when it's higher than our revenue, which was SEK 112 million compared to SEK 140 million. It means our backlog is going up, backlog going up is a good thing because it gives more predictability into the future. Looking at what are the key deals, we had 2 more MicroSats from Unseenlabs, SEK 50 million. We had a big product order for kit sales. Remember, the kit is the IKEA bag. We take all the -- everything you need to build your own satellite, put it in a bag with a little description and some screws and cables and send it to the customer and then they can do it themselves. So this is the first -- we have had some orders on this before. This is the biggest deal we've had so far on this -- and if you compare it to revenue, I think you saw SEK 47 million for first half for products and then look at the orders. So you can see we start seeing a differentiation a bit in the order sizes in products. We still have [EUR 5,000, EUR 10,000] sale. This is more frequently going and then we start seeing some bigger ticket items. Costs a bit more unpredictable, but when they're coming, they also have a big impact on the company results. So very happy with that deal. More CubeSat to Unseenlabs and also ESA RAMSES, European Space Agency, another asteroid mission. Remember, we still have a little satellite Juventas flying out, still has to fly for some time before it gets to the asteroid 180 million kilometers away. We're entering now more on a consulting basis in another program, which is what's called Apophis or something like that. It's another asteroid that's coming close to Earth in -- I believe it's in 2030 or very soon, it's going to go very close to Earth. And this is a rapid mission to try and get something up and flying so we can study what does that Asteroid look like when it's much closer to Earth than before. So it's also a very cool mission coming in here. Now this is -- I haven't showed you this one before. It's in the report, but just looking a little bit differently, how is it distributed on order intake per business unit. You can see SEK 47 million for products, SEK 74 million from Satellite Systems, Advanced Missions and North America. Overall, our order backlog is going up. You can see where the order backlog is sitting. So right now, the largest is still in Satellite Systems. That's understood. That's where we have contracts that's running over a longer time. The backlog for products will never externally be -- it should be a lot higher because if it gets too high -- much higher, then we are not fast enough in delivering. So that will always be turning quickly, whereas Satellite Systems, we would like to see that it's growing for predictability. Now here, you can see what I'm saying, why we have structured it the way we do between the different product units and actually Satellite Systems and the others are shopping from products. So externally, we might have a SEK 42 million backlog. But if you count all the obligations that are internally to the other business units and on customer contracts, it's a lot higher number, to repeat myself, SEK 134 million. So it's significantly higher. And this is to imply also and show this is actually the activity level that's there in the business unit. This is how we need to scale our manufacturing capacity and our supply chain is actually to the SEK 134 million. It's not to the SEK 42 million alone. So it's also why we do it like this, and there's some internal trading to make sure that there's a fair compensation in the products in order to keep up the supply chain and everything going. Conclusion on that. So our order backlog has gone up SEK 28 million since first quarter, and the order intake is outperforming the revenue for the quarter. I'm pleased with that. So outlook for 2026 unchanged. I still believe that we will hit inside the range. You can ask Carsten, why you're not narrowing it down now. There's a lot of dynamic going on. Things are moving quickly. There could be some large product orders coming that we can ship quickly. They could also come a bit later. I just don't know now. It's hard to predict. But our best estimate is that we are hitting inside of this range with a good profitability. You can take the first half as we are definitely on the right track here. So unless we totally fall through in the second half of the year, there's no reason to believe that we are not doing well in this area here. And the cash flow remains negative as already projected. We see strong opportunities, particularly within National and Defense Solutions. This is where we see the big ticket items. you can -- you will see that the business is going to be a continuous business of products. There will be some swings up and down, but that's a solid income and contribution margin stream there. Satellite Systems also have different deals. We announced some SEK 50 million for Unseen, SEK 24 million for Unseen. We have VirtuaLabs in Italy, the previous quarter. So we will have these SEK 20 million, SEK 30 million, maybe up to SEK 80 million deals coming on a regular basis. That's our bread and butter. And then we all want, I know you want, I want, we all want the same thing, the big ticket items, and they will very much be coming through the National Defense Solutions. That is my expectation. Now let's take a look at market momentum. So I'm going to show you a slide you've seen before. I think repeat is good for clarity, and then I want to put some more market trends and comments on this. So I pay attention here. I'm trying -- I think I will answer a number of the questions I see in the chat forum also. First of all, we are here, satellites are redefining what's happening in the world now. Space is now frontline, space is defense, defense is space. That is undisputable. This is what's happening. Governments are shifting to a large extent towards sovereign assets, enabling end-to-end solutions. Like I said, we're not selling satellites, we're selling