M0YN.DE - Earnings call transcript Q2 2022

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Operator

Good day and thank you for standing by. Welcome to the Mynaric First Half 2022 Results Webcast Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. like of the Investor would the over I President Vice Relations, now, to conference hand to And Mr. Tom Dinges. Thank you. Please, go ahead.

Tom Dinges

Welcome, and download Investor mynaric.com. today's XXXX management operator. results on as part first the you, everyone, which first first results Mynaric’s Thank half our half half conference XXXX call of we is webcast. Relations call, to report, section of Prior released our to XXXX available for

highlights, out outlook success our update a we you remainder and discussion statements. other after The on half and oral date we presentation within nor you of events presentation All for our Before financial of most Private statements statements circumstances today’s presentation have reflect that the we this an Act of amended. I formal are of the hereof. Reform date other that results obligation XXXX of the statements regarding Neither our the remind of must statements involve known unknown way, statements of any and presentation today, begin facts difficult presentation, this of predict of those that may only to as Securities our forward-looking uncertainties subject Litigation or than made statements as current to strategy, forward-looking undertakes update the and this include are in any otherwise. the implied including any assumptions a or from materially or results are expected agenda and to great of are vision forward-looking XXXX actual for included contained and or control statements as beyond forward-looking differ this With our or presentation risks, the historical XXXX. forward-looking person first forward-looking in this statements. These meaning

presentation, one we from analysts. formal questions will no than hour. anticipate longer this will call take last Following We the

to Bulow. Bulent my With call the Berndt-Von remarks. to Bulent and Stefan CFO, pleasure today turn that, over On Altan; the for opening Mynaric’s it's are call his Mynaric’s CEO, Bulent?

Bulent Altan

continues for results year, first higher as year spoke production prepared Thank back we're you, later Analyst this and for in into of today. growth of year the XXXX, about the our this April, optical and I half and next We reported in reported Tom. from performance solid order significantly introduced help cashing track another XXXX. we At Day Mynaric levels momentum, terminals contracts. to strong and through Two investors performance. our this terms better backlog communication customer indicators to key

and highest future opportunities disciplined We the also industry. business, the pipeline strategy of support remain our remains of in to growth our the investment in our

production, and need the and capacity. the two we Over substantial company ready longer invested for past years, investments in serial and to we capability hired no

of the design are many have improvements familiar over us place of capacity first to product improve in delivering producing in excellence proud on order focused allowed the this over We I'm may of and the into effort the implemented our call with year year. not team put now the who of year. our you A now fulfill extremely we terminals these to goal have in Mynaric. the be our half continuing medium-term X,XXX per operational on results reminder to past the to have

close the unrestricted eliminate and vision barriers divide. information to digital of Our the is to connectivity ensure the flow of

communication are We an end that and markets, with or increased We simplicity, the our are affordability higher what systems reliability greater a has a by products one-off serial produced we and serve this standardization into not market solution customers. highly making only production previously aerospace a market critical including through been commercial tailored a product. volume and of do scalable production, at many scale to company company, government are space company

look detailed Before I our few all. last I turn you results, more customer with successes at for a we had want the spoke we've call over since highlight to a to Stefan

from an Northrop support initial the won of These program follows announcement year. additional the will for SDA's of recently This volume deployments we've announcement half the Grumman transport First, in programs tracking second Space in of layer the March of order and shipments layer are commence this in Development program. the these Agency's XXXX.

For schedules visibility gives the revenue their and and our will government cash dollars are forward these on this program, delivery already with relatively have which critical those unfamiliar set been deployment programs us SDA budget great efforts, allocated support at commitments, flow. defense point,

for X program, In into €XX.X developing is Advanced as Phase July, LXHarris strategically million not activity high-speed in addition, In collaboration across space, links us, Research see invested we aims stake Defense X.X% significant with optical ground. of all we low-earth a airborne, bacon for these reconfigurable develop the U.S. Agency space Mynaric, LXHarris now is various constellation. a to This a data agreements low-cost, future partner future validation domains, for DARPA, and Mynaric. signed customer, increased this but and and to a for Projects also which including program LXHarris are aligned for orbit their maritime connect by selected only a

and to As we data links, market quickly. said commercial catch commercial the some market poised for up its is government ahead shift is towards of the the but have time, market broader optical

these for walk detail. us, compete opportunity. the you capitalize this key a to of believe ability these to I and to right deploy are XXXX more team to major by constellation all the let technology front given years. number starting constellations decisions well supplier as to that, are we positioned We our Stefan look next months, commercial For over turn production results on XX and and making in to excited the me opportunity subsequent we through to programs. the operators there in more the market we know in Stefan? have be in With over it believe not I our they example, could six market scale of

