Electro Optic Systems Aktie

Thank you for standing by, and welcome to the Electro Optic Systems 2026 Half Year Results. [Operator Instructions]

I'd now like to hand the conference over to Dr. Andreas Schwer, Managing Director and CEO. Please go ahead.

Good morning, good evening, ladies and gentlemen. My name is Andreas Schwer, Managing Director and Chief Executive Officer of Electro Optic Systems. I would like to give you our speech to the first half 2026 year results presentation, and we are very proud to announce that the first half year has been exceptionally good. It has been a record year for Electro Optic System.

Let's please move to Slide #4. So the agenda looks like the following. We will first summarize the highlights of the first half year. I will put you then into the strategic context what has happened in particularly in the first half of 2026 with a focus on the high-energy laser weapon business and then a very strong focus on the MARSS update, MARSS, our recent acquisition. We then have a look to the order book, and I will give you an outlook on our business development, what will happen over the next few months. I will then hand over to Clive Cuthell, our CFO, who will give you an overview about our financial performance down to divisional level, some aspects on the cash flow, and then I will summarize the presentation by giving you a strategic outlook before we go to the question-and-answer session.

Please move on. We're on Slide #6. So to put you into the context, EOS is operating in a very strong market. The first half year has been exceptionally strong from a market perspective, the conflict in Ukraine, but also and in particular, in the Middle East, was helping us a lot to get more traction and to achieve the results, which we have achieved. Part of that obviously was a strongly evolving partnership network. You might remember that part of our go-to-market strategy is to enter into partnerships with national champions in particular, key core markets. That has happened also in the first half of 2026.

You could also demonstrate now in a quite impressive way that we can deliver. We can deliver on commercials, we can deliver in a highly operational excellence mode. So we could convert quite significantly our order book into revenue. And we could operate in a very complex and demanding supply chain environment, an environment where internationally, lots of challenges where we faced but we delivered according to customer requirements, urgent customer requirements, we could deliver in very short delivery time frames, quicker than most of our competitors and this could be done because of some strategic investments, which we did in the past, some of you might remember, we have invested some years ago into a framework agreement with Northrop Grumman to secure the supply of a very strategic component the 30-millimeter canon and that's 1 example why it's paying off.

Now we can deliver quicker than some of our competitors, and that is giving us a strategic lead. So we expect the growth to be very sustainable and robust and we are very optimistic for the outlook over the next few months and years. So we are well positioned to capitalize on all those factors and all those frame work conditions. Let's move on, please. I would like to hand over to Clive to give you the highlights of the first half 2026 financials. So please, Clive.

Thank you, Andreas, and good morning, everyone. So as this slide shows, it's been quite a positive first half in many respects. The revenue of $169 million, which was announced a few weeks ago, is an increase of almost 300% on the comparable prior period. Gross margin at 58% continues a trend of positive development in -- particularly in our remote weapon systems. And we're extremely pleased that in the first half, we were able to report an underlying EBITDA of AUD 21 million. As we have said previously, we've been targeting profitability for some time. The strong markets, combined with the order book and in particularly, the agility that Andreas mentioned has allowed us to achieve the revenue that has driven this positive EBITDA for the first half of the year.

The cash position and the funding position of the business has never been better. At the end of June, we had $256 million in the bank. We also had undrawn debt facilities of $30 million. And in July, after the end of the period, we received the final tranche of the equity raise, which was a further $30 million. So we are in markets, as Andreas is about to explain that are very strong and the business is extremely well capitalized to deliver on that growth. The other highlight that I'll come back to later on is this morning, we are announcing that our revenue outlook for the calendar year 2026 is now a range of $360 million to $400 million, including the benefit of the MARSS business, which we acquired in May. So we're going to talk about that a little bit more as we go on. But I will hand back to Andreas, who's going to talk more about the environment that we are dealing with and the opportunities ahead of the company.

Thank you, Clive. We are on Page #8. So EOS is active in 4 segments, following our strategic imperatives of becoming the #1 global provider of integrated counter-UAS solutions and secondly, to become the worldwide leader outside the U.S. on space control, space warfare type of systems. In order to achieve that, we are active in the following 4 domains, 2 of those domains are effector type of domains and the other 2 domains are system-level type of domains. I'll start with the effectors. So, we have been, we are and we will be a world-leading supplier of kinetic defeat systems of remote weapon systems or remote weapon stations. This business is remaining very exceptionally strong, and we expect a strong growth path also over the next few months and years because of our highest accuracy in tracking and shooting the highest hit probability. And I just want to remind everybody, we have never lost any kind of competitive shooting event. And that is the baseline of our business success in this particular business area.

Our high-energy laser but business where we succeeded in 2025 with the first worldwide 100-kilowatt laser weapon contract for export. That is a domain where we expect a very substantial growth in the future. This is becoming a backbone of our business, and that's an area where the competition is not that strong. There are only very few players on the market competing against Electro Optic Systems. I will come back on all those segments in a few minutes again.

Most notably here is our recent acquisition of the company, MARSS, a company which was based at the acquisition time in Monaco. We have transferred the company meanwhile to France, to Nice. They're active now with operations in France and in U.K. and in Saudi Arabia. And this pillar, which was always promising. It was promising from day 1 is turning now to become an extremely positive growth area for the business. We are now in a position to offer integrated counter UAS systems, turnkey systems for any kind of client, whether it's a military client or whether it's a client coming from the so-called homeland security area, such as operators of airports, commercial airports power stations and other critical infrastructure.

So that is our business, which is driven by MARSS and MARSS is backed by its own proprietary NiDAR AI-driven command and control system, a system which is using any kind of sensor information and creating an integrated picture for the operator in order to decide automatically on which sensor which effector should take over, which kind of intruder in order to protect the infrastructure in a hemispherical way. I will also come back on this a little bit later on.

The fourth pillar of activity is our so-called space control system, our space business where we are developing systems being able to interact with any kind of space object interaction could go that far that we are able to not only move space debris but also being able to blind satellites temporarily or also permanently, we can disable satellites from ground. That is a business which is coming sooner than we have expected and which we believe we become a very strong pillar as well, a little bit later than the high-energy laser weapon business and the MARSS business, but with the same level of potential in the future. And that's also a business where there is hardly any competition outside the U.S. in the marketplace.

Let's move on, please, on Slide #9. So let's recap the first megatrend, the drone warfare. I cannot repeat this enough that the appearance of the drone in the battlefield is causing a substantial change in the overall warfare scenario. And month-over-month, we can see this in Ukraine, but also in the Middle East that this kind of threat is dominating their space. It is creating a zone of upper 40 kilometer the so-called kill zone in between the front lines causing almost a standstill in ground-based operation because of loitering ammunition because of attacking kamikaze drones. This is becoming the threat scenario number one. And that's the reason why the defense #1, the defense priority #1 will be on counter-UAS and anti-drone patent systems, and that's exactly where EOS is active, where we put all efforts in. And there, we are so strongly positioned.

Let's move on. #10, this anti-drone warfare is facing substantial problems First of all, traditional defense systems, which are basically missile and rocket based systems are way too expensive to defeat on the long term, those kind of drones. Nobody can afford to shoot with missiles costing to USD 3 million, USD 4 million of costs. So shoot down drones for a few thousand dollars, not even the rich and wealthy, the Middle Eastern states, can afford that long run. That's the reason why also those states are heavily investing into integrated counter U.S. systems such as ours being able to offer more affordable effectors to go against with more for value effectors.

The second point is traditionally air defense is too inflexible. They are based on a few effectors only, effectors which cannot exchange that quickly effectors, which cannot interlock with those kinds of threats that quickly. And this kind of slow response, the traditional slow response is not adequate anymore in this upcoming drone warfare, a warfare of the drones can be launched in your nearest vicinity and giving only a few seconds to react. Such a short period of time, which even request you to give up on manual operation to even give up on the human operator being in the loop but instead of going to fully automated to fully robotic type of defense operation. So those are the key changes in the field and we experience week-over-week changes to that one in Ukraine requiring adaptations of the defense strategy adaptation of our effectors, which happens mostly in the software area.

Please move on Slide #11. So the EOS solution is now with the acquisition of MARSS that we can offer this kind of complete counter-drone platform. And I want to remind everybody that EOS is active, in particular, in the Middle East with more than 60 installed bases, means EOS is protecting more than 60 critical infrastructures in the Middle East successfully over the last few months from being affected by and impacted by attacks of drones or cruise missiles or rockets. We have shut down with our systems, hundreds of Shahed drones and dozens of misses and rockets. If anybody needs a testimony, we can provide first-hand testimony from the top leaders of those countries there. And what makes us extremely proud is we seem to be the 1 only customized and dedicated anti-drone platform.

We are not competing in those markets with a traditional C4I platforms coming from the big OEMs such as, for example, Raytheon, Lockheed Martin or Thales systems, which have been developed in a very complex environment to operate very complicated systems such as Patriot or THAAD systems, which are interconnected different domains, land base Air & Sea. That is an overkill for most of those applications. It's an overkill for what is demanded by the clients. What the clients are asking are flexible solution, adaptive solutions to protect a single piece of infrastructure where a system which they can purchase for a much lower price is much more an appropriate solution. And this is exactly where MARSS is active where MARSS delivered since 2018 and '19. And that's the reason why EOS is now at the forefront of this megatrend. Again, not only a trend to protect military installations, trends to also protect commercial and homemade security type of platforms.

That is all possible because of our hardware-agnostic platform, MARSS because of its history is absolutely hardware agnostic provider of those solutions. They can integrate any kind of sensor, whether it's whether it's in RADAR, electrooptic RF, acoustic or any kind of sensor and any kind of effector MARSS integrated more than 160 different type of sensors and effectors. Nobody else has done this multitude of effectors. This is allowing us now to offer the client on the spot to use his existing portfolio of sensors to integrate in a very seamless way within no time and to offer our clients in very few days to set up a solution, which is able to defeat those kind of drones even if they attack in large quantities in swarms. Our secret behind is our AI-driven algorithms. We have a software package, which is extremely user-intuitive and which is extremely flexible to handle complex type of threat scenarios and the user-intuitive usage capability is a key point, allowing us to train operators within a few days.

Everybody can operate those kind of systems within no time, thanks to the concept of operation, a concept, which allows you to operate those systems either from traditional combined control centers, war centers but also from a simple platform like an iPad, it doesn't make any difference in terms of effectivity, it only depends on the customer preference, but it is extremely easy to operate. That's another key selling factor and it's absolutely at the state of the art on how to operate those kinds of platforms today and in the future.

Please move on, you go to Slide 12. So this kind of operation of an integrated MARSS count System is following the following kind of action stream. The system is always continuously doing this data fusion from all those kinds of sensors I was just mentioning, it identifies any kind of intrude any kind of object. It does then the identification to not only discriminate whether it's a hostile kind of threat, whether it's a drone or whether it's just a bird or a friendly force. It's doing the identification down for the type of effect up, it can even identify the veterinary on those kind of incoming threats, which is quite unusual. We are doing this by doing a kind of permanent comparison with a library, which is uploaded to any of those systems. And this kind of library is learning day by day, and we give our clients permanent upgrades of those libraries. That's a very good aftersales business to allow our clients to always be at the forefront of knowledge on what is potentially coming in and how to defeat those kinds of systems in the most efficient way.

So this NiDAR system is giving them recommendation to the operator to engage, and it is proposing which type of effector should take out which type of intruder. Again, this can be done with man or with person in the loop or it can be done autonomously. In the future, that's our prediction it will be done more and more autonomously because there is no time for a human in the action. In many cases, we will only have a few seconds for the decision-making process requiring a fully automated robotic approach. And then the system will decide by itself on the engagement and we shoot down those kind of drones. That's the kind of circle of operation. It is a state of the art. It is what the customer is needing. And this is how we are operating day by day. And again, EOS has a battle proven system. That's quite unique in anti-drone warfare.

This is showing you just illustrating you how such kind of operating center could look like. This is the kind of high-end solution with a 360-degree kind of war area or war zone or command center where the kind of control is happening. But again, it can go down to a simple iPad or laptop type of operation where you see everything on one single screen and the operator does not need anything else in order to fulfill more or less the same kind of job.

What you can see on the right side, that's more the kind of setup for a nationwide operation or an operation where you interconnect several critical infrastructures to keep the overview on what's ongoing over a certain number of sites, more than 1.

So please move on. So Slide #14, Partner and clients. This is a collection of partnerships which we have active. So you can see top notch, first-class defense companies from all around the world which are our proud partners from starting from Korean companies, European companies, top-notch American companies. We are partnering with them because they all appreciate over high-end performance, our first hit probability and our survivability in the battlefield. We have signed a couple of new partnerships. And I just want to highlight 2 of them here. One is with BAE Systems, 1 of the world leading providers of defense systems. BAE Systems has decided to use for all of its future counter U.S. applications, our NiDAR command control software. That is an exceptional result, and it shows that 1 of the world market leaders has done after a very thorough review of all the options on the global market they have decided in our favor. They have decided that our NiDAR system is the best of the best. And that's the reason why we are together now and shaping up the future between BAE Systems and Electropic systems.

We also formed a partnership with the French German group, KNDS, one of the leading European groups in land systems, and we are a proud partner of KNDS in the area of remote weapon systems, including its application in the anti-drone warfare. Those are just 2 examples of how we go into markets to minimize the time to market and to minimize the capital exposure.

So let's move on, please. We have signed the first contract in the middle of 2025. This contract is not only running according to schedule. We are about 1 year ahead of schedule. The client is extremely happy with our performance. And as a result of that, he intends to place the first low-rate initial production contract. So the first kind of serial production contract to EOS much ahead of the delivery time of the first system. So we will deliver the first system, not only in 2028, but towards the middle of 2027, which is a tremendous achievement and because of that, we will end up with a client most likely into a contract for this low rate initial production contract ahead of even that point in time. That's underlining our capability and it's underlining that our investment into the setup of the first worldwide serial production facility of high-energy laser weapons in Singapore was the right decision to do.

It puts us at the forefront at this very prestigious advantages market and a market which we grow significantly over the next 3 years where we can play now a very, very strong position. So the contract with the Dutch has had a value of EUR 71 million, but you might recall that we are able to deliver in large quantities system systems at a price of down to EUR 30 million. So that is giving the client a huge advantage because of the large-scale opportunity. As I was mentioning before, we passed successfully the so-called critical design review. That's the kind of standard review, you have to pass in any kind of military procurement process. That is a strong a strong quality stand which we got by the client that they consider their system being ready for production now. And that is the reason why we can increase or decrease the time scope delivered earlier than expected. -- and the customers also considering to increase the scope of this standing contract by adding other features like navalization, for example. So all that, again, is a testimony of our quality even in delivery, not only in development.

So please move on. So MARSS has secured in 2026 contracts for more than AUD 200 million. And you might recall that we are very optimistic to be able to sign for MARSS orders of up to EUR 1 billion, which is around AUD 1.6 billion of orders within the first 12 months. That's the reason why we've increased the cap in earn-out from originally EUR 500 million to EUR 700 million. So we are more confident than ever before that we can achieve those values. And this is the reason why the acquisition of MARSS was a turning point for Electro Optic Systems it is giving us not only the position of being able to compete against other brands in the delivery of turnkey solution, but also to be able to significantly scale up our revenue base as the MARSS contract size usually is higher than if you sell just normal type of equipment, normal type of effectors. So MARSS from any kind of angle is a big success story for us already now.

Please move on. So the order book, the unconditional order book, we could manage to increase from last year, AUD 459 million and end of '24, AUD 136 million to now more than AUD 846 million. That is an exceptional success and what makes us team optimistic. It's not only the mass business coming on top of it. It's also the laser business coming into play now and also our very kind of backbone and the so-called bread and butter business, the weapon station business is picking up extremely successfully giving us a very optimistic outlook into the next future. And if you look to the order book, this is driven currently very much by the Middle East. That is basically reflecting the actual geopolitical situation with a strong short-term delivery demand. We expect this to be more balanced in the next future by European programs coming into play, also very significant programs and acquisitions coming into play where we expect long term to have a balanced order book with kind of 1/3 going to the Middle East, 1/3 at least going to Europe and another 1/3 going to the United States and the rest of the world.

So that gives us a more robust position in the market, we become less and less depending on a single client or a single region. Please move on. This is the order book. We can -- you can see here that we have added some more lines, some more lines of very substantial opportunities, large-scale opportunities some of them, but not all of them coming from the MARSS type of business opportunity. MARSS has so far been only active or predominantly active in the Middle East with its over 60 installations. What will come now very soon and much sooner than expected. Also, MARSS will reach out to 2 countries with reach out to European countries, and most of you will have been informed that there was some days ago, the first aggressive drone attack on European Airport. It was in Leipzig, Germany, where a drone with explosives on it was attacking an Antonov aircraft.

It was the first time that weapon system was really attacking in a direct manner on a commercial airport and aircraft. That has caused lots of panic with most of European airport operators, also with many operators of other type of civil infrastructure all across Europe. We are over-flooded by inquiries from those type of operators. We are now in very intense contacts and dialogues, not only with the ministries of defense across Europe, but also in the Ministries of interior with the homeland security ministries, with the police forces and all the commercial operators all across Europe, and we expect this business to pick up in a much stronger way than we have ever expecting before. and thanks to MARSS and thanks to our ability to deliver solutions, which are also customizable for those kind of infrastructures where you cannot use missiles where you not can use canon-based air defense but where you can use laser weapons. That is where you can use interceptor drones and our Interceptor drone is a drone, which is not based on an explosive forward, but which is just operating by the pure kinetic impact by hitting the attackers.

Those kind of effectors we play a dominant role with those kind of installations. So MARSS is perfectly positioned to also go into those kind of markets, which is creating another layer of growth potential on the short run. And all that has not been expected when we were starting the acquisition of MARSS. That is the reason why we are more optimistic than we've ever been before. So please move on. Space is also getting more and more traction. I just want to highlight 1 country -- the German government has decided and they have allocated budget of more than EUR 35 billion, which is more than AUD 60 billion for expenditure to defend and to protect their own space, their own military space infrastructure, a significant subline of this EUR 35 billion budget is denoted for our type of capability to protect space-based assets by ground-based systems. This is giving us a strong outlook for our Space business.

So we believe that not only on the German example because other governments will follow this example that our space business, we pick up business much earlier than we have ever expected before. And we expect the base business to become very substantial, not only beyond 2030, but even before 2030. That is, again, based on our capability to track in an unmatched position any object in space down to a single coin even in cislunar orbit combined with our ability to correct atmospheric distortions, which nobody else can do outside the U.S. to this kind of extent and our ability now to combine our high-energy laser weapon technology, which we have available up to 150 kilowatts today, in which we expect to scale up to 300-kilowatt over 4 years -- we'll be able -- you combine all that together will allow us to engage against satellites from ground irrespective of the orbit of the satellite.

So this is giving our kind of client a more decisive leading edge. That type of business is extremely sensitive if we require localization and that's 1 reason why we are able and prepared to localize not only this kind of space type of business in NATO countries, such as Germany, we will also do that in any kind of request for laser for contract-based type of business. And we can do that because we own all IP from A to Z. So let's move on, please. Yes, coming now to the financial side, I would like to hand over to our CFO, Clive Cuthell, please.

Thank you, Andreas. So on the next slide is a little bit more detail on the financial results for the first half. Overall, the revenue of $169 million, which was announced a few weeks ago. As the chart on the right-hand side shows that first half revenue is the highest first half revenue that EOS has ever achieved. And that reflects many of the market trends that Andreas has outlined. The chart on the bottom right sets out the diversity of our revenue stream, and we are particularly pleased with the improvement in the geographic diversity of our revenue that was achieved during the half the company, as many people know, has done a lot of work to diversify the sources of geographic revenue over the last couple of years, and that is now translating into the financial results.

The other things to highlight include, obviously, the underlying EBITDA of $21 million achieved during the period. The company, as I said earlier, has been focused on profitability coming from scale for some time, and we're obviously pleased to see that being operationalized. The result includes a gross margin of 58% as the table shows. -- and ignoring the very unusual onetime result of 76% last year. This 58% continues the positive trend that we've seen across different parts of our business. which is attributable not just to the strong markets that we're in, but also the pricing discipline and the execution discipline that we've been establishing over the last few years in EOS.

The next page over on Page 23 shows a summary of the results between our different segments. The Defense segment at the top now includes the MARSS business, but also includes the results for high-energy laser and for remote weapon systems. During the first half, more than 80% of the revenue in the first half came from our remote weapon system business, in particular, selling the Slinger counter drone gun system that we have. In the Space Systems part of the business, as Andreas said, this is more of a significant future growth opportunity. We remain very positive on the outlook for this business and we will continue to make very modest investments from the company's perspective in this and continue to develop the European market in this area.

Maybe just a couple of comments on the margin mix in the business. Over the next 12 months, we expect to see 2 or 3 things impacting margin in the business, in particular, the growth in high-energy laser weapon revenue that we expect to arise from the Dutch contract should have a positive impact on gross margin and EBITDA margins. On the other hand, the growth in the MARSS business that we are expecting over the next 12 months as we've taken over ownership, -- and that will have a lower gross margin, but we still expect 20% EBITDA. So we're not providing guidance on margins overall. But as we've indicated previously, in our industry and in our business, in particular, we are aiming -- we continue to aim for a 20% EBITDA margin overall.

On the next page is the cash flow -- and as people who followed us for a long time know, cash flow is very important at EOS, and it's been a strong focus for us over the last few years. Most of our business, remote weapon systems, laser weapons and space -- we have always run these over the last few years to be cash flow positive. Our business is evolving a little bit with the acquisition of MARSS.

So as Andreas mentioned, MARSS is a prime contractor which is a little bit different from an OEM manufacturer that our traditional business has been -- so larger projects when you're a prime contractor can be a little bit lumpy. That said, it's -- I think it's safe to say that EOS will continue to be very disciplined in managing the cash flow and the profitability and the execution on prime contracts over the next 12 months in the same way that we've been careful with cash over the last 2 to 3 years. So over the next 12 months, we do expect to deploy capital, particularly in growing the MARSS business, -- some of that will be bank guarantees, some of that will be working capital. And typically, we can sometimes see in the MARSS business investments in the first few months of large contracts. And with the existing MARSS order book, we may see a little bit of that over the next 6 to 12 months.

The company is well funded. As mentioned earlier, we had more than AUD 260 million in the bank at the end of June and AUD 30 million of undrawn debt facilities, so a total of almost AUD 300 million. So the company has all of the funding that it needs to grow the business in the way that Andreas has outlined over the next few years. We will continue to focus on scale and profitability and cash flow.

Finally, naturally, we're obviously very pleased that the first half result has operationalized the growth that we've talked about over the last few reporting periods. The revenue outlook, as Andreas has indicated, is stronger than we previously expected. That's a factor of market growth. It's driven by our strategy to focus on counter drones, kind of drone activity, and it's obviously driven by the company's agility in the way that Andreas mentioned, our ability to supply customers quickly has been a defining factor in our first half performance. So as a result of all of these things, the full year growth outlook has been increased and the revenue that we are guiding for the full year, as I mentioned earlier, is a range of AUD 360 million to Aud 400 million, including the MARSS business. I'm going to hand back to Andreas now for some wrap-up comments before Q&A.

Okay. Thank you, Clive. So as you have seen, our business is very stable and robust. All of our segments are performing really well. We are extremely confident to increase our growth year-over-year and our revenue base year-over-year as the strategy is working out in a very nice manner. The decision to focus our strategy on the 2 pillars, counter drone and the so-called space control or space warfare is playing off now. We are very proud of having taken this kind of decision some years ago. We are in the middle of the military growth, and we are a so-called new tech player in defense. We are not seen as a traditional player.

We are not a metal-bending company. with the company working and being active in areas such as anti-drone business, AI technology, software technology in high-tech technologies such as laser and in this antisatellite business. Those are all key drivers which make EOS very attractive for clients, for industrial partners and also for investors and this is giving us all the confidence to be able to execute this growth path, again, based on the remote weapon systems -- further -- much further push with the AI-enabled C2 command control system capability by MARSS, further pushed by our high-energy laser weapon business, then in third step by our space warfare type of capability. This is the growth story, which we have told you we will go through. And if you please go to Slide #27 -- that's the kind of growth story which we will continue to be executed.

We are currently writing an exceptionally strong wave and we expect this wave to continue. We will benefit with all you together on that wave. And we -- EOS, we want to remain your trusted partner in defense business -- and to conclude my statements with my standard kind of closing statement, we always say what we think -- and we always do what we say and we continue on in this wave. And in this context, we are more than happy to receive your questions now. Thank you very much for your attention and looking forward to further collaborate with all of you.

[Operator Instructions] Your first question from the phone comes from Owen Humphries from Canaccord.

Well done, guys. -- set of numbers, and it looks like the pipeline is building strongly. I got a couple of questions here. One relates to the guidance upgrade here relating to MARSS how much of the upgrade relates to contracts you have not secured yet.

Thanks, Owen. I'll cover that one. The guidance that we have provided is entirely based on contracts that are secured. There are no amounts in the guidance that relate to future contracts that are not signed, and there are no amounts in the guidance relating to conditional contracts. So if we sign additional contracts over the coming weeks, there is the possibility that they would benefit 2026, albeit as time passes and actually, that will be of limited benefit to 2026. Does that cover it, Owen?

Yes, the guidance in the second half of the core business is, call it, $110 million. You've just done $170 million in the first half. Does that relate to supply constraints for the core business?

Yes, we've given guidance in total of $360 to $400 million, which obviously includes both businesses. The first half was especially strong, Owen. The -- I think it's more a reflection of the lumpiness of some of our contracts. We are expecting, as you've indicated, that the core business may not be quite as strong in the second half as it was in the first half. although that's just more due to the timing of deliveries and other factors. And we continue to manage capacity and supply chain constraints, and we're very comfortable about our ability to grow over the next 12 to 24 months.

And just checking the notes to the account, it looks like you've put through a $77 million security deposit. Just historically, can you guys give us a range of how much would you sign a contract, how much is required upfront for a security deposit, not a number, maybe a range?

Yes. Thanks, Owen. That's right. In the detailed financial report, we have indicated that the company provided a guarantee to a potential future customer after -- sorry, June. Typically, in our industry, we can give guarantees to customers or prospective customers sometimes that are the guarantees can sometimes be 5%, 10%, 20%, sometimes even higher relative to contract value. And just for context, the guarantee that was provided is in relation to an opportunity that is presently unsigned and announced -- and if it results in a material contract being signed, then actually, we would update the market immediately.