solutions to problems, challenges. And we'll also see that we should start -- eventually, we'll see some contracts from all our efforts over the years that are multiyear in nature. So it's not just in and out and then we have to get more sales. We always have to get more sales, but longer contracts is good for us. Now let's reflect a little bit on what we see here. Okay, Ukraine. Pay attention. So we now have the satellite for the so-called UASAT, the operator -- potential satellite operator ambition in Ukraine. We have the first satellite, which is intended as IOD, in-orbit demonstrator, where we're going to look at frequencies, measure different things to prepare for a larger constellation. Now there's a long road to go. As I've shared before, there is budgets in EU and funding from Europe that are very positive to go to Ukraine for this. We are talking directly with the MoD and the government in Ukraine around this. But it is a process of -- there needs to be funding, a service operator for running it similar to Starlink needs to be set -- it has to be in Ukraine. When that structure is in place, that customer will be our customer who will then order satellites from us. So here, we are really truly showing you what solution selling me and market making means because in the end, we want to sell the satellite for you as well as investors. But we have to do a lot of work to allow you to make sure that the money is going in the right way. And this is what we're doing. The first technical step on that is to get that satellite up and flying. It is right now, it's been podded as it's called. It's been through the vibration here and it's on the way to the launch site and we'll go up with the next Starlink or SpaceX launch in the beginning of October. So this is progressing. I know everybody wants to hear what are the numbers and when is it happening. We are working on it. It's a complicated process, as you can imagine. Ask yourself the question, when is the war in Iran ending. If you can answer that question, you can answer when this is happening also. When is the war in Ukraine ending? If you can answer that question, you can see how fast this is going. It's not an impossibility, but it is a process. And we're taking the steps and the measures, and we are well positioned here. Ukraine is more than that. This is one opportunity that has gone somewhat public before. There are other opportunities that we are working with the Ukrainian government. Asia is another area speaking into those 4 bullets that I'm mentioning here. Yes, Indonesia is alive. No, I will not answer when it's closing, but yes, Indonesia is alive. And asked for years, what does that mean? It's a project around illegal fishing in Indonesia. It's still there. We have the commercial contract. It's still valid. There's no end date on it. And the next step is still that the financing direct government to government financing from Denmark is happening, but Indonesians has to ask for that, and this is still the process. So sorry, guys, long process. I'm not going to give up. We'll keep at it. And eventually, we will see results out of that. But Asia in general is a key market. I've said that before because there's not that much local industry. There's some industry in the different countries, but not really -- not so much in Indonesia, not in the Philippines, not in Malaysia. Singapore has something, but actually we have -- we're the biggest provider of satellites to Singapore right now. So there is a need out in Asia, especially Southeast Asia that is there. You can say, but oh, it's also big in Europe. Yes, it is. We'll talk a bit about that. But in Italy, for example, Italians have a tendency to buy from Italians and France buying France, et cetera. So while there is bigger budgets there, there is also a local industry that they're keeping alive. But in Asia, not so much, not in Southeast Asia. So that's a key area for us. And so you'll also see some revenue streams from there. If you go north. South Korea is very aggressive, ambitious here. We have a lot of product sales in South Korea, so that's good. And we see more programs coming from there. We have a good name in South Korea. Lars and Morten, our founders were there when they were students, they were teaching at the university. Everybody knows Lars and Morten and GomSpace in South Korea. So that's helping us. Japan is opening up. Japan has been a fairly closed market. They're trying to do their own industry. They've done okay, but actually they haven't done as well as they should. They don't have a sovereign network for communication. They are missing capabilities. So we see an opening there also that we are starting to focus on. And we've got to put more boots on the ground in Asia, meaning we will hire people in the Asian market to be closer. Denmark, ongoing, what to say, I think across Europe and in Denmark, I see a couple of things. The understanding of what investing in space for defense is there. The political understanding is there, and I believe the political will is there. The budgets have been put forward across Europe, also in Denmark. What's missing right now is the procurement processes have not really changed. So while the political process and budgeting process has actually moved forward, there is a lot of money flowing. There is a political will. And I'm not blaming anybody, don't take it wrong, but there is a procurement process that hasn't really changed. You can discuss why who's responsible for that. But it doesn't really matter. The fact is that it's sort of a [ ravine ], it's rolling. First, the politicians understood this is needed. Government decision makers, this is needed. And after some time, there were budgets, now there's budgets, now the procurement processes need to happen. So -- we are patiently working on here also in Denmark. I'm mentioning Germany because we have been focusing on that for some time now, trying to understand