OHB SE
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OHB SE
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Good morning, and welcome to the conference call of OHB SE. At our customer's request, this conference will be recorded. May I now hand you over to Mr. Marco Fuchs.
Yes. Good morning. Thank you very much. Good morning to OHB's first quarter 3-month results 2020 call. I hope you have all been able to download the documents that have been put on the system this morning. So we published our 3-month results, our Q1 report has been published. And as always, I'd like to walk you quickly through the slides. And then, of course, we have time for Q&A.Of course, it's a special time for Q1 call now after 2 months of corona impacts. But I guess what you see in our numbers and in our document is that for us, the first quarter has been reasonably normal. And so I start on Page 2 with the recent developments on the operational side. We had 2 additions to the Management Board of the OHB System. Chiara Pedersoli started early January and Ulrich Scheib was appointed member of the -- first time of the MT Aerospace.Maybe I'd quickly also introduce my colleagues here. Sorry that I'm jumping immediately into the slides because I'm here together with Kurt Melching, Lutz Bertling and our colleagues from the financial department. And Martina Lilienthal is here as well. Operational progress has been quite successfully and significantly with regard to a number of design reviews that have been completed. Even in a home office mode, we have been able or as I call it in Italy. They don't call it home office in Italy, but they call it, hard working. In Italy, we closed critical design review for the ground segment of NAOS. We had very successful progress in the system critical design review for -- in Heinrich Hertz mission and the preliminary design review of PLATO. And the launch earlier this year took place of the Solar Orbiter where -- which OHB Italy was on the payload side with the latest payload and OHB Sweden was involved in the propulsion system and the attitude control system. So pretty normal work at OHB.But going on to Page 3, we see that we do have also, of course, impact from the COVID-19 crisis. Space industry has been relatively crisis-resistant because the demand for space products is still sound, of course, driven by the usefulness of space products. The long-term nature of our order intake of our projects is a plus in a situation like that. And of course, certain risks do exist in our industry. We have a delay of order intake because of potentially decision-making delays due to the slowdown in the decision-making process at some customer organizations. And we do have also some impact from restrictions, for example, the Galileo test center in Noordwijk was shut down, so we lost time there.So there's a lot of uncertainty in the whole world these days. Of course, it's the same for us. And due to the high degree of uncertainty, we decided -- we proposed as the -- first time, to the Supervisory Board. And jointly, we will propose -- or we did propose to the annual meeting that there will be no dividend paid for the year 2019. Our annual meeting will take place on May 26, as it was always planned to be. It will be a virtual meeting. So this will be a new experience for all of us. But of course, many companies will have this year virtual meetings, and it will be the first time that no people will be there and that no dividends will be proposed, and very likely will be adopted.If you go to Page 4, another key point, obviously, is the impact of the COVID-19 pandemic situation with regard to our guidance. During our Capital Markets Day on February 13, we issued the guidance for this year of EUR 1.1 billion total revenue, and we are forecasting for 2020, EUR 80 million in EBITDA and EUR 44 million in EBIT. At present, it is not yet possible to see if the actual results at the end of this year will or will not deviate from our plans that we explained in February. For this reason, we cannot -- we can neither confirm nor withdraw the guidance. So it's not that we say we will be off. It's not that we say we will be weaker. It's just that at this point because of the uncertainty that is around the whole economy, but also especially the time lines, as I explained earlier, we are making the reservation that the guidance cannot be confirmed nor withdrawn for the time being. But we'll have time to discuss that later in the Q&A session.If I go on, on Page 5, we see the quick overview. Backlog has decreased to EUR 1.7 billion. That obviously is the regular course of business in the first 3 months. We still expect and we are still very hopeful of very significant order intake coming this year. We will discuss that later. Lutz can give you an update on that point. Revenues are down -- Q1 revenues are down to EUR 184 million, that's minus 4%. EBITDA, almost on the same level, and then EBIT and EBT lower than before. So it all ends in an earnings