And then if you go to your outlook or your business development update there, there's -- that's a new slide that's getting to pick up to me, particularly the bottom 3, say you do sign a material contract, call it, 1 of those big 3 there. How does the working capital nature go? I know most of the revenue side comes in the first year, but with the procurement, what's the lead time between order and delivery and payment?

Thanks, Owen. Yes, look, we -- I think it's fair to say that we're -- as Andreas has indicated, the outlook for the MARSS business that we acquired is stronger than we expected and some of that is shown on the bottom of Slide 19. We see quite a lot of opportunities to grow that business. And we do think that there may be on some opportunities, there may be some initial working capital investments that are modest and well within the funding position that the company has. I think, as you know, we did raise equity in the first half of the year. And as a result, balance sheet is very more positioned to support North outlook including the operationalizing of future opportunities, such as those listed on Page 19. So I hope that answers the question for you.

[Operator Instructions] Your next question comes from Baxter Kirk from Bell Potter.

Great result and outlook there. This question has been partially answered, but I was just hoping to get an idea on future MARSS orders. Is the ramp-up in the contract that has been signed late last half to revenue, is that typical of future orders that revenue ramp up from signing to what is actually being delivered? Or is that more reflecting the urgency there by the Middle East customer?

Thanks, Baxter. I'll answer that. Yes, so we acquired MARSS in May, it came with an order book of about 200 -- just over AUD 200 million most of which was signed in April and May. And in the MARSS business, it is typical that 60% and 70% of the revenue sometimes a touch more is earned in the first 12 to 24 months of the contract. And that's because usually, contracts that MARSS wins are involved in setting up new anti-drone systems to protect assets in -- of the customers concerned -- so the profile of having front-end loaded revenue that is earned over 12 to 24 months is normal. It is fair to say that there are urgent operational requirements, particularly in the Middle East that are benefiting our business at the moment. That includes MARSS and also there's some benefit in the first half for our remote weapon system business from urgent operational requirements. We do not expect the urgency in the market to diminish over the coming years. because the trends that are giving rise to it are long term, and we expect it then to continue.

Well, if you allow me to add 1 more point, I think it's important for the understanding. So the beauty of the MARSS system again is to be able to act such as the toy lego. So you can plug and play any kind of brick one on top of each other. It's always working. It's all compatible. And as MARSS has integrated more than 160 type of effectors and sensors over the last couple of years, can just use on the market whatever is available on short-term delivery, whether it's a sensor in effector and we can combine this very easily allowing us to deliver much faster than other players, which are only qualified for the usage of very few types of sensors and components and they are really required to wait for the delivery time for those kind of few centers and effectors. We are more flexible and we can use and integrate again, whatever is available short term. This is giving us a leading edge and allows us to convert orders into revenue much bigger than anybody else. .

Yes. Just another question. Just looking at the market development order book pipeline, I'm curious to know whether the Abrams product integration, is that in that pipeline there, perhaps in the U.S. Army follow-on opportunities?

Yes. So Page 19 lists the opportunities. And what is listed there at the top of Page 19 is the nearest of the U.S. Army opportunities, which we've listed at $20 million to $50 million and relates to some of the work that we've talked about before like you mentioned. There are significant opportunities in the United States that are larger than the 20 to 50 indicated here, but they are a little bit further away. So potentially more 27 than 26, but there are sizable opportunities there, as we've indicated previously. .

Yes, as -- so this business development update pipeline slide, it relates to sort of potential orders in the next 12 months, would you say, or 24 months?

Yes, this is a selection of some of the most significant and the most -- the nearest opportunities. And yes, some of these we would expect to sign over the next 12 months and some will take a little bit longer but it's not exhaustive. I think it's what Andreas -- it's about to add.

Yes. It's not the exhaustive pipeline as other companies are reporting. This is just a selection of some key elements out of our pipeline. And yes, the focus is on very short-term execution of contracts here. And to come back on your question on the U.S. Army, this will be the second phase of the preproduction contract phase, which we expect to get. And we received the first pre-serial contract order last year. The second one, which is the one which you can see here in the pipeline, we expect to see if either towards end of this year, beginning of next year. And then we expect the first high-volume serial contracts to come into play towards maybe end of next year or 2028. That is then a substantially bigger one, and that goes then really into the high-volume production to serve our weapon systems for this particular platform, which you have seen on one of the slides before.

Okay. And can you perhaps detail your localization and your production capacity in the U.S. Obviously, we've seen drone tariffs come through, obviously, not relating to counter drone, but can you just detail to what extent you've localized in the U.S.?

We are operating a facility in Huntsville, Alabama, which has the same kind of capacity as Queanbeyan in Australia. So we can produce in 1 shift operation around 300 systems per year into shift operation up to 500, 600 systems per year depending on the product mix. Again, the same kind of quantity we can produce in Australia. And with a new joint venture in the Middle East, which we have recently signed with a company which is government owned. In that facility, we will also be able to produce a couple of hundreds per year. So capacity constraints, we do not have with our current setup and we do not need to invest heavy CapEx in order to achieve that kind of growth.

So that is the situation for remote weapon systems all what relates to the MARSS type of business is even easier to scale because our in-house value contribution to MARSS is software. So we just need to adopt the software case by case. -- in order to scale the business. We don't need any kind of CapEx in order to do so we just need recruit some more software engineers. We need to increase the quantity of procurement managers and project managers because we need to purchase more products from the market. But again, that is not a question of building up internal production capacity. So the MARSS type of business is extremely easy to scale. I hope that answers your question.

There are no further phone questions at this time. We will now address any webcast questions. Your first question from the webcast comes from Amit Malik. What is the time line for the German contracts? And who are the other bidders in for it?

So I assume this question relates to the so-called UTF tender that is to provide up to 4,000 R 150 type of weapon systems on top of military logistics trucks. That is probably 1 of the biggest worldwide remote weapon system tenders over the next 10 years to come. So we are in a lucky position to be 1 of the 3 remaining contenders. We are not permitted to disclose further information on who are our remaining competitors. We can only tell you that we are very confident few have received from the clients that we are very well positioned in terms of quality of the product and also in terms of the price which we have delivered to the client.

The client is now executing a 1 year of testing with the products. So everybody has to deliver units, which will be integrated on those platforms and tested extensively over 1 year, and we expect the clients to take a decision towards end of 2027. That will be also a multiphase contract with a total volume of up to 4,000 systems, it's huge.

Your next question comes from Glenn [ Meredith ]. Glenn asks what is stopping Australian defense purchase of C-UAS for protection of local airports and infrastructure.

Nothing is stopping the Australian government to do so. I mean I want to remind, we have been selected, together with Leidos and other partners in the program called that will be the backbone for any Australian anti-drone application, whether it's for the military domain, which was the primary planned purpose in the past, but now also homeland security type of operators have reached out to MOD and have declared interest in order to participate and to benefit from this program coming into a kind of production phase pretty soon. So we expect also Australia and we pick up in the domain, but not to the extent as it will happen in Europe because of the threat scenario, which is more imminent in Europe because of geopolitical framework conditions.

Your next question comes from Mike C. Mike asks, how is Nidar from MARSS being used in combat in the Middle East?

Yes, I was mentioning before, we have more than 60 active installations, and it's in operational use since 2018. So that started after the Houthis have attacked 2000 -- I think it was '18, some Saudi Aramco oil refineries in Saudi Arabia. That was a starting point from us. to deploy those kind of systems in Saudi Arabia. Today, we have in the entire Middle East, more than 60 stations supporting more than 60 critical infrastructures. And yes, we have been -- we are shooting down more than 100 Shahed drones and dozens of missiles and rockets and that is continuing. Day by day, we are defending those kind of systems. That is making us unique in the marketplace because almost nobody else can or has this kind of stamp being battle proven as a dedicated counter-UAS system.

Your next question comes from David Tobias. David asks, can HELW shoot down ballistic missiles?

Sorry, who can shoot down ballistic missiles?

Rather, can the high-energy laser weapons shoot down ballistics missiles.

Okay. So it depends on the power level of the system. Yes, with 100-kilowatt systems, you are able to shoot down slow speed or low-speed type of rockets, artillery shells and mortars in order to shoot down faster, quicker flying objects like a missile, you need to have higher power levels. That's 1 reason why we will go into a 300-kilowatt domain to be able to have a full C-RAM type of capability, which includes the missile segment, which will allow us to go against any kind of classic missile, not against hypersonic missiles, but classical missiles. But that's not our primary objective. Our primary objective is to become the anti-drone company number one, because that is the dominant threat on the battlefield. There are thousands more drones being launched against targets than missiles. And that's the reason why the 100-kilowatt market will be the dominant, the kind of mass market over the next years.

Unfortunately, that does conclude our time for questions today. I'll now hand the conference back to Andreas for any closing remarks.

So ladies and gentlemen, thank you so much for being with us. Thank you so much for listening to this conference. I think the first half of this year is providing the evidence which we have promised to deliver for a long period of time. It's the evidence and proof point that our strategy is 100% right in putting all of our efforts into a strategy which is focusing on 2 pillars, 2 pillars of military warfare, which are now turning out to be in the center of all actions in the future. We will execute exactly the strategy further on. And as I was mentioning before, we will always say what we think and do what we say, we will provide 100% transparency, and we are absolutely convinced that our growth path will be sustainable and stable to create more shareholder value. Thanks for being us, and we are crossing fingers for another half year to come with great success.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you. Good morning, everybody, and thank you for joining this call at short notice. Today, EOS is announcing a capital raise to support growth, and we have launched this morning an ASX announcement and the presentation that goes through that material. The material is being presented on the screen, and we're going to step through that material, and we are going to take questions at the end. A couple of opening remarks from me and then Andreas will take over. So on Friday last week, we announced the acquisition of MARSS.

The acquisition has been updated since it was announced in January. And the context for the changed arrangements on Friday is a significant change in the circumstances of the MARSS business, mainly due to the war in the Middle East. What we have seen since we cut that deal in January is the outbreak of war in the Middle East has led to MARSS product being used again and again to defeat drones of customer -- attacking customer countries in a number of locations in the Middle East.

The outcome of that is that the leadership of several countries in the Middle East has seen firsthand the MARSS NiDAR command and control system to defeat drones that are incoming to places like Royal residencies where the leaders are. And as you can imagine, that's a very credible demonstration of the MARSS product. The outcome of that is that inquiry levels and demand for the MARSS product have gone up a lot. And in particular, we announced on Friday that the MARSS business had secured a new customer with a country in the Middle East. We also announced on Friday the order book of the MARSS business is over AUD 200 million.

And in short, as I said, the value of the MARSS business has increased since we announced the acquisition originally back in January. In discussion with the vendors, we decided and we agreed to increase the consideration to the MARSS business. We did not change the upfront price, and we did not change the ratio in the earn-out, but we did, as we announced on Friday, increase the cap on the earn-out. Specifically, we increased the cap from a EUR 100 million earn-out on EUR 500 million of orders to a EUR 140 million earn-out on EUR 700 million of orders. So that's an increase in the cap. So we're seeing a very strong growth in the MARSS business over the last 3 months. We are also seeing a very significant growth in the opportunity pipeline of the MARSS business, and we're going to talk about that just a little bit more on this call. In the base EOS business, we are also seeing, as we've announced, strong market tailwinds that are helping us grow the order book. We recently announced an increase in the order book during the first quarter to over $500 million.

So today, we are seeking to raise equity to support growth opportunities in the business, and that's to give us the flexibility to make the most of a number of opportunities that we see in front of the MARSS business, but also the wider EOS business. So I'm going to hand over to Andreas now, who's going to talk a little bit more about the MARSS business and some of these...

Thank you very much, Clive. My name is Andreas Schwer. I'm Managing Director and Chief Executive Officer of Electro-Optic Systems. When we announced and signed the MARSS deal at the beginning of this year, we obviously are all driven by the fact that MARSS is one of the very few fully integrated UAS command and control system providers worldwide with a very specific custom-made C2 capability. At that time, it was clear for us this will be a game changer for EOS, and we signed a deal under the terms Clive was mentioning. And since that, in the Middle East has happened a conflict, a war, which is still ongoing, which was changing this picture in a dramatic way on the positive side.

When we started this and when we expected that a cap of EUR 500 million will be more a theoretical value, which will never be achieved, that has changed so much that meanwhile, with the $700 million -- EUR 700 million cap, we believe in a quite realistic way that we can achieve that kind of cap within the next 12 months in terms of order intake for the MARSS-related products. And that's going to happen very likely because of the war in the Middle East, a war where we could demonstrate the effectiveness of the MARSS NiDAR-based command control system by defeating hundreds of Shahed drones, defeating dozens of missiles and rockets flying on to the critical infrastructure, which is currently being protected by a MARSS system. MARSS has dozens of installations active in the Middle East in various countries to protect critical infrastructure. Those infrastructure comprises palaces of kings of crown princes, it comprises military installations and it comprises industrial installations such as Saudi Aramco type of platforms.

This kind of defense was so effective that almost any country in the Middle East has raised the interest have approached us and have entered into discussions and negotiations with Mars. That is giving us the confidence that we will be able to sign a significant number of contracts over the next 12 months, and that's again triggering the increase of the cap to EUR 700 million. So the MARSS system is one of the very few systems, which is custom-made against the drone warfare. In the Middle East, there are a couple of installations of higher value complex C2 systems serving the operation of very expensive missile defense systems such as patriot. You all know that.

But as everybody has experienced in this war, it is from a commercial perspective, unaffordable even for very rich countries like Middle Eastern countries to continue this type of warfare. Instead, everybody is now looking to tailor custom-made counter U.S. systems such as the one of MARSS. Again, MARSS is one of the very, very few players having such kind of solutions available and probably the only specialized solution, which is now called battle-proven in the Middle East. That is an asset which has a huge value for EOS We cannot only close the gap to be a turnkey solution provider in this domain. This kind of event in the Middle East and the fact that we are now closing the acquisition of MARSS will be in the lead position worldwide.

This is a kind of reference ticket supported by key political stakeholders such as the Saudi King, for example, the Saudi Crown Prince. We will be in a position to lock in market the system also into NATO countries, countries where MARSS has not been active so far, countries which already have significant interest in this type of technology. And under the wings of EOS, we will be now in a position to offer those kind of turnkey solutions also for European clients. Overall, and to summarize this part, we are very confident that this is a very significant game changer for U.S. And if you look to the commercials, most of those contracts which will be signed will have very short turnover time.

The contract which we have signed or which MARSS has signed a couple of days ago with this one client in Middle East in the value of AUD 165 million has a turnover time of 12, 15 months or 70% of the budget and the remaining 30% is related to ILS maintenance work over the next 3, 4 years. The contracts to be signed over the next few months will have a similar type of characteristics, meaning that we have lots of delivery options in the next few weeks and months and a significant potential to increase revenue and earnings in the course of '26 and predominantly '27 and follow -- those kind of programs are not one-off programs. Those kind of programs are phased. We are talking now with the EUR 700 million of Phase 1 or Phase 2 of either existing installations or of new programs with further phases to follow later on.

To give you one example, we are in negotiation with one Middle Eastern country, which is asking to install a nationwide commanding control system to protect the entire territory of this country. This is a new kind of challenge for industry. And this country has done a tender process in this tender process, MARSS was participating and was in a position to defeat and to win against two major multibillion-dollar heavy European prime contractors. That is also for MARSS itself a game changer was now MARSS in a position to play in this weak against the big primes and to be able to deliver to clients nationwide control and defense systems against drone attacks.

This company now will go for -- we entered with us into detailed negotiations to conclude this contract. This contract will be of significant value. It is for the Phase 1 more than USD 300 million -- and as I was mentioning, several other phases to follow. We expect this program to be in the multibillion dollar range. And again, MARSS has been selected. We are the exclusive partner for the negotiation of this contract with the client. This is for us extremely important as we cannot only sell for those high-value integrated counter systems.

Also our standard traditional business will benefit largely from those kind of contracts as we can sell into those systems, our effectors, most notably our Slinger and also our R800 counter UAS-based effectors, our high energy laser weapons, which will play a major role in this context in the future, but also our anti-drone interceptor business, which we recently acquired, which is U.K. based. All of those type of effector businesses will benefit a lot from all those -- we are also negotiating with another country, a Phase 2 also in Middle East of an existing installation base also this contract has a value of more than USD 100 million. We expect that this contract will be the next one to be signed ahead of the one which was mentioned before with a country who wants to have a nationwide coverage.

Overall, we are very optimistic that all those programs again will fill up the order book quickly. We expect to reach this cap over the next 6 to 12 months, and we expect to be able to deliver as there's not too much of scaling efforts required on our side. Why not? Because our systems are predominantly based on software. In each in any case, we need to adapt the software. So we need to recruit some software engineers. But it's not a question of investing lots of CapEx into the buildup of production facilities. Again, we're talking about software here and all required hardware is coming either from third parties like radar or sensor equipment provider or from ourselves, providing effectors into the range.

We have our facility in Singapore, a laser production facility, which is able to produce up to 20 systems per year. And we have a capacity in our based air defense business unit to produce more than 300 shift, even 600 RWS in Australia and a similar amount also to our Hub facility in the U.S. So we have no capacity limits in order to fulfill those kind of needs. That is giving us lots of optimism to execute those contracts as per plan. And with the capital we are asking not to be, we will be in a position to execute this growth and not to be limited by flexibility which in capital. I would like to hand over to Clive now to go more into the financials.

Thank you, Andreas. I would firstly just like to highlight, as you can see on the screen, the significant development in the order book of the combined business, which now stands at AUD 726 million. We expect the acquisition of MARSS to be complete over the next few days as funds are received internationally with the different vendors, including some in the Middle East. We are on Page 19, we have an update on the trading outlook for the combined business. As we have said there, there is significant momentum in the business, including contract wins in 2026.

Previously, we have announced in March '26, counter drone order for our Slinger Kinetic defense system for $60 million. And on Friday, we announced also the MARSS contracts have been won since we announced the acquisition, and that includes $170 million of new orders, which is the first country that Andreas mentioned a minute ago. As a result, the unconditional order book effectively combining both businesses together is $726 million. As indicated, we are guiding today that approximately 60% to 80% of that [ 700 million ] order book is expected to flow into revenue in the remainder of 2026 and in 2027.

On top of the secured order book, as Andreas has indicated, we see a very strong and evolving pipeline of opportunities. Andreas has mentioned two specific opportunities that are both countries in the Middle East. We believe that these have the opportunity to be signed prior to the end of the earn-out period, which is 31 May 2027. As always, the timing of new orders in our industry can vary, and we believe that these orders can be signed in the next 6 to 12 months. It could be earlier than that, and it could be later than that. I may also now just say a few words about the use of proceeds, which is on Page 21 in the deck. Today, we are announcing that we are raising AUD 150 million.

This will be used as we've noted, together with our term loan facility that we previously secured to grow EOS. We see very significant opportunities to accelerate the growth profile of this company over the next 12 to 18 months. Our aim, particularly with MARSS, is to get through and at the end of the next 18 months, have a number of established customer sites in the Middle East with MARSS that are excellent reference points for us to continue to show customers and prospects from Europe and from Asia that the MARSS system is an excellent system that truly shoots down drones with the compelling evidence that some customers have already seen in the Middle East.

So with that in mind, we want to make the most of the opportunities in front of us and the use of proceeds together with the term loan includes the acquisition price of MARSS, which is the $50 million upfront that we've mentioned. And also a number of growth opportunities across the business. I'll just give a brief example. One of the countries that MARSS has already signed a contract for the one Andreas mentioned for the contract of AUD 160 million. The initial discussions with that customer involved the customer looking for a bank guarantee of AUD 100 million to for 2 years. Our capital discipline is very important to us at EOS and the capital intensity of that project is unacceptably high.

So we -- along with the MARSS management, we were able to renegotiate that contract so that there was no bank guarantee requirement at all. So removing the AUD 100 million 2-year commitment and instead replacing it with a short-term requirement that essentially amounts to $40 million of working capital over the first 1, 2 and 3 months of that contract, that contract is a 4-year contract. As Andreas said, 70% of the revenue is on the setup and comes up in the first 2 years. Actually, the second half of that contract is my favorite part, it's 30%, and that creates a very sticky customer base as we provide maintenance and software support for the customer over the life of that 4-year contract. And of course, that makes the customer very sticky and develops deep customer intimacy.

So -- that kind of contract is what we are facing into with the two examples that Andreas gave. They are substantial. The first and the opportunity is over USD 100 million, and that's with an established customer. The second opportunity is over USD 300 million, and that's with a new potential customer country. And what we want to do is have the flexibility to trade terms with these customers as we negotiate over the coming weeks and months. And we believe that flexibility will give us the best outcomes. In addition, I would add that the balance sheet strength, we would be aiming to use that with funding providers to secure lower collateralization levels on bank guarantees as we develop relationships with funding providers over the coming months.

In addition, we see some opportunities in laser weapons and space control brief I'll just touch on them and then hand back to Andreas. On laser weapons, I would like to highlight that there are two significant updates on laser weapons in the presentation. The first one is that the launch customer for the laser weapon is progressing very well, and we have announced today in the deck that this is significantly ahead of schedule. The launch customer is the Netherlands, and we are very pleased that we are now 6 months ahead of schedule on that launch customer following some detailed review work and approvals of milestones that were conducted last week in Singapore.

So as usual, some things go well. Other things sometimes take a bit longer, and we are including in this announcement a note that the Korean opportunity that we have reviewed previously is now more likely to occur in 2027 than 2026, and that's been highlighted in this presentation that we've made. We are looking to invest some of the proceeds of this raise in market development, and we're evaluating whether to invest $10 million or $20 million in laser weapon demonstrators. And we're also looking at investing $10 million, $20 million or $30 million in space control demonstrators. And Andreas is going to say a little bit more about the outlook in both of these areas.

Yes. Thanks, Clive. Let's start first with the EOS laser with our Dutch clients. So as Clive was rightly mentioning, we have concluded a critical design review with our client in Singapore over the last few days. The client is extremely happy with the technical progress. We can accelerate the delivery of the first unit over 6 months. So we expect the delivery to happen in 2027. That is very good news because the Dutch system will be the first one worldwide to be fielded and being fully in operation before the end of the next year.

More important than that is the fact that the Dutch client has indicated to be ready to place the order for the first serial lot ahead of the delivery of the first system, which is giving us a significant upside potential with the first client. So we could sign it within the first half of next year or even earlier, which obviously would give us a huge push in terms of order book. Also, our negotiations in the Middle East are progressing on high-volume laser weapon procurement programs. Various clients have asked for the immediate delivery of laser weapons, which obviously nobody can do because there's the kind of stock of key produced systems available. But we are very optimistic to sign contracts also in the Middle East for larger volumes of 100-kilowatt laser weapons.

And as you could follow in the press and media, competition is rising. Some competitors have offered support in the Middle East by installing prototype systems, demonstrator systems, and that's the reason why we also want to invest into the buildup of maybe additional 100-kilowatt laser weapon demonstrator to be in a position. We have one permanently installed in Middle East as a demonstrator unit for the various clients in this area. So again, the laser weapon business is picking up. Demand is coming more intense than we thought before, and we are very optimistic to sign contracts in this domain before end of this year. Same with Slinger, our counter-UAS-based gun air defense system, we are also in intense negotiations with various clients in the Middle East.

And also here, we expect in a similar time frame as the other MARSS contracts will come in to be able to sign significant contracts with various clients in Middle East. So our traditional business will grow at more or less the same speed as the mass business will grow in the future. It goes hand in hand. Coming now to space control. You can see on one of the slides in the left a system which will become, and it's Slide #16. This system is currently under development and production. We want to invest into one or two of those systems. Those systems will be the worldwide first mobile ground-based anti-satellite weapon systems. With those systems, our client will be in a position to interact with satellites to blind and to their sensors, but also to disable the entire satellite. This is something which is coming now under severe demand, significant demand.

We've had recently the German Minister of Defense visiting our facilities in Australia, not only for counter U.S.-based laser activities, but also have shown strong interest in those type of anti-satellite [indiscernible] systems. This goes also in line with American Gold and Drone program, whereas the European clients, and those are the clients we concentrate on, we focus on the disabling of satellites not miss. And obviously, our clients, they want to have mobile solutions to be less affected and threatened by missile attack on any potential [indiscernible]. So this is something which we want to work on very intensely. One or two of those prototypes we are going to build and the idea is to unveil this formally to the market to show the fully integrated system in the course of the first half of next year to European clients.

We expect and plan to have system prototype going on a roadshow across Europe to be showcased to all the various clients within the Western NATO domain. This is something which is forming up our second boost phase of the growth of the company. You might remember, we always say that our baseline business has a significant growth potential, and we will execute that. Our first stage of significant growth on top of that will be the laser [indiscernible] business. And the second stage, as we always mention, will be space control or space warfare. The second stage, which we forecast only to happen by around 2030 and beyond will happen now earlier than we expected.

And again, this is underlined by even very recent visits to Australia, not only by the German minister, not only by the German command of the Space Force, but also by the command of the space forces of primary other European clients, Tier 1 clients. So that gives us lots of confidence even more in the domain of space warfare. Those type of systems like the ones you see on Page 16 are unique worldwide. Nobody has any kind of weapon system like this in its portfolio -- and we expect that we can play a kind of monopoly across the non-U.S. market over the next years to come. So it's a very, very compelling and promising outlook. Okay. This concludes my part. I would like to hand over back to you.

So thank you, Andreas. So as indicated on Page 22, the details of the capital raising are set out there. That includes the placement of approximately 19 million shares -- in addition, we will be taking a non-underwritten [ STT ] offer because we want to make sure that many of our retail shareholders get the opportunity to participate fully in the growth of EOS. With that, we are going to hand back to the host who is going to assist with the moderation of questions. And I'll hand back to you, Paul. Thank you.

[Operator Instructions] Your first question is from the line of Owen Humphries at Canaccord.

Well done on securing MARSS. It's a great acquisition and lots of opportunities here, particularly around that pipeline. Maybe a question that's undoubtedly going to get asked of me around the working capital of this. Like you say you signed that USD 300 million opportunity, call it, your capacity to fund that through a working capital perspective? And just maybe just to lead out how the kind of cash in and out happens on a per contract basis with MARSS.

Thanks Owen. Yes, so one contract has been signed that we've mentioned already for just over $160 million. And as you indicate, there are opportunities as big as USD 300 million and more. Maybe the first thing to add is that EOS will be very heavily involved in the negotiation of any customer contracts with MARSS. As we've indicated previously, Andreas and I review every customer contract before it's signed, and that includes a review of margins.