what's our place. There are some opportunities we see in Germany where we can play. Remember, it's a EUR 35 billion investment from the government into space for defense in Germany. I just heard that it's been expanded to [ EUR 42 million ]. It's a lot of money. It's more than the German industry can handle by themselves. The interesting part for us is that we're saying, okay, where do we play? We start seeing some openings. I want to reference a large prime, let's just call it that, right? We met with -- we're meeting with a lot of potential partners in Germany. They came to us and say, let's talk more and say, okay, let's talk more. Why do you want to talk to us and say, you know what, when we analyze the whole German market for the type of satellites that you're representing and building, you're actually more mature than most of the rest of the German market. So you can imagine we were smiling and say, okay. So this is also playing a bit into the old Indra case. I know you want some news on that. There is still working on budget, so there's not a lot of progress there. But remember, back in the day, some of you disputed with Indra. They didn't like what we were doing. [ Big shot, dude ], not nice. And in the end, they came back after 1 year, 1.5 years and paid us SEK 20 million and say, actually, we've been around the world, you guys are actually pretty good. And we are sorry, and now we want to work more, which we solved it, and we have launched a satellite with them. This is an example also, we were happy to hear that and encouraging us to go even more towards Germany. You can ask me when are you closing deals? I don't know. But what I do know is that the pipeline is growing and opportunities also there in Germany. Next one is deep space. I talked about the ESA's RAMSES asteroid mission. Remember, Blue Origin is here also, not to forget all the good things we've been doing. We announced the first phase of Blue Origin earlier in the year. And obviously, we're expecting that there will be a second phase as well for a lunar mission. This is run out of Luxembourg is also funded from the Luxembourg government actually. So this is pretty cool. By the way, P Chris, why is it that Luxembourg is investing in lunar missions? Weird. Well, the lunar mission is about mapping out the minerals on the Moon for potential future mining. What is Luxembourg? If you go back in history, some of you are strong on that, pick it up on the chat forum. Luxembourg is actually the mining heart of Europe. So they have a vision to say, we used to be great. Our biggest income is for mining in the past. Let's make it so in the future. So that's why they're investing. It's a bit curious why it's Luxembourg, but they do. They're serious about it. So there you go, there is more opportunity here. Products, I've also said that we will see there will be more product revenue coming because when the whole market is growing and since we're catering to the whole market also our competitors, shared by growth and keeping our market share on our brand out there, we should see a growing revenue stream here. The large Kit order we got is the largest we've had so far is a confirmation of that. And you can imagine, I said that SEK 34 million out of the current revenue of SEK 50 million in the half year. It's a pretty big deal, and they come with good contribution. So we need more of those. There will be a bit more lumpy. They will come some in 1 quarter and then nothing and then they will come in the next quarter. So it will be a bit more lumpy. But nevertheless, once they're coming, they are very good for us. Then volume scalability will become a competitive advantage. We have to be able to scale our production. We can do a lot, and we will -- and we can still do -- we have a lot of capacity here. We just built our migration table for larger satellites. But going into larger satellites, if we really pick up on larger deals, we need to have a more scalable supply chain. We need to understand we have to invest more in also managing supply chain inventory. We will have to expand eventually our production capability. It goes without saying. So therefore, what's the negative cash flow, Carsten? Well, it is related, amongst others to this also the investment and now we have proof it's here. So not like actually put some millions into this one. But we need to be able to scale. It's not just about the physical production capacity. It's also how do we handle our supply chain, how do we make sure that long lead items are critical components that we can get them also in volume when those deals comes in. Last one, roll-up and consolidation will happen. We don't -- we have a plan to be the ones that are rolling up and consolidating others and I don't see any reason that you need to be consolidated at this stage. I think we have much -- many good times, much more good time in front of us than looking for that right now. Okay. So I hope you pay attention. I'm trying to answer a lot of your questions and give you an idea of where will the revenue come from going into the second half year and also into the coming years. Okay. So summarizing it, so we can get to questions. We keep our forecast and our guidance for the year. We have a 30% growth year-on-year in the first half year. EBITDA is a nice 11% with a net profit of SEK 28 million. Remember, the market is growing with 15%, 14%. So anything above that is better than market. And right now, we have doubled. So quite okay with that. Cash flow negative as anticipated, we have money in the bank at the end of the quarter. Order backlog improved from quarter-to-quarter here from Q1 to Q2, and we have a higher -- obviously, because we had a higher order intake than we had revenue. And balance sheet improved. Again, thank you to Peter Hargreaves for supporting not just GomSpace, all of you, investors. This is a good thing for you. So now we have a solid 41% equity ratio. Michael, over to you.