per share of EUR 0.36 this first quarter instead of the EUR 0.42 that we had last year. So it's a soft first quarter. Of course, it has to do with the slowdown that we saw also in March.Compared to last year, the head count has increased. It's -- yes, it's almost 200 people more or it's actually 173 people more. So the company was significantly growing during the last 4 quarters. But that is not, I think, not a surprise. Even from last year's end, December 31, where we were 2,930 or 2,933, I guess. We still have 37 people more in the first quarter. So the Q1 increase was also still a few dust.I move on to the next Page 6, the group results compared to the last 4 years. Here you see that total revenues over the last 5 years, including Q1 2020 from '16, '17, '18, '19 onwards, is a steady increase and a little bit of slowing down. Now in this year, EBITDA is pretty much on the same level as it was in 2019. And EBIT a bit softer with the EUR 11.1 million. But still the second-largest EBIT that we historically had in Q1.Strong results from Space Systems on Page 7. You see that -- especially profitability is very strong. EBITDA was EUR 17.2 million. It's a record Q1 result we ever had in our history. Also EBIT, the same with EUR 10.8 million. The EBIT margin on own value added. If we take out the subcontractors that only pass-through the 12.6% strong result.Moving on to the next Slide 8. Weak results in Aerospace + Industrial Products. Weak total revenue and even weaker profitability with EBITDA and EBIT at EUR 2.2 million and EUR 0.4 million, respectively, at EBIT. So that's weak. Of course, it has to do with the weak business around Ariane. That's not new. Also the other small entities in this domain, the more industrial-oriented entities had a weak first quarter. So overall, this is a weak spot of our group. Unfortunately, I don't see that to improve very fast this year because I mean our business, we see still for the whole year to be very weak. And the industrial activities, the small telematic tracking and tracing activities, well, also have a weak year. So this will be not a strong year for Aerospace + Industrial Products.Cash flow, Page 9. Pretty much the same as last year. So the minus EUR 50 million is really, by accident, this chart looks very much the same as last year. So we had a EUR 50 million operating net outflow investment also at around EUR 3 million. What is a bit different is that we had a stronger net inflow from financing because in March, when the COVID crisis came, we decided to stock up our cash reserves at our accounts. This resulted in a more significant increase in cash. So you see that financing activities you see the EUR 20 million -- EUR 21 million more. And obviously, you see that the bottom line that the liquid funds at the end of March has been significantly higher with EUR 116.5 million compared to EUR 60 million last year. That is a lot of precaution. That is a lot of unpredictability. And of course, the reaction with us was let's put ourselves on the safe side and have a strong cash reserve at the company.Quickly moving through the balance sheet, Page 10 on the asset side. Yes. I guess the biggest change here is the cash actually which is good. So the fact that the balance sheet got longer by EUR 35 million is basically cash-driven. As you can see, everything else is pretty much the same as it was on December 31 last year. And that's a good sign.On the shareholders' equity and liability side, no surprise that the biggest change there is current financial liabilities, that was also the stock up of cash. But not -- no significant change in the balance sheet.If we go on to Page 12, a couple of selected financial ratios, free cash flow similar than it was last year. Net debt slightly up from the year-end 2019 with EUR 192 million. I'll come to that in an overview. CapEx is at the same level. Low -- very low with EUR 4 million compared to the EUR 3 million last year. Own work capitalized is even lower. I mean, it was EUR 1 million, basically not -- there were no significant own work capitalized in Q1 2020. Return on capital employed is a bit lower than last year. But if we compare that in a few slides with the historic chart, the 12% is pretty much a number that is very much normal for us.On Page 13, the development of the net debt ratio. You see that over the last years from 2015 onwards, the net debt, which is including the pension provisions that we have on our balance sheet mainly for our MT Aerospace has decreased from EUR 174 million in '15 down to EUR 135 million at year-end '19. You see more significant, if you take the light blue, then the net debt without pensions, that over the last years because of the constant positive cash flow that we had over the last 5 years, went down from EUR 81 million to EUR 27 million. Currently, at Q3 -- Q1, 3 months, it's up again, but that's the regular cost. So overall, we see that the OHB Group has been able to generate significant free cash flow over the