It includes a review of cash flow and it includes things like bank guarantees, funding concerns and risk management. We've put a lot of discipline into EOS over the last 3 years. And of course, we intend to do the same with MARSS. Customer terms are often customer dependent, but there's always room for negotiation. So we will be aiming to make sure that bank guarantee requirements with customers are manageable.

In particular, we have in the past and we will in the future be drawing on the support of national government agencies for bank guarantees. And in the past, that's included the Australian EFA agency for exports. And in the case of MARSS, we may be using Australian support, but we may also be using support of other countries that are involved in the export process like the British government, which has a substantial support program for exports. So we'll be managing the bank guarantee requirements quite carefully. We've looked at all of the contracts in the pipeline, and we are very satisfied that our ability to fund bank guarantees and working capital requirements is well within the capability of EOS post this raise.

Of course, we don't want to stop the growth at what's in the pipeline, but we will only be taking on contracts that have appropriate working capital requirements, as I've mentioned and we will manage within our constraints. We see significant growth as outlined, the 60% to 80% order book conversion that we've guided to does not have any significant working capital requirement. Maybe the final comment to add is we have run this business on a target working capital requirement for customer contracts of 0%.

And Investors may remember that at the end of March this year, we have increased the level of upfront payments on customer contracts to $70 million. That is customers have given us $70 million in advance on contracts. And that's because industry terms are moving in favor of producers because it's a high-growth market with many players sold out. So we're very comfortable on and you can rely on us to continue to focus on driving the results in the way that we've done in the past.

Good one. And it seems like a very comprehensive platform. Maybe to understand where they sit in the industry, like how many third-party systems are they integrating to the NiDAR platform?

So the question is how many installations or locations do we have in the NiDAR platform. Andreas has done quite a lot on this, so I'll pass to Andreas.

MARSS has installed more than 60 systems predominantly in the Middle East to various clients for different types of infrastructure to protect it. Most of those 60 installations are actively involved in the defense against Iranian and type of drones and...

The question was more around how many third-party effectors like radars or cameras or sensors or other inputs that go into your system, like how -- like there must be an integration process you have to third parties around the world. I guess how many systems kind of -- can you guys embed inside your -- inside the NiDAR system?

So the NiDAR system is a highly modular system. You can integrate almost an infinite number of sensors and effectors by sensor fusion with AI support. It is able to handle not only one, I would say, local installation, but even more, and that's the case for this first contract, which we are working now on to install a nationwide system where you have lots of local installations and the kind of layer-over where you integrate and control all those kind of locals or cells to enable a kind of countrywide seam protection system.

That is possible. So we usually have one radar, [indiscernible] radar installed with each command and control system and at least one high-end optical system plus usually acoustic sensing and other types of sensors, which will all be integrated into one NiDAR [indiscernible].

In terms of availability, the critical element in this kind of procurement chain are the radar. The radar market is quite sold out. So MARSS could secure a certain number of those radars to be able to deliver to clients within a short period of notice. And we have also cases where clients have given up on their kind of additional radar supplier and are ready now to accept other radar products coming from other radar supplier just for the sake of a quick delivery time.

That is happening right now. And as the MARSS system, the NiDAR system was already integrated with more than 160 different type of sensors. There's almost no effect or no sensor on the market, which has not been so far integrated. So the integration effort is very limited and that allows us to be very flexible in terms of offering to the clients. So we don't see a significant risk of supply chain delays stopping us from executing the contracts as outlined by...

[Operator Instructions] We have a question from Baxter Kirk at Bell Potter.

Can you provide a bit of color around the circumstances that led to the $100 million contract win for the C2 system? Were there competitors involved? And what are some of the factors that underpin your confidence of future contract wins?

So the first contract, which has been signed recently by MARSS was a follow-on contract because previously MARSS was already installed in this protecting all the [indiscernible], for example. So it was a natural evolution, and we expect that the stick to us will stick to us with any further insulation to -- what for us is more important than that is that we have won a contest against two European big primes.

And when I say big primes, those companies are each $15 billion, $20 billion, $25 billion of annual revenue size companies. MARSS has won against those two big competitors and has been selected for a countrywide installation. That is giving us a lot of confidence because by that we know now that we can compete. I mean we as a small entity with all the lobbying power coming into this country, we have succeeded against those big companies which were present there for the last decade.

So that means we have offered a very attractive price, and we offered obviously a highly innovative, better technical solution. That is giving us the confidence and even more the kind of fact that our system is probably the only one tailor-made antic system active in the Middle East which also can say with all pride, we are [indiscernible] Rubin should give us all confidence we need in order to make this a big success story across almost all countries, not only in the Middle East, but also across Europe and then Asian region.

So we are extremely confident. So the war in the Middle East was for us, if I may say so kind of extremely lucky event, I'm ready to say that because it's always a bad thing to have war conflict. But from a pure commercial perspective for EOS and also from a timing perspective, it is really the optimum the best possible case. We signed this contract at the time when the war was not in effect, and now we are benefiting obviously from all its consequences.

And this does conclude our Q&A session for today. I would like to hand back to Andreas for closing remarks.

Thank you, ladies and gentlemen, for participating to this call. Thanks for your continued interest in Electro-Optic Systems. With the acquisition of MARSS, we have done, I think, the biggest step towards the fulfillment of our strategic objective, number one, to become the worldwide leader in counter UAS systems. We will be able now to boost our revenues with the acquisition of MARSS.

We will be a turnkey solution provider. We will differentiate by that for most of the other competitors in this domain, and it will allow us to substantially increase our business volume over the next few months and years to come. Also space warfare and our laser business is getting an additional push for those kinds of activities, and we are extremely confident to exceed expectations and to make this company a great success story for our clients, but also for our investors.

Thank you for standing by, and welcome to the Electro Optic Systems 2025 Full Year Results. [Operator Instructions]

I would now like to hand the conference over to Dr. Andreas Schwer, Group CEO. Please go ahead.

Good morning, ladies and gentlemen. Welcome to our annual results presentation. I will go through the slide deck, which has been published on ASX this morning.

Starting with Page #4 with the agenda. So we will go through the 2025 summary by highlighting the most important aspects of last year. I will give you some aspects in terms of market conditions. I will further explain our growth and expansion strategy. We will focus on the order book and the forthcoming sales pipeline before I will hand over to our CFO, Clive Cuthell, who will give you a detailed overview about our financial performance and the cash flow situation. At the end, I will take over again to lead you through our strategy and to highlight some further growth and strategic market opportunities.

Let's switch to Page #5, please. The EOS leadership team is stable, the same as last year with one exception. We have added Lee Kormany. Lee is heading our Defense Systems Australia team. The other people you probably know from last year's presentation.

So 2025 summary, Page #7. The markets are not only remaining strong, they are getting stronger and stronger month by month. Thanks to global tensions and some advancements on the technological side, we expect to benefit largely from those kind of superb market conditions.

Our strategic focus is absolutely on 2 domains. One is the counter-drone business. We are aiming to become one of the globally leading anti-drone companies. And also, we want to become one of the world-leading space control or space warfare companies.

EOS has enhanced its sales capability. We have added significant number of people, in particular, in Europe in order to increase our sales capability and the order book 2025 is a good testimony of that. We have also expanded in terms of geography. We have added new offices and operations in Europe, in France, in U.K., in the Netherlands and Germany to be followed soon.

In terms of commercialization, we have succeeded in the high-energy laser weapon domain by EOS, becoming the first company worldwide to sign a 100-kilowatt high-energy laser weapon export contract. That is a breakthrough for EOS, and it's a breakthrough in the laser weapon world. And we are very optimistic to sign further contracts over the next years to come.

We also have executed, in a very disciplined way, our M&A strategy. We have divested what is noncore to our business. So you might remember it was SpaceLink in 2022 and 2023. And now we have divested also EM Solutions because it didn't fit or it doesn't fit our long-term strategy.

Instead, we have reinvested into something which is absolutely core to our business, into a C2 command and control company, MARSS, which also brings with it AI technology, AI algorithms, which you can easily put into our remote weapon systems and the laser weapons to further increase and improve the performance in terms of drone detection and classification. So all those things, we can tick the box and which makes us very optimistic in terms of future outlook.

We move to Page #8. Let's have a look to the highlights of 2025. So the revenue was $128.5 million. It's down compared to '24 because of 2 aspects, obviously, because of the divestment of EM Solutions. and second, some of the major order intakes happened later than we wished to be in 2025. And that had obviously also an impact on the revenue in 2025. We expect in return all that to happen in 2026.

The gross margin went up to 63%, which is very positive and very pleasing. The underlying EBITDA with minus $24 million is a result of our revenue, which went down. And you might remember our CFO saying that our breakeven is around AUD 200 million. So obviously, we expect this year to see a change there.

If you look to the order book, I think that is the most important aspect here. We have signed last year 18 contracts totaling up to AUD 420 million order intake, which is a significant high number compared to the year before, where we only had $70 million, 6 orders in order intake. This is resulting in an unconditional order book of AUD 459 million, and this unconditional order book does not include the conditional order, which we have signed with a Korean client.

Our cash position is very positive with more than $106 million plus the restrained cash sitting for bank guarantees and other activities, and that comes on top of $106 million.

In terms of investments, we have opened quite recently our new high-energy laser weapon factory in Singapore, and I will come back at a later point in time on that particular subject. We've announced the acquisition of the C2 command and control company, MARSS, end of last year, beginning of this year. We have opened up facilities in the Netherlands, France, U.K. and Germany will happen also this year.

Our total number of employees went up to 436 people. We remain extremely sensitive in terms of adding indirect costs to our organization to keep overall indirect cost and overhead low and to stay very competitive in terms of our pricing structure.

Page #9. If you look backwards into 2025, the year was filled up with many positive events, obviously a little bit back-end loaded. I just want to highlight, again, in August, the landmark contract with the Dutch government for the first 100-kilowatt laser weapon, EUR 71 million.

We have been successful in bidding with LAND 156, which by the dollar value now is not so large, but it has more than AUD 1 billion order intake perspective as we are now selected with our partners to be the solution provider for the anti-drone systems for Australia. We also signed the LAND 400 Phase 3 contract with more than $100 million in October and towards the end of the year, very important contracts with General Dynamics, one of our key clients, and one of them is opening up the big market towards the U.S. Army as we became the key supplier for the future Abrams main battle tank. I will also come back to that in a minute.

So the market conditions are superb. The markets are growing as the budgets are growing. And as long as geopolitical tension continues to be high, we can benefit from that one. This statement is not new. But again, if you see how much budgets are growing over the last few months and how many governments have formally stated to go even higher, this is very promising for Electro Optic Systems. And again, that's the key reason why we want to expand into those markets, in particular, into the European market as in Europe, this super-cycle is extremely dominant.

On this chart, again, you can see on the right side, the number of drone attacks, which is extremely growing. The number of missile strikes on Ukraine is rather going down. That has more or less a kind of price or cost structure rationale behind. The anti-drone business, as a consequence of that, will become predominant. The entire warfare situation in Ukraine has changed dramatically.

The Ukraine war in the beginning was pretty much a kind of war on the ground between artillery forces on the left and right side. That has changed now drastically. It's now a drone and an anti-drone warfare where the front line is dominated by loitering ammunition falling down and destroying tanks which are high-value target destroyed by drones for a few thousand dollars only in terms of production cost.

So this is the key reason why we believe that this drone or anti-drone warfare will be dominant not only in Ukraine, but will also play a dominant role in all the future conflicts to come. And that's the reason why we invest heavily into this kind of technology base and why EOS is well positioned to become a global leader in this particular type of business.

Page #12, you can see the different types of effectors being able to defeat drones. You obviously need to have a layered response to tackle the different types of drones attacking your high-value assets. EOS is concentrating on the so-called hard kill. We're concentrating on hard kill as soft kill becomes less and less effective in military context as drones are more and more hardened.

In the area of hard kill, EOS has by far the broadest product portfolio globally. Our product portfolio includes remote weapon systems. Here, we are one of the world market leaders. Nobody is as accurate as we are in terms of anti-drone performance on long range.

We have added to our portfolio, end of last year, interceptor drones, drones which fly up, which kill the attacking drones by flying into them. That is a new type of effector which we are happily adding to our portfolio and which is predominantly of advantage in commercial or homeland security applications where you cannot use missiles, rockets or canon-based air defense systems.

We have added now high-energy laser weapon and our actual architecture allows us to scale those weapons between 50 and 150 kilowatts. And I just want to remind everybody that there's only one other competitor to EOS in the global market. And so the overall competitive situation is very, very favorable to EOS.

We have also added rocket systems and various types of missile systems on our multi-carrier platform, so we can offer the full range to be able to defeat any kind of incoming drone threat.

And with the acquisition of MARSS and its NiDAR Command & Control system, we are now in a position to offer fully integrated solution. The command and control system is the brain behind any anti-drone system as it identifies the threat as it allocates the various effectors to the threat, and it's the key to make sure that you can defeat large quantities of drones or drone swarms. So now we are in a position as one of the very, very few bidders on the market to offer turnkey solution to any client in the military, in the homeland security and in the civil/commercial context, including operators of airports, for example.

Let's move on to Page #13, please. Number 13 is not an exhaustive list of partners and clients. All those companies mentioned here are also clients of Electro Optic Systems. You can see very prominent names, big OEMs worldwide, OEMs which trust EOS, which trust our performance, our quality, our high-end products, and all of them have acquired our products.

I just want to highlight one aspect. You can see on the right upper side, a prototype of the M1E3 Abrams main battle tank. This is the breakthrough landmark contract, which we have achieved by end of last year. Even if the dollar value is not so impressive, it is only the very first slice of something which will become very, very big.

So after many years of absence from the U.S. Army market, we have succeeded now -- we have been selected by the U.S. government and by General Dynamics to become their sole partner to put our R400 Slinger weapon station in a very autonomous version on top of the Abrams tank, allowing this very important American platform to survive the threats of the modern battlefield.

As the U.S. Army is operating thousands of those tanks and as many export clients around the world are operating Abrams tanks, we believe that the total market potential just for this type of integration installation will add up over the next 15 years to up to USD 3 billion. So that's the reason why this contract now, even if it's only the very first slice, is extremely important for Electro Optic Systems. We expect further slices to come in the course of the next years, and this will add up to those large numbers then.

Let's move on. Slide #14 is a selection of some partnership agreements which we have signed in the course of the last year, very important ones. So Calidus is a very strategic partner in the Middle East for EOS, not only for remote weapon systems, we aim also partnership in the other product domains with Calidus to open and to secure, for example, the very important UAE market.

We've signed, under recommendation by the British government, a partnership agreement with MSI, which opens for us the U.K. market and associated exports market. So MSI will produce our weapon systems under license.

We've also entered into a teaming agreement with a world-leading KNDS company, which is this German-French multinational company. KNDS is also highly interested in the partnership with us. We can add up there or we can add and integrate their canons on our weapon stations. And KNDS in return is interested in producing our weapon systems, our remote weapon systems in France for the French market, for example. So very important to penetrate those European markets.

And we most recently also signed a strategic partnership agreement with a Turkish company, Roketsan. Roketsan is also a very strong, very large company active in the missile domain today, which has decided to enter into the high-energy laser weapon domain. And with Roketsan, we are in a very comfortable position and very optimistic to conquer also the Turkish and associated export market with high-energy laser weapons.

Page #15. So the high-energy laser weapon domain is, for us, the first strategic pillar of growth over and above a remote weapon system market, which is growing by itself. Again, irrespective of whether or not the Ukrainian conflict would come to an end, the remote weapon system market will continue to grow and the laser energy market -- the high-energy laser weapon market will be the first layer above that. As there's only very limited competition in our 100-kilowatt power domain, we expect that we can acquire a large chunk of the non-U.S. international market.

In order to be able to serve those huge markets, we've opened up our first, and I think it's the worldwide first serial high-energy laser weapon production facility. It was opened on February 6, so quite recently. It is a 20,000 square feet capability, a factory which allows us to produce 20 laser weapons per year, and we have expansion potential to go up to 40 laser weapons per year there.

But even if we can produce 40 laser weapons per year there, we expect that most of our clients will ask us to localize production in their home country. And here, our unique feature comes into play as EOS is the only company worldwide in the laser weapon domain, which owns all the IP relevant to do this kind of development and production. We can offer turnkey solutions, and we can localize the production in each client country, which none of our competitors is able to do so. That's the reason why we strongly believe into this kind of strategic growth area.

To give you some update on where we are with the Netherlands contract, so the initial design approval, the first milestones, have been successfully passed. We have passed the so-called PDR on the system. We have passed the CDR on the laser itself, which is a very successful process and progress which we have achieved. The client is extremely happy.

We are negotiating now with the clients to increase the scope of the contract and to accelerate the delivery time frame. The client is highly interested in signing further orders with EOS and to make EOS a strong partner -- a strong strategic partner of the Netherlands government. So this is very promising, and it's a world-class testimony of our quality and performance.

If you look to the opportunities, our go-to-market strategy depends on the type of client, depends on the region. If you look to the NATO market, and in particular here, the Western European market, it's, in most of the cases, either a direct sale to a government or we go through partners and through teaming arrangements with the respective national champions.

If you look to the Middle East, it's either direct sale or it's a partnering model with local producers. In many cases, it's governmentally owned companies. And if you look to other markets like the Korean markets, there are a range of other channels, depending on the specific local market conditions.

So we have continued discussions and ongoing negotiations with many countries and many governments related to future high-energy laser weapon sales opportunities. Among those ones are Germany, France, Italy, Turkey, Saudi Arabia, the UAE, India, Korea, Australia and the United States. This list is not exhaustive, but it should give you a little bit of a perspective of how much this kind of weapon system is in demand and how much the market will grow in the future. And again, we are in the pole position because we have been the only company so far being able to sign a 100-kilowatt laser weapon contract to an export client.

The conditions of the USD 80 million Korean laser weapon contract we have mentioned before, it's a highly conditional contract. It's not included in our internal planning. We have not spent any money on that one so far, but we expect that the conditions will be concluded in the course of the first quarter this year. But again, no guarantee is coming with that one.

Page #16, space warfare, whereas we call our product line for high-energy laser weapons in the anti-drone business domain, Apollo, we have given our product family for space warfare, the name Atlas. Atlas comes in different configuration in fixed installations, like you can see here on the right side of this slide, or it comes in a mobile configuration. It comes in containers, which are coming on the backside of trucks.

So the Atlas product range is designed in order to fulfill 3 dedicated missions. The first mission is to blind and dazzle satellite sensors to stop satellites from taking pictures and intelligence from the ground. That's very important in any kind of military context.

The second mission is to disable or to defeat satellites. This kind of destruction capability comes by increasing the laser power. So if we include now our high-energy laser weapon capability, the 100-kilowatt effectors, into the kind of optical chain of our telescopes, it will allow us to do those kind of missions.

And the third mission is obviously to move satellites and to move space debris. We can even cause atmospheric re-entry if we illuminate those satellites and space debris with our laser weapons. So this is giving our operators, our clients, a huge portfolio of more decisive capabilities.

I want to highlight that there's not any other company outside EOS being able to offer this kind of competency and capability to any client. That's the reason why this will become a huge growth opportunity for EOS. And I'm very happy to announce also that we welcome frequently commanders from Tier 1 governments, commanders of space forces coming to Canberra, coming to our Mount Stromlo installation to visit and to witness what we can do in this kind of domain.

Page #17. You might remember this slide from the last year. We always had 3 ticks. The tick on markets was there. The tick on product was there as we have launched many new products. We are highly innovative. And we can also tick now the right side of this slide, we can tick sales and marketing, and we can tick the order book as we have increased our order book from $136 million end of 2024 to more than $459 million by end of December 2025. Again, this does not include the USD 80 million order from this Korean client.

So this is an extreme success last year. And again, we expect this year to be extremely positive in terms of order intake. We will continue putting focus on order book growth as this will be the baseline for any revenue growth in the future.

Page #18. I don't want to go into all the details here. I mentioned some of them before. Important is really that our European footprint is creating now much more value, much more order intake. And if you really look to the development of the unconditional order book, this underlines our statements. It is very strong with $459 million, and we aim to realize about half of this order book value by revenue in 2026, plus all revenue coming in by new orders taking on board over the next few months to come.

Page #19. This is an updated pipeline. This pipeline is extremely conservative. So if you go through that one, you will notice that we have not included here order intake for laser weapons in 2026, but we're obviously aiming for achieving order intake for laser weapons in 2026. But even if it would not come hypothetically, the pipeline is very strong and the foundation for a very strong year in terms of revenue is extremely high.

So it's -- this contains order intake opportunities from all around the world. It is extremely diversified. It includes lots of opportunities from the Middle East, but also from North America and from Europe. And it should give everybody lots of confidence that the growth strategy of the company is intact, and we are in a very, very healthy and extremely positive outlook position.

Page #20, a summary of the MARSS acquisition. MARSS is one of the very few companies in the market, which is offering a highly customized integrated anti-drone solution. It is a company which has fielded more than 60 systems around the globe, a company which is well established, a company which is world-leading in terms of user intuitive C2 systems, a company with which we have collaborated in the past for a long time.

And our team always came back and said that the MARSS integration is the most easiest to be done. The MARSS user interface is the best one from a customer perspective. And with MARSS being part of our EOS portfolio once we have completed the deal in a few months or weeks from now, we are in a position to offer turnkey solutions to the client.

And again, with this kind of capability, we have also the advantage of including all those AI algorithms into our weapon stations and into our laser weapons to make those weapon systems even more competitive and leading edge by being able to even better discriminate drones and to detect drones.

So the transaction summary, we announced that on January 12, there's an upfront cash payment of USD 36 million, plus an earn-out in shares and cash. The earn-out will happen as the order intake is happening and as all those products and all those orders are extremely profitable, we expect that we can pay those kind of earn-outs by the order intake cash flow to come.

So I would like to hand over now to Clive to go through the details of the financial results 2025. Clive?

Thank you, Andreas. So for those that joined late, my name is Clive, and I'm the CFO and COO. I joined EOS 3 years ago in mid-'22, going on for 4 years.

Revenue -- as this slide shows, revenue came in at just over $128 million. That is in line with what we said at the end of January, which was slightly above the guidance range that we issued at the end of the year last year. The lower revenue compared to last year really reflects the end of old contracts and the start of some new ones and a little bit of a gap in between. And obviously, there's been, as Andreas said, a big focus on growing the order book this year to underpin a position next year that hopefully will be more favorable.

The gross margin was 63%. This includes 2 main things. One was the benefit of a contract that was finalized in the Middle East. That was already reported back in June, so that's not new news. The second thing that's perhaps more significant is there has been a continued improvement in the base gross margin in our business.

We do not expect to achieve 63% gross margin going forward, but we do expect a continuation of the multiyear improvement in gross margin that we have seen consistently between '23, '24 and '25. So we are aiming for continued improvement in '26 on the historical levels, perhaps over 50%.

The underlying EBITDA was a loss of $24 million, mainly driven by the lower revenue during the year. The gross margin benefit was offsetting some increase in operating expense as well.

The EBIT was impacted by a number of items, including higher depreciation and amortization, a big chunk of which is customer-funded CapEx. We also had 2 nonrecurring items totaling $9 million. These are nontrading, 2/3 of this relates to the ASIC matter penalty in Australia, and the other 1/3 relates to some acquisition costs with MARSS that were expensed during the year. And there are some details in the back of the slide deck on these nonrecurring nontrading items.

Finance costs improved. All debt was repaid in January 2025, and EOS today has no borrowings. The expense for finance costs includes the make-whole expense relating to the debt repayment that took place in January 2025.

And the total net profit after tax includes the continuing operations, but it also includes the $91 million gain on sale that was recorded in January 2025 following the sale of EM Solutions that Andreas mentioned earlier.

Maybe the other thing to note and highlight on this slide is that we have done an awful lot of work, as Andreas said, on revenue diversity. And the graph at the bottom right of the slide shows the split of revenue by geography, and as we said, an increasing emphasis on Europe, not just in the orders secured that Andreas mentioned earlier, but also flowing into revenue this year. So that work going to market in different ways in different parts of the world is going to continue as we -- and we expect the quality and the diversity of the revenue base to continue improving in future years.

The next, Page 23, has the segment results for defense and space. The outcomes at segment level here are largely a result of lower defense revenue because of the gap in contract activity during the year. In the space business, pleasingly, that business continued to grow during the year. As Andreas said, this is really developing -- designing, developing and starting to commercialize new products, particularly in the space control area. And it's pleasing to see that Atlas system work includes customer-funded activity, which flows through the revenue line.

As we said, a big focus on growing the order book during 2025. And we have said the order book of $459 million, our outlook for this year -- we've not issued revenue guidance, but we have said that between 40% and 50% of that order book of $459 million is what we're aiming to realize in 2026. And that should give you a little bit of a thumbnail sketch as to where revenue could end up.

The next page has cash flow on it. Now the cash flow information was largely announced at the end of January already. So some of this is not new news. But as you can see, the operating cash flow was a net $24 million out the door. That's despite the lower revenue during the year. We did have some big receipts from the finalization of the contract in the Middle East. And also in the cash flow, we had the impact of interest in the operating cash flow -- the impact of the make-whole interest that I mentioned earlier.

Investing cash flows, which was $130 million coming in, included the disposal proceeds on the sale of EM Solutions as well as some other items. Notably, the level of security deposits on bank guarantees also reduced during the year. which is a positive. Financing cash outflows included the repayment of debt of $48 million that occurred in January with the sale -- January 2025 with the sale of EM Solutions.

Maybe just a couple of other things. Cash flow discipline is quite important to us at EOS. At the end of December, we achieved the highest yet, the highest ever position of cash received in advance from customers. So upfront payments from customers at the end of December were $42 million, which is up $18 million on the prior year. And that's because of a consistent focus on this item as we deal with customer contract negotiations at the signing stage.

We continue to manage cash carefully. We do make targeted investments in inventory where we can get a source of competitive advantage from reducing long lead times as some of our competitors are not able to supply quickly. And if we make limited investments, we can really improve there.

On the balance sheet, as we've announced previously, cash at bank $107 million at the end of December. And we have a committed term loan facility for $100 million with docs being finalized at the moment to help cash flow liquidity protection over the next 12 and 24 months, and particularly as we get into the MARSS acquisition and aim to realize a lot of the growth that we've been mentioning earlier.

That's it on cash flow, and I'm going to hand back to Andreas now, who's going to talk a little bit more strategically.