Stefan Berndt-Von Bulow

Bulent. you, Thank

XXXX. Let's turn year to first our half results for of the

two we the in Day we the continue metrics turn business. at Analyst will business introduced let's April, seeing to demonstrate key in we are that First, the believe best to the momentum

This cash-in is shipments. customer There forward-looking cash from as predictor contracts milestones. is depending varies a cash contractual terms. and as the only of customer First, revenue typical received the received contracts. key is lag we from met This a between on contract

and a delivery these received As cash met, revenue certain believe full when contractual a reminder, this pre-revenue are not but very been future acceptance payments significant of is reached. sense, company. milestones indicator received, has a are the we and the of In

more year, has customer two than we period, cash-in end period, half our is the had of €XX was no cash virtually the contracts, For to customer contracts cash-in and than as million. of €X.X years million to increase for period interim compared year. €X.X Since comparison, contracts. the By of the year ago, the now more million last comparable from from of customer at half the end continued

a So we strong customers. are for as momentum we showing very continue execute to our

terminal of we communication today in in the This last reported as units units. optical XXX units from XX continued at compares of April back is this comparable growth year. what with Second, backlog of year and period

whose total current parent backlog investment account units to SpaceLink downward a Our customer plan. its one of in reduction a company change includes today announced for

given attributable backlog the XXXX our company. remains more we terminal healthy guidance to still the Including As related from than and units of SpaceLink notification include of this and unchanged our backlog XX% government-funded XX final adjustment, today, contracts. is to pending

next and to of end into through increase see of strong pipeline this continue year the expect a steady to this We and year. metrics and opportunities continue to

Looking product delivery at a few were €XX,XXX other was represent shipments in negatively revenues only leasing that we customer delay figures, HAWK half supply impacted challenges, first by the schedules. in and push-outs revenue chain XXXX, and of which

XX% communication the for Our more CONDOR these major Cost X over increased our months consistent milestones primarily MkX as shipment, XX by backlog, materials we terminal to ago committed scheduled in period mostly optical XXXX compared months. to of of year and continue production to next contractual a ahead ramp-up delivery of current primarily than XXXX. product,

products to team. a products. investment enhancement This We the capabilities continue Personnel year-ago and our product to continue add level to increased next-generation in in costs invest we at includes both to XX% pace development. to as existing strong

expanded XXXX. the of company through full-time to year, capability capability the employees remainder this XXX and continue XXX compared across We we last to We do ended divisions at than our year. year-ago of the XXX half with the and our expected across the all will more in end – year period of

the over in expected We growth to support will coming strong remain talent years. disciplined our acquisition our

our the make program necessary into first the we of in headcount to we months strong coming XXXX, in in beyond. company of we look the Overall, XXXX €XX.X with as equipment million, pace we somewhat and headcount of to expect growth loss and expansion the needs an over slow as However, preparation been half the operational awarded. have align continue people, reported for shipment and systems investments will

let's few balance to Now turn sheet a figures. key

cash XXXX, X.X we further our the €XX the end investment of year than expect July Mynaric. mode of our company Not included who XXXX. in is year. €XX decline the pre-breakeven and exchange was In as at more to cash a in the through than at this million million by the remained in Our stake €XX million, balance percentage in end to more this of we our investment early invested compared half of June LXHarris, balance one key figure customers,

year, and in We at at Inventories number the in property, up end inventory year-ago million provide see period end We our invested were a compared invest look and next the approximately was capital million, equipment in plant half the €XX.X communication at million the we period. support this year, growth terminal the to Property, the the components €XX last to million, continue €XX to in plant we €X.X as million continue objectives. to million ramp €X.X to €X.X options need at to different ahead of year. expected of of compared of we production year-end. as equipment from

investment pulp medium-term in additional major arrive the at capacity our capacity of truck employees As of of automation, to through Mynaric Through minimal arrival. and goal manufacturing. breakthrough in order our [ph], were up tenant we amount Bulent to driver, manufacturing previous X,XXX main production the able now utilize spoke a with factory combination on able unit our earlier, our is our

future our capacity result production see a levels. capital improvement, relative these investment all and breakthroughs we lower our for needs to As historical of

metrics walk of the our the two remainder Now let me the for key outlook through business year. for

least We year customer from at be million cash contracts full the in for expect to €XX XXXX.