Yes. But you have already done my job much easier. I can't. I think you took a lot in advance. There's a question about this statement. You talked that there was which milestones technical, contractual and financial. Financial, that's the funding from EU and so on, if I should understand that correct. Technical, that is you shipping it off and showing that it will work before that. And then maybe contractual, this joint venture, this -- you might see you selling a service provider. Can you elaborate a little bit on -- is that the joint venture who will be a service provider or maybe a little bit more understanding there?

Yes. Let me clarify. So no, the joint venture is not the service provider. Service provider would be something like Starlink. Those of you who are familiar with Ukraine has a company called Kyivstar, but you can compare it to Telenor here in Denmark as an operator. So that would be the operator. And that needs to be set up. And this is where the money is going to flow in. Money flows into the operator. Operator needs something to operate and need satellites. Okay. So they will go out and buy satellites from GomSpace together with STETMAN and potentially others in this joint venture. The reason we have a joint venture is that it needs to be anchored in Ukraine and...

In Ukraine, yes. Exactly.

Yes, and while we do the first satellites in -- very likely out of production here in Aalborg over time, it is supposed to be a Ukrainian sovereign asset. So we also want to move the production to Ukraine using our technology. And the vision is also this is needed now where Ukraine is in peril and in a very difficult situation, but it is also a vision to be a future operator. So there's going to be future business for Ukraine. We're part of setting this up. It's a fantastic job to do. It's hard. It's hard, but the demand is there and the willingness from EU is there. But again, we're talking big bucks, it's not solved in one day, but we are on a track now to get some technology flying for the first time.

So the contractual part is actually maybe more surrounding the service provider right now, if I should understand.

First step, the service provider needs to come up and running. And it will take some time. But once they're up and running, then they can start placing orders for satellites.

And what you're telling me, you knew or maybe not the investors, they follow you very, very closely is -- that could actually be a European-run Starlink.

Yes, but Ukrainian-run, not Ukrainian-run Starlink.

Yes, Ukrainian-run, but it could actually be selling to all of European -- if we feel that they are our backbone of defense in Europe.

The Danish government could buy services as well. It's just a question of the number of satellites that you send up. But the initial focus is to cover Ukraine with a certain amount of satellites that I'm not commenting on, but a certain amount of satellites. Go Google how many satellites are needed to run a network over a country, people can use ChatGPT. And then if you want to have a global coverage, you need more, obviously, but that's step 2.

And then, of course, I think you already answered this on the Indra and Startical. As we say, they are starting to be a more vertically integrated company. But the question here is, could you still be a platform subsystem supplier when Indra scales in the future? So the direct question is, is that still a possibility even if they are going more vertically integrated?