Thanks, Clive. Page #26, key strategic achievements. EOS will position itself as the leading counter-drone company worldwide, being able to serve any kind of client, whether it's military or nonmilitary. And in order to do so, we have also increased our portfolio in counter-drone effectors.

So beside our R400 Slinger, we are at the last stage now to also include the R800 in anti-drone configuration to the field. And all those systems will be, in the future, equipped with AI-enabled C2 system coming from us, which allows us to be even more effective.

I just want to mention one further contract, which we have not announced so far in the -- which we have not outlined here in the paper. It's the German UTF tender. It's probably one of the largest RWS tenders over the next 10 years to come. The German government wants to procure more than 3,000 systems and among -- and we've been among 13 bidders to bid for this first phase of the contract.

The German government has down selected 3 bidders to go into the last round of selection, and we are proud to say that our partner Diehl and EOS, we are among those 3 last bidders in a very promising position. So we are very optimistic to make that happen in the course of this year and to announce an order intake on that one, not this year, but the final decision is probably to be made by the German government in 2027. So this is -- this will become then also the next landmark order intake. Again, it's more than 3,000 weapon stations.

So that's underlining our growth strategy in remote weapon systems. And as we have now partnership agreements in place with local champions in Germany, in France, in U.K., those markets are widely open for us in the future. The high-energy laser weapon market is just starting now.

And again, we are one of the very, very few contenders in this market, only one other company active in the 100-kilowatt domain. This is promising very healthy contracts, very profitable contracts in the future. And with our new laser innovation center, the worldwide first serial production laser center, we should be well positioned there.

Space control, to be more commercialized, we have to complete our development on the mobile solution, the mobile Atlas solution, which will put us into a market which is just about to come. It will position us as the unique source outside U.S., and we will be very well positioned to let the company grow in space control then over the next 3 to 10 years.

So Page # -- what is that, 27, our growth strategy. Again, we will have a very robust organic growth by RWS by enabling our weapon stations with the AI algorithms and with bringing further counter-drone variants to the market. This will be substantial for our further growth. And then, with the laser weapon and with the MARSS-enabled C2 systems, we'll be in a position to bump our revenues up significantly over the next few years.

Before then, space control will kick in with very substantial revenues to become the world market leader in space warfare. So we will continue commercializing our IP assets, our huge inventory of IP and innovation. We will further put effort in developing software. We will continue investing into new features such as mesh network technologies to give our clients a leading edge over anybody else in the market, whilst obviously maintaining our strict capital discipline.

So Page #28. The markets will remain very supportive. We are benefiting from a super-cycle. We are perfectly positioned with our counter-drone and space control business segments within those markets. And as our growth strategy and our go-to-market strategy in Europe is already proving that we are highly effective and highly successful, we are very well positioned.

And again, with the inclusion of MARSS in our portfolio and our widened product range, we should be able to offer and to reach out to all the homeland security and commercial clients in the future as we expect that most of the airports, most of the civil and commercial infrastructure needs to be protected against drone attacks in the future. EOS wants to be in the middle of this kind of market to become the world-leading anti-drone company.

Thank you, ladies and gentlemen, for your interest. We are ready now to answer your questions.

Your first phone question is from Baxter Kirk with Bell Potter.

Andreas and Clive, can you hear me?

Yes.

You've mentioned commercialization of the stationary Atlas product from 2026 onwards. What would the initial contracts look like? Should we expect multiyear development contracts like the laser contracts and then followed by JVs? So how would that work?

So the product in terms of stationary fixed asset product is available. We can duplicate our installation on Mount Stromlo. It's a fixed asset, which we are starting now to offer to the market, to clients. So a copy of this kind of system comes in for a price of around about USD 100 million. That is an asset which we can sell instantaneously. There is no further development needed. Development is still continuing for the mobile solution where we expect to be able to have a prototype ready by end '27, 2028.

Okay. Great. And since the events that happened last year regarding the drone incursions across Europe, are you seeing an acceleration in procurement cycles, particularly for your counter-drone products?

Yes, we can see a growing demand, but obviously, military procurement cycles are long lasting. It goes through a very complex capability definition process on the client side, followed by low quantity orders, and that is what we are seeing today. And as soon as low quantities are delivered, as soon as they have done the incorporation into their overall multilayered ConOps process, we can expect that large quantity orders will follow by that. It's the normal kind of cycle when you introduce a new weapon system to the market.

Okay. So there's no sort of -- they're not skipping steps or anything, given the urgency of drone protection. It's just following normal procurement cycles.

In most of the cases. Obviously, if there's an emergency demand like to support Ukraine, we can expect quick delivery and quick turnovers, same in the Middle East. So that is still the case. But predominantly the market of the future, the growth market will come through normal type of procurement cycles.

There are no further questions on the phone line at this time. I'll now hand back to address any webcast questions.

Thanks. We have a number of webcast questions, and we'll try to get to as many of them as we can. There are some related questions, which I'll present relating to the 40% to 50% realization of the $459 million backlog. Could you talk a bit more about what sort of swing factors would affect that range and any weighting that you can provide as well?

Thanks, David. So the order book is -- as we said, we're pleased. It's grown a lot to $459 million at the end of December. We -- obviously, we track the tenor or the rollout of that order book quite carefully for our internal management purposes. And today, we have guided that we are aiming for 40% or 50% of that order book to roll into calendar 2026. So that represents something like AUD 180 million to AUD 230 million.

Now that's obviously the revenue that we're aiming for that could come from the existing order book. And obviously, on top of that, as Andreas mentioned, would be new orders received, particularly in the first half of the year that are capable of delivery before the end of the year.

We do -- what are the factors that impact where we land in that range? Obviously, it depends on -- a little bit on order intake and whether we get short notice orders, but also it depends particularly on delivery. A large amount of delivery is within our control, but some of it involves very close cooperation with customers, but we've been working quite hard for several months now to lock in as much of that 2026 revenue as we can. So it does depend on -- more largely on delivery than on new orders being won.

We have not issued revenue guidance. This guidance that we're issuing today in order book rollout is as far as we're going at this stage. But we can say that the revenue is as normal, is more likely to be weighted towards the second half than the first half of the year. And if that changes, we can -- we will be looking to keep the market informed.

There is quite a wide range in analyst consensus out there that we are aware of. Some of the analyst numbers assume an exceptionally high level of order intake and I'm not -- being turned into revenue in 2026. I'm not sure that's quite right, but that's as far as we're prepared to go at this stage. So thanks for that question, David. Hopefully, that deals with the 2 or 3 questions that have been asked on this area.

We have a couple of related questions on the Korean high-energy laser contract. Can you confirm if the deposit has been received yet? And if not, is there a deadline on when this contract would be terminated?

Thanks, David. So we've been quite clear in our announcements that the deposit has not yet been received. That was a condition in the contract. And the second condition is for a letter of credit to be finalized, and we've also been clear in our announcements that, that has not occurred yet either. And I'll pass to Andreas for the second part of the question, which is how do we look at this?

Yes. So is the South Korean contract exclusive? And if so, does the cash deposit have to be provided before -- between the 2 parties?

So the South Korean contract, which is signed with a private party is not exclusive. We are in parallel also in discussions with the Korean government and end users. And yes, at any point in time, we can enter into contracts with the government in parallel.

Another question relating to the high-energy laser facility. You mentioned that you can build up to 20 lasers per year. Why does the current order take up to 2 years to build?

It takes more than 2 years to build because of the supply chain. Key components which we have to buy from the market have a long lead time. And that is the key reason as with any other weapon system you sell to the market that simply the delivery time line is usually between 2, 3, 4 years.

We try to optimize this time line, and we are in negotiations with the client to bring the delivery forward. If everything works well, it could be as early as end of 2027, which is compared to the procurement of any other weapon system, quite a record time.

Great. There are a number of questions about the German opportunity with Diehl. Could you just talk a bit more detail on -- and what sort of price points for the products?

So the German UTF tender, which is about 3,000 systems, it's related to our R150 weapon station, which we do, and which we produce together with the German partner Diehl. It has a total market potential of more than EUR 1 billion.

What are the next steps for the M1 Abrams tank integration opportunity?

So the contract which we have signed end of last year was about to finalize the integration of the R400 Slinger and a very specific version on the Abrams tank. We expect that to happen in the course of 2026. We expect to get the next slice of orders in the course of this year, 2026, before then, large quantity orders will come in by 2027 onwards.

Great. An analyst has asked, what are the expectations for capital expenditure in 2026?

Yes. Thanks, David. So CapEx -- we don't provide guidance on CapEx, but historically, it has been -- typically it has been less than $20 million. I would emphasize that, within the amounts that we've had historically, very significant portions of our CapEx have been funded by customers under customer contracts with no net cash going out from the business. So we would expect to see that activity continue.

We do make selective investments in opportunities where we see near -- modest amounts of development spending being required. But we are very judicious in terms of the level of investment risk we take around technical developments and the amount of money we put at stake, and that is going to continue. So that's -- I'd probably leave it at that, David.

There's a question here on what kind of opportunities are in front of MARSS in terms of timing, value, type of end products and customers?

Thanks, David. So we think the opportunities in front of MARSS over the next 2 to 3 years are exceptional because they provide a route to market in the counter-drone area. MARSS has a pipeline and it has an order book, and as one of the slides said earlier that our pipeline slide and our order book slide do not include any information in relation to the pipeline and order book of the MARSS business.

They consistently look at a number of markets and different opportunities. And at the moment, they're looking at opportunities that include anything from EUR 20 million and EUR 30 million per bid to, in a few cases, bids that are much larger, stretching upwards, including EUR 50 million and EUR 100 million per bid.

Now the lead time on sales in the MARSS business is -- which sells into defense and homeland security, a bit like us, the lead time is just as elongated in that business as it is in ours. But we are hoping that the business could achieve significant orders in '26 and '27 that could make a potentially very material difference to the EOS order book over the next 12 and 24 months.

We are not expecting the MARSS order book to be dilutive to EOS margins in any way. And naturally, we are looking for the right cash flow profile on these orders. I think it's a bit too early to be more specific on the size of the order opportunities, but I'm just going to ask Andreas to make a couple of other comments about how we see the market overall for the MARSS products and the cross-selling opportunities.

So the market opportunities are tremendous. Their home market was the Middle East or is the Middle East. And as you can see by the geopolitical tensions and the actual political threat scenario between Iran and the other GCC countries, we expect further push coming from that end. So we hope to be able to sign contracts over the next 12 months in a significant value to protect critical military and governmental infrastructure in countries like the UAE or Saudi Arabia. That is imminent. And again, politics is playing currently in our favor there.

We also expect that we will be able to sign contracts in non-Middle Eastern markets, in European markets. But obviously, as we need to reach out now to NATO clients for the MARSS portfolio, which was not done before to a large extent, this will take a little bit more time. But yes, all the protection requirements for critical infrastructure in Eastern and Western Europe, MARSS is made for that. And we believe that, that market on the long run will be extremely substantial for EOS.

Great. There's a question here about the recent news articles around the German government pausing of the Rheinmetall high-energy laser weapon contract. Can you comment further on this?

Yes, sure. So we have to look a little bit backwards in history. So the German government has supported Rheinmetall and MBDA over the last 15 years with more than EUR 150 million subsidized R&D work to develop laser weapon technology. Today, Rheinmetall has reached a level of 20 kilowatts, and they have offered and agreed with the German MoD to get into a development contract to develop a 50-kilowatt solution in the course of the next 5 years for a total budget of EUR 500 million. That is a very tremendous amount of money.

And when the German parliament -- so the German government became aware of the Dutch contract, which we have signed for a fraction of the price, and when they have asked us, would you be ready to deliver also to us, to Germany, we obviously said, yes, you can get twice the power for less than half the price in half the time.

And with that, the kind of statement and obviously, by then consecutive interactions with leading stakeholders on the German government side, the parliament and the government has decided to stop the further procurement in a sole-source mode with Rheinmetall, but to have a detailed look instead on the EOS capability. And that is happening right now.

A few questions have come through about what's the future product development pathway for our laser weapon project.

So our current technology is scalable between 50 and 150 kilowatts. So we don't need to spend any more money to make that happen. But we are in negotiation with 2 governments and with one of them, we will hopefully sign this year, a contract to develop a 300-kilowatt laser weapon family. which is also scalable.

This will enable us to offer to the market something which is not the best solution to kill drones, but which is also very capable to act as a so-called C-RAM type of effector. C-RAM means it can go against any kind of missile rocket and artillery shell. That is opening up an additional market for EOS.

And we can also use those 300-kilowatt lasers to extend our space warfare capability to engage not only against satellites flying in low earth orbit, the low earth orbit is up to 1,000, 1,500 kilometers and it includes all the constellations such as Starlink, but the 300-kilowatt will also allow us to engage against higher flying objects such as [ GPS ] or GLONASS navigation satellites or even geostationary satellites, whether it's communication, intelligent satellites or what else. So that will give us the full portfolio.

Great. I think that's all the questions that we have time for at this time. Thanks, operator.

Thank you. And that does conclude our conference for today. Thank you for participating. You may now disconnect.

Okay. Thank you. Good morning, everybody, and happy New Year, and welcome to 2026 with EOS. My name is Clive, and I am the CFO and COO of EOS. This morning, we announced on filings on the Australian Stock Exchange, the acquisition of the business of MARSS Group. We lodged on the Australian Exchange an announcement with a number of details about the acquisition. And we also filed this investor presentation that we are going to talk through now.

On the call today is our CEO, Dr. Andreas Schwer and David Bert, our Director of Corporate Development. So I'm going to hand over to Andreas. And what we're going to do is we're going to step through the slides that we published on the ASX this morning. And then we are going to open the call up to Q&A later. If you have a question, please type it into the chat box that's available and David will moderate the questions at the end of the call. So with that, I will hand over to Andreas Schwer.

Thank you, Clive. My name is Andreas Schwer, I'm Managing Director and Chief Executive Officer of Electro Optic Systems. So dear shareholders, dear investors, today, it's a transformative day for Electro Optic Systems.

You might recall that EOS has one of its mission statements saying that we want to become the world's leading company for the anti-drone business. With this kind of acquisition, we are getting one significant step ahead and becoming very close to that target. So the acquisition of MARSS is transforming our business in many respects. And the key advantage of having MARSS within the portfolio of EOS is that we now close the gap between being a sensor or an effector provider and now becoming a fully integrated end-to-end solution provider for integrated counter UAS systems, whether it's in the military context, whether it's in the homeland security context or whether it's in the commercial or civil context.

That is, for us, a big step forward. So MARSS is a European-based defense and security technology provider. They're doing many things. Their key product is the NiDAR product. NiDAR is an advanced AI-enabled decision-making and sensor-effector orchestration tool. It is making MARSS an integrated C2 provider. There are only a few C2 providers worldwide active in this market and MARSS is one of the few providers, which has an installed base of more than 60 systems around the globe, 60 systems which prove that those systems are working.

The system is very effective to defeat drones. So we can call it a fully battle-proven system, which is a kind of asset, in fact, which not many companies being active in this domain can really state. So the NiDAR C2 technology, NiDAR stands for Network Integrated Defense for Detection and Response. This kind of technology is doing a sensor fusion, sensors of any kind of respect, radar sensors, optical sensors, acoustic sensors, RF sensors.

And the AI-embedded software is allowing for an extremely rapid real-time decision-making, allowing the overall system to react in the best way possible to [indiscernible] drones, not only single drones, but large quantity of drones, large swarms of drones. That kind of capability is extremely important in the future as the threat potential has changed towards attack profiles of many, many drones at the same time.

So the kind of chain of detection, classification, identification, decision-making and defeat can be done either in a fully automated way if the clients prefer to do that. So there is no more person within the loop or it can be done obviously with a person still being in the loop and taking the last decision. That's up to the client.

With the acquisition of MARSS, EOS is expanding its geographic footprint and we broaden our market presence. I will come back later on to a map showing you where MARSS is active today and where its assets are. And in terms of market presence, I mentioned it right some minutes ago. It is extending the EOS market, the end user market from being a pure military client-oriented company into homeland security and civil commercial areas.

So this product, the C2 product of MARSS, NiDAR is applicable also to protect critical infrastructure in those types of domains, commercial airports, normal types of power stations, cities, palaces, all those kind of things which are not of pure military nature, but things or assets which are critical infrastructure.

It can also be used to protect borders. So the NiDAR technology, which is, as I was mentioning before, AI-enabled is not only helping EOS to open those types of markets to become a truly fully integrated counter UAS solution provider. We can also make use of this AI-enabled NiDAR to implement this technology, the AI-based software algorithms into our remote weapon systems product range.

And I'm talking about the entire product range starting from the small R150 up to the very large and very powerful R800. We can then use those kind of weapon systems for what I was mentioning in some of our earlier calls to create a mesh network kind of system out of several RWS to create hemisphere coverage of armored vehicles in the field to defeat them against complex drone attacks.

So our RWS product range will also significantly benefit from this acquisition. So it's helping us in many, many dimensions. The transaction is structured in an upfront cash payment of AUD 54 million, plus contingent consideration of up to AUD 174 million in form of performance right tied to new MARSS orders over the next 12 months, payable in a combination of cash, which is capped at EUR 20 million and EOS shares.

Clive will give you in a few minutes some further details on the commercials of this transaction. We expect that this acquisition will be primarily funded from existing cash reserves and it is anticipated to be broadly neutral for earnings and operating cash flow in 2026. Obviously, we expect this business to significantly contribute to our top line and earnings from 2027 onwards as their pipeline and as a business perspective of MARSS as a stand-alone business unit is tremendously positive and giving us lots of upside potential.

Please move on. This slide is certainly familiar to some of you. We can see here in blue boxes what the EOS product portfolio was up to today. It is mainly based on sensor systems and effector systems. On the effector side, as you know, canon-based air defense systems, canon-based RWS, high-energy laser weapons since a few months. The integration of missiles and rockets in our multipurpose RWS platforms and the recent acquisition of the interceptor drone business of MARSS, they have formed up so far our effector suite.

Now we can close the gap between sensors and effectors with the acquisition of MARSS. MARSS is a commanding control system provider, will allow us to have on all of our critical infrastructures, which are to be protected, a fully situational awareness picture, the full operational battlefield picture, which allows us to detect, to identify, to classify any kind of intruder, any kind of target. And thanks to the AI-supported decision-making algorithms, we can or the machine can decide in no time about which kind of engagement mode is the most promising one, and we instruct various effectors to slow on the targets and to defeat those targets.

This is what we call the brain behind any kind of integrated counter UAS systems and there are not many of those type of brains available to the market. So with the acquisition of MARSS, as I was mentioning before, we are now in the position as one of the very few integrated solution providers to offer the client an end-to-end solution.

Please go on. So what is the challenge of today? Today, the challenge is the so-called swarm challenge. Low-cost and very adaptable drone swarms are flying on targets on your critical infrastructure, causing you significant problems in defeating those drones. It causes a kind of cognitive overload to the people which have -- who have to deal with it. And only AI-supported, machine supported decision-making can help you to defeat those large quantities in a small period of time.

So this overwhelming force of attackers is something which is causing so much problems that it is hard to defeat 50 or 100 drones. With our type of system, with a NiDAR-based system, we are able to defeat as many drones as you want. So the limitation only comes with an effector suite you are going to use against those type of drones.

The C2 system can be operated stand-alone to protect a single critical infrastructure, but it can also integrate a cluster of those C2 systems into a regional or even a nationwide C2 system. That is what some of our clients have already indicated to us, that is what they want us to do. So it's a very versatile, very flexible system solution. Let's move on.

Clive, I would like to take over on the commercials, please.

Yes. Thank you, Andreas. And for those that have joined recently, my name is Clive, I'm the CFO and COO of EOS. So as mentioned earlier, this is a transaction to buy MARSS. The purchase price has 2 components. There is an upfront component, which is USD 36 million, which is approximately AUD 54 million. That will be paid at the time of completion and EOS has cash in the bank to make that payment, and I'll come back to that a little bit later.

The business of MARSS has significant growth opportunities ahead of it at this time. These include a number of fairly significant contract opportunities that it could sign during the earnout period. So there's an earnout period that has been defined that runs until May 2027. And under the earnout agreement with the vendors of MARSS, the vendors will receive EUR 20 million for each EUR 100 million of new orders that are secured during the earnout period to May 2027.

The earnout payment is capped at EUR 100 million, which equates to EUR 500 million worth of orders if secured by May 2027. The way the earnout is paid is a combination of cash, but that is limited -- at vendor's option that is limited to EUR 20 million, and the rest of the earnout is paid in EOS shares. The EOS shares for the earnout will go to the vendor based on a fixed price of AUD 7.40.

The vendors were very keen to be able to participate in the upside for EOS of winning -- of MARSS winning new orders and helping grow the MARSS business and, of course, helping grow the EOS business as well. So they were keen to take shares in EOS.

Over the last few months, as this contract to buy MARSS was negotiated, the share price of EOS has moved quite a bit at times and therefore, a longer VWAP period was selected in determining the strike price for these shares. And we -- in the end, it was settled on 25 days.

I'm now going to just confirm -- so just in case anyone's got any questions, the shares that will be issued are all going from EOS' existing issuance capacity on the Australian Stock Exchange and no further shareholder approvals are required in order to issue these shares.

Completion is expected in 2026. It is subject to standard conditions, including customer approvals for major contracts and also regulatory and defense export approvals in certain jurisdictions.

Finally, I'll just mention a new committed optional loan facility, which EOS has secured. So EOS has a large number of attractive growth opportunities in front of it at this time. And having access to capital is important to EOS in order to make the most of the very strong markets that we find ourselves in. So to that end, EOS has secured a new committed AUD 100 million facility, which can be exercised at EOS option. Facility will support the growth in the EOS business as required.

It will provide liquidity buffers. We do have quite a lumpy business sometimes and some of our opportunities are very large, so it's important that we maintain appropriate liquidity buffers. And it's -- the money is also available to assist if required in helping us with the MARSS growth as well. So as you can tell, the business is very well funded. And I would just say that we will disclose more information on the final details of that facility when the long-form documentation on that is finalized in the coming weeks. So as you can tell, this is a very strategic acquisition for EOS.

And I'm now going to pass back to Andreas, who's going to outline the strategic rationale a little more.

Thank you, Clive, for the very comprehensive overview. So what is the compelling strategic rationale behind? It's closing the gap, the gap between component sensors and effectors and an end-to-end solution for the client. Today, the key problem is the identification of threats. And as illustrated on that graphics on the right side of this slide, you can see the complexity by identifying and discriminating through threats, drones for natural objects such as birds.

In order to do this kind of discrimination, you need to identify movement patterns, movement patterns which a human being hardly can detect, but the machine can. That's the reason why NiDAR with its AI-based algorithms with a library behind of those type of movement patterns is in a position to help the operator or to even decide by itself what it is and what to do.

This is extremely important in any kind of counter UAS application from now on and in the future. A key point is that this technology is not something coming out of the labs, which is in a kind of prototype or early development stage. No, it is a proven technology. It is fielded for more than 60 times with various clients, and it has been exposed to real threats, so it's battle proven. We know it's working, and that is giving us the confidence to say that this is a game changer for Electro Optic Systems.

Please move on. So EOS is moving up the value chain from a component provider to component weapon system, remote weapon station or high-energy laser weapon system to become an integrated counter UAS provider. And as you might recall, there are not many companies around who can say that they are an integrated counter UAS solution provider. We can tailor the solution to the clients' perspective. We can integrate obviously, our own sensors and effectors, but we can integrate as well third-party effectors whatever the clients want us to do.

We will operate MARSS, our new counter UAS system business as a stand-alone business unit within EOS in order to be able to best serve the various markets. So our go-to-market proposition is much stronger, and I cannot underline enough and strong and clearly enough that the opportunity now to enter homeland security and commercial/civil markets is an extreme enlargement of our potential customer base.

It helps any of our business to grow much more than what we could have done otherwise. And it's even more expanding our international footprint. MARSS, its assets today are in France, in Monaco and in the United Kingdom and in Saudi Arabia. So with the acquisition of this business, we have now an operating footprint in France and U.K. and in Saudi Arabia, which is helping EOS a lot in order to expand into so-called primary strategic markets, again, also with our other core business, which is the laser business or which is the remote weapon station business.

So this will open up lots of new opportunities, and it will grow our pipeline very significantly.

Please go on. So as you can see here, MARSS today's headquarter is in Monaco. We have taken the decision to shift this headquarter about 15 kilometers to the West, and then we end up in Southern France, so we have a French entity.

We've decided to go that way in order to open up and to ease the access to the huge French domestic market. So France will be depicted tomorrow in blue on this chart or in red as U.K. is colored here in red because it's an existing MARSS operating site in Saudi Arabia.

Don't forget our latest developments, which are happening now in Germany, where we've taken the decision to open up operating facilities predominantly in the area of high-energy laser weapons and for space control or space warfare activities. Our very strong footprint in the United States with our facility in Huntsville, Alabama, our strong footprint in the UAE, the United Arab Emirates, where we have our own activity, our own company and where we are about also to enter into joint ventures and obviously, our home country in Australia, where we have most of our today's operations and our headquarter and obviously, not to be forgotten, Singapore.

That is the footprint of EOS as of today. With a global reach and a truly global operating footprint, which will underline our aspiration to become a truly global player, not only in counter EOS solutions, but obviously also in our other types of businesses.

With the acquisition of MARSS, we have a team of, in total, more than 500 people, among those more than 40 very exclusive, an AI competent software engineers. This is our brain in the future to develop the company further.

Let's move on. So we would like to discuss a little bit more the role of the C2 system, starting obviously with [indiscernible]. You are very familiar with this kind of page, showing the different types of drones. And again, our C2 system is a system which is scalable. Our C2 system is not only identifying drones, it can also identify any other kind of intruder, but obviously, we as EOS, we want to have integrated counter UAS solutions focusing on the anti-drone business. And as such, we will show you over the next few slides what the C2 system is really doing and how we are integrating our effectors and sensors into it.

Before we come to that point, once more, our suite of effectors. So we are concentrating on the so-called hard kill product range, expanding from remote cannon-based weapon systems, over interceptor drones, our high-energy laser business, which makes us very much unique on the market and obviously, any kind of rocket system, which we can install in our weapon platforms. This is giving us a quite large range of effective firepower to defeat drones and other incoming threats.

Next move on. So the core of any C2 system is its software. The software, which is called NiDAR in our case, the software is providing sensor fusion, any kind of sensor, whether it's radar, optical sensor in the visible or infra-red range, any kind of RF sensor or any kind of acoustic sensor, all those data are fused, are combined. And then a very complicated decision-making process within the NiDAR software is happening in real time in order to direct the various effectors against the various types of threats and to engage as many of those threats simultaneously. This is something which is extremely time critical, and that's the reason why it is indispensable to have an AI-supported movement pattern identifying software algorithm behind. NiDAR has it and NiDAR is unique in the market from that respect.

