MilDef Group AB

STO:MILDEF

Earnings Call Transcript 2023-Q2

[Olof Engvall, executive]

Good morning, everyone. We will give additional, lovely people, another 30 seconds to join this Q2 Investor Conference Call starting in a few hours. So just bear with me, and we'll make sure that we have everyone onboard this lovely July morning in the year of 2023.So I'll just kick it off then. Welcome, ladies and gentlemen, to this investor call with MilDef with a special focus naturally on MilDef Reporting on the Second Quarter of 2023 and the First 6 Months of the very same year. This call will be presented by Mr. Daniel Ljunggren, President and CEO, MilDef Group, and we expect approximately 45 minutes to be sufficient for the presentation and the Q&A, maybe shorter, maybe longer depending on how many questions you have.A friendly reminder is to help me keep your microphones muted, otherwise, I will do my best to make that happen. And we'll open up your mics for the Q&A session or you'll just state your questions in the chat, and I will moderate it.Also for GDPR reasons and for information, we record this meeting. It will be published on our website around noon today. So a very warm welcome to the MilDef second quarter presentation.So with no further ado, please take away, Daniel Ljunggren.

[Daniel Ljungren, executive]

Thank you very much for that, Olof, and it's very happy to see that so many people have joined this conference call even if we are in the middle of the Swedish summer and vacation period. So for those of you that have been followed MilDef for a while, you know that I'm normally here in my previous role, as CFO and now it's the first time, I'm presenting in the new role, as CEO instead.Right. Let us jump into Q2 report and presentation, and start with the highlights that we see in the second quarter here in 2023. Number one, continued strong momentum in sales. We see a sales increase in the second quarter, that is up 144% and which the organic growth is up 104%. We exceeded sales growth that is, on all our geographic markets that we operate on. And we also hit, I would say, quite a milestone for each company's history. We reached sales on a rolling 12-month basis that exceeded SEK 1.0 billion for the first time in the company's history. So we see a strong momentum when it comes to sales. And that is something, of course, the order intake and the order backlog 1 year, 2 year going back has indicated that we will have the strong sales going forward.What we are absolutely most happy about is that we now clearly improved our profitability. We see gross margin in the second quarter that is above 50%, and that will give a good boost of also further down into the P&L. For example, I can say that we see high 16.5% EBITDA margin here in the second quarter. I would say that this proves our scalability and our scalable business model, when we are getting the sales volume and when the gross margin are, where we want it to be, we see that there is a big impact on our profitability, and that is something I'm super happy to present here for you today. I know that there has been some questions mark around our ability to perform this kind of profitability due to the component issues we have had 1 year, 2 year going back, but now we see that we have good impact on the profitability.If we look a little bit on the market, we can see a gradually more active market. We closed the second quarter with a record high order backlog. It's close to SEK 1.3 billion. We see order intake rolling 12 months that exceed SEK 1.2 million. So more and more things are happening on the market. But as I said, we're still not yet any material impact due to Russian's Invasion. We're still waiting for that kind of so-called catch-up effect, and we're still waiting for the slowness in the systems to be rippling down and impacting our order intake and order backlog. So I hope that the major demand from the customer is lying ahead of us.Another input on the market is that we see a high demand landscape, and we see that is here to stay. We see now the largest increase in military spending in Europe in 30 years. We -- on top of that, also say see that there is a great need for digitalization in the defense sector. I think there is a big [indiscernible] many countries to pay when it comes to modernization their defense.Our key markets, EU and NATO countries, they will continue to invest in their defense market. And I think that is something that we will see for a long time going forward. So it's interesting that it's our key markets, where we see the biggest increase in military spending.If we jump over to some key figures, you probably recognized them already. Net sales in the second quarter ended up on SEK 288.8 million. As I said, it's 144% million increase if we compare to Q2, '22. And if we zoom out and look at the first half of the '23, we see an increase of net sales of 120%. So I would say it's a fast-growing pace and continued strong growth in net sales.Order intake, 11% up. We had a pretty tough year -- pretty tough quarter to compare with in 2022. But I think it's more important to zoom out and see what happened in the first half of '23, and now, we can see an increase in order intake of 74%. So I would say it's a strong growth the first half of '23, and that's despite yet no material impact post Russian Invasion.And of course, the profitability, as we measure here in this case, in EBITDA clearly improved if we compare to the second quarter last year. Second quarter last year, we had a minus SEK 9.6 million in EBITDA. This year -- in this quarter, is SEK 47.7 million instead, EBITDA margin of 16.5%. And also, if we zoom out on a rolling 12-month basis, we see now EBITDA reaching