last years.And you can see that on Page 14, where you see that around EUR 100 million free cash flow was generated from '15, '16, '17, '18, '19. And we see for the cash flow this year, even though all the unpredictability, we see a solid cash flow year this year, and I'm sure Kurt will go into detail on that.Also on Slide 14, you see the return on capital employed, 12%. I said that's pretty much a regular number. We have had also over the past year. So in that respect, business as usual.On Slide 15, what is not, as in the past years is the investment spending. So you see the CapEx has been pretty high over the last 5 years, mainly driven -- not mainly, but significantly driven by the investments in MT Aerospace, the Ariane 6 facility and significantly driven an OHB System investment in upgrades of clean rooms here, Mikroba and the satellite test center. And a lot of investment also in the overall IT domain. Pretty low this year so far. We will probably be significantly below last year's average. And especially, that is the case for the own work capitalized. So we had a high point in the own work capitalized in 2016 with EUR 29 million. And you see that reduced over the past years down to EUR 10 million in 2019. And this year, we will we be even significantly below this 2019 number. Mainly the case because our massive effort in own work developed around large satellite geostationary platforms has been completed. That's the biggest part that you see here that has been successfully completed. And we have still some investments going on, but not in such a massive time. So it's now -- it comes -- the years are coming where we have an investment honeymoon with regard to our own satellite development.Yes, the next slide have not changed at all. Shareholder structure unchanged since a long time. The analyst rating has been updated recently, still a mixture between buy and to hold.What has changed on Slide 18, significant change in the average daily trading. Massive increase Q1 with 22,000 almost 23,000 average daily trading significantly higher than last year. But I have to say last year was also very low with 4,000. So we are not coming into territory where we should be. So overall, I think the stock did reasonably well compared to others in the crisis months. And yes, that ends the quick run through.As I told you before on Slide 19, you see that the annual meeting will be a virtual meeting. And the next quarterly report will be in August, August 11 half year report.With regard to Investor Relations activity investment in the community, of course, it's a bit uncertain this year. Lots of conferences have been canceled. We're not really aware I mean how to predict how this will end the year.So this was my quick overview. And now I would like to open the Q&A session for you. So please feel free to ask questions. Thank you very much.
[Operator Instructions] First question is coming from Mr. Alexander Hauenstein.
Alex Hauenstein from DZ Bank. I have got 4 questions, maybe we can go for it one by one. First of all, could you please provide some more details about where the difference is between March Q1 and April, May, Q2 are in terms of production sites and utilization as well as other COVID-19-related issues in order to allow us to get a better assessment of the Q2 profitability by segment, please.
Yes. Kurt, maybe this is a question for you.
What we expect in the second quarter is that there will be still an ongoing movement of milestones in our supply chain for -- to a later date. So this may be in the second quarter to a comparable low total revenues. And on the other hand, we see no major impact on the profitability in Q2. You see in the first quarter already that in the Space Systems segment, the total revenues are a little bit lower compared to last year, but on the other hand, profitability is good.Usually, we have each year in Q2 some profitability comparable weakness compared to Q1 due to the fact that the working days -- number of working days in Q2 is lower compared to Q1. But on the other hand, we see in our first indications of the -- from the month April that the number -- total number of productive hours is still an acceptable good level due to the fact that in principle, our productivity figures are good concerning, also the figures concerning like illness, like unproductive hours are still in a good shape. And it's on a good level. So at the end of the day, in summary, I expect for Q2 comparable lower total revenues, the shift from these revenues to Q3 and Q4 and Q1 next year, most likely. But on the other hand, no major impact on profitability coming from -- resulting from COVID-19.
Okay. And the next question would be, could you please speak a bit about the potential deferrals or even cancellations, which you already mentioned a bit. Which are the orders and/or projects that you have the biggest risk here?
We don't have really a risk of cancellation, but Lutz will walk you a little bit through the impact on order intake.
