Maven Wireless Sweden AB (publ) - publish interim report January-March 2024

Increased order intake and gross margin together with continued profitable growth

First quarter 1 January – 31 March 2024
•Net sales amounted to SEK 53.741 M (41.069)
•EBITDA amounted to SEK 10.356 M (3.874)
•Operating profit amounted to SEK 8.454 M (2.590)
•Order intake amounted to SEK 46.846 M (34.938)
•Cash flow from current operations amounted to SEK -27. 179 M (-7.051)
•Earnings per share after dilution SEK 0,12 (0,05)
•Equity per share, SEK 2,41 (1,57)

CEO’s statement

The first quarter is normally the weakest quarter of the year, despite this we delivered continued profit-driven growth with net sales of SEK 54 million. Our production also shows that we have very good control of deliveries and costs in the production flow, as the Group reports a gross profit margin of 47%, which is a record high. This means that we have already delivered a profit of just over SEK 8 million after the first quarter.

The inflow of orders from both existing and new customers continued to increase during the quarter, which is a sign that the Group is expanding, but also that we are in the final phase of normalizing the order book from the pandemic. With normal delivery times from our contract manufacturers, this means that our customers place orders with around 3 months notice before the desired delivery. This should be compared with the pandemic period when this advance planning was up to 15 months, which is why the order book has been abnormally large. Order intake during the quarter grew to approximately SEK 47 million.  In particular, I would like to highlight the order from the UK for a cellular DAS project in London where the UK operators will distribute coverage through our products. It will be Maven Wireless' first mobile telephony project and reference in the UK, which is the largest DAS market in Europe, which is an important milestone for our further expansion in Europe. In addition, we win additional orders from the US for a DAS system on the east coast.

During the quarter, we delivered products to new customers, including an integrator in Germany that builds TETRA coverage for BOS-net (Germany's equivalent to RAKEL) and to another new integrator in Turkey that builds similar TETRA systems.

Cash flow was affected during the quarter by the Group paying for all production related to all deliveries, while parts of invoiced deliveries under framework agreements will only be paid after tests have been carried out on installed systems during the spring. At the same time, there are some accounts receivables that are being carried over to the next quarter. As part of our efforts to increase the gross profit margin, the stock of power amplifiers has increased, which in turn means that we are increasing capital formation on the balance sheet. After the end of the period, overdue accounts receivable of SEK 10 million have been paid.

During the period, a new product platform was launched, primarily for 5G indoor coverage, called Nimbus. The product can deliver up to 4x4 MIMO for all operators on the 3.5 GHz band, which is the spectrum where the bandwidth for users can be maximized.  Until today, Maven Wireless has delivered 5G systems to Asia, but right now the rollout for indoor 5G coverage is also starting in Europe, which is why the launch of Nimbus is well timed. Compared to other products on the market, Nimbus delivers more than double data rates and is also without cooling fans, which helps Maven Wireless maintain its technological lead. Furthermore, customers can build 5G coverage with Nimbus independently of older equipment that has already been installed. This enables us to address the so-called brownfield market with Nimbus in order to gain ground and customers who have traditionally purchased equipment from competing companies.

There is still a strong focus on security in IT and telecom systems in the market, which is why all EU member states will implement local laws based on the NIS-2 directive later this year. This means that ultimately the board and management of organizations that provide IT and telecom systems are responsible for cybersecurity. Furthermore, it means that systems that are built will be safer in the future. Insecure and vulnerable systems, such as public Wi-Fi networks, will be replaced by more secure and resilient systems in the future. Maven Wireless systems maintain the same high level of security as delivered from the core networks as well as base stations and can therefore be used for secure and resilient installations.

Finally, I am very pleased that the Group is continuing its global expansion into new countries while its expansion in existing markets is proceeding according to plan and with good gross profit margins.

With the Nimbus platform, we continue to contribute to the digitalization of safe and secure societies, both for 5G and other critical communications.

Fredrik Ekström - Group CEO

Significant events during the first quarter

Maven Wireless receives follow-up orders from Dutch MNO worth circa SEK 10 million
One of the biggest mobile network operators (MNO) in Holland will use Maven Wireless high power digital DAS to build mobile phone coverage in both tunnel and in-door projects in the Netherlands. Both projects will be shipped and invoiced during first half of 2024.
Maven Wireless digital DAS was selected by the customer primarily based on its sustainable DAS product with the lowest CO2 emissions on the market. The simple interface for all technologies makes upgrades for 5G very simple was also a key factor in the selection process.

Maven Wireless granted a fourth patent in India
Including the new granted patent, Maven Wireless possesses 73 patents worldwide and has additionally 6 patent applications pending. The new patent in India covers a method performed by a digital DAS for routing aggregated carriers received by at least one digital master unit of the DAS to at least one digital remote unit of the DAS system. This patent supports and protects Maven Wireless’ business especially in the APAC region.
 
Maven Wireless receives first cellular order from the UK worth circa 2 MSEK
Maven Wireless British partner SAS Wireless wins a tunnel project in London with Maven Wireless DAS and equipment for cellular services. This is the first Maven Wireless cellular system being deployed in the UK connecting the UK Mobile Network Operators. The products will be shipped and invoiced during first half of 2024

Significant events after the period

Maven Wireless receives call-off order of circa SEK 15 million for new product variant
Maven Wireless has developed support for up to 5 different frequency bands in the Stratus high-power radio remote, which previously supported up to 4 frequency bands per remote. The new product has been included in the framework agreement for the Austrian Transport Administration (ÖBB) where a first call-off order has been received via the local partner Tomek. The order is planned to be delivered and invoiced during June-July 2024. The product primarily addresses the tunnel market in Europe but can also be used in the Middle East and parts of Asia. The five frequency bands support mobile telephony for all operators in the market, including 5G in the lower frequency bands, which provides optimized propagation for tunnel coverage. In addition, the product supports the supplementary downlink band at 1400 MHz (SDL), which further increases the total bandwidth the system delivers, making Maven Wireless' product unique in the DAS market.

Maven Wireless signs production agreement with Vexos Inc.
Maven Wireless Sweden AB (publ) has entered into a production agreement with Vexos Inc. a global Electronics Manufacturing Services (EMS) and custom material solutions provider. Vexos has facilities in United States, Canada, Mexico, China, and Vietnam.
The manufacturing partnership will initially be supported at Vexos’ factory in Vietnam.