Please move on. So coming now to the overview. So it's a piece of software NiDAR, but obviously, our delivery is not only a piece of software. We deliver integrated command and control centers. Those kind of centers can be stationary centers as the one which you can see here on the right upper side, a kind of center, which is like a center in a building.

But we are also offering other than those type of war rooms, also very integrated, very smart and small in terms of volumetric constraints, type of centers which are embedded into containers, which go on small vehicles, which go outside on platforms into the field even into very expeditionary environments. So it's very versatile.

As mentioned before, 60 deployments worldwide in a very successful manner. And MARSS comes with a total team size of about 80 people, primarily located in EMEA, so in European establishments. The core technology platform, NiDAR, it is, as I was mentioning before, versatile. We will also use it and embed it in our existing fire control software and normal weapon systems to give that the latest edge of AI capability and to use those kind of weapon stations in the future as meshed network, which is unique.

No other remote weapon platform provider is able to provide meshed network technology to clients, which is giving them hemispherical coverage and protection against any kind of intruding drone attacking those vehicles from the top. So NiDAR is helping us in many, many types of respects.

Please move on. So I think we covered most of those points. It is fully modular. It comes in different versions. It comes in war centers. It comes in war room kind of configurations. It comes in stand-alone configurations to protect a single stand-alone critical infrastructure, but it can also combine various types of infrastructures together into kind of regional multi-domain or even nationwide integrated C2 system. And yes, obviously, you can also use it to integrate missile-based air defense and to make it a more comprehensive system. It is fully modular and scalable, which makes it so attractive for EOS.

Please move on. So here, you can see different type of sensors, which we are using and which -- with which we can do this kind of sensor fusion. We have GPS sensors. We have RF. We have acoustic sensors. We have any kind of optical sensors, some of which will come from our own EOS sensor portfolio. Many of them will come from third-party optical sensor providers. And obviously, we can indicate any kind of third-party radar.

This is giving our C2 system an identification and tracking range of up to 80 kilometers, which is huge. It's absolutely huge. And if you go one slide further on in terms of how we defeat those kind of drones, as it was also shown in one of the other charts beforehand, [indiscernible] then the full suite of integrated effectors available starting from canon-based systems, soft kill options. So jamming is also obviously an integral part of those kind of systems, but any kind of hard kill spanning up to high-energy laser weapons, missiles or rockets can be used as effectors within this kind of integrated system.

Please move on. This is just a very simplistic example where we've only shown 4 RWS being integrated to NiDAR and the concept is very simple. So the radar is giving you 360 degree of coverage. And as soon as one intruder is identified, it hands over the signal to one of the electro-optic sensors and the sensor is showing in no time on the target and starting the process of detection, identification and classification for which you need to have this software behind.

And then obviously, the decision is taken on which effector has to take out which kind of threat and the weapon system is slowing in and killing the intruder. That's a very simplistic model, but obviously, in reality, it is very complicated and the decision-making is very complicated depending on the nature of the threat and the overall environmental conditions and emission situation in which our critical infrastructure is situated in.

So it's a multilayered sensor system, multilayered detection system and the multilayered effector defense system. On this chart, you can see a mobile solution. You can see how small this kind of NiDAR system can be integrated into a container being able to provide this kind of competence and capability to the effector suite around. In this chart, you can see we can mount all required sensors on the top side of this small vehicle. The system itself comes in this small substandard container. And again, we can even integrate it into a weapon station onboard computing system. So there are no volumetric constraints.

Please move on. So we can summarize the acquisition of MARSS is a transformative element to the long-term journey of Electro Optic Systems. It brings us a significant step forward to become the global counter UAS leading company. And with global, I really mean worldwide. We are closing the main gap which we have had so far between sensing, detecting and having an ineffective defense. And we have not only closed this gap with a kind of system provider.

No, we have been successful in acquiring one of the leaders in this particular domain worldwide. And with the integration of MARSS into EOS. We will have a very much improved go-to-market proposition. We are vertically integrated. We are boosting us up into the next layer, and we have a much wider market access, again, in terms of commercial, civil and homeland security type of clients, but also from a geographical perspective.

So the transaction coming in at commercial conditions, as outlined by Clive before, is a very attractive deal for EOS, opening up many opportunities for our future growth.

With that, we want to conclude this presentation, and I would like to hand over to David to monitor and to administrate the session of questions and answers, please.

Thanks, Andreas. [Operator Instructions] First question comes from an investor, who asks, how long do you expect the -- to take to integrate the MARSS NiDAR system with the existing EOS product suite? Will there be any priority in terms of system, for example, R400. Andreas?

Excuse me, can you please repeat?

How long will it take to integrate that MARSS NiDAR system with EOS' product suite?

Okay. We have already started some conceptual activities, so we expect about 18 months from today to have it integrated and to have the first demonstrators in the field. We already have customers who have expressed a strong desire to have this as a standard solution. So about 18 months from now.

Great. Clive, James from Petra asks, do we have any -- are we able to say anything about the size of the MARSS' pipeline at this point in terms of the sales mix within that pipeline?

Sure. Thanks, David. So we haven't made any forward-looking statements that maybe just a little bit of color will help. So historically, the business has generated revenue of about EUR 240 million over 5 years. So it's a very established business, albeit the contracts sometimes can be quite lumpy. Order book-wise, the order book is modest at the moment.

But as I said, they expect -- they have a number of opportunities in the pipeline that they think can turn into secured orders over the coming months, and that's what has driven the earnout period. Typically, sales orders can either be in 2 forms. They can either be to set up a system for a new site. So that's, I suppose, the first install of a new system, and that can be done over a year, sometimes a bit less, sometimes a bit more.

And then the second thing that happens is you get follow-on orders to roll out multiple sites and to support these sites, these can typically be 3- to 5-year contracts. So obviously, this is a business that has the opportunity to have more of a recurring revenue base and a more stable revenue base than some onetime sales that EOS has had in the past, and that's going to continue to add to the diversity of the EOS order book, which, as you know, is something that we've been working on for some time.

Maybe the final comment in terms of sales contract composition. So typically, you can see contracts that have sometimes maybe 30% of the revenue coming from the sale of software and 70% coming from the sale of hardware. So a customer will ask for a comprehensive setup with sensors and effectors. And that means that MARSS is in the position of being prime because it's delivering the software that joins everything together.

So 30% of our contract would be for the software itself and 70% would be the price that the customer pays for the sourcing of sensors and effectors that the MARSS and the prime would do. So I hope that helps provide a little bit of color.

We will be monitoring the development of the MARSS order book and the lead up to completion, and we'll keep the market informed and provide further information, particularly as that order book develops and new wins happen because the earnout period has started as of yesterday, Sunday.

Thanks, David. I think we'll go to the next question.

Great. A follow-up question from James. How does -- and perhaps for Andreas, how does the NiDAR system enable EOS to enter the civilian homeland security markets?

As the NiDAR systems agnostic in terms of effectors, obviously, we can now offer to the client integrated solutions, which are more focusing on so-called soft kill options or options which are, I would say, adjusted for critical use in areas where you hardly can use missiles rockets or canons. So a combined usage of our laser business, laser factors plus some soft kill options will allow the system to be an ideal candidate for the protection of, for example, commercial airports or other urban areas. That is something which we could not do in the past. So again, this is a universal kind of system for any kind of client.

Great. And perhaps as a follow-up question, does EOS intend to sell integrated C2 products on a stand-alone basis?

Yes, we are doing so. So we will operate today's MARSS portfolio as a stand-alone business unit, a unit called integrated counter UAS systems. So this kind of business unit is obviously allowed to sell the system without selling with them any kind of EOS effector. It's not mandatory. And whatever the clients want, we are ready to deliver. We are happy, obviously, to sell also laser weapons and remote weapon platforms with it, but it's not a must do.

Another question for Andreas. How long will it take to develop the NiDAR mesh network capability?

As was mentioning before, it's about 18 months. That is the embodiment of the NiDAR software algorithms into our existing fire control software tool, which we have onboard of all weapon stations. It requires a significant enhanced computing power. And that's the reason why we have introduced with R500, the next-generation onboard computing platform, which has at least 25x more computing power than what we have seen so far, and this will allow us to fully -- to do a full embodiment of this NiDAR software package within one weapon station.

And with this step then, we will include also a communication module, which allows the weapon stations to interconnect with each other, allowing for the meshed technology. But the key comes really with embodiment of this NiDAR software into our fire control system, 18 months from today.

Great. [Jasper] has asked if this acquisition of the NiDAR solution could expand the scope of any existing opportunities within our pipeline, the EOS pipeline?

Yes, obviously. I mean, it opens a new market for us. So far, our clients were, in most of the cases, system integrating companies, system integrators to which we have sold stand-alone effectors. In a few cases, we have sold effectors in a stand-alone mode. But the future, as the threat scenario is becoming more and more complex, clients will ask more and more for integrated solutions, those kind of clients we can serve from today on with an end-to-end solution, which we could not do so far. So yes, it will significantly increase our product portfolio offering and our market potential and pipeline.

And perhaps, Andreas, there's a follow-up question, does the acquisition change the likelihood of existing negotiations with EOS customers?

Also, that point is true. We have ongoing negotiations with some clients where we have offered also integrated counter UAS systems or the software package behind the command and control suite as an option, and we would have subcontracted those kind of activities to a third party like MARSS. Those kind of negotiations are becoming now much easier as we can provide now a seamless, fully integrated solution coming out of one hand, a one-stop shop that makes any negotiation much simpler.

And we have a couple of those negotiations today ongoing. That's one reason also why we have capped the earnout at a maximum of EUR 100 million, which correlates to EUR 500 million of order intake potential, very likely order intake potential over the next 12 months, which is giving you quite a good view on what we expect from this business to be in the future.

Great. Perhaps a question for Clive. Could you just recap what the impact the acquisition will have on the overall cost base and profitability of EOS?

Sure. So I think we've previously said for EOS that the EBITDA breakeven for EOS will come in north of $200 million, so that's a baseline, I guess. MARSS has been profitable in its own right at EBITDA level at times over the last 5 years. It has been a lumpy business, and there are some years where it has made a modest profit, in other years it's made a modest loss.

So depending on the level of contracts secured during the earnout period, there's the opportunity for MARSS to make a significant contribution to EOS EBITDA from 2027 onwards. And that will be because it covers its own operating costs with an adequate delivery of contracts. So we do not expect it to add a significant operating cost burden to the business that is unfunded.

And we're confident about EOS' ability to become profitable in the period ahead at EBITDA level. I think based on the order book that the group has as a whole, which the EOS secured order book is over $400 million at the end of December. And that does not include conditional contracts like the one we have announced with another high-energy laser customer. So with a very strong order book and the profile I mentioned earlier, I think we're very confident in the EBITDA profitability of EOS going forward.

Thanks, Clive. Andreas, Owen Humphries at Canaccord asks how many third-party products are currently integrated into the NiDAR system?

The NiDAR system was delivered in 60 or to 60 different clients and installations, and they've integrated more than 100 different types of radar and electro-optical sensor units coming from almost any kind of globally available sensor suite provider. So it has more or less seen almost any potential to be integrated sensor suite so far. So it's -- there's no surprise to be expected. They are very versatile.

Great. Another question for Andreas. Will EOS now seek to bid as a systems integrator in the future, unlike in Land 156?

Yes, that is going to happen. That's the main reason why we have done this transaction. We want to be seen as a system provider, but we will also continue to deliver our systems, our effectors, our sensors to other system integrators. So we don't want to stop all this kind of business, but we as EOS want to be also in a position to act as an integrated system provider as we could have done with Land 156. So in the future, we are able to offer those kind of fully integrated systems.

Great. That brings all the questions to an end. Would you like to wrap us up, Andreas?

Yes. Thanks, David, for the moderation of the questions. So I want to mention once again that this is a transformative deal for Electro Optic Systems. It opens up absolutely new market, homeland security and commercial markets, which we were not accessible to EOS so far. It allows us to tap into other geographies much easier than we could have done otherwise. And it opens for us a market which will drive the future, the market of very complicated counter drone systems as the threat profile is emerging more and more into this direction, UAS will be more and more centric to those kinds of absolutely dominating scenarios in the future business of -- within the defense market. And we are very, very confident that the acquisition of MARSS will be a cornerstone in the history of Electro Optic Systems.

So leaving you with our strong level of confidence, we hope that the market is sharing our confidence, and we are very optimistic to make this business a significant pillar of the EOS portfolio from now on.

Thanks to everybody for being with us. Thanks for your time. And we are obviously happy to respond to any kind of questions which might come up over the next few hours or days. Please direct those ones either to David, Clive or myself. Thanks for your attention, ladies and gentlemen. And have a good day.

All right. It is 10 a.m. -- sorry, it's 8 a.m. So good morning, everybody. And my name is Clive, and I'm the CFO at EOS. Today's webinar is a brief recap of our ASX announcement yesterday morning on a high-energy laser contract. On the call today is Andreas Schwer, our CEO; and David Bert, who looks after Investor Relations, is also on the call.

We are going to briefly recap the announcement yesterday. So Andreas will talk a little bit about that, and then we will open it up to questions. [Operator Instructions] Once Andreas has recapped yesterday's announcement, David will help us go through the questions that arise.

So with that, I will hand over to Andreas.

Yes, thanks, Clive, for the introduction. My name is Andreas Schwer, CEO of Electro Optic Systems. Welcome to this call, ladies and gentlemen, good morning, good evening.

EOS has signed over the weekend a contract with a partner in Korea, which is a contract coming quite to our surprise. It was not planned for many, many months. We got an inquiry only a few months ago, and we started negotiations, which came to a positive and earlier than we've expected. So also that is happening in defense industry. Usually things take longer than expected, but sometimes you get positive, very positive experiences like this one.

So that is an absolute positive showcase for EOS. It is the second worldwide laser export contract, which we have won for 100-kilowatt laser weapons. So far, nobody else has 100-kilowatt laser weapon to an export client. So if you do some statistics, you can say 100% of the export market is EOS, which is a good starting point for us. And it makes us very proud because this time, we have a client which is non-NATO, which is non-European, it is Korea. Korea is also a first-tier country as the Netherlands are first-tier country, a client which has a very strong industrial base, a client which has a very strong domestic defense industry. And we, as an Australian company, got the contract. I mean that is saying something. The client has also here evaluated all the international options and he's decided in favor of the EOS technology. All that is great.

So let's talk a little bit about the contract. We have signed this contract with an industrial partner, which is for us the big door opener for the Korean market. With this industrial partner, we will create a joint venture, a joint venture which we will consolidate, which we will control that is important. So you will see then the numbers in order intake and in revenue, whatever we do in the future in Korea. And this partner will benefit from being with us in this joint venture, and we will provide a transfer of technology. We give a license for the production of this 100-kilowatt laser weapon technology to our joint venture in Korea.

What does it mean? It means that it's obviously of highest importance of the clients to get access to the IP, to get access to a local production line. Korea has grown its defense industry by those kind of localization effects. And with the laser weapon technology, which EOS will bring to the table, they will do the next big step. That's exactly the kind of argument we are using also with respect to other localization attempts in our other negotiations with other potential countries. That is one key discriminator where EOS can offer something which others cannot offer. As we own all the IP and as we are in a position to transfer all those IPs. That makes a big, big difference. And also here, that was a key decision maker for the client in our favor.

So the contract has a volume of USD 80 million, 8-0. It comes with this technology transfer. It comes with a down payment of USD 18 million. And the rest -- the remainder of the contract volume will be secured by letter of credit. In order to put this in place and in order to give the client a chance to visit and audit our brand-new facility in Singapore, which, by the way, will have its formal opening during the Singapore Airshow in February next year. Once this is done, the contract will have fulfilled all the condition precedents and we become effective. We expect that to happen before end of January 2026. So very soon from today, given the fact that we have some weeks of Christmas vacation all around the world.

So this contract is for EOS of particular importance, not only because it's Korea, it's also of importance because of the size of the local demand. I was mentioning in some previous calls and investor meetings and publications that we are in negotiation with 2 countries for a larger quantity of laser weapons to be procured. And I was mentioning that Korea is one of them. So what does it mean? It means now that we are in a kind of pole position for the future large volume procurement program in Korea. And obviously, we expect whenever there is a tender coming up in the future, we have a great chance of winning this.

We do not expect such a tender to be 100 in 1 batch or in 1 piece in 1 contract. We expect those kind of contracts to come also in smaller batches in sizes of 10, 20, 30, something like that units. But given the fact that one laser weapon sells for a quite significant price, the volume of each of those contracts will be very significant. And all that justifies the localization of our technology and the buildup of a local supply chain.

So that is, I think, the key essence of this contract. We will use this momentum now, obviously, to push also other contracts forward. We are in negotiation with a couple of clients. And most of those clients, obviously, will have a specific focus on local content. For those of you who have dialed in not from Australia, but more from the European side, I'm pretty sure that you have noticed, for example, our activities in Germany where we have offered to the German government also full localization of our laser weapon technology for a very attractive price. And also here, we expect in the course of 2026, some kind of decisions, but Germany is not the only country which is highly interested into EOS laser technology.

So this is the growth path #1 for EOS over the next few years to come. This will build upon a steadily growing RWS market, which we said before, we can probably triple quadruple over the next 3 to 5 years just by the demand of counter EOS [ cannon-based ] solutions. On top of that, we come this laser weapon technology, the revenues out of laser technology. And we expect this to become the dominant sales and revenue generator within the next 3 to 5 years, by far, the dominating one. And then in a step afterwards, if we go to space warfare, where we'll employ this kind of laser technology, but not to shoot down drones, but to engage against satellites from ground. Also, that one is coming into play now much earlier than we have ever expected before.

So this is, in a nutshell, the situation. I'm happy to answer any kind of question which you might have in mind. So please feel free to raise those ones, and David will moderate those questions for us. Thank you so far.

Thanks, Andreas. We have a few questions coming through. So the first question is from Paul. He asks, what is the production capacity of the Singapore facility? What will be the maximum capacity with the South Korean deal?

Yes. So we always said in Singapore, we can produce between 5 or 10 systems per year. We have still further -- we can do that today with the facility size, which we are preparing now. We can expand this facility to double the kind of throughput if needed. But again, we do not expect that we need to do that as most of the clients as also here in the case of South Korea will insist on the local production. So we will use our joint venture in Singapore -- sorry, our joint venture in Korea to produce any future laser weapon for the Korean domestic market.

So this first one for Korea is the only one which will be produced in Singapore. So it's more about the question how much can we -- how much kind of capacity we can set up in our new joint venture arrangements like this one here in Korea. And this depends always on the size of the market. So if they would buy, for example, 100, we would have a production capacity of, I would assume, about 15 to 20 per year, something like that.

Great. I think you've answered the question, but will the JV have restricted geographical coverage?

We have agreed that the production license and the IP transfer will only be valid for the Korean market and case by case for certain export market. This depends on two factors. First of all, on the industrial link and network and lobby power of our industrial partner into certain areas or countries. And secondly, about the Korean government itself, if they have a government-to-government deal, obviously, we want to benefit from that. And also in those cases, we would then produce within the joint venture for this third country.

Are you able to talk any further about the payment terms on the contract?

Yes, we have 30% upfront payment and the remainder of the 70% or the remainder of the value, which is 70% is following quite a linear distribution over the time line. And most of the revenue or almost all revenue will happen in '26 and '27.

Can you explain how EOS protects its IP once it has been transferred to the JV?

Yes. We always apply the same kind of model. Those kind of JVs have to be under control of EOS. So we can make sure that the respective key positions in engineering, development and R&D are covered by experts, which come from EOS. So we control the technology within those joint ventures even if it's fully localized. That is the absolute key, and we do not sign any deal where this is not guaranteed, but that we can avoid any kind of unwanted dissemination of technology to third parties.

Could this JV be an option to enter into the Polish market?

Yes, obviously, it could be an option as the Korean government has in place very significant defense deals with the Polish government. It could well be that also here, we might be asked by one of those 2 governments to enter into this kind of arrangements and to produce weapon systems in this joint venture in Korea for the Polish market. That could happen.

Great. We've got lots of questions coming through. So are you able to share any news about future laser weapon developments, for example, greater than 100 kilowatts?

Yes. As I was mentioning before, we are also in negotiation with 1 government, 1 country to fully finance the development of a 300-kilowatt laser weapon family. Those discussions are still ongoing. And if we get this signed in the course of 2026, we will be the only company worldwide outside the U.S. being able to produce then 300-kilowatt laser weapons within the time horizon of, let's say, 3 to 4 years. That will give us a much more substantial, say, advantage over anybody else.

Are we able to provide any further details on who the joint venture partner is with?

As in most of the defense deals, obviously, the client or the partner does not want to be nominated. Sometimes, and I refer you to the Dutch contract in the beginning, we were not allowed to mention that one. And then after some months, we got the permission to talk about it. So this could also happen here. For the time being, they ask us to keep silence and to keep it confidential, and we respect that.

Are we able to talk any further about similar conversations with customers outside of Korea?

Yes, we have quite a lot of discussions and negotiations ongoing, some of them with governments from the Middle East. Obviously, Middle East is a very key market to us, and it's not only one country. We are talking here with 3, 4 different countries. But we expect that the majority of sales long term will be more in the European landscape, given the political -- the geopolitical tension there. And here, we're in discussions with a multitude of governments in Europe. And I mean, most notably, as you can read in the press, it's Germany and France. Next to obviously the Dutch client, which is already in contract with us. But where we also expect some further steps to follow. Also here, the Dutch government has announced to be extremely eager to give us more contracts and to enter into a strategic relationship. We have already started those discussions with the Dutch government.

Great. Jonathan asks, can you provide a rough estimate for what the average sale price is in Australian dollars for one system? And any -- can we provide any further details on what the accounting could look like for this transaction?

I'll give the figure in U.S. dollars. Otherwise, people will be confused as we're always talking here in U.S. dollars. So if you buy a 100-kilowatt laser weapon in low quantities, the typical sales price in U.S. dollars is between USD 45 million and USD 50 million. If you buy large quantities and large means, I would say, USD 20 million and above, the price goes down to USD 25 million to USD 30 million. That is a kind of typical price range for 100-kilowatt laser weapon.

But as you also see in this particular contract here, where we have signed not for USD 45 million to USD 50 million, but for USD 80 million, usually in such a contract, you sell more than just a kind of blank laser weapon. In this case here, it comes along with the transfer of IP, the transfer of skills, technology and the training locally of the people within the country, plus spare parts and many other things. So that's the reason why typically those contracts are reflecting a much higher dollar value than the net price of recurring 100-kilowatt laser weapon.

Just on the accounting for this, the question asked, David. So the sale of the High Energy Laser Weapon will be recorded the same as most of our normal sales are. So we would book revenue through that contract. We need to finalize the details of that between now and the contract becoming unconditional. There's not likely to be significant revenue in calendar 2025. But as Andreas said, we would look to book revenue in '26 and '27 with a little bit in '28.

In relation to the production joint venture, as Andreas said, this has been set up so that it's a joint venture controlled by EOS, which means it would be 100% consolidated and EOS would record 100% of the revenue and 100% of the EBITDA with a takeout at the bottom of the P&L for the 50% that EOS does not own.

100% of order intake and revenue, but 51% of EBITDA, not 100% of EBITDA. Yes.

One of the investor has asked, can you remind us when the USD 80 million down payment is due to be received?

So yes, we expect the down payments to happen over the next few days or next few weeks, significantly ahead of end of January.

Have there been any attempts to enter into the Indian market?

Yes, India is one of the countries which has reached out to us, has shown a strong interest in our laser weapon technology, not only in the 100-kilowatt domain. Here, we talk about different tenders and different opportunities coming up, varying between 30 kilowatt and 300 kilowatt.

[ Rays ] asks, can you talk a bit about how you were able to win this contract without having done a test for the customer?

The customer has seen our 36-kilowatt laser weapon as the Dutch government has seen this laser weapon, and they have been impressed by the quality of the product. And we have explained them and show them how we can scale this easily up to 100 or 150 kilowatts. And as this scale up does not come with any technology risk, they were very confident that we can easily do that. And that's the same reason why the Dutch have signed this contract.

Owen asks, will this contract be cash flow neutral? Or will there be a working capital drag?

This contract is -- please, Clive.

Yes, go on. This Andreas is about to say this is a cash flow positive contract overall. It has no significant working capital drag during the project at all. There is an upfront deposit of USD 18 million that Andreas mentioned. So it will be neutral to positive from the outset.

Great. In investor notes, the inclusion of the Slinger in the recent LAND 156 exercise and asks if our laser weapon could be included in a future -- in this project in the future.

Yes, the Australian government is very open in this LAND 156 program in terms of further expansion stages. In the beginning, you are right. The baseline LAND 156 configuration only comprises soft kill from an Australian-based company and our hard kill solution, the [ cannon-based ] Slinger solution, which is coming also from us from within Australia and some 70-millimeter rocket systems. That is the baseline effector suite. But yes, the government is ready to include further effectors. And obviously, we want to come into play not only with the laser weapon, but also with Interceptor drones, which we have recently acquired. That's another potential.

Great. Peter notes the current production time for laser weapon is around 2 years and ask what EOS is doing to speed up this process?

I mean it depends, obviously, as soon as we have a kind of standing production line with a kind of certain probability of inflow of new contracts, we can then also start long lead item procurement ahead of those contracts. And we will do that as we are doing it today also for Slinger and other RWS products. We have not started it yet because the market is just forming up for laser weapons. But yes, we can expect it to come in a few months from now. And as soon as we have, for example, a kind of order book of 10 or 20 laser weapons, you can assume that the lead time between order intake and delivery will go down to something like 15 or 18 months, but not much below.

Baxter asks, do the 100-kilowatt systems from the 2 development contracts need to be demonstrated before we see larger orders being signed?

No, they do not need to be demonstrated. In the case of Korea, yes, the Koreans first want to see that before they sign the next contract, but other clients do not insist on seeing anything before they place even a larger order.

Owen asked, is the deposit nonrefundable?

Clive?

Yes. The deposit is due by the end of January, and it is not a refundable deposit. There is -- as you've seen in the announcement, there is some refund clauses relating to performance of the product overall, but not in relation to the deposit specifically. So we're not in a situation where we expect to receive a deposit and then have something change and repay it 2 months later. So I hope that answers that question, Owen.