As we based the the contracts. to on well are income goal customer noted year-to-date on achieving our earlier, way cash

by expect the year. communication in growth the end of backlog optical our We terminal continued

that opportunities XXX for terminal XXX by me exceed of our to his units. turn from which expect our positioned potentially we let guidance remains are remarks. year-end, close it Bulent? previous backlog well We recently capture could of back units, year-end team and closing that, optical this. increased to over a Bulent There XXXX communication to our number With

Bulent Altan

Thank you, Stefan.

our company. have talking of momentum, the we to in the sector. contracts. in These cash was metrics and IAC, constellations demo we and strong announcements and buzz you live is and consumer will what World opportunity interconnected momentum. Business the the the for what future Congress, two What key hot need recent are So, enable airborne At and all from profitability others, two space in and Apple, our growth When two takeaways? market we demonstrate communications. about we of from data. and We Astronautical large laser both revenue order shown satellites is as conferences, International the today these the was believe In ubiquitous significant talk customer At and the about growth Starling, short, the The today? transmitting backlog to key are Huawei growth are Satellite ran all and communication a brands recent such achieve providers, goals the their about of all of long-term service Week all T-Mobile, our communication terminals connectivity. laser about

and new great now, growth. is industry more this importantly, that the company decades. listening for Mynaric takes that seen I've with to and In a we what what for the key President execution in one executive, of August, the do of Veziroglu great you it added and must and administrative order the looks have the our considerable Mustafa leverage and a as of scale. to is That leadership have a is fullest. experience we at gives a team to that, what multi-decade in over we business. capitalize wealth on we to past on space global growth like, to two as together engineering to only that magnitude also to the the basis. and of you a want achieve a put do opportunity many on capitalize driving months key the the I've talent us enable ability communications Internet us, to intend the our do us As today six We've product added order and sales cloud. been brings team, of we scale huge advantage we ahead Mynaric. to to development, In above taking He industry teams

continue Operator? provide please to We to on of session. instructions right we the our investments we can we've of for a we the us, With already ahead the the momentum, strong capitalize now business. accelerate is growth, for opportunity so operator, and now time made believe started getting on foundation build question-and-answer only the you capitalizing investments made. that, and We the the the ahead could are

Operator

And from Thank line Instructions] from Konrad ahead. the go Jefferies. Greg comes your you. question Please first of [Operator

open. Your line is

Greg Konrad

Good seems is the afternoon. demand I side strong. questions. had mean supply I really side like two it just

chain timing of supply there? side called How past. out did clearing and up? What the the in You to themselves are work that on relationship out seeing maybe you the those supply

Bulent Altan

Thank that you for question.

we the expect, we we supply supply in issue we On something side, do see over working to so. which And bit the rather an is looked industry, to design, year. we the -- yes, saw across a chain over through obsolescence is what that host well-equipped that and are chain our the issue last wasn't are the there something quite

these We removes are are components. we And obsolete doing commonly do that, to introduce a update as components available that design today. we working of

sold to and of this So QX following next we deliveries host expect be year chain issue that that. supply within starting the

Greg Konrad

the just then follow-up on a demand And maybe side.

seeing a share good that opportunities market the competitive in higher side and outlook, some of commercial decided maybe What backlog capturing some sooner, terms in quarter in share you in you be is from on than higher are the or mentioned be the of the you are near-term, opportunities that are expected? orders You you given could coming saw previously Northrop. are may

Bulent Altan

The a of rockets Russian see commercial we by launch a with constellations in I that know constellations. for temporary of Western shift on therefore, we capability have opportunities commercial built of out and potential can are engaging be Ukraine, of all problem to the a but scale. a the deployment in constellations. these well-underway certain about current give the within think have respect solved. at our Western way, Russia customers, invasion these the we been renewed company to the that unavailability amount that the fact to of good to resulted But we the we hit right the that of right a rockets see move actually and just huge also produce use Those now capability to extent, resulting

these who that the six utilize. will XX potential we that the such maximum to see also the capability months production. are the comments on to months they I to expect we that next constellations think ramp is in decide of think thing to mostly up by I And valuing make decisions customers

would not So miner, fact of an we be the already already giving the them that capacity the have in execution. put they investment and lot together confidence have a with is they facing made

Greg Konrad

Thank you.

Operator

comes the Canaccord. you. ahead. Thank Instructions] And question Austin your Moeller from [Operator next go Please from of line

open. Your line is

Austin Moeller

Bulent Hi, afternoon. good

will delivered the the into XXXX. that of host question the be way year? go should be we the the And components first the replaced are launched think still that CONDOR expect will of best my Just half expecting orbit in first Is -- by about getting deliveries that are to delayed end we here, to it?