SEK 145 million, corresponding to an EBITDA margin of 13.8%. So clearly improved profitability, and I think that puts our scalable business model going forward.Last bullet in here is something that we're keeping close eye too, and we work hard with, and we see that we have clearly improved our operating cash flow despite that we see continued high inventory due to our continued growth, so to say. So -- but we predicted that the working capital, as a percent of a rolling 12-month sales to go back, where we have been back in the history around something 20% to 25% within 6 months to 12 months, and that will give us a good boost of operating cash flow going forward. But we see year-to-date first half of '23, we see a positive operating cash flow of SEK 24.5 million. If we compare that to the same period last year, it was minus [ 5.6 ]. So we -- I think the first half of '23, we have moving forward in a better position when it comes to operating cash flow.Some business headlines here in the second quarter, some of them [ have you ] -- maybe already said because some of them has been press released. If we start from the left hand, you can see extended framework agreement. We made an extension on additional 2 years with our framework agreement with the Norwegian Defense Material Agency. It's a long partnership we have with Norwegian Defense Material Agency, and we hope that, that will continue for a long time going forward.Next is that we recruited a new CFO here in Viveca Johnsson, replacing me, now when I have stepped into my new role. Viveca has a very solid background in finance, and she has the past 10 years spending her time at another listed company here in Helsingborg, Nederman, so I think she has a good experience also from operating in a public environment.Next is that we are accelerating our U.S. ambitions and now we have put a new leadership in place for both our legal entities in the U.S. Jim Rimay, was today is the Handheld's CEO is now taking over the responsibility for both MilDef and Handheld. And by doing that, I think we secure a more sales and business-oriented leadership in U.S., and the U.S. market is by far the largest defense market in the world. And I think there is a huge handheld potential for MilDef. I know that it's tough competition in U.S. as well, but I think our product portfolio and our company has some keys to be able to be successful on the U.S. market.The next one is that we have won some business related to the framework agreement that we signed with the Swedish FMV in 2022. So they are now starting to placing order on with that framework agreement, and we saw one contract coming in here on SEK 37million.Next one is Astronics Corporation in the U.S., they placed an order [ on ] SEK 30 million. So it's also showing that we have continued good growth pace in the U.S.And the last bullet is something that we announced here in the third quarter is showing that we are in top of innovation showing that we now can win business related to high-tech things, and this was related to drones or unmanned air vehicle. We have won 2 orders. And one was actually won by our subsidiary Handheld [ that's ] a very interesting order, and we see a good growth potential of that deal going forward.Something about market if we continue that. We see on the headline is strong market fundamentals. If we start with #1, we see a great need of modernization and digitalization in the defense sector. If you want to stretch it a little bit, we can say that pens, compasses and paper maps are replaced by real-time digitalization -- information.I think that if we look at war here, Russia, Ukraine, I think one of the key factors for being successful is to have the right information in the right time. And I think that the market has realized that this is something that we will hopefully see even more going forward that they spend more and more money because they know it's one of the success factors in a potential war.The next one is, as I said, increased defense budgets in EU and NATO enables high demand, and this is something that we can see for a long time going forward. We see now the largest increase in military spend in Europe in 30 years. So the demand is here, and the market is here for -- to stay for a long time going forward.I also know that many -- several countries are now defense -- in their defense planning processes. We are not actually seeing all the money putting into the budgets and the system. They need to first decide how to move on and decide what they are acquiring. And MilDef is quite late in this cycle is something to remember. Since there were -- since it was started last year, 24th of February, our customer has prioritized operational ability and they have spent more and more money on ammunition and things like that. But now I think they are turning their eyes towards more long-term programs, including modernization and digitalization to build threshold effects.Last is very much said and written about is the opportunities with a potential Swedish NATO membership. We see this as a clearly positive thing for the Swedish defense industry in the long run. So let's hope that Sweden will be a member of the NATO and that can, in the long run, give us a positive effect as well.Something to mention just if you go back on the market is the need for smaller and smarter products with more computing power. The need for that is increasing. And we, as a company, are in a sweet spot, we could say when it comes to those [ and things ] because it's actually what we are doing or what we can do. So it's interesting to see where that will take us.Okay. Then we [ move over ] to the more financial summary of this presentation. If we saw from the left hand, you