There's a question from investor, Sean asking if we can just remind the audience on what exactly EOS produces in the laser weapon system, which elements?

Yes. We are the only company which has a fully vertically integrated production or value chain. We start with our own production line. If I start from bottom to top with the laser source. So we are purchasing the fibers, and we are producing the laser source by ourselves. We purchased some commercial off-the-shelf laser amplifiers, which we disassemble, we ruggedize, militarize and make it specific product. And we do the entire beam forming, the beam head and the beam director, the entire tracking and software system, everything by ourselves. So the only major component we are buying is the laser amplifier. But again, even that one, we completely upgrade. So nobody else has this kind of in-house spectrum of activities. And that makes us extremely independent. And as we own all the IPs, we can easily transfer those into other countries, which you couldn't do that easily if you only would have a very limited scope of value add in this overall value chain.

I think that answers most of the questions. So perhaps, Andreas, would you like to wrap up?

Okay. Thanks, David. So I just wanted to summarize that, obviously, this kind of conduct came to the surprise of many investors, and we hope that we have some more surprises in our upcoming books pretty soon. The market is extremely bullish. We believe that we will become the world market leader in high-energy laser weapons. This market is extremely growing. It is the best option to defeat drones, and it's the only option to defeat drones swarms. And it is almost the only option to defeat drone swarms even at commercial and civil installations such as airports. That makes it extremely versatile and the market demand will grow in a way that we hopefully will soon reach a point where we have problems to serve all the shortcomings and all the needs that keeps us extremely optimistic. We will expand our capacity as needed in order to serve most of that, and we are very confident to make this again a very stable growing and profitable business line of EOS.

Thank you very much for your interest in EOS and for interest in this particular deal.

All right. We'll close the call there. Thank you, and bye-bye.

Good morning, everyone, and warm welcome to today's conference, the Drone Conference in cooperation with Dr. Reuter Investor Relations. It's a pleasure to have you all here today for this special roundtable. The session is dedicated to EOS, and we are delighted to have the chance to hear from their leadership team, CEO, Andreas Schwer. Andreas, I hand over to you. The stage is yours.

Thank you very much for your kind introduction. My name is Andreas Schwer, Managing Director and CEO of Electro Optic Systems. Electro Optic Systems, or EOS, is an Australian stock-listed company, but with operations around the world. We have large operations in the U.S. in Huntsville, Alabama, in Abu Dhabi in UAE, in Singapore and pretty soon also in Europe. Europe means U.K., the Netherlands, France and Germany.

The company -- maybe some little bit on the background. The company was, in the 1970s, a research institute owned by the Australian government such as Max Planck in Germany. It was privatized in the 1980s and then went to the stock market in the early 2000s. The company was always driven from its first days by scientific excellence, by a huge innovation potential and a huge backlog of IPs. The company has had last year a revenue base of more than EUR 200 million.

We have then divested a business, EM Solutions, which was doing satellite communication, which doesn't play a role in our overall company strategy. That's reason why the revenue is expected to be lower this year. Next year, our expectations are significantly higher, much, much higher. So we should hopefully have next year record numbers in terms of revenue. I will come back on some other fiscal figures like order intake in a minute from now. So we are acting globally and maybe some other words to what we have done in the past.

In our early days in the 1980s, we started a business with what you can see in this slide, what we call space awareness, space intelligence, space control or even space warfare. We have been in the 1980s, partner of the U.S. government in a program which was called SDI, Strategic Defense Initiative, or Star Wars. During that program, we have been the partner of the U.S. industry, Lockheed Martin and Northrop Grumman to develop systems to engage against missiles and satellites from ground, but also from within space.

That is a program which was very beneficial to EOS. So we have learned a lot in terms of laser technology, of highest accuracy tracking. And since that we are the world market leader outside U.S. in all those domains. We can track today any object in space down to a coin, down to a EUR 1 coin from ground over 10,000s of kilometers. That's the reason why for us it's also easy to track any object in aerospace, whether it's a drone, an aircraft or something else over large distance that is comparably easy if you compare this with our tracking capability against space assets and objects.

Please move on. The company EOS is active in 3 business domains. One is our remote weapon systems business, so remote weapon stations, something like small turrets. We've invented this kind of product class in the 1980s, and EOS became the first contractor of this type of weapon systems to the U.S. Army in the 1980s. And since that, we are the world market leader. We are unbeaten in terms of accuracy and performance. We have never lost any competitive trial with those type of weapon systems, and we are at least 30% better in accuracy than the next best in class. And if you ask me why, the reason is, as I was just mentioning, our tracking capability, which goes back to our space activity.

This is our backbone business today. We make about $120 million, $150 million of revenue with this business. It is profitable. It's 15% to 20% EBITDA. And we believe that we can, over the next 3 to 5 years, triple this kind of revenue, thanks to the market, which is extremely bullishing, and I'll come back in a second to that subject. So the remote weapon systems business, which is a success story for the company, it's complemented obviously by what I told you before, by our space intelligence and space control business. Here on the right side of this chart.

This kind of business, we are doing the following. We are tracking any object in space. We sell intelligence data to NATO clients, to NATO partners, satellite information, information about military satellites, killer satellites from any hostile party. We can move space debris, we can track space debris, those kind of services we are selling. And we are now in the process of converting this business into what is called space warfare business by implementing our high-energy laser weapon technology into the optical chain of those telescopes, allowing us to put high-energy laser weapon impact on satellites. So by that, we can, in the first step, blind any satellite in space from ground. We can stop satellites taking pictures from ground.

And in the second step, we can manage to disable satellites to destroy satellites from ground. That is groundbreaking. That is new and there's nobody other than EOS outside the United States of America being able to do those kind of things. And this is obviously hitting the absolute strategic core of the European strategy in military context. Billions over billions will be spent over the next 10 years to enable Europe to defend themselves against satellites and other space objects. So that is one avenue where we expect huge growth.

Coming back to the middle, high-energy laser weapons, we are a world market leader in high-energy laser weapons, in particular, in the area of counter U.S., the anti-drone business. We have obviously based this technology on what we have done in the 1980s during this Star Wars program, but we have further developed that one. We have used also in-house funds to develop counter U.S. solutions, so a specific laser, which is able to engage against drones. I come back also in a minute on that one.

If you please move on. The market in where we are acting with those 3 product lines is extremely bullishing. We expect huge upward trends, not only supported by the generic increase in defense budgets, and I don't need to explain you what it means in terms of NATO budget increase. You're all aware of the 5% target, and we are all on a good way to that to achieve those targets. It is predominantly driven by the appearance of a new threat scenario over the battlefield, which is -- please go to our next slide, which is the emergence of the drone warfare.

In the Ukraine war, where, by the way, U.S. is very active, we have more than 250 of our remote weapon systems active in the field, defending high-value assets in Ukraine against incoming drone attacks. The Ukrainian warfare is a paradigm shift in warfare because it's not the classical ground-to-ground warfare anymore. There is meanwhile no more movement on the open ground. Everybody is hiding himself because of hundreds of loitering drones, of hovering drones being able to control the battlefield and being able to come down in a kind of kamikaze way to destroy any of -- any moving target on ground.

This kind of threat scenario is characterizing any future context in any kind of conflict. And that's the reason why we need to develop weapon systems which are able to defend our infrastructure and our troops from being attacked by those kind of drones, and that is one of our core market. So EOS has 2 major objectives, 2 major strategic pillars. One pillar is to become the anti-drone company #1 worldwide. And the second objective is to become the space warfare company #1 outside the United States over time. I will give you further insight over the next few minutes.

So when we talk about the anti-drone warfare, we are talking mainly about the drones belonging to the categories 1, 2 and sometimes 3. Why? Because 99% of all drone attacks are flown with this kind of low-end drones. We are not talking about the very large drones like the U.S. Reaper because they are not a threat on the field. The threat are really those Shahed type of drones, so drones of Class II mainly. Our effectors are made and customized to defeat in particular those type of drones.

If you please move on. EOS has centered its capabilities around the anti-drone warfare. We have the broadest portfolio of effectors being able to engage against those drone attacks. We are active in what we call hard kill. Hard kill means we really shoot the object down by either kinetic kill, which means cannon-based air defense systems. With interceptor drones, so drones which will be launched from ground flying into the target and destroy the target. Third, by the high-energy laser weapons. And here, we have developed a family between 50- and 150-kilowatt output power. We are a world market leader in that domain. And also rocket systems which we can install in our weapon systems to fire against incoming targets.

So we can see we can engage against any object in between 0 kilometer to up to 8, 9 kilometers. Obviously, we can also integrate missiles on our platforms, but from a cost perspective, that is the high-end solution. We do not concentrate on electronic warfare, on jamming. Why? Because that's a kind of commodity product which we can buy from dozens of suppliers on the market. And the Ukraine war as well as the Gaza conflict has shown that most of the militarized drones meanwhile are hardened against jamming or even are operated by fiber optic cables.

Those fiber optic cables also disable any kind of jamming because there is no more signal which can be jammed. It's hardwired. So there is no way by jamming to defeat any drone in the future in the military context. And that's also the feedback which we receive and not only we, everybody from the Ukrainian war zone, all the generals are asking for hard kill options to get down all the drones as soft kill is becoming less and less effective. And that's the reason, again, why we are concentrating on the so-called hard kill options, and we have here a very broad portfolio of effectors.

What you can see here is the entire value chain of the drone defense. We have most of the effectors in-house in our portfolio. All the blue boxes show you what we have in-house today. We are working very actively on the box in the middle, the so-called command and control system. That is the kind of brain behind any integrated counter UAS system. So we have in-house solution but we also pursuing market surveys to see whether we can acquire a company being already fielded with a system to enable us to offer our clients a turnkey solution, to offer a one-stop shop solution, not only able to have the entire brain, the network behind, but also to have the broadest range of effectors and some sensors coming with it. So that would push us absolutely in the leadership position, undisputably being able to offer to military clients as well as to homeland security or commercial clients like civil airport operators, an end-to-end solution.

So if you go to our first class of effectors, the remote weapon systems, obviously those are systems which were designed in the past to go against ground-to-ground targets. So they are used in the kind of traditional war scenario. We have, by far, the broadest range from very small, the R150 to very heavy R800 comparable with a fully fledged medium caliber turret system. Our systems are much lighter than anybody else, allowing you to put very heavy weapons, very powerful weapons on very, very small platform. That is what the clients want to see. And as the trend goes to more -- towards robotic vehicles, remote weapon systems, we become the option of choice to equip those systems with a strong weapon system.

And you can put any kind of weapon on those platforms, whether it's machine guns, whether it's medium caliber cannons, whether it's rocket systems, whether it is laser dazzle up or missile, or any kind of effector you can put on those stations. There are multipurpose carrier platforms. And now what is coming into play is the anti-drone warfare. I mean, in the past, it was all ground to ground or sometimes naval applications. We are also active in the naval domain. Now with the Ukrainian drone warfare, we have derived very specific versions of our systems to be able to engage against drones.

We have equipped them with specific radars. We have optimized the software. We did some other modifications to allow us to be most efficient against drone attacks. And I can tell you that we have participated to many trials, live firing trials this year in the U.S., in other countries, and we have always won and succeeded in all those tests. They were always comparative. So we were always shooting against our competitor systems, and we have never lost a single of those -- single one of those competitive trials.

The most important one was one operated by the U.S. Army this year in cooperation with Northrop Grumman in the U.S. During that test, also here, we have succeeded. We have shut down 100% of the drones. Nobody else could manage that. And in consequence, the U.S. Army has decided to use this system, which we call the Slinger product as their baseline for one of their most important type of fighting vehicles. And we are in a position to announce in the very next few days a very important order intake to become the sole supplier for this particular fighting platform for the U.S. Army.

That's a breakthrough for EOS because over the last 10, 15 years, the U.S. Army was kind of close market for us, and that's now the entry point, back again into the largest client base. So this is the Slinger. We also have been down selected by the British Army. The British Army was also participating to this trial, and they were so enthusiastic about our performance that they said, we want this to be produced in England for England. And they have requested our U.K. competitor, MSI, to become a partner of EOS and to get a production license for this product in the U.K. This is what we have done. So in the future, we will produce through our partner MSI in England for the British Army.

Also, the French government has indicated that they want to select in the future, not a French weapon station, but this EOS weapon station for the same reason, for the reason of accuracy. And we are in cooperation talks with the French supplier, KNDS, to become also their partner for the future French demand. So we see step by step, we are growing into those markets. And I need to explain you a little bit the background. In the past, U.S. was not very active in key markets -- in strategic markets. U.S. was concentrating its business on a few countries, not driven by commercial success, only driven by scientific excellence and perfectionism. That has changed now. We are reaching out to all those key markets, like the ones I was just mentioning, Germany, U.K., France and so on. And we do this usually in a partnership mode.

So we select local champions as our partner to minimize our CapEx exposure and to minimize our time to market. I've given you some examples on U.K. and France. And in Germany, our partner is the company Diehl, the missile company. So we will produce those weapon stations in the facilities of Diehl in Germany and by that have much less effort in terms of time and money to acquire the German market. So that's our weapon station business. It is -- again, it is highly profitable, and we are becoming the kind of quasi standard in our domain worldwide with those type of weapon systems.

Let's go to the next one, the high-energy laser weapon business. High-energy laser weapons, there are only very few companies around the world being active in this domain. And why is this laser weapon business becoming so important in the future? It's not only but predominantly because of the anti-drone warfare as well. The laser weapon has the following key advantages over any other weapon system. You do not need any ammunition. No problems with ammunition supply, no problems with ammunition cost because you're just using energy, you're just firing light.

So the cost per shot is the cost to generate this energy, which is an average about $1 to $4 per shot. So $1 to $4 compared to a missile attack with $400,000, $500,000, $600,000 or an attack by a rocket system, $20,000 or an attack by a cannon. A cannon shot, depending on the mission, is between $50 and about $2,000. So this here is extremely affordable, extremely high value for money because it's only $1 to $4 per engagement. That is the key -- one of the key advantages.

Another advantage is that we can kill up to 30 drones per minute. The reason is that an engagement to kill a drone is only about 1 second and to slew over from one drone to another one takes us less than 1 second. That's the reason why we can kill 30 drones per minute. If you do the comparison to cannons or to rockets, missiles or any other thing, they can only cope with 4 to 5 kills or engagements per minute. So the laser weapon is much more agile. And by that, he can kill, or he can defeat and protect critical infrastructure against the attack by large quantities of drones by so-called swarm attacks.

The future in defending critical infrastructure, it's all about to kill as many drones as possible in the shortest time possible. Those kind of attacks we are seeing now every day in Ukraine, but also the Ukrainians, as you might remember, have attacked Russian airports far in the backyard of the Russian territory. And they have launched from a container sitting next to an airport, hundreds of drones. How do you want to protect your airport against those type of attacks? You have to have defensive systems capable of shooting down 100 drones per minute. So that can be only achieved in a clever combination of those laser weapons with interceptors and some cannons. Without laser weapons, it's close to impossible to shoot down 100 drones within a minute.

So the laser weapon is extremely agile, but it also allows you to shoot into the vertical. No other weapon system can shoot vertical for technical reasons. The problem those days is that many attacks in Ukraine are flown by kamikaze drones. Those drones, they fly down at a 90-degree angle, and you can only defeat them by using laser weapons because any other weapon system has a maximum elevation angle of 70 to 80 degrees. So all those aspects are clear advantage of the laser weapons.

The laser weapon has one disadvantage. It is susceptive of weather conditions. That means if it is extremely humid, if there's heavy rain or even if it's extremely high temperature like a desert type of degrees, 40, 50 degrees, that the power level or -- sorry, the efficiency goes down. How do we compensate for that? We compensate for that by just increasing the power level. That's the reason why we are offering laser weapons in the power domain of 100 to 150 kilowatt, whereas you only would need 50 kilowatt at good weather conditions to kill a drone. So if we just double the power level, we can still compensate for those kind of humidity effects and still being extremely effective.

So EOS has been the first company worldwide being able to sell a 100-kilowatt laser weapon to an international client. We have managed to sell to the Dutch government in August the first laser weapon for a price of EUR 71 million. That price includes lots of so-called nonrecurring, so onetime efforts such as the local development of a cooling and a power system, the integration into a multilayered air defense system which was already in existence and lots of spare parts, training and other activities.

The normal kind of recurring price for 100-kilowatt laser weapon is between EUR 40 million and EUR 45 million in low quantities. And if you order larger quantities, a larger quantity means 50 pieces and above, then the price will go down to EUR 20 million to EUR 25 million. So it is very affordable, and the price then is lower than the price you have to pay for one main battle tank. So those systems are delivered in a containerized solution. Those containers can stay on the truck. They can move around, but they can also be dismounted. And whenever we protect critical infrastructure such as an airport, most of the clients want to have them somewhere sitting down and connected to the local power grid.

If you don't have this kind of option to be connected to a power grid, you operate by your onboard batteries and your onboard power generator. We have stout energy to allow up to 300 kills without being forced to recharge the batteries. And only after you have killed 300 drones, you need to recharge the batteries. That gives you lots of operational flexibility. So please move on.

Thank you so much, Andreas, for the insightful presentation. We have a couple more minutes or for you to present, but then we would need to move forward to the Q&A.

Okay. Good. So EOS has recently acquired an interceptor business. This interceptor is unique on the market. It is coming from a very low production price. We can sell it for less than EUR 10,000 per piece. It is unique in its speed. It flies directly into the object, and we can launch in dozens, in even hundreds at the same time, allowing us to defend drone swarm attacks. Please move on.

So this is our latest product, we should not go into the weapon station business. We have discussed it already. We can also go on. So we've tripled the order book from about 130 million last year to about 400 million now, and we still expect some further orders to come in before year-end. So in terms of order book, we have done a really successful year. Next year, that's our forecast will be another record year in terms of order intake, thanks to laser weapons, we expect some further laser orders coming into the company. And as each laser weapon is selling at much higher price than a weapon station, we expect the revenue to go up drastically.

And our expectation is for the mid and long term to make a quantum leap in terms of revenue expectation. So every country has on their plan to procure hundreds of laser weapons, and you can make your own calculation. There's only one competitor in the market for 100-kilowatt systems which is an Israeli consortium. There's nobody else on the world market active on 100-kilowatt laser weapons. And European competitor is lagging still behind. The best one is the U.K. consortium working on a 50-kilowatt solution ready by 2028. The Germans are still at 20 kilowatt and the French at 5 kilowatts, so there's almost no competition other than the Israeli consortia and ourselves for 100 kilowatt. That gives us lots of confidence to drastically increase our revenue and earning base over the next few years to come, starting with next year.

Maybe we can leave it with that. Maybe one last sense on space warfare. We will put those lasers into our kind of space warfare type of platforms. Also here, we have stationary platforms, but we are working also on a mobile solution called Atlas. The mobile solution allows you to kill any satellite from ground wherever you are on this planet, which allows our allied forces to defeat any, for example, Russian and Chinese satellite whenever they want.

That is a key war decisive capability which is coming now into the focus of most of the governments. The German government has reserved EUR 40 billion of budget for those type of weapon systems over the next 10 years, just to give you an illustration, that's the reason why we have decided to build up operations in Germany, predominantly for high-energy laser weapons and for space warfare type of product development and production. I would like to leave it with that, and let's go to the questions, please.

Thank you so much, Andreas, for the insightful presentation. We move now forward with the Q&A session. [Operator Instructions] And I would like to start actually. So regarding the plans for Europe 2026, could you please explain this a little bit more to us?

So we've taken the decision to open up operations in Germany because the German defense market is by far the biggest one. So we will start with a local production of laser weapons in Germany and in the second step also to provide local production capability and assets for space warfare. Our remote weapon system business, we execute through our partnership with the company Diehl. Our partner in the laser weapon business is Helsing in Germany and for space warfare, it's OHB in Germany.

There's always a country-by-country type of collaboration scheme in place. In France, we do the same. We've just created a company in the Nice area. And in U.K., our footprint will be defined by the acquisition of this interceptor business, which is close to Bristol. So yes, we will have operations and production in all those major countries. And obviously, the Netherlands will play a key focus as they've been the first clients for our laser weapon business. So also in the Netherlands, we will do production.

Thank you so much. We received another question from the chat. Given the increasingly hybrid nature of the conflict in Ukraine, what roles does EOS see itself playing with regards to protecting critical infrastructure well behind the front line?

You have seen that at the end, it's only hard kill who is protecting those kind of infrastructure. We have to discriminate between the military and the civil infrastructure. If it's a civil infrastructure, you cannot use missiles, cannons or rockets, you have to use things which don't create collateral damage or panic reaction by the people. So it's predominantly driven by laser weapons because you cannot see, and you cannot hear them and by those kind of interceptor drones.

For commercial -- for military installations, this will be accompanied and complemented by hard kill effectors like cannons and missiles and rockets. But we can offer this kind of multilayered approach. So we believe we will play a very central role in the European program called drone wall and other kind of big programs coming up.

Thank you so much, Andreas. Then we received another question. What role does EOS see AI playing in conflicts in the future?

Excuse me, which role does?

What role does EOS see AI playing in conflicts in the future?

Okay. AI plays a very dominant role. Why? Because future drone attacks in swarms will be complemented by AI-driven swarm intelligence. That means swarms which a human being cannot understand within real-time considerations. So you need to have AI intelligence in your defense systems, being able to predict those kind of movement patterns and to be able to shoot down those drone swarms in a most efficient way. We are already preparing for that. We have AI algorithms in our systems, and we will further invest into AI by either organic growth or by an acquisition.

Thank you so much. And then received another question. What impact do you see of potential peace process in Ukraine?

This peace process has a little to no impact on us. Why? Because all the army depots, all the stocks are emptied in western world. It takes up to 7 -- minimum 7 up to 10 years to refill those kind of emptied stocks and to go even higher as everybody wants to have more and higher stocks than prior to the Ukraine war. So we are very confident that has no impact.

Moreover, there's no cannon-based air defense anymore in existence or that has been stopped many decades ago. And because of the new drone threat, everybody has to reinstall those kind of cannon-based air defense systems. Also, this is something where everybody starts greenfield which will be a trend for the next 5 to 10 years at least. Plus, again, all the laser business which comes now into play. And here, we are quite unique on the marketplace.

Thank you. Another question. Could you please summarize what development work still needs to be done on the laser weapon before it is delivered to the Dutch Army?

There's no development work to be done. The product has been fully developed. We do know a Dutch kind of qualification and an integration into the air defense system. So it's a kind of normal production cycle.

Thank you so much. And this is also the last chance for you, the listeners, to post your question via the audio line or via the chat. And let's see, we received another question from [ Peter ]. For Land 156, how does the technical integration work between EOS, Slinger, hard kill and DroneShield's RF detection systems? Is there direct communication between the systems?

So first of all, we have won the Land 156 program which is a $1.3 billion program, together with our partner Leidos from America. This consortium does not include DroneShield. DroneShield was coming in with their own offer, and they have not been selected by the client. So the solution which is in the Land 156 is based on our hard kill plus a soft kill option which comes from a competitor of DroneShield. So we have not to integrate with DroneShield, but we can easily integrate with DroneShield, and we have already offered together in other applications and other programs successfully together. But in Land 156, they're not part of the picture.

Thank you so much, Andreas. As there are many more questions but we are running out of time. I kindly like to ask you to also contact EOS if you wish and should further questions arise, I'm sure that Andreas will answer them. Thank you so much from our side, Airtime. I hand over now to Andreas for some final remarks.

Yes. So I think that EOS is in a unique position. EOS has, from a portfolio perspective, the most critical assets in order to defeat drones in the future. We are well positioned. We are world market leader and the benchmark technology and performance-wise in all what we are doing with the laser weapons coming into play now and laser weapons you need to have in order to protect the infrastructure. Each country has a list of up to 500 assets to be protected.

Each assets needs at least one weapon station, and there are only 2 competitors out in the field. That gives us a prominent chance to take at least 50% of the total market on laser weapons outside the U.S. And the same will happen in space warfare, maybe with 2 or 3 years of delay where today there is nobody other than EOS being able to deliver capacity to kill satellites from ground. That is giving us the next quantum leap of order intake and revenue and earnings growth, and we are very confident to turn this company into multibillion-dollar enterprise over the next 5 years.

Thanks for your interest in EOS. And as it was mentioned before, we are ready to receive any kind of question by e-mail, phone or any other channel.

Good morning, everybody. We are just going to wait a few seconds for everybody to get into the room, and we will start the call in a moment. Okay, everybody. Good morning. It is 8:00 a.m. here in Canberra. And this morning, we've made 2 announcements on the Australian Stock Exchange this week, one on Monday and one on Wednesday. They covered -- on the Monday announcement covered a new order that we received for $20 million and the Wednesday announcement related to the acquisition of the Interceptor business. So today's call is to provide you a little bit more information about these and just an update on the High Energy Laser landscape. So Andreas is going to talk through some materials. So we have some slides that will shortly be filed on the Australian Stock Exchange. They will appear on the screen and they will be distributed just after the call with the filing on the ASX.

So Andreas, I'm going to hand over to you. We will talk through some slides, and then there will be Q&A available at the end. Please feel free to put questions into the chat box. And then David, who's on the call from our team will help moderate the questions at the end.

So with that, Andreas, over to you.

Thank you very much, Clive. So my name is Andreas Schwer, Managing Director and Chief Executive Officer of Electro Optic Systems. Today, we have a very remarkable day in the history of the company. It is very remarkable because we did an acquisition of a product, Clive was mentioning an interceptor drone product, which is extremely strategic for us and which fills up a gap in our product portfolio, which will become of extreme importance in the future. Why that? It's not only because of the range gap, it's because of the capability of our type of interceptor drone, which is helping our clients to defeat large quantities of drones attacks in large swarms. That is something which is today the biggest kind of threat scenario where you need to have a highly versatile multilayer defense system. And there are only a few effectors on the market, which could cope with this kind of mass attack problem.

The laser weapon is one of that. Any other kind of system, whether it's rockets, missiles or canons have limitations in terms of the number of kills per minute. But our type of interceptor drone is unique because you can simply launch as many as you want at the same second at the same time. I will come back to all those arguments in a minute. Just have a review quickly on our kind of product focus. So EOS is focusing on hard kill solutions. So we have in our portfolio now remote weapon systems. We are the world market leader in canon-based air defense with our benchmark system, which is called Slinger. We have the High Energy Laser Weapon in our portfolio. We only started recently with the commercialization, and we have had recently the first announcement of the world's first 100-kilowatt sale and several more to come over the next months and years in the subject.