Actually -- first of all, good morning. Actually, in terms of cancellation, I wouldn't see the slightest risk. We don't have any indication that customers would cancel existing orders. So -- and I haven't heard Marco saying this honestly so there might have been simply a misunderstanding.In terms of order intake, I would say, for most of it, it's nominal. And then there are a few risk and opportunities. So what is nominal, in particular on the ESA business. So the results of the ministerial conference 2019, which were very favorable for us and for the whole space industry have not been challenged. All countries are sticking to their commitments. And the European trade agency is actually doing pretty well in progressing on the valuation of the different offers, which have been placed already. So the first big things to come will be, on the one hand, the so-called gateway which is the new space station, which will actually offered around the moon. And here, we don't have order intake yet, but the proposal in which we have been involved has already been selected here internally, so we expect the order intake to come.The next one then is Copernicus. Copernicus is running nominal. It was foreseen that the ESA internal boards taking the decisions on the Copernicus missions shall happen on June 30. I recall with the response to a Director of ESA last Friday, and he confirmed June 30. So they are on track with aviation of the contracts.Hera, our asteroid deflection mission. The offer from us is due this week Friday, and we expect this to happen, which means we would submit it, and we expect by early Q3. We are the sole bidder. So normally by early Q3, we should have an order intake here.So on the ESA business, honestly, I don't see any negative impact. If we leave ESA and we go to EU, the one thing which might slip timely a bit is GTS, Galileo Transition Satellites. This might create even an opportunity for us. So if ESA slips there, then to keep the overall Galileo system operational, they would need to have a gap filler and even a larger -- potentially larger gap filler than 14 up to now, which means we expect that there might be an additional order for Galileo but 3 satellites. This order naturally would go to us because if you want to go for a gap filler, then you can just order more of the same. If they would go to somebody else, then development efforts will start. And the effect of being a gap filler to keep the operational capability of the constellation would be gone. So a slippage of GTS would not degrade our chances for the next-generation GTS, Galileo Transition Satellites, but if it slips, it might create an opportunity even for this gap filler. No impact expected at this point in time on Copernicus, which I mentioned already, which is a joint program by ESA and EU. But at this phase, the decision and the funding is fully coming from ESA, so no impact expected there.National orders, we -- compared to our plan, we do not expect any negative news. We might even see -- and here, I can't go into any detail. We might even see good news in Q3, but I'm simply not allowed to disclose any detail here. So here, again, I would say, a slight upside.The one thing where I would see a slight downside or slight risk is on commercial business, commercial business for telecom, but actually in our order intake planning, commercial telecom was literally nothing. And commercial order intake for oil and gas. Here, I mean, with the current economic development and with the oil price, which we see at the moment, financing for oil companies is more difficult. We have one project in that area. And actually, to my surprise, the financing commitment, which I have seen up to now and very recently, are good. But this one, I believe, once the ink is on the paper. So that the one and only, the one single project where I would see a bit of risk, while on the other hand, I see opportunities as well, as I said.So overall, it's quite a balanced picture. I don't see any overall negative significant impact. We might see something slipping from 2020 to '21. But this is a bit unforeseeable. Depends a bit on how this corona thing goes on. If there's a second wave or not and so on. But in substance, I don't see any significant risk for us.
Okay. Interesting. Maybe I raise another question, which is not an easy one regarding the guidance. What are your underlying base case assumptions here in order to achieve the EUR 44 million EBIT? I mean, in which constellation will it be difficult or even impossible to reach it? Or to put it differently, how quick do you expect any kind of recovery for OHB. Yes. You all know it's probably impossible to predict exactly. But what are your ways of thinking in terms of scenarios here?