Yes. Let's divide it up. Indra is definitely a potential customer for us into the future as well, delivering technology or full platforms, whatever it depends like the question is a bit direction they go. Just to be clear that the customer we have is called Startical. Yes, Startical, and they are a joint venture between Indra and I believe it's the Spanish airport authorities. So that's a joint venture. And this venture needs money in order to progress what we've been doing. But Indra is behind it. And the question is, will they take over? Are they going to take, say, okay, we're going to do this. We're going to fund it. Somebody has to fund it, right? Somebody needs to commit to build this network. And we are still there. We're in a dialogue. Our satellite is flying. It's working. It's being tested, and we are in a regular conversation. But again, as many of these larger programs, it's about budget, either you're a commercial start-up operator like our good customer, old customer for many years hasn't yet paid. They are working to get capital for commercial start-up. When it's government business and air traffic control is very likely going to be funded from a government that takes time. Look at Denmark, how long time it takes. So these are the processes we are in that. But our job and what we're doing right now is we're preparing for all of that. We're making sure we have technology, the competencies we are talking to everybody, and we're also starting to build this trusted relationship where we are actually helping shape what should Ukraine buy and they're starting to ask us as an example.

Perfect. And then, of course, a lot of questions surrounding this receivable and so on and the collateral you took in here. I think actually, I'm not really sure how much more you can ask there. So maybe a little bit on the valuation part. Is that because you kind of know they are in a funding process. So you kind of know some valuations. So when you say you have this amount of shares, the value here. And then the question, of course, also rounding how do you get it? And if I understand you correct, you had a put option that actually would let the company if they get funded, buy back the shares. But a little bit on the number you put up here, is that because there is some indications when they are picking up -- when they are fundraising right now. So there will always be some numbers swimming around on the valuation.

Yes. So let me answer that with a disclaimer. I cannot give any guarantee that these shares have any value in the future, but it is an upside. And I want to separate it from -- it's not a security for what they haven't paid. We actually hold the assets. There are actual satellites that they haven't paid for. We control those. So that's actually our collateral. That's why we're not taking a write-off, but we keep it alive. Those shares is basically a bonus. They haven't paid in time by August 1. So a big bonus for everybody, including you, investors. But we don't know what it will be. And you're right in terms of the -- it is described on Page 33, so you can read more about it there. There is a share price of $949 per share. This is how they have been raising capital. It's not like they have received nothing, but they haven't received enough. So we have a documentation. This is the current share price and valuation. So that's, of course, that's what we are looking at. And if you look specifically for the first half year, we have recognized a few shares, Page 33, you can read it. And we put them in that value at $949. Disclaimer. I cannot guarantee you that it will be that in the future. It could be nothing if they are not successful, they have a different story. It could be a lot more if they're very successful. I just don't know. So look at it as a nice upside.

Nice upside. And you have the collateral in the satellites and maybe that's also why we're seeing your inventory go a little bit up. Perfect. I think that's kind of -- you alluded to this. They ask you to name the company and so on, so people can feel more comfortable, I'm not sure, you...

We believe -- I want to also say I speak with them every day, including some of their large investors. So we're very close to them. We understand what they're doing. I know where they are today. I know where the CEO is. I know who he's talking to. So we are very close to them. We have no interest in sharing that because we're going to go public, and that might jeopardize their capital raise for whatever reason. So we have no interest -- it's not in your interest either to know. No, no, no. Take it as an upside and then let them be successful and they will be successful.

Yes. Then there's a question. When do we see the best development for 1 of the 4 business units for the next year, looking into it, not that we are asking you to guide in each area, but where do we see the best opportunities? Are these National & Defense?

National & Defense Solutions. Yes, let me say not the best, but let's say, the biggest -- the big ticket items is National & Defense Solutions. There are lots of good opportunities also for satellite systems for Advanced Missions. We talked a bit about Blue Origin. It's going to be a continuation of that contract. It's no secret. It's out in the press release. That's what we're expecting. We also see product pipeline keeps evolving and growing. But like I say, every time we close something, we ship in a quarter or faster and then we add it again. So we see good opportunities in many places. The big ticket items are in National & Defense Solutions. And I think the way to look at it is that, what you see now is bread and butter. I'm very happy with the first quarter because the first half is really delivering on target. But all of that is coming from these, let's say, small to midsize and slightly sniffing at the larger deals, but we can keep a growth on that. And of course, we are waiting patiently. I know you're impatient, so am I, but we are waiting patiently for the big ticket deal that's going to give us a jump and change the dynamics, but they take time.

And actually, maybe we should stop asking these questions because if I should understand you, you're building the company, you have something as a base. If you need to scale up your production, you need some kind of a base case going base tune, I would say, through the products and the satellite systems and then being prepared for potential big ticket items that can come in some of the others. I guess, is that how you kind of think of your setting up the company right now?