can see our net sales on a rolling 12-month basis. You can see that we now are above SEK 1.0 billion. You can see that we have grown the company and the top line with 76% the past -- last 12 months. And on the right hand, you can see the development of the gross margin rolling 12-months. And we can see that we are steady around 47%, 48% just below the 50% we are aiming for. In the second quarter here, isolated, it was above 50%. So let's see if we can take that further on and be able to put the rolling 12-months gross margin also above 50%.As I said, the profitability EBITDA is an all-time high on a rolling 12-months basis, SEK 145 million, which is an EBITDA margin of 13.8%, and we have heavily increased this if we go 12-months back, it's growing with 215%. So it's clearly positive to stand here today and see that the profitability is back for MilDef.If we look at the order intake, then and I said also that it's an all-time high, and we have exceeded SEK 1.2 billion. We can see that for the fourth quarter in a row, we present all-time high order intake, also showing that the activities on the market is steadily growing.And also the order backlog, which is an all-time high, has grown with 41% if we compare with Q2, 2022. So we still have a lot to do. We have still a lot in the order backlog. And if we break that down to how the deliveries are planned, we can see that for the rest of the half of 2023, we still have plus SEK 500 million to deliver in the second half of '23. We can also hopefully add something to that just the window of opportunities to sell and delivering for this year is still open, and we also have some sales that is not in the order backlog. It's more of the consultancy and the software business that is not in that one so.Also looking to some of the more balance sheet-related items. From the left hand, you can see net working capital, as I said, is more or less on the same absolute level that it has been since we acquired Handheld, but we can now see that in terms of percent of a rolling 12-month sales, it's starting to go down again, and we ended up here with 31% in Q2. And as I said before, hopefully, and this is what I predict is that we will be back in 6 months to 12 months around 20%, 25% rolling 12 months if you compare that to the net working capital.Also on the right hand, you see the net debt to EBITDA. There is -- the bottom line here is our target that says we should not be above 2.5% more than temporarily. We saw that when we acquired Handheld here in the third quarter '22 that we went over this 2.5x EBITDA. But we also see now when we're closing the Q2 here that it was temporary, and we are now back under a target closing second quarter with a net debt to EBITDA of 1.9x. So I think it's clearly on the right path. We are [ taking it ] from both sides, the EBITDA is going up, and we are repaying the acquisition credits. So we're attacking it from both sides so to say.Priorities going forward. We started this year by really having a focus on customer deliveries, so that will be our absolute #1 priorities going forward as well. We need to continue to deliver to our customers, that it was increasing -- drives the increase in revenues, it driving the cash flow, et cetera. So that is super important for us.#2 is the Swedish NATO membership and monitoring impact and also put MilDef in the right position for being able to capture the opportunities that we can have from the Swedish NATO membership. So we need to be close on what's happening and also get MilDef in the right position to be able to capture opportunities.And about capture opportunities, our main priority is also to capture opportunities in EU and NATO, our key markets going forward. We will see heavily increase in defense spending in EU and NATO. So there is opportunities. It's just that we need to be super focused around that we will win the deal.The next is improve our net working capital and operating cash flow. When you have a high growth rate, as we have at MilDef, and we are also an [ manufacturing ] company, there is a big chance of [ churning out ] and tying more and more capital into inventory and other things. So to be able to self fund -- self finance our continued growth, we need to work hard with the components you can find in working capital and cash flow. So that is something that we will put an extra focus on going forward.And also materialize additional Handheld synergies. We have now reported that in the beginning of the third quarter, we won one deal that has growth -- has big growth potential going forward. It's development project together with one big defense company that is based in the U.S. So hopefully, after that development process, we can see that volume orders will follow. And that is something we have ambitions to also take on to other customers and win more deals. This is mainly around selling MilDef or selling Handheld's product portfolio into the military domain, and that is something we -- something we spoke about already when we did the acquisition of Handheld.Last is that, as I said, continue to accelerate our U.S. expansion, huge potential, I think, for our product portfolio. It's by far the largest defense market in the world. So I think that we will have -- we are -- to be able to have some success in the U.S. market if we play this out right.Some in the end, some short outlook for 2023. We see positive expectations going forward here in 2023. We closed second quarter with a record high order backlog, and we have a more active market. So we predict continued strong sales, order intake and profitability in the rest of 2023.And by that, I think it's time for the Q&A session then. Hopefully, you have some good questions for me.