And we have obviously in our multipurpose remote weapon system platforms, also the opportunity to integrate 70-millimeter rocket systems, which are also quite affordable and quite effective over long ranges. And now we are adding to this the interceptor drones. So those drones, which are launched from ground and flying into the attacking drones and killing them by a hard kill. That is very interesting. And there are multiple options on the market from different vendors. We believe that we have acquired with this particular kind of design, one of the leading ones because they are optimum in terms of cost and efficiency. And I will tell you in the next few minutes why we are absolutely sure that this is a big differentiator on the marketplace.

So you can see we have a broad portfolio. There's nobody in the market with this kind of broad portfolio, and that gives us the confidence why EOS will become the leading anti-drone company worldwide. I think we are on a good track. And we will show you over the next months and years that we will develop into this position to be undisputed leader in this domain.

Let's move on. So our interceptor, how does it differentiate? So our interceptor is a high speed, high agility and a full autonomous type of interceptor. Why is high speed required? High speed is required in order to be able to shoot down drones, which are flying at high speed, not only Class 1 drones, not only quadrocopters, but even Shahed type of drones flying also at a similar level of speed. With 290 kilometers per hour, our drone belongs to the absolute fastest flying objects. And by that, we have the highest probability of kills against fast-moving objects.

We can -- we have a high agility. Why do we have high agility? Our drones are navigated and controlled by AI. Embedded AI software on the drone, which allows you to predict movement patterns, dynamic patterns of the targets and with this kind of prediction being able to have a higher kill rate and also a much higher range than most of the other systems. We are offering this kind of product in 2 versions, a medium range and a short range. The short range is very small with 30 centimeters of wingspan, which you can easily integrate on the side arms on launching tubes on remote weapon stations. And the medium range one has 70 centimeter of diameter and the range of 5, maybe even more kilometers. So it is quite a long-range type of weapon system. And it comes in our system at a very low price, very low recurring price. So our target is to offer those kind of systems to the market for less than USD 10,000 per piece.

Just for comparison, some of our competitors or most of our competitors with similar type of attack drones offering the system to the market for $50,000, $60,000 per piece. So we are much more affordable. And by that, being able to defeat swarms at very low cost. The system is battery driven. There's no kind of fuel on board. The kill mode is hard kill by impact. So we have a titanium nose. And by the sheer kinetic power, it's destroying its target. If it's a small target, it can fly on and you can hit even a second or third target. If it's a large target like a Shahed drone, it will instruct also itself. There is no warhead included, but optionally, we can include a high explosive fragmentation warhead if you want, with the proximity fuse, allowing us to have a diameter of kill or kill zone of more than 10 meters in diameter. But in its basic version, it has no chemicals on board, no fuel, no explosives. And by that, it is easy in terms of any kind of safety and security mechanism to handle on ground. That is also a very significant differentiator. So this is our product, how it looks like.

Let's move on. So we have 2 versions. Again, we have the short range with 1 to 2 kilometers and the long range or medium range with 5 kilometers. The medium range cannot only kill 1 Class 1 and 2 UAVs. We also believe that we can kill Class 3 UAVs if they are not flying at maximum speed. We believe that this is something which will make a difference because most of the interceptors can only kill small Class 1 drones. One aspect which is extremely important, which I didn't mention before, it's our system are operated in a fire-and-forget mode. So you do not need to have an operator which is connected with some goggles on their eyes connected to the drones and is leading or guiding the drone into its target, that's not required here. We can do that optionally, but the drone is fired. It's locked on the target by the command and control system. And once it's fired, you forget about it, you can concentrate on other items and it's finding its way autonomously into the target.

Why is that important? It's important because you don't need 100 operators to operate 100 interceptor drones to fly into 100 attacking drones. You just need one operator and the fleet will operate by itself. That is a key differentiator in the future to be very effective in mass attacks. And it has, again, low collateral damage potential because there is no explosive onboard, no chemical, no, nothing. You can use those kind of drones in any kind of nonmilitarized zone in civil, in urban areas or around airports. That's also an important factor that us. now becomes also able to better equip with anti-drone systems, civil installations in the future. It's an absolute dual-use type of product with a very, very low cost per kilo.

Next one. Let me show you over the next few slides how this thing is operating. You can see here on ground some launch boxes, the systems will be launched in a vertical way out of those boxes, you can install as many boxes as you want. We expect that an airport in the future will be equipped with between 50 and 100 of those drones. So the investment per airport is around about $1 million or means $1 million of investment of CapEx for critical infrastructure. Each country has list of identified critical infrastructures in the range of [ EUR 300 million to EUR 500 million ]. That means per country, we have a kind of sales potential of [ EUR 300 million to EUR 500 million or U.S. dollar ] roughly to give you an impression of what the market size is for this type of product. So it's launched through those kind of boxes.

Let's move on in a second. So you see they're coming in a vertical way out of the boxes. Again, fire-and-forget, you don't need to be online with them anymore. They're fully autonomous. They acquire the target, the targets which have been instructed to them with the coordinates when they are launched. And thanks to their infrared seeker head and thanks to the AI imaging and the onboard intelligence, they are able to identify the target, again, to predict their movement patterns and to directly fly into the targets.

Let's move on. I mentioned fire-and-forget. Again, the range is about 5 kilometers in terms of altitude. We are sure that we can make at least 2 kilometers of altitude. That is the kind of ceiling below which most of the drones are operating today. And again, the speed of 290 kilometers per hour is almost unmatched in this type of market and makes a big difference in the future.

Let's move on. So in the terminal phase, obviously, we are flying into the target. It's either one-on-one or if the client decides to have a warhead, an explosive warhead in it with a proximity fuse, we only need to get in the kind of vicinity of 5, 6 meters to the target, and that's enough to kill the drone. That is the next stage, but we believe most of the clients will go for the standard version with a normal kind of titanium nose and with a kinetic impact one by one, hard kill, okay?

So depending on the target, our drone, the interceptor drone might continue its fight, its operation and can go against the second or a third target. If it's -- if the target is a larger drone, a Class 2 drone, we expect that in most of the cases, our drone will be destroyed as well. We will lose it and it is designed for that particular purpose. That's the reason why we try to keep the cost very low, and with less than $10,000 sales price, we are almost -- we are unmatched in the market for this type of interceptor drone. There's nobody being able to offer in hard kill impact drones at this price level.

So let's talk about intellectual property. That was one key reason why we have decided to acquire this particular product. It comes not only as a piece of hardware. It comes with very high sophisticated software, software with, again, libraries, libraries of drones, catalogs, which have not only visible and infrared images of all the kinds of drones being operated in the market, but also acoustic and electromagnetic libraries. With all those libraries and with our AI software, which is embedded in this very small onboard computer system, we are able to achieve a kind of tracking, a kind of detection and a kind of hit rate, which is unmatched in the market. All that is proprietary with sensor fusion target classification capabilities, we are probably the leading edge in this kind of upcoming market segment. There are only very few competitors on the market. And again, most of the competitors are operating interceptor drones, which are kind of quadrocopter, flying at very low speed and most of them are using a kind of net in order to capture the target.

Only very few of them are able to impact the target and to kill it by impact because of the minimum speed. We can do that because of our 290 kilometers per hour maximum speed. The hardware is very sophisticated. So it's a titanium nose. We have a composite airframe. So it's extremely lightweight. It is a very clever architecture. And again, that's allowing us to keep the production cost extremely low, lower than $10,000 if ordered in larger quantities.

Let's move on. I would like to hand over to Clive to give you some aspects of the transaction summary and to explain why we believe that from a commercial perspective, this deal was really highly attractive to EOS.

Yes. Thanks, Andreas. So a couple of comments. We have said previously that we are looking for the right kind of acquisition. This is an interceptor, but it's also quite heavy on software -- uses a lot of software and AI to make it very effective. We have said that we're going to use a disciplined approach when we assess acquisitions, and that's what we've done here. We believe this is a very low-cost acquisition for what it is. There are advanced technologies like this in defense that are changing hands for relatively high prices, and we wanted to find something that was at the appropriate stage of development and had the right investment characteristics. So we think it's a good size.

The business we're buying is based in the U.K. The total investment is just under about AUD 10 million. And we expect a further 12 to 24 months of development. This product is an advanced prototype at this time. It is flying and it is in demonstration. So the business has a very significant demonstration that's doing next month in the United States under some customer-funded work that it's been doing. And we're very impressed with the technology that we've seen. We've assessed this opportunity as much faster and lower risk than the option to develop this in-house. And we see that we may invest as much as $10 million over the next 3 years or so in this product, although it will be significantly less than that if we can secure the next rounds of customer funding that this business has been working on.

So that's -- we think that's a fairly modest investment with $10 million upfront and a bit more potentially over the next 2 to 3 years. The cash will come from EOS existing cash reserves. So there's no borrowing or need for funding in relation to this. The transaction has been signed, and it will complete following customary approvals and conditions. And in terms of revenue, we're not looking for any revenue from this, obviously, in 2025, but [ years ] nearly out. In 2026, there is the possibility for some revenue from customer development funding. And we think commercial launch with meaningful sales is more likely to be in 2027, although naturally, we are aiming a little bit earlier than that in-house.

We do see the launch pattern for this as being similar to some of our more recent product launches. So our Slinger product was launched in 2023 and has been enormously successful with small batch initial orders and is well on its way to a rapid growth curve. The High Energy Laser contract that we announced took a significant amount of time to negotiate and is now being commercialized. So we see this piece of -- this opportunity as something that EOS is quite good at, is commercializing advanced technology, selling into militaries. In this case, we expect to sell into the dual-use market with civil application, as Andreas said.

So I'm going to hand back to Andreas just now. We're now going to talk about our other opportunities as well, the Slinger and High Energy Laser area, and Andreas will touch on these. And then we will come back to questions at the end. So if you have questions, please put them in the chat box and David will moderate at the end. So thank you, Andreas.

Thanks, Clive. And one point before we move into Slinger. So Clive was mentioning, this is a U.K.-based business. And what does it mean for EOS? It means that it ticks also another box. We told you that we want to target and we want to strengthen our footprint and position in Europe. In Europe means predominantly in some core countries like U.K., France, Germany, maybe Poland. And here, we can tick the U.K. box. So we will use this entity in U.K. to become EOS U.K. and to also do other businesses to our other business lines activities in the U.K. over the short and medium term. So also from that perspective, it was highly attractive to us.

But let's talk now a little bit about Slinger. I mean you have heard a lot in the past. Slinger is moving forward. Slinger is becoming more and more the kind of baseline in the market. Obviously, procurement programs coming up following the normal type of pattern, which is slow and coming in smaller and medium-sized quantities before customers go into large volume orders. We have here announced this week one order for $20 million, which is one of those customers ordering the next batch and testing it and then hopefully going also in the large quantity orders.

It's extremely important because it's another client using Slinger in its fleet. So that is just one further success. We have ongoing discussions with various clients outside and inside Europe. Most of them follow this kind of procurement pattern. And we hopefully will be able in the next future to announce further sales for Slingers in the marketplace.

Let's move on. This is our 100-kilowatt Apollo laser weapon system, and now we can talk only about the client. In the beginning, I was only allowed to say it's a NATO client. It is the Netherlands. The Netherlands government has decided to play a leading role, if not the leading role in the European future laser weapon business because they believe this is a strategic niche, which will become a very big business in the future. And the Dutch industry is not in the forefront in any military technology. And here, they believe they could become the leading nation in the laser weapon business. And they have decided after going into kind of worldwide check on who can deliver this kind of capability, they have selected finally to go with [ U.S. ], which is a very great success for us, and we will become the partner for also future acquisition programs.

The first sales was for EUR 71 million. It included lots of nonrecurring, as I was mentioning in previous investor calls. The recurring price for this kind of 100-kilowatt laser weapon system is for low quantities between USD 45 million and USD 50 million. If you order in large quantities, it can go down to USD 25 million to USD 30 million. So it's becoming very affordable. We are in negotiation with a couple of clients. Those negotiations are progressing and not only for small quantities, some clients want to order in medium and even larger quantities. So we are very optimistic to sell and to sign further contracts in the course of next year. There's not too much competition in the 100-kilowatt class. We have only one competitor in the global market, which is an Israeli company.

What plays in our hand is we own all the IP, which our competitor does not have, and we can sell and we can license and we can transfer IP into any kind of client country to satisfy localization and transfer of IP requirements, which makes it extremely interesting. So laser weapons are also ideal for drone -- for swarms of drones to defeat them. Why? Because our laser weapon, they have been optimized to kill up to 20 and sometimes even 30 drones per minute. This kind of kill rate is unmatched, normal kind of launch of platform missiles, rockets or canon-based air defense system like our Slinger cannot handle more than 4 to 5 drone kills per minute. So here, we are then a factor of 5, 6 higher.

You might ask us, why do you now have interceptors killer drones in your portfolio? Because we believe in the future, critical infrastructure like an airport might have 1 or 2 laser systems. So they can kill 50 or 60 drones per minute. But if those drones are launched in the vicinity of an airport, you don't have a minute of time, maybe only 10, 20 or 30 seconds. That means the 2 lasers can only bring down 10, 20 drones and there are still maybe quite a number of drones left over. So what to do with that, how to shoot them down. And here, our very affordable interceptor drone comes into play. And if an airport has 50 or so installed, they can shoot down 50 drones in one instance. And that makes the interceptor drone so important for our kind of hybrid installation. That was the key driver for us to invest very little money into a very strategic business line.

So overall, we believe that with the laser weapon as we are almost the only company in the market, plus the Interceptor business where there's almost nobody with this kind of capability, we will be best positioned to become the leading player in the anti-drone business.

On this slide, we've modified it slightly compared to the past. You can see here now the current power levels of different consortia operating on the market or trying to develop something. You can see again the United States being leading in terms of power levels, but very much restricted in terms of export. So we do not bother too much on U.S. competition. Our main competition is from Israel, where we have a company which is working and operating on a 100-kilowatt level. They have shared IPs. So nobody of them in a stand-alone mode can export those kind of systems. They need to agree all among themselves. So it's 3 companies and the government needs to say yes.

And so far, the Israeli government has not allowed any export of IPs or to start a foreign-based production, which we can do. On France, they have just received a 50-kilowatt contract for EUR 100 million -- rather about EUR 130 million as I remember. We are in close contact with this consortium. We are in contact also with the French government, and there is a certain likelihood that we will join this and localize our IP also in France in cooperation with this consortium to become a member of the French laser market in the future. In Germany, we have also approached the German government. You might have read some articles in the press. We have offered for the German Navy our 100-kilowatt system for a fraction of the price a German consortium has asked for.

So we are optimistic also to have a very competitive position in an upcoming tender in the German market. And the German laser market will be by far the biggest one in Europe. In the U.K., a consortium is working on a 50-kilowatt solution. They want to bring the 50-kilowatt to market by 2028. Again, we are already here with 100-kilowatt and more. So we also believe that we have a solid standing in case there's an open tender coming up on the U.K. market. The Chinese competitors are power-wise at the same level, but we know from our clients, they are testing and they even feel that some Chinese system, the beam quality is very, very bad. And that's the reason why the Saudi Arabian client has taken off service. They have decommissioned the Chinese systems because of bad performance. And we hope that in the Middle East, again, where the UAE and Saudi have tested those kind of Chinese systems and they're highly disappointed.

We believe that in the Middle East, we have a great chance to sell many of our laser weapons in the future. And we have the 100 to 150-kilowatt class ready for production. We have sold the first unit. And we are negotiating with a client a fully funded development program for a 300-kilowatt version. If we are successful in the acquisition of this program, we will have a 300-kilowatt laser ready for production in about 3 to 4 years from now. And this will cement our market-leading position because nobody outside U.S. is working in this power domain.

If you get this, this will give us a leading-edge position for at least 10 years. And with 300-kilowatt, we do not only have a laser weapon, which is good for anti-drone warfare. With 300-kilowatt, we can have a fully CRAM type of defense system. That means we can shoot down rockets, some missiles, artillery shells and mortars. So it's a highly versatile laser system. I can tell you one of our client, which was focusing in the beginning on a large fleet of 100-kilowatt systems, he already indicated to us in the course of this week [indiscernible] by Airshow that he wants to have the majority of this large volume order he is looking forward, and most of the systems should be 300-kilowatt laser systems. A 300-kilowatt laser system, the acquisition cost of that one is beyond USD 100 million to give you an idea of what it means for us revenue-wise. So I think we are in an extraordinary good competitive situation on the laser weapon side.

So please move on one slide. So we're coming to the outlook. So we have a very solid remote weapon system business where we will add one after the other in terms of contracts for Slinger, but also for ground to ground remote weapon systems application. As we mentioned before, we believe that we can triple or quadruple our today's revenue base on weapon stations over the next 3 to 5 years.

So it will be a kind of $400 million to $500 million business, annual business in that period of time. But the bigger change we expect from the High Energy Laser Weapon business where we believe that given the competitive edge we have today that we can achieve a kind of market share of around about 50% in the non-U.S. market and an annual revenue base of between $1.5 billion and $2 billion in about 3 to 5 years from now.

We didn't touch on Space Control. Space Control is a combination of the application of High Energy Laser Weapons, the same portfolio we have just discussed with our capability of adaptive optics and the highly sophisticated capability of building high aperture telescopes. This is a business which comes much faster than expected because of the U.S. Golden Dome program. And we also have got inquiries from various European nations. We have welcomed recently also the leading commanders from all the major European countries in Australia at our facility, and we expect another visit from a high-level French delegation in the course of December at our facility.

So this is coming earlier than expected, and we expect the first revenues to come into play by 2027, so much earlier than expected. And this business from a size perspective, I believe it will be larger than the laser weapon business because the Space Control or Space Warfare business with the ability to shoot satellites from ground will be more decisive, even more strategic. And that will add up on top of the numbers I have given you before, but again, it comes later into play. So overall, EOS is in a very solid position. We have a tremendous market outlook. We will operate our business in a very traditional conservative, disciplined way. We are extremely aware of the cost situation and we keep our dollars, our pennies together. As you can see with this acquisition of the Interceptor, we pay only a little bit of money to get a huge quantum leap in terms of additional capabilities into the company, and that's our basic principle of operation.

We will continue like that to invest customer funding like the [ EUR 300 million ] -- the 300-kilowatt laser weapon development program we are negotiating will be fully customer funded. We want -- we do not want to use shareholders' money for all those kind of activities. And we will stick to this kind of principle and only invest in a modest amount like the $10 million Clive was mentioning before in the completion of this Interceptor business. The big dollars for the big development programs will come from clients or third parties.

With this kind of outlook, maybe Clive, you want to add some more points on the financial side, on the commercial side.

Yes. Look, I think the order book for our business is at the highest level it's been for several years. That is not an accident. We're in an industry that is growing very strongly. We have products that are demanded in the marketplace, and we have now got a sales team in place that is capable of securing orders that generate significant returns. We are going to continue to be disciplined with our capital, as Andreas said. We are going to continue to execute contracts in a way that is cash flow positive and profitable. And we're just going to continue to run the business the way we've been doing it for the last 3 years and to continue to grow it in a disciplined way. So that is all we were going to cover in this presentation. We want to have the facility for questions. So if people have got questions, please put them into the chat box. David, do we have any questions that have come through.

We do have a number of questions. Thanks, Clive. So first question I have is from Tim. He asks, do you see risk of cannibalization from -- on your laser weapon or Slinger market from the interceptor?

So I take this question. No, we don't think so because the kind of operation mode is different and parties will only use those kind of interceptor drones if they believe the threat scenario has a significant element of large drone swarm attacks. Otherwise, it will not come into play. We still believe that the laser weapon is indispensable as the canon-based air defense. At the end, it's the mixture depending on the threat scenario and depending on the types of drones attacking. And if, for example, the threat scenario is characterized by very large drones, the laser weapon is more effective than this interceptor. If you talk about civil installations, people will tend more towards those type of interceptors.

If the threat scenario is driven by small Class 1 or quadrocopters, then people will tend more towards those kind of interceptor drones. So it depends case by case. There is little to no cannibalization from our perspective.

That's great. Another technical question Michael asks, does interceptor have the ability to return a home once it's been deployed?

Yes, we could program it in a way that it returns back home, but we believe that in most of the cases, the first hit would also mean it's a destruction of the interceptor drone. It is designed and kept low in price in order to do this type of mission. We will see with the first kind of qualification tests in what is the kind of probability of survival. If there is a significant number, we will program them in a way that they return back to the home base, but we don't expect that to happen too often.

Great. Baxter asks, who do you see as your key competitors in the interceptor space? And how does EOS' interceptor differentiate from these?

Yes. So there's -- I do not want to mention the concrete competitors here. So there are companies from Israel selling their type of systems for $60,000 a month. So we are 6x cheaper than them. There's a company in Germany who is also in developing also their prices beyond EUR 50,000. So it's significantly more expensive than ours. There's a best product, which is even more expensive from the market. And there are some products which are cheaper, but they are flying at much lower speed. They are quadrocopter type of drones and do not show as a kind of competitor to our type of application. So we believe we have by far the best value for money proposition for our clients with this product. That was one key driver for our decision to buy this technology because it's quite a unique design.

Clive, perhaps one for you. Peter asks, can you comment on the influence on profitability in the near future regarding this recent news?

That's a great question. So we think the impact on profitability in 2026 will be minor. We do not think this will be significantly accretive or dilutive to margins in 2026. We do think this will open up significant new markets for the company in time. As Andreas said, this is a low collateral damage solution. That is very significant in nonmilitary markets and in urban areas. So while we don't think this is going to have a significant accretive or dilutive impact to margins in 2026, we see significant absolute growth opportunities in 2027 and 2028. And it may also allow us to more access to markets that we wouldn't get into for our remote weapon systems and laser weapons as well. It's a comprehensive layered suite of products. So thank you.

Owen asks, we see that you are broadening your product portfolio. Can you talk through the investment case? For example, how many units are required to get return on your investment? What does the contract profile look like, et cetera?

Yes. So maybe an example for the interceptor. So as Andreas said, the target price is under USD 10,000 per unit. If one airport wants 100 or 500 of these, that's a revenue basis of $1 million to $5 million. We think the margins on these sales would be quite high, certainly as high as our existing margins, which are 50% gross margin. So we think per airport at $1 million to $5 million of revenue at a 50% margin, you do not need very many sales to individual sites in order to achieve a significant return on investment. So we think that this acquisition is a very low-cost investment compared to the pieces that some of these projects are changing hands at in the market, particularly in transactions where PE are buying and selling. The vendor is keen to focus on their core business and invest proceeds in their core business.

And for that reason, we think we've been able to secure a very attractive price for this investment. And we think the returns are going to be very compelling over time, particularly as we get into 2027 and 2028.

So if I may add some points here. So Clive was mentioning [ $3 million to $5 million or euro ] of investment of CapEx per critical infrastructure. Again, per country, we have 300 to 500 pieces of critical infrastructure. So you can see that is the market potential per country. So it's adding up a lot. That is a direct benefit, but there's also lots of indirect benefit. Having this kind of effect in our portfolio makes us more the kind of one-stop supplier, the turnkey solution supplier for an integrated counter-UAS system. And we believe we get into markets which otherwise we would not be able to access. And with the kind of indirect impact, collateral impact, we will be also able to sell more Slingers and to sell more laser weapons into certain markets. So that obviously has a huge knock-on effect and additional benefit for the company.

Yes. I might -- David, I might answer the other part of Owen's question. I think in terms of CapEx for manufacturing, we do not envisage investing significant amounts of capital to set up manufacturing this product and there are options for contract manufacturer and there's options for customer funding for manufacturer for this product. I have to say the smart part of this project -- product is the software and the technology, and that's what really creates the value and that exists already. So we don't see a big investment burden on that front to answer Owen's question.

Yes. There's a follow-up question from Ken on that, basically acknowledging that a large part of the competitive advantage is in the software and the AI models for these interceptor products. The question is, how is EOS planning to continue to stay ahead in this domain?

So we obviously want to -- so we acquire a company with some very clever software engineers who have developed those kind of AI algorithms. We want to use this kind of capacity and capability not only for the interceptor drones, but also to use that kind of software code for our fire control software for remote weapon systems. So that is part of our storyline to develop the next-generation weapon stations to have the leading edge in terms of detection, identification and tracking. So there's huge synergy potential. We will have the same kind of algorithms in the interceptors as in the lasers as in the weapon stations, the same kind of software, the same kind of engineering capability behind.

Troy asks, are there any earn-outs or contingent payments with this recent acquisition? Perhaps one for Clive.

Yes. No, the total investment here is EUR 5.5 million. There is no earn-out. We do -- we always want to retain and motivate senior managers, and we will obviously be working to make sure we do that, particularly with the very skilled engineers in this company. But there's no earn-outs or deferred or contingent consideration.

Troy also asks, have militaries globally concluded that kinetic hard kill systems are the ultimate solution to the canon drone defense? Or will soft kill still play a part?

So maybe I can answer that one. I mean most of the soft kill companies have now announced to go into hard kill. Also a prominent Australian company has announced last week to look into hard kill. I mean that should answer the questions. And if you read into any kind of military report from Ukraine, that is underlining the trend that soft kill is becoming less and less effective in the military context, not in urban and civil, but in the military context. That's the reason why we believe that this interceptor drone is probably one of the best solutions, and it's considered by most of the militaries as one of the most promising anti-swarm type of effectors if it's cheap.

And if you look what does it mean cheap, we got an answer from the German procurement agency. They say our threshold price for purchasing this is EUR 15,000. If it's higher, we don't look at it. If it's lower, it's becoming super attractive. So we believe with USD 10,000, we are significantly below and should be quite a good offer or value for money for all of our clients. And again, the invitation by the U.S. Army to participate to trials in the U.S. where they have only invited a handful of companies is underlining the superiority of this type of technology.

Great. Okay. A few just more general questions. So Thomas asks, what is the status of the manufacturing facility for High Energy Laser systems? Is it on track?

It's on track. We will formally inaugurate our new facility in Singapore in the course of the Singapore Airshow beginning of February, and you will hear and see that also in the press. We will also publicize some pictures.

Yes, we -- it's time for an advert, Andreas. We -- when we open the manufacturing facility in Singapore, we will be arranging an Investor Day in early February, and we will communicate details of that before Christmas, but it will be first week of February.

Another just more general question. Ken notes the increasing advances around fiber optic drones on the battlefield. Are there risks of drones being applied with some sort of anti-laser material, for example, [ reflected ]?