Yes, that's not an easy question. And of course, in the time of uncertainty, the key thing is uncertainty. So this is why we basically said to the guidance what we said. But I think what you can see from Q1 is already a tendency that the top line is lower than last year, whereas the profitability in Space Systems and overall, our EBITDA level for the group is not so much impacted. This is what Kurt just said. And this is probably more the trend that we also now, with all the uncertainty. As a general landscape, we expect probably to also be valid for the whole year.Having said that, our guidance at EUR 44 million EBIT was not -- if you remember, not -- let's say, very overambitious in February to be careful because you remember that this was the guidance that was lower than some market expectation. And when we came out with the EUR 44 million in February, markets were not excited about it. But somehow, it was a good timing that we came out with a relatively low EBIT guidance.So I mean, I think you might be able to extract from my comments that I don't feel totally uncomfortable with the EUR 44 million. But maybe I'll leave it to Kurt to give more into detail. Okay. Great.
Yes, is this really the case, what Marco just mentioned, the question of uncertainties. It's a question of uncertainty. Especially, as I already mentioned, there are some movements of important milestones in our supply chain. And it's really, really not predictable what will happen in the next months. We see a realization in some companies in south of Europe, in Italy and south of France and in Spain. But if this is realization and again, start-up of open the facilities and open the companies and produce on -- actually not on the full level, but if this will increase. Then some of these movements will be recovered. But I expect it will not be fully recovered for the whole year. But really, it's difficult to say.On the profitability, if we proceed -- if we can proceed our business, as we can -- as happened in the last month and also has happened in April, if this is the case, with no major influence from other and again, influences from COVID-19. Then, I see the profitability guidance is really achievable for us.
This is why we are not lowering the guidance. We're just saying it's uncertain. So it's not a lowering of the guidance. It's -- the point is it's uncertain.
Yes.
Okay. Yes, that's understood. Last question, very quickly. How does the crisis impact the Ariane 5 ramp down and Ariane 6 ramp-up schedule or also the topics that you're faced with?
My understanding that the ramp down of Ariane 5 is not much impacted. Our industrial ramp down is already more or less completed. We have delivered everything from -- for Ariane 5 already last year. So our ramp down is there. And I think also the execution of the remaining Ariane 5 flights might be a little bit delayed because of the shutdown that we saw in French Guiana over the last months, but I'm not aware of significant changes there.With regard to the ramp-up of Ariane 6. The industrial ramp-up on our side is there. We are manufacturing the first -- we have delivered actually the first. And now we are working on the first lot of Ariane 6 chipsets. I don't know what it really means. I think this will be later this year, communicated by Ariane -- or Ariane Group. But it overall means with regard to the Ariane 6 introduction, I have no real feeling.I think the Ariane 6 development is on a very good path. I think technically, the rocket is ready. So let's hold our thumbs that the ramp-up of Ariane 6 will go as the prime contractor plans to.
Mr. Zafer Rüzgar from Pareto Securities.
Only one question from my side. Regarding the margin development in the space segment, it was quite impressive, and maybe you can shed some light on the reason behind of this quite impressive improvement. Is it related to the mix? Or is it related to the share of subcontractors? Or are there any other reasons?
At the end of the day, obviously related to the share of subcontractors. The own work share, the own contribution from the company is higher compared to last year. And amount of subcontracts are lower compared to last year. And obviously, this leads to an increase of margin to a very good level of now 7.56%. And -- but if -- to be very honest and to be very clear, if there is an increase in the next quarter, not in the second but in the third or fourth quarter of the amount of subcontracts, then the margin looks a little bit lower -- will look a little bit lower.
Mr. Richard Schramm from HSBC.
So just follow-up on this margin explanation you gave. I think you should have quite good visibility on how the mix looks for each project between your own workload and the subsuppliers. So as you indicated, we should expect that H2 will see here a change in the favorable trends we have seen in Q1, correct?
You mean a change in the sense of what our own work share suppliers. I mean, what you see, of course, is that the share of the suppliers was a little bit delayed, and that was the main reason why the top line was weaker than the bottom line because the own value was more steady. This is, I think what you will be referencing to. Kurt, this is case, right? And this will be the case in Q2 as well, right?
Yes, this will be the case in Q2 as well, but it may change, as mentioned in Q3 or Q4.
Because there might be a recovery of -- I mean, of course, we are optimistic people. So there might be a recovery from the supply chain in Q -- at the end of the year, right? That's the idea.
Yes.
