Hi,
Defence is a big theme. In my first ever paid write-up I shared a company called Kebni AB, which has recently found an inflection point in earnings. Therefore naturally I got interested, which leads to talking with management team after doing some work. As I told, I plan to update all interesting companies from my “Five from A-Z lists”. As with many defence companies, it looks like Kebni AB is also catching a good bid, as the share price moved +60% since end of April. While that hurts, the goal is to get to know all of them. You never know, where opportunity could meet prepareness. I missed Theon, Nextvision, Exosens and Exail, which I highlighted at €50 but have not bought. I do not want to miss next.
So I am sharing notes from the call as well as update. And these are the questions that got asked. Again few questions are mine and few are of my good and very sharp friend. This is built on initial look here.
In 2020, Saab and Kebni formed a framework agreement for inertial sensing. At the time, Torbjörn worked at Saab’s marketing and sales for missiles. Is that how he learned about Kebni? What is the story there? Did he like the product? What about it made him think he could take Kebni and grow itto a portfolio of products? Did Kebni have that aspiration before he joined?
How did Saab and Kebni originally agree on a framework agreement? Why did Saab choose Kebni for inertial sensing when the company called ASTG, was antenna gimbals?
What % of NLAW sales are still related to Ukraine?
What margin are you able to get from this relationship on the orders from Saab? Does Saab usesother suppliers of IMUs for other projects/uses?
Are you going to focus on more bespoke projects going forward, like with Saab, or more off-the shelf products?
Why did ACE Antenna decide to go with the new kid on the block rather than other INSproviders that were in on the tender? Pricing? Willingness to work together?
Are drones the biggest potential for your SensAltion sensors in the short-to-medium term? In the long run too? How long will it take to reorientate to aerial applications? Is it something that your customers asked you to do or was it your initiative?
Are prime contractors doing more and more in-house or increasing their sub-contracting?
Drones – getting smaller, sometimes used as self-guided missles, shifting towards Kebni?
How long did it take to renegotiate payment terms with key suppliers? What was the number one priority?
What cost efficiencies going forward are going to be the biggest savers?
Is SatCom or IMUs a more competitive industry?
The number of satellites launched is quickly growing. For every satellite launched, is there an equivalent number or ratio of antennas that need to be installed at sea or on land? Why does more satellites mean more satellite antennas? What spurs the sale of a new antenna or gimbal? A new ship?
What kind of customer will use the modernized P7 gimbal vs the P9?
Looking out to 2028, if you achieve the hoped for 20-25% annual revenue growth, do you expect the revenue mix to be 50-50 satcom, intertial sensing? Do you expect one to be a majority over the other?
Are repeat purchases from customers more regular in SatCom or IMUs? Why?
Capitalized development costs – target % of revenue?
Besides being a board member, what was Magnus Edmans’ role at Kebni?
What doors are being opened by joining SOFF?
ScaffSense sounds like a good idea and application of sensor technology, but its also a very different space, which is probably why you’re doing a joint venture. What I am curious about is how was this idea introduced, how many steps was the decision making progress, what pros and cons were being weighed?
But first lets get to the update and new learnings.