[Olof Engvall, executive]

Thank you, Daniel. And by the way, congratulations for the inauguration. This is your first quarterly report, as MilDef's President and CEO. As the CFO, we've done quite a few. We will commence with Erik Golrang, financial analyst at SEB.

[Erik Golrang, analyst]

Thank you, Olof, and thank you, Daniel. I have a couple of questions. Could you give some indications? I mean, Q1 was a strong quarter in terms of larger orders, Q2 was -- it wasn't bad, but it was a bit slower on that note. What's the -- if you look on the tender backlog now and orders up for potential decision here in the second half, is there increasing activity? I guess, I'm -- what I'm gunning at is your comment on thinking that you're a bit late cyclical, and we haven't seen a pickup in orders related to all the ramp-up in military spending. I mean, when the timing of that, when could we see that?And then the second question on the SEK 500 million or so that you have or planned delivery in the second half year, help us out a bit with the absolute numbers on the software consultant business that isn't in there. And then, also maybe in a world without supply chain constraints and normal demand, how much [indiscernible] business would you expect on top of that?And the final question, if I may, on the gross margin. I realize it will probably continue to be volatile. But is there anything extraordinary or sort of really out of the ordinary in the mix that would have the Q1 level a bit -- and a bit on the high side compared to the underlying trend?

[Daniel Ljungren, executive]

Thanks very much, Erik. I will try to answer all the 3 questions. I think I captured them. If we start with order intake, we see 11% up here in Q2 compared to last year. And I think last year was quite a tough year to compare with. But if we zoom out the first half, it's up 74%. So I think it's still showing that there is a good demand for our products.Looking forward a little bit on the second half of 2023, as I said, I see more and more active markets, and I see that more and more, the big procurements that has been done are starting to [ rippling ] down a little bit [ into the middle ], as we are a lead cycle company. They're starting to place orders on other things that they are really in need of. And now we see that more and more discussions and dialogues regarding a business that I would say is coming from increased military spending due to the war in Russia and Ukraine.So I'm very hopeful when it comes to order intake in the second quarter, but I won't be able to -- the tough thing in our business is to put the time line on the order intake because it sometimes could be delayed in the discussions or something that needs to be sorted out, but it's still going to be volatile, I think, when it's order intake. You need to have a longer perspective on it, but I'm hopeful for the second quarter.And the next question was around the breakdown of the order backlog and the [ SEK 506 million ] that is still in there and what we can expect on top of that? If you're a little bit conservative, you could add SEK 50 million related to our subsidiary in Norway -- in Norway's Sysint and that's related to their software and their consultancy business. So SEK 50 million for the second half, you could absolutely add on top of what we already have there.And then, we also have the window is still open for taking orders and deliveries within the second half of 2023, even if we are starting to see that, that window is getting smaller and smaller, but there are still opportunities. We also have a little bit change when we acquired Handheld. They have much, much more finished products already in inventory, so it can be much quicker for them to -- from order to sales in the military domain is more long cycle. So let's say that we maybe can be open until late September, then we -- the window is closed for delivering this year. But it depends on what kind of products and projects it is.And then, I think the -- was the -- the last question was around the gross margin and the volatility there. We see plus 50% here in the second quarter and it would -- it would probably be volatile going forward as well. But the underlying trend, I think, is there. And I think that we are now starting to see positive effects from the price adjustments we have done 1 year, 2 year ago in the pandemic time, in the inflation time, we were able to increase our prices and make price adjustments.And in our business, it takes 6 months to 12 months before we're starting to see any impact in the books on that price adjustment. So it's starting to get a positive effect. We're starting to see that the product mix is also getting better and better from a gross margin perspective. More and more of our own product is delivering here in '23 and less of the third-party products. So there is a couple of components that's -- it's driving the gross margin.

[Olof Engvall, executive]

Thank you for that, Erik. I think that it's also solved Hugo's question regarding the gross margin going forward. We have 2 other questions in the chat, and I'll start with our good friend up in the West Coast, [indiscernible]. Actually, you saw the press release about SKELDAR, the new system for flight controlling. You believe that will have a good future in the Air Force. But to be at the forefront, do you have -- do we have any thoughts to develop a similar system for underwater environment. The SKELDAR control -- controls the UMS SKELDAR or mini helicopter developed by Saab, if you did not read that press release. So what about underwater, Daniel?