Okay. And then concerning the overall, let's say, sector environment, we have seen that there are some issues on the financing side from commercial projects, especially these market light projects are under pressure here. How do you see the impact from this on your business? Do you expect any impact? Or is it even favorable for you, that your newcomers yes, on the competitive side, at the moment, so much under pressure here? How do you see the situation?
Yes, there are always good and bad things and it changes. Of course, you see that in a time of crisis, established companies, like ourselves, have also certain advantages. On the other hand, in times of change, newcomers have certain advantages. We feel that we are in a good spot in between these things. So we feel that -- of course, we're working based on an established business with institutional clients. So our robust business model in general is being confirmed in the crisis. We're very happy that we have this solid business with ESA and institutional clients, that makes us pretty robust.Of course, there might be some of the newcomers now being in strong difficulties. Yes, that's something there might be a shakeout in that respect. So the conclusion is it's hard to predict. We feel comfortable at the positioning where we are. And we feel we're in a good middle spot to be on the innovative side with some of the activities Lutz was just explaining.
Okay. And last point is on the liquidity position you mentioned. So just that I understand you correctly. So you increased on one hand, your liquid funds, while you also increased short-term financial debt. Does this makes sense? I assume that you pay more interest than you get because you guys done at all, interest on your liquidity.
Yes. You're right. What we did is we made some -- before the end of March -- so that's part of these numbers, we made some -- we made a draw of our loan because we were uncertain if the money came in on time, and it did come in. So the bottom line is that we are -- of course, we have made a cautious approach in taking lines, using lines. And then it turned out that the inflow of money was better than expected.
But at the end of the day, there is no major impact on the interest fees we have to pay. It's a small impact for sure. But compared to last year, we expect no major impact on this side.
Okay. So it's more a kind of timing issue we see and a certain temporary imbalance?
Yes.
Jasko Terzic from Bankhaus Lampe.
Yes, my first one, and sorry to bother you again on the guidance. I was wondering if you could give us an indication, what are the conditions that you either think the guidance could be reachable or that would make you think that the guidance is not reachable anymore. So for example, is it the test center that needs to be running latest until end of May? Or is it something that gives us a little bit more grip on what are the conditions that the guidance could be reached or failed in that respect?
It's -- I see 2 aspects. Maybe I'll start. The first is really the timing of order intake. If some of the orders that we see in the pipeline and Lutz was talking about come within this year in a way that we really start them this year. That helps us a lot with regard to guidance. The uncertainty is that we do expect or do not maybe expect. But we are concerned that maybe some of the order intake that are coming our way, and we hope we are winning might come, but they might come in a bit delayed fashion that they will not have an impact in our books this year. And that would be the -- that's the major risk I see for 2020.Second risk is, of course, if the shutdown, with regards to test centers and spaceports, is longer than we expect. And by the way, we do expect that, that is ending soon. We feel that -- we know and not we feel. We know that French Guiana will have the next launch scheduled for mid-June. It's a rocket -- data rocket. And one of the main satellites on it is one of our satellites from LuxSpace ESA. Satellite is in French Guiana since a long time, and there is a schedule now that French Guiana opens in, as I said, relaunch or opens launch in mid-June. So if that takes place, we are not losing much on that side.The test center is another debate. I mean we're having test centers in Holland that we are waiting for to fully be utilized again. So 2 things, order intake and external impacts on ongoing projects. Those are the 2 impacts I see.
But the first one, you mentioned is the more concerning one or the more crucial one.
Yes.
Regarding orders. Okay. That's very helpful. Then secondly, on the European Commission budget. I know in the last crisis, I think there was no real European Commission budget. However, can you give us your thoughts on the key risk of those budget approvals because I think as of yet, there hasn't been any approval so far?
