Interim report, January–September 2021

New orders drive increased growth rate

January–September 2021

• Revenue amounted to TSEK 118,169 (126,844)
• Operating profit amounted to TSEK -84,353 (-28,958)
• Profit after tax amounted to TSEK -62,131 (-48,366). The result includes currency conversions and financial transaction costs of TSEK 22,475 (-22,397)
• Earnings per share amounted to SEK -1.34 (-1.19)

July–September 2021

• Revenue increased to TSEK 47,823 (32,285)
• Operating profit amounted to TSEK -22,785 (-17,000)
• Profit after tax amounted to TSEK -12,339 (-30,180). The result includes currency conversions and financial transaction costs of TSEK 10,527 (-13,044)
• Earnings per share amounted to -0.26 SEK (-0.55)

Significant events during the period

• Order from the U.S. Department of Defense on Ovzon T6 terminals for use in air operations
• New order from Airbus UK
• Order from the U.S. DoD at MUSD 5.9
• Reschedules the launch of the Ovzon 3 satellite to Q2 2022
• Directed share issue provided the company approximately MSEK 238

Significant events after the period

• Ovzon receives 1.92 MUSD order of 50 Ovzon T6 terminals from the U.S. DoD

Outlook

• The company estimate remains, that revenues in 2021 will be higher than in 2020.
  With Ovzon 3, which will be put into operation in 2022, the company expects revenues to increase even further.

Key figures

New orders drive increased growth rate

During the third quarter, we continued to take substantial steps in positioning Ovzon as a world leader in Satcom-as-a-Service. This means that we provide our focus markets and customer segments with an integrated and industry-leading mobile satellite communication solution, helping them to operate and fulfill their services and assignments globally. Ovzon delivers a complete solution that includes the smallest, lightest, most efficient mobile satellite communication terminals, a satellite network with the highest performance and unmatched service and support around the clock.

The new orders that Ovzon took during the quarter confirms the increased need for our products and services. The deals we execute in combination with the partnerships we have entered and the initiatives we have taken, show that we are on the right track, with increased momentum in our growth rate. We have a clear focus where we work very closely with our customers in all markets, as well as a robust plan and a progressive strategy.

Additional orders represent the next step for Ovzon

During the third quarter, we received multiple new orders together 6.3 MUSD from the U.S. DoD, compared to 3.8 MUSD during the second quarter. We are proud of the steady and expanded trust from this key costumer and we have the ambition to deepen and expand the cooperation. These orders enable the U.S. DoD to expand the use of Ovzon's Satcom-as-a-Service, which include our new and existing Ovzon terminals to more locations globally, with enhanced functionality and performance for both "On-the-Move" and "On-the-Pause”. Our customers depend and rely on our services to carry out their missions and operate in remote locations around the world where infrastructure is non-existent, unreliable and when they need a guaranteed communications solution. Our new high-performance and user-friendly Ovzon T6 terminal has proven to add great customer value. During the quarter, we also received a new order from our partner Airbus UK regarding a new customer in the UK. The contract started in August, runs over 12 months, and contains our end-to-end service, including the new Ovzon T6 terminal.

To meet these increased demands and for our organization to deliver on new costumer contracts, we have created a solid platform for growth. We are now about to enter a phase in which we will produce and deliver, for the company, historically high volumes of our satellite communication terminals.
In accordance to plan, we will during the fourth quarter implement a scalable industrial process with experienced partners to ensure that we achieve the new production capacity.
 

Good growth opportunities independent of Ovzon 3

These new orders are a confirmation of our relevance to existing and new customers. They are a clear indication of continued strong demand for our comprehensive service, even before the launch of Ovzon's new satellite, Ovzon 3. As we communicated in August, we have been forced to reschedule the launch of Ovzon 3 to the second quarter of 2022. The plan is to take the satellite into operation in the fourth quarter the same year. The delay is a consequence of deficiencies in key components and delays at subcontractors, which also affect the completion of a large number of other satellites in the industry. The delay does not affect Ovzon's current business and deliveries to existing or new customers. Until
Ovzon 3 is operational, we have good opportunities to continue at this increased sales rate. We have previously strategically secured leased satellite capacity on the IS-37 and IS-39 satellites. These satellites deliver good performance. This also helps us to position Ovzon 3 as a satellite with completely groundbreaking performance and technology in terms of data speed, data transfer capacity combined with fast and easy usability.
 

Strengthened finances backed by strong investors

During the quarter, the financial position was further strengthened through a directed issue to selected institutional investors of 238 MSEK. This, of course, strengthens our financial position and flexibility. It also means that we can accelerate our market penetration of our global service offer and continue to broaden our sales and distribution network. It also enables us to drive innovation through pilot projects and the development of new products and services.

In early September, Ovzon received the "The Company To Watch Award" from the industry association Mobile Satellite Users Association (MSUA). It was a great recognition from the entire industry, our customers and our partners proving how our dedicated employees on a daily basis develop and deliver unique and value-creating technology solutions. Our customers' needs and the continued rapid technological development inspire and motivate us to be agile in everything we do. We will continue to increase the pace and simultaneously be precise and execute flawlessly when we now transform Ovzon into a global industrial company.

For the remainder of 2021, Ovzon's focus will be to continue to deliver and support what we have already sold. We will also work methodically to create new deals, scale up our delivery capacity and thus position Ovzon as a global de facto standard for Satcom-as-a-Service. Our assessment is that the market for satellite communication services, which requires high mobility and performance, continuously will grow and develop positively and that our revenues in 2021 will be higher than in 2020.

I am convinced that the increase in demand we have seen is only the beginning. With our unique Satcom-as-a-Service solution to demanding and loyal customers around the world, we are well positioned. We know that our customers highly value Ovzon, and we know what it takes to succeed.

We estimate that the market for satellite communications services that require high mobility and performance will continue to develop positively and that our sales for 2021 will be higher than in 2020.

Per Norén, CEO Ovzon

This information is information that Ovzon AB (publ) is obligated to make public pursuant to the EU Market Abuse Regulation 596/2014 and the Securities Markets Act (2007:528). The information in this press release has been published through the agency of the contact persons set out below, at the time stated by Ovzon AB’s (publ) news distributor Cision upon publication of this press release.

For further information please contact:

Per Norén, CEO, pno@ovzon.com, +1 206 931 7232

Johan Brandt, CFO, jbr@ovzon.com, +46 (0)703 693300