[Daniel Ljungren, executive]

I'm not really sure, but we will take it. I mean, we are very happy to now closing the deal here with the SKELDAR drone and our remote pilot station. So let us put a lot of focus on closing that one, and we'll see if we can take it on the water as well. But today, it's too unclear to answer that. I mean, we are happy to contribute to all the discussions in potential business going forward, if that's underwater or over water, et cetera, but let's see if it can be something like that. But I'm super happy about the SKELDAR project in total and that MilDef is one of the partners that they will contribute in this. So it's a very interesting deal.

[Olof Engvall, executive]

And as you might have followed, you guys and girls following MilDef, you also saw the press release, I think, the day ahead or was it after the SKELDAR release covering the mini drones. So the drone, the unmanned air vehicle domain is an area, where MilDef is accelerating.Okay. We'll go to the next question from [ Niklas ]. In this positive expansion phase, what is your main bottlenecks to operate according to existing orders and forecasts going forward, personal cash flow bottlenecks and supply chain due to special component needs, monopoly situation, so bottlenecks to go forward. What do you see, Daniel?

[Daniel Ljungren, executive]

It's a good question. Thank you for that. I touch base a little bit on the cash flow. There could be a potential bottleneck going forward when you have a fast-growing company and a manufacturing company working with inventory and things like that, then you need to tie up more capital. But we have really put focus on that there should not be any bottleneck going forward.On the [indiscernible] side, I think that we see more and more people actively looking into working in the industry. So I think we see a boost from that. And so far, there hasn't been any issues or bottlenecks around that.The last one, I think, is the supply chain. We have now seen -- I mean, we're coming from 2 years, 3 years, where it has been a really bad situation. Now we have seen that it's a clear better landscape when it comes to getting hold of the components. But if it's totally out in the light again, so to say, I'm not really sure about it maybe we can see the [ supplying ] issues coming back again. So I'm sure about that one. So I was -- in the end, I would say, we're keeping -- monitoring both level cash flow, making sure that, that will not be the bottleneck. So supply chain would probably -- if we see a problem there again, that would be a bottleneck for us.

[Olof Engvall, executive]

Thank you for that. And next question comes from [indiscernible]. What are the largest challenges for becoming successful in the U.S. competition? Is L3Harris a good peer? And what other companies look the most like MilDef worldwide?

[Daniel Ljungren, executive]

It's a good question. As I said, we are a little bit more accelerating our ambitions in U.S. and I think there is a couple of components to sort out to being successful in the U.S. I think you have to be more present in the U.S. We need to have more local capacities in the U.S. Maybe in the long run, we need to be able to manufacturing our products in the U.S. We have already made in U.S. and all the things like that. So that is something that we look really closely and to see what are the key components here to be more successful in the U.S. I think we already have a strong product portfolio going into the U.S. I think we need to increase our efforts when it comes to marketing in the U.S. In the U.S., MilDef is a small player. So we need to be able to get the brand awareness up.And regarding L3Harris, it's a -- if it's a good peer? I mean, let's remember that L3Harris is probably on the -- at least top 10 list, global defense companies in the world. So if -- and even if I want to compare MilDef with L3Harris, remember that L3Harris is, I mean, by far, a much bigger company than MilDef and doing a lot of other things. We have L3Harris, as one of our customers in U.S. So we have that kind of relationship.Otherwise, if you look at other companies, they are mostly look like -- like MilDef worldwide. It's not super easy to find [ and ] find some in the U.S. Curtiss-Wright is one example, for example, that you can look into if you want to see. They are doing a lot of these things that we are producing here in Sweden when it comes to routers, switches, et cetera, that's right -- so Curtiss-Wright, I would say.

[Olof Engvall, executive]

Thank you, Daniel. And before we go to Benny, Joakim asked a question. You raised -- MilDef raised or our board raised our revenue target came after the positive NATO remembering, we raised the -- Board raised them from 15% to 25% -- over 25%. Is Swedish entry into NATO a condition for growth north of 25%.

[Daniel Ljungren, executive]

No. I wouldn't say that. I think that the Board of Directors, if you go back to the autumn last year, so what's happening on the market and saw the increased activities on the market. So -- and that was actually before I think we had any success with the Swedish NATO membership. So I wouldn't say that, that is a condition for MilDef to being able to grow more than 25% per year. I think there will be enough opportunities anyway even if Sweden not will be a member.