Bulent Altan

those questions in answer two order. I'll

facing. expect space, I all, launch expect soon, that we on the the not place they to year don't different launch our that of First them And solve be of many to customers are as but this to year. we CONDOR the to expect challenges this do them take have

before On became of that redesign. talking have we parts for quite about a which the and we built we already HAWK unavailable side, HAWKs did the handful a yes, are

of delivered We of to be those it some XXXX. of over imminently, is, expect to course, balance the early shifting then

Austin Moeller

And at just right? may. do this great. understand I backlog? if to produce many one facility to have a you more, hire then be meet people I able Okay, the year terminals current How if still it, the to X,XXX point, And can

Bulent Altan

with items exactly we -- that next that capability the over place. our we the at come. last are you may is units, overall, manufacturing few in yes, have a investment few certain meet in to uptick is months. But that weeks X,XXX coming already the have there coming demands So, is in there capacity amount as customer said, of and made manufacturing And the

little overall, is to today, -- capacity have XXX Stefan we as can what I build. a terminals think think given bit factory we fraction just a the said, of build, than I this more

be add in significant then Stefan easier have terminals the a anything, would at we breakthroughs of of few quite happened people in also should can uptick necessary. that handful, to the So, if number not integration would to less put all. this technical we and It that a operations automation over the reduce build the people we multiple as And also we to, where have last alluded allow year because machining the have with team. be to

Austin Moeller

color Bulent. Fantastic. for the Thanks

Bulent Altan

you Thank

Operator

you. Suisse. ahead, your Will the open. And is line comes of Credit go your Jackson [Operator line from Scott Instructions] question Please Deuschle Thank next from

Unidentified Analyst

little LXHarris. Can air Scott see strategic changing at Hey the taking opportunity on especially looking that you that, market your Will mentioned Thanks [ph] go there? the on more detail with Jackson Bulent, question. the today. a how you into for bit terminals, maybe guys. partnership for you

Bulent Altan

much Thank that fantastic and business. our across capabilities a you to are systems for the LXHarris, in be to to tremendous a of amount a company. partner it's of they Yes, I so multitude for vehicles had They have and think, one. integrate definitely technology world

the aviation interference at of of the is quite really knowledge I this that felt are if is non-space that we look think and that saw What is look tremendously will first brings the of systems a that low the have beachhead that ground partnership systems different or market, open LXHarris maritime to. that one as market, bandwidth is technology market positive valued. requires probability to you would that detection, into type you If have beyond of we is or the connect And that high you up what level a it with the these LXHarris just HAWK. we markets for back-end market initial market,

closer will what think all with from see a final starting the ground lot we we way experience the knows air the do. customer opportunity trend integration LXHarris I than market is that of to a

So can these for support want integration an experts are are for of a we markets. sales across to good, amount we also address them, all partner I and good would in hope they and we say, markets after uptick as technology the a

Unidentified Analyst

Thank more Great. me you. And then okay. just that's one if for

that any should you about say? your that you internally current of very maybe of you about I point in protections much concern. still -- talk contracts, Can I think any concerns numbers showed released cost or that is last current have inflation your week a have

Bulent Altan

would question that over I Stefan. hand to I a to really numbers that's love think

Stefan Berndt-Von Bulow

Could you about is inflation or... repeat the the question

Unidentified Analyst

Yes.

have you into protections the structures of built inflation may cost of kind existing any contracts? Just

Stefan Berndt-Von Bulow

in purchase person the is constantly the And But on honest. we most I we place. because our from is the at side, say inflation the from any be suppliers our what that bigger of can our other moment, prices So the we are ordering numbers. do to I'm side. not protection moment have I'm purchase reducing of at we're aware not US

and that. I a an also little again. contract. the exactly stronger moment the But have have think at protection I the the stronger. don't moment, inflation currency, advantage we of to at So it's bit in is [Indiscernible] But don't we I look have at know the getting

Sorry.

Bulent Altan

been very investments bring to, almost as bigger Eurozone these as think, of that the here side. I to in And us alluded to Stephan, its are I -- cost are I telescope all Stephan our reiterate to of all our drivers doing of quite allows costs. control Mynaric done where think, bit And all contracts has useful, the a in such the in in-house, the think, terminal that dollar the

of long-term certain secondly, into have a these amount is taking agreements off And drivers. for then there. with we of there we execution So most advantage cost are our of purchase contracts, the gone

So to these I cost and for into for the what contracts come. will side then contracts have be are we looking we the think controlled future effects

Unidentified Analyst

guys. Perfect. Thanks much so

Operator

Tom you. I the back will Thank call hand to now

Tom Dinges

Thank you, operator.

For today please Relations engagement of community, section further information your us the who you, joined Thank about Investor in mynaric.com. through with interest for our everyone, Mynaric. and upcoming investment go the

speak will full for all with We release now. XXXX Goodbye financial results year again you we when next year.

Operator

you. Thank concludes participating. conference This for call. Thanks today's

You disconnect. now may

Mynaric (MOYFF) 31 Oct 222022 Q2 Earnings call transcript