No. You're right. You remember that by the end of last year, the Finnish presidency was working hard to get the budget done. Currently, the president -- it's obviously a big debate. And the Croatian presidency now is also working on it, but the expectation -- this is just Marco talking. My expectation is that this will go into the German presidency which starts on July 1. So I do not expect a deal on the budget now in the remaining 6 weeks of this presidency. But maybe I'm wrong. Who knows. But my feeling is that we will see a budget deal in the fall.Where that budget comes out, obviously, it's very much to up to speculation. I think, overall, I think when this crisis moves to the next phase in the mindset of people, there will be a lot of money being, let's say, organized and established for recovery. How that will then be divided is obviously a political process. I am pretty optimistic that space will not do bad because we are a useful, high-tech innovative industry. So the things we do with regard to helping mobility, with Galileo, and the things we are intending to do with regard to Copernicus also fit in well with the overall -- the overarching goal of the green deal. So I do expect that Copernicus will be funded. But the exact numbers, obviously, are currently not there. So I do expect that the space budget will be within the corridors of the debate that we had over the last presidency. So it will be somewhere between the Finnish and the parliamentary proposals. I guess. Whatever, look I don't know. But that's something that the end comes with the lean. I mean at the end of the day, our government will be very crucial to proposing deals on that.
Okay. And the final one is pertaining to MT Aerospace. And also the potential projects that are looming in India, if you can give us an update here? And maybe also your thoughts on what do you expect how severe setback in demand might incur in MT Aerospace in Q2?
Yes. I think MT Aerospace, obviously, has a different business model, it's a factory, and it's very much driven. In the past, it was very much different simply by the amount of Ariane chipsets. So if there were, I don't know, 5 a year, it was like this, if they were 6 or 7 or 8. So of course, the demand and the timing of Ariane 6 chipsets is very important for MT Aerospace. And this is something obviously completely independent from COVID-19. It's something hard to predict because the first launch of Ariane 6 is still pending. The moment that takes place, hopefully, successfully, we have a better understanding how this ramp-up will be there. So uncertainty is the big word there.Again, not necessarily bad, but it's uncertain. So if everything goes well, the demand might be bigger than we all believe now, but we are in this period before the product Ariane 6 is introduced to the market where uncertainty is, unfortunately, the big thing. Especially as MT is just a supplier, so we don't really have complete visibility on that.The good thing is with Ariane 6, I think that the technical development goes very well. And the good thing is that Europe has made a strong commitment to use Ariane 6 or to make Ariane 6 a success. So this is something that we all rely on in the Ariane world, and that should safeguard MT to a certain extent.With regard to other businesses, you were mentioning India. Yes, since quite some time, we are preparing a JV there. I'm not completely aware of the last deal, maybe Lutz you know better, but I know that there are lawyers working on setting up the JV and stuff like that. So I think there is -- something going on there. Lutz, you know better than me and...
Not very much. So what I can say is that the process with our Indian partners is going as planned. We don't have any major delays there. We don't see any indication that India would withdraw from its commitment. The need for launches would go down. And by this the business case of the JV would no longer fly or so. So actually, up to now, we have not seen any major -- or any impact, which was significant enough that I would have heard about it.
[Operator Instructions] No. We have no further questions, Mr. Fuchs.
Yes. Thank you very much. I'm looking to my clock, it's already 10 to 10:00. So thank you very much for your interest. Thank you for following OHB so closely. And I hope even in uncertain times, our information, our documents and also the answers we could give are sufficient for you to make your assessment.Overall, my conclusion is that space is in a positive spot. Our industry at large is doing well. You see that in the United States, you see that everywhere in the world. So we are very happy to be in this part of the industry. Many other industries around us have really severe issues, the ones that we talked about also in this call are relatively manageable.Having said that, there's still uncertainty, but as people that go far out into the universe, we are very much used to deal with uncertainty, so this is not a major issue for us. And in that respect, I hope that OHB will deliver on this year. And we're all very happy to stay in touch with the financial markets. So if there are any questions, please feel free to get in touch with Martina Lilienthal or Kurt or myself or Lutz. And we hope to hear you all again then on August 11 with our Q2 numbers, hopefully, having a clearer visibility for 2020. So thank you very much, and have a nice week. Thanks from Bremen. Bye-bye.
We want to thank all the participants of this conference. Thank you very much, and goodbye.