[Olof Engvall, executive]

Well, thank you for many good questions, Joakim, and now, [indiscernible], if you open your mic. Please state your question. Unfortunately, we cannot hear you, Benny. We have a technical issue. Maybe you have to write it in the chat, and we'll do some [indiscernible], as we say, in Swedish. We still have some minutes. So if there are any other questions, yes, [ Band ], some service, raising his hand. Please go ahead, Band. Make sure to open your mic.

[Unknown Analyst]

Do you hear me?

[Olof Engvall, executive]

Absolutely. Thank you.

[Daniel Ljungren, executive]

Yes. We hear you.

[Unknown Analyst]

I have a question about the -- what we call after sales, the support services, spare parts and so on. How do you work with that and develop that part of the market?

[Daniel Ljungren, executive]

Well, you should remember that the aftermarket is a quite small piece of our business. We, of course, have support on the product side, et cetera. We are looking into more and more working with service and maintenance agreements to our big customers. So that is something we can see going forward that we will increase the efforts around to put more and more agreements in place.It's otherwise in our industry, I think the aftermarket is not that huge. I mean, they are taking care of most of the issues by themselves, et cetera. So we're looking at how we can increase the aftermarket. But I think the aftermarket is still going to be quite low, if we compare the total revenue streams, the revenues from aftermarket will, I think, continue to be quite small going forward.

[Olof Engvall, executive]

Shall we give it a new try, Benny. Okay. We have audio, Benny. Okay. So we have a question from Benny [indiscernible]. The working capital are normalized in future. Will it take 2 or more quarters?

[Daniel Ljungren, executive]

It's -- I mean, it's a good question. Thank you for that. I would say it's pretty tough to be exactly where and when it will be normalized. I have put 6 months to 12 months into my CEO letter, and I think that is something that we see. So I'm not -- in the best world, we are there already within 2 quarters, but it may take up to 12 months before we are there. But I think we will be there. We work hard to be there, and it will have a positive effect on our operating cash flow. So that's where we want to be. But I'm not -- I'm sure if it's within 6 months or 12 months, so to say.

[Olof Engvall, executive]

Thank you for that question. You still raise your hand, Band, but I take it is your question. So I have a question for Daniel, while the rest of ladies and gentlemen think of a final question set. Has the M&A strategy to buy a company a year? Has it changed? What about the M&A?

[Daniel Ljungren, executive]

I think M&A, again, is still there, still important for us, and we still look very deep into a couple of potential acquisitions. On the other hand, as everyone in this call are aware of, I mean, the macro environment has changed. It's totally different landscape when it comes to interest rates and things like that. So -- but we're still looking, and if we really find potential acquisition that fits good into our strategy, we are more than open to make acquisitions. So the acquisition is still on the table. We're still actively working with it, but maybe not -- maybe down 1 from top priorities.

[Olof Engvall, executive]

Okay. I take it, Band, that your hand is raised still, but if you have a final question, go ahead.

[Unknown Analyst]

Yes. No. I think I pushed it twice last time. But thank you very much for a good show here.

[Daniel Ljungren, executive]

Thank you for following -- for following -- both joining this conference call, but also joining MilDef, and our journey, and it's very, I think important for us to hear your thoughts and ideas. And it's -- we feel strongly that you are following the company and our journey.

[Olof Engvall, executive]

So another hand, Band. Okay. Well, then let's close this call. I see no more questions in the chat. We have an image still in the presentation deck, and I can just give you some exciting dates if you want to travel or can visit MilDef or go deeper into our world. I can disclose that we will launch a new revamped and repolished and elevated brand positioning in September. And we'll do that in conjunction with a huge and very impressive DSEi, Defense Technology Convention in London in September 12 to 15. So if you're in London, shout out to me, and I'll make sure that you can come and visit one of the large world's biggest defense conventions.The same for AUSA in Washington, D.C. in October. That's another exciting venue. And then, we have the Q3 report on October 26 and year-end 2023. It's coming fast, time flies, February 8th next year. In a few moments, we'll be there.But anyways, thank you, everyone -- everybody for following this Q2 Investor Call from MilDef. Don't be a stranger. Stay in touch. Follow us on LinkedIn, send an e-mail or make a call. We are here to help you understand the MilDef continuing journey. So stay tuned for more. Have a fine holiday, summer vacation and stay safe. Thank you, ladies and gentlemen.

[Daniel Ljungren, executive]

Thank you. Take care. Bye-bye.