Yes, that is coming. And by the way, we are testing those kind of things also in our laser test tunnels. So under contract by some clients, they are coming with drones being coated with very specific materials such as tantalum, for example, or palladium. And we do those kind of tests. And I mean, I cannot disclose all the details, but I can tell you, it's not helping. So it takes a little bit longer, 10% to 15% more time to go through all those materials, but not more. It could only have a significant impact if you spray on wall thicknesses, which are so thick, so large that the weight of the drone would go up too much and the payload capacity would go down too drastically. So today, there is no way to defeat -- no way to protect the drones against lasers.

Great. One more question on the Slinger. Does the Slinger system have the ability to fire rounds that exploit on proximity to the drone?

Yes, we have it. We have different types. So our Slinger with a small 30-millimeter round has so-called proximity round. So it's a round which has an infrared seeker head in each bullet, measuring the distance of a target and exploding usually 2 meters ahead of the target, creating this kind of cloud of particles destroying the target. And for the R800, we have so-called programmable ammunition. That means the ammunition is programmed before it leaves the barrel, because of the laser range finder, it understands and it's programmed to explode after a certain period of time depending on the speed of the round and resulting in the same kind of impact. That means an explosion a few meters ahead of the target. Yes, we have that. It's state-of-the-art. It is common practice in the counter-UAS kind of based air defense.

Maybe just 1 or 2 final questions. So Jasper notes, this is our first small bolt-on acquisition in our M&A strategy. Are there any other areas or capabilities which we are considering M&A as well?

I'll take that, David. Thank you. I mean we have said that we are interested in software and AI. We'll continue to think about that. There's always a question whether you do stuff in-house, whether you partner with people or whether you acquire. I think what we've announced yesterday demonstrates that EOS has a disciplined approach to acquisitions. We are -- we've been disciplined in every other aspect of our business for the last 3 years, and we're going to continue to do that with acquisitions. And there'll be -- we are interested in the areas that I've just mentioned. So thank you.

A final question perhaps for Andreas. Rheinmetall has just announced that they have a laser system for the German Navy. Why do you believe that [ yours ] gets a chance to compete against the German system beside the cost factor?

Because we have a qualified 100 to 150 class technology available for production and ready to be delivered within 2.5 years or 2 years even after contract signature. Rheinmetall [ has a 30-kilowatt ] and has proposed a development to get to 50-kilowatt, maximum 60-kilowatt over a period of time of 5 years with a risky development program, a development program which costs the German government EUR 502 million to purchase 3 50-kilowatt lasers at the end. So we've offered to the German Navy 3 100-kilowatt systems to be delivered in 2.5 years for the price of [ EUR 150 million ]. So it is less than half the price for twice the power in less than half the time. We have had talks with the leadership of the German Navy. We have discussions ongoing with the German government. And I can tell you that they are all highly interested in our solution, and we expect to get a fair chance in this German contest.

Great. That covers most of the questions. Andreas, would you like to wrap it up for us?

Okay. So again, I want to thank you for the interest in Electro Optic Systems. I think that what we've shown you today is a very good and classical example of how we want to operate our business. We are very pragmatic. We are very cost concentrated, and we want to keep our dollars together. We invest only if we see a crystal clear business case. We have now a strategic portfolio of effectors together, which allow us to be seen as a kind of turnkey one-stop shop provider for most of the clients. We will continue on this track and our target will remain the same, and we will strictly follow our strategy to become the anti-drone company #1 and to become the worldwide leading company for Space Warfare.

The connecting element between the 2 will be our High Energy Laser Weapon business, where our clear target is to become the #1 outside the U.S. as well. We are on the good track, and we will keep you updated on the progress over the next few weeks and months. And we want to thank you for your loyalty in the company as existing investor and your interest to become a future investor. Thanks a lot for being with us.

Thank you for standing by, and welcome to the Electro Optic Systems 2025 Half Year Results. [Operator Instructions] I would now like to hand the conference over to Clive Cuthell, CFO and COO. Please go ahead.

Thank you, Drew. Good morning, everybody. This is the EOS half year results webinar. This morning, we will be talking to a presentation that was filed on the Australian Stock Exchange earlier today. In that presentation, we're on Page 2. And the agenda today will be an update from Andreas, our CEO, on the first half highlights and the business update. I will then go through the financial results for the first half, and then Andreas will go back through the strategic growth drivers and the summary and outlook for the business. At the end of that, we will open the call up for questions. And as Drew said, we'll -- if you want to ask questions please press star and one and that will go in the queue. So I'm going to hand this back to Andreas now, and we will talk to the presentation that was filed on the ASX earlier.

Andreas?

Thank you, Clive, for the introduction. My name is Andreas Schwer, CEO of EOS. I would like to start presenting you the summary and then the highlights of the first half of 2025. If you please swap to Page #4, the business summary. The key headline is that we could grow our contract backlog by $171 million since December 2024. We are standing now at $307 million at August 22, and we expect to further increase this number significantly before year-end.

Our revenue is heavily back-end loaded this year. We have reached $44 million in the first half. There's no worrying sign. Again, it's heavily backloaded. And as a consequence of this revenue figure, also the EBITDA was going down compared to last year, but also here, no worrying is needed. The gross margin went up by 32% from the first half of 2024 to now 76% and the cash balance, including the term deposits is $130 million at the end of June 2025. We will get a significant deeper level of financial insight and more background information on those figures by Clive in a few minutes, and it's then following from Slide 17 onwards.

If we have a quick look on the summary sheet on the lower side of the page, the market conditions are extremely strong. The geopolitical uncertainty is remaining very strong and the technological disruption on the fields in the conflict zones are evolving, asking for very agile adaptation of our technologies and [ DS EOS ], we are an agile company ready to adopt and bring in new innovation in order to cope with the upcoming requirements into changing requirements on the battlefield.

So we expect the tailwinds to continue on the long run. Long run means at least 5 to 10 years with a strong European rearmament and also with a significant increase in sales into the Middle Eastern region. We could prove over the last 6 months, once again, our ability to commercialize our IP base. We have introduced now new Counter-Drone RWS weapon stations. We have signed the first 100-kilowatt High Energy Laser Weapon contracts to an international client, and we have received contracts in Space Control, which is paving the way to also make here a commercial product line accessible to our clients within short to midterm. Overall, we could provide lots of evidence that U.S. has the capability to deliver growth while we are still exercising a significant capital discipline.

Let's move on to Slide #5. What are the year-to-date highlights? So during the first half of 2025, we could continue to diversify our order book and to significantly strengthen our balance sheet. In January, we received a receipt of $160 million proceeds from the divestment of EM Solutions. You might remember, we've decided to divest EM Solutions because there was no more strategic fit with the key company objectives, which are the Counter-Drone business and the Space Warfare business and the High Energy Laser Weapon business.

In January, we could by that also repay all of our remaining debt. Today, the company is debt free. In May, we signed a AUD 53 million deal on the Slinger Counter-Drone Order. In June, we received cash of about AUD 60 million from the finalization of a significant Middle Eastern contract. And in July, we have already announced that one. We got a couple of smaller contracts predominantly in the Space segment from -- predominantly from the Commonwealth, which allows us to further expand our product capability and our R&D base into Space Control.

In August, we got another type of -- another contract of this type, which is allowing us to do the next step, and we are optimistic to sign further orders also in this domain, allowing us to execute our Space Systems strategic plan. We also signed and that's, I think, the key highlight of this Space, we signed a couple of days ago, the worldwide first 100-kilowatt High Energy Laser Weapon contract to an export client with a contract value of about AUD 125 million. I will come back to this point in a few minutes from now.

Please go to Page #6. So the market conditions are exceptionally positive due to the geopolitical changes, due to the relationship between the United States of America and European countries, triggering much more demand on the European side than ever expected before and continuing regional tensions in the various regions. We see a rapid technology change in conflict areas, predominantly driven by new application of drones and artificial intelligence. Those kinds of changes are requesting new kind of answers, new kind of technologies, which EOS is placing at the forefront because we are well equipped in our IT base to offer those kind of new equipment and technologies to all of our clients.

So as we can talk about the kind of growth super cycle that's also underlined by the budgets. You can see that in 2024, the United States have spent about 3.4% of the GDP into Defense. The rest of NATO, obviously, all the European countries on average about 2%. And based on the latest commitments of all the NATO member states, this will grow to 5% over GDP within the next 10 years. So a huge growth perspective.

If you please swap to Page #7, which is labeled the rise of Drone Warfare. And you see some interesting picture on the left side. You can see some pictures of drones having a small box hanging below them. Those boxes are canisters having more than 50 kilometers of very thin fiber optical cables inside. With those fiber optical cables, operators can operate drones over distance of 50 kilometers, sending the commands through those cables, making those drones un-vulnerable by jamming and by spoofing. That means that those drones can only be intercepted and killed by taking it out by hard kill by shooting them down from the sky. That is new as jamming and spoofing was very easy to use and very cheap mechanism to hold them off. That's gone that's history.

On the right side, you can see the number of drone attacks compared to the number of missile attacks. And you can see that there's a strong trend towards drones simply by the fact of cost. It keeps the cost and the investment of the [indiscernible] are low, and it offers us as EOS as the anti-drone company, huge opportunity from now on.

I go to Page #8. The Drone business, the drone threat is not characterized by Group IV and V drones like it's shown here in the middle of this page. Predominantly, the drones being in operation are Group I, II and Group III drones. Those kind of drones, we can shoot down with all our effectors, whether it's a kinetic kill effector with our worldwide benchmark R400, for example, whether it's our High Energy Laser Weapon system or whether it's rocket systems, which we also can formally integrate in our remote weapon system platforms.

Those kinds of drones are attacking not only military assets, but also civilian assets. Assets not only being at the front line, but assets being far in the backyard in your country, 500,000 kilometers away from the front line. That's causing now the need to protect even those kind of backyard enterprises and infrastructures, which is causing much more of demand than we have thought before.

So drone defense becomes extremely critical and drone defense needs to be highly accurate because the window of opportunity to shoot down a drone is very limited, just a few seconds. It has to be very economical because there's a limited amount of budget and there's an equation to be fulfilled to shoot down a drone, which only costs you about $100 to $1,000. It must be layered because there are still attacks coming from missiles and hypersonic vehicles in the future. It must be well coordinated. It needs to be controlled by the C2 system, clearly allocating the best kind of weapon system to defeat the various kinds of threats.

If we swap please to Page #9. Here, you can see that the key EOS products are complementary within a very comprehensive and layered counter-drone defense system. We are at the core of what is needed to have a layered air defense system against drones composed mainly by remote weapon systems. And again, those weapon systems are not only carrying cans, they can also carry Laser Dazzlers, and we have those products in our range that can carry rockets, air defense missiles and other kinds of equipment. Secondly, the High Energy Laser Weapon where we have developed a range between 50 and 150 kilowatts that is unique in the world. With our High Energy Laser Weapon, we are in a position to shoot on up to 20 drones per minute, and we can shoot them down over complete hemisphere.

The laser weapon is the only weapon which can shoot in the vertical, avoiding threats like kamikaze type of drones, routering ammunition, which fall down in a quite vertical way. Only the laser weapon can engage against those kind of vertical threats. And as I was mentioning before, we can also integrate rocket systems on our weapon stations. All those kind of systems, except for the laser weapon has been deployed in Ukraine warfare. We have more than 200 systems successfully in operation. And you will find hundreds of videos testing their successful operation spread around social media channels such as Telegram. Again, we are predominantly going against Group I, II and Group III drones. Those are the drones which are predominantly attacking the Ukrainian grounds and the same in other conflict areas. It's all about range, accuracy and our systems are known to be at least 30% more accurate than the next best-in-class.

By that, they are highly effective. It's about acquisition costs to keep them low and affordable and tenant-based air defense is very affordable. It comes in with very low operating costs. And if you look to the cost per drone kill, we talk here about $50 to $100 for a drone kill by kinetic bullet. We talk about $1 to $10 only for a kinetic kill by a High Energy Laser Weapon. It's just the cost of the energy and about $10,000 to $15,000 of $20,000 if you shoot the drone down by a rocket.

Page #10, please. It shows our worldwide bestseller and worldwide benchmark in the anti-drone tenant-based business, which is called Slinger. Our Slinger product, which has its origin in the R400 platform has been baselined meanwhile by more and more NATO countries. Among them is the United States of America. The British government has more or less decided to go ahead with a Slinger as a baseline for their troops. The French government has asked us to provide weapon systems for testing. We have sold it to the Germans to other Western NATO countries to the Middle East and also to the Far East. So it's becoming the kind of baseline and the kind of standard on the market of which we are extremely proud of.

Please go to Page #11. We signed this month the worldwide first export contract of a 100-kilowatt laser weapon. I cannot emphasize this enough. It is a breakthrough for Electro Optic Systems and it's a breakthrough for the entire laser weapon industry. It's the first time that 100-kilowatt laser weapon will go into an operational scenario. It is more than a demonstrator. It is no more kind of prototype. It's not for testing. It's for operation for the first time worldwide. Since we have signed this contract with a customer, which is a Western European NATO member, which we are not suppose to disclose, since we have received this contract, we received many inquiries from other countries, not only NATO countries, all being very much interested in this type of product, and we are very optimistic to realize further sales in the future and to become a worldwide leader in this kind of upcoming new market and business segment.

We've signed this contract at a price of EUR 71 million, which is more than the typical sales price of a recurring unit as this contract comes with lots of additional tasks and duties such as the integration into multilayered air defense system, including complicated testing and other assets, which are typically not within the framework of a recurring procurement program. So we expect that the recurring price of such a system is around USD 40 million to USD 50 million. And if you go into mass production, and that's what we plan to do over the next 3 years, the prices can go down significantly. We will produce those systems in our Singaporean Innovation Center and the company is ready to transfer IPs and to localize this technology at customer wish within the territory.

The project we have signed is extremely profitable, and it is cash flow positive as all of our other projects are cash flow positive. You can see the laser comes in a container. The container is put on the backside of a truck. It can stay on the truck, but it can be dismounted from the truck depending on customer requirements. It is usually used to protect critical infrastructure, which could be military air bases, civil airports, could be nuclear power stations, other kind of high-end power infrastructure, harbors, cities, capital cities, could be palaces, religious places, sportive activities and so on.

The customers have declared to us that they have done a kind of estimate and they believe that they need for each in any country, more than 100 to 300 systems to just protect the most essential critical infrastructure within the territories. That can give you a kind of flavor on the market volume, the market potential. And I can tell you that today, there's only one competitor outside the U.S., which is competing against us in the 100 kilowatts domain. It is only one competitor. And if you just use normal arithmetics, so we should assume a market share of around 50% in the non-U.S. market, which is giving us an extremely positive and promising outlook.

We swap to Page #12. I would like to talk a little bit about space and our space capabilities. If you remember our previous calls, we always were saying that we are going to develop our future space capabilities in relation to space control. And we have delivered on this commitment as you could secure customer funding to develop this kind of road map and to go into this range. We've received a couple of contracts for up to today, and we expect some further contracts to come to get a fully funded development pipeline and to be able to offer our clients a full range of space control activities by 2027, 2028.

Please go to Page #13. You might remember this kind of slide. We always bring it up in order to show you where we are and to show you our progress and to provide evidence. So the market are extremely positive. So we can give a tick. It is extremely promising. The products are there. We have launched this year the R500. We have the R800, the R400 and the R150 in the market. All of those families will have a counter U.S. version. All of those family members will have a naval version. So we have overall by far the broadest product portfolio on the market.

We've increased our sales and marketing activities, not only by having invested heavily in demonstrations in live hiring shooting campaigns, but also we've increased our focus on Europe by setting up an office in the Netherlands. Further offices and footprints will come and by having hired a significant number of salespeople or sales experts. Just to give some more words on the demonstrations, we have recently succeeded in, I would say, the world's most renowned comparative drone shooting campaign, which is -- which was happening in the U.S. During that event, which was happening in April, we were competing against all the other remote demonstration providers worldwide.

This kind of contest was organized by the U.S. Army and Northrop Grumman, the famous cannon provider. So it was really a head-to-head competition, and we again succeeded. We have won this contest shooting down by far more drones than anybody else. And the feedback which we received from more than 50 delegations, which we are coming from around the world was extremely promising. And a consequence of that, several NATO countries have announced and have prepared decisions to go ahead with a Slinger kind of consideration and to make Slinger the baseline for the future Counter-Drone cannon-based warfare. So a big tick to that box.

And on the right side, we can also give now a first tick onto that box because we could increase our contract backlog to $307 million, which is $136 million up compared to December '24. This was predominantly done by or achieved by 2 significant order intakes. It was the $53 million Slinger order intake in May and the laser intake I was just mentioning in August 2025.

We are very optimistic to sign further contracts over the next few weeks and months, and we are optimistic to have a much better contract backlog by end of this year, better than the $307 million shown here.

This is also reflected on Page #14. You can see the growth in contract backlog. And again, it's just a starting point. We are very optimistic to further increase this before end of this year by various other contracts, which are close to signature. I will come to some more details on the next slide.

Slide #15, the market development update. So we are very optimistic to be invited pretty soon for negotiations on the Australian LAND 156 counter-drone capability project. That is the contract for Australia, which will form the standard solution for counter U.S. business, and we are very optimistic to be selected within the team of winners to provide this capability to the Australian forces over the next years.

We're also very optimistic on the LAND 400 project. That's the project where we deliver weapon stations on Hanwha Redback vehicles that was pending for a very long time. This kind of pending period is coming to an end pretty soon, and we are very optimistic to sign here a contract to fill up our order pipeline even more. The Ukrainian opportunities are always or have been always a mix between a conditional direct sale to Ukrainians and donations from Western European countries. We can tell you that we are in very advanced negotiations with 2 Western countries to realize this kind of conditional direct sale and to make this really happen and ready for delivery.

We also expect further contracts in the High Energy Laser domain orders coming in between the range of 30 to 100 kilowatts, not over the next few months, but definitely in 2026. We have discussions ongoing and not only for low order quantities, we have 2 clients which have expressed a clear interest in purchasing up to 100 laser systems for their country. So there are huge opportunities. It takes some time. Those huge contracts are complicated negotiations. But I can tell you that we have received so many inquiries from countries across the globe that we are very optimistic for this product domain. I do not want to go into each and any line here, but you can see that our order pipeline is very healthy. It's very full. It is a multibillion-dollar pipeline, and we are very optimistic to increase our revenue by this kind of execution.

I would like to hand over now to Clive, our Chief Financial Officer, to go further into the details on our financials. Clive, please.

Thanks, Andreas. So turning to Page 17 of the deck we filed on the ASX this morning. So the revenue for the first half was previously announced towards the end of June. We announced at the end of June that we expected revenue of $40 million to $45 million for the first half. And today, we are announcing it was, in fact, $44 million. So this slide does have a little bit more detail on the result than we previously announced.

And notably, the gross margin on materials was 76%. That includes the benefit of the finalization of the large contract that we completed in the Middle East towards the end of last year. And as that was finalized and the final cash payments were received in June, we had a benefit to the income statement that flowed through the gross margin line. Also looking at the P&L, the finance cost line has finance costs of $16 million in it, which includes 13 million, which is the final make-whole payment on the retirement of all of the debt that occurred at the end of January.

I would like to highlight down on the bottom right of this Page 17 is the revenue chart, which shows the split of our revenue by geography. And the result for the first half, as the chart shows, is more diverse than ever. So this is evidence that we are continuing to execute on our strategy of widening the customer base of the business across the globe and by commercializing our IP. I would also highlight that the results on this page are for our continuing operations.

As many people will know, in January 2025, we divested of a noncore business called EMS for proceeds of $160 million. The net gain on that disposal was AUD 90 million, and that benefit flowed through to the net assets recorded for the business.

Turning to Page 18, which shows the segment results for our 2 different business segments. I'm taking the Space Systems segment result first. The revenue in the half of $5 million is again an increase on the previous year, and this reflects the activities that Andreas mentioned earlier, where we continue to secure contracts from government customers which are funding the product development work that we are doing in the space business as we develop capabilities in the area of Space Control. It's very important to us that we use customer and third-party funding rather than shareholders' money for product development in this area, and we're pleased to see that success coming through these results.

The Defense Systems result shown at the top of the page. So as Andrea said, the numbers here reflect the completion of a very large order towards the end of last year. So the lower revenue reflects that. As you can see, the business was a bit subscale in the first half, and our focus has been on growing the order book. So with an order book now of over AUD 300 million, that we expect that to help return the business to a much stronger result in the second half of '25 and going on into 2026.

Cash flow is on Page 19. Our cash flow for the first half was previously disclosed at the end of July in our standard ASX filing. So the data on this page is not new. But just to recaps the first half cash flow, Cash receipts from customers was much stronger than revenue with $100 million receipts from customers, including the final payment that we mentioned earlier from the customer in the Middle East.

It is -- when you get a big final payment from a customer like that one in the Middle East, it's very strong evidence of a positive relationship and it's promising for some of the follow-on orders that we are working on in the pipeline. The cash flow also shows the investing cash flows. So the net investing cash flows was an inflow of just under $100 million, and that includes the proceeds of the sale of the EM Solutions business, which was $160 million inflow, offset by some cash investments that we made in term deposits of $40 million and offset by CapEx of $10 million. The financing cash flows during the first half of $50 million includes debt repayments of $48 million during the period, which is the principal that was repaid as well as the make whole I mentioned earlier.

So the net result of this cash flow is that at the end of June, we had cash balances, including term deposits of AUD 130 million. This -- and on top of that, we have some cash security deposits of $50 million as well. So this cash position, I would emphasize, is a very big turnaround from 2 to 3 years ago when the company had debt of $130 million. And that turnaround has only been achieved because of strategic discipline and operational discipline in the way that we run the business.

What does that look like? On Page 20, there's an update on the balance sheet. And we've highlighted on Page 20, the work we've done over the last 2 to 3 years to manage working capital. The net amount invested in contract assets, so that's work done not paid for with customers. Back in 2022, we had $140 million of shareholders' money tied up in working capital and contracts. So we have been very disciplined in our approach to driving that down over the last 2 to 3 years. And we're very pleased to flag today that today, we are in a net cash positive position on contracts. So as at 30 June, adding up the total picture across all of our contracts, customers have paid us $15 million ahead of time for work that we have to do. So we will continue to run the business with a focus on securing cash flow positive contracts and then executing on time.

We are also, as many people know, continuing to make targeted investments in long lead supply risks, and that has included cannons last year and small amounts invested in germanium-related supplies over the first half. This has given us a significant competitive advantage during the half. One of the Slinger contracts that we signed for $53 million was underpinned by the fact that we could deliver very quickly, and that's because of some of the investments we've made in supply chain in the past. Going from operational balance sheet management to the strategic side, as mentioned, we disposed the noncore business earlier in the year.

Our approach to capital rationing will remain disciplined. We will focus on customer-funded product development. And during the last month, we've signed the high-energy laser contract, which is customer-funded expansion. And it is paying that contract that we've signed for the High Energy Laser Weapon includes the setup of a low-volume manufacturing facility in Singapore. And as Andreas mentioned, in the area of Space Systems, we've secured significant customer funding more for product development in that area. So the result of all of that is the reduction in debt that we mentioned earlier, and that disciplined approach is going to continue.

On Page 21, we do have a number of investment opportunities that we continue to review and develop. These include opportunities in the areas of remote weapon systems and counter drone. So we are intent on maintaining our market leadership position in Counter-Drone technology, and that will include looking at opportunities to continue improving, particularly the software side of our Counter-Drone products, whether it's Remote Weapon Systems or the targeting and software support that sits behind our High Energy Laser Weapon.

High Energy Laser Weapons are an emerging market. And as we've communicated, EOS is in a very strong position with this world first export contract for 100-kilowatt system. We intend to invest in market development and growth and establish market leadership in this high-growth emerging market. And finally, we will be continuing to review any opportunities to accelerate growth in our core strategic areas, provided they meet the criteria that we assess as a management team and a Board. Any acquisitions need to fit strategically with our business and be financially attractive and have manageable execution risks. So the company has got to the financial position it's in today with a disciplined approach, as we've mentioned, that will continue to apply as we allocate capital.

I'm now going to hand back to Andreas, who will talk about the strategic growth update. Over to you, Andreas.

Thanks, Clive. Gentlemen, ladies, please switch to Page #23. We are executing on our strategic goals. We are delivering on our key strategic goals by commercializing our IP in our Remote Weapon Systems business, in the Counter-Drone business and in Space Control, we can tick the boxes on what we have done on RWS because we have launched lots of new products. We are seen as the most innovative RWS company worldwide.

We are extremely aggressive in the market going into key markets, in particular, in Europe and the Middle East, which we consider being the biggest growth markets for U.S. in the short and midterm. We have now launched after 2 years of intense testing and development, the first contract of 100-kilowatt laser weapon system, which is just a starting point into a new area of and a new kind of, I would say, time for High Energy Laser Weapons, which will be acquired by lots of countries. Everybody is considering the High Energy Laser Weapon domain as being a key enabling technology, not only for the anti-drone warfare, but also for other applications in the future. So we will focus on that one, and we do our very best to become a key leading global player in this Laser Weapon business.

And we can also put a tick after our Space Control box here, a tick which was not that obvious because we were a little bit skeptical and how quickly we can achieve the first steps in our long-lasting product development plan and plan going over 3 years to produce the full product range of capabilities to serve our customer needs in the areas of being able to dazzle satellites, being able to destroy sensors and being able to disable even complete satellites in space from ground. That is also a groundbreaking achievement once we have done and executed this kind of development plan. We are now in the kind of the middle of it and we are very optimistic to get this job done.

Some words on the market, the Space Control market is also coming quicker than we have expected, quicker than we have anticipated. That's happening because of a major event in the United States where the President Donald Trump has announced to launch $175 billion program called Golden Dome, which is more or less doing the same thing to engage against missiles and satellites from ground and also from space. And we are a player in this kind of domain, and we are most likely the only player outside the U.S. being able to deliver similar kind of competencies and products to key clients.

That is a big tick, and this is having us a lot, if you go to Page #24, to execute on our 2 key strategic growth initiatives. Number one is obviously our High Energy Laser Weapon, which is boosting U.S. into another layer of revenue generation and earnings. And then as a second step, the kind of Space Control or Space Warfare business, which will push us again into another leap. Those kind of systems have great potential for U.S. because each system sells for a much higher price than the remote station. Those systems are of huge importance for U.S. because the kind of competitive landscape is not as wide as it is for remote systems. We are quite alone there with very few competitors. And that is giving us lots of confidence that if we deliver on those domains, we will become the global market leader, and we have a great future ahead of us.

If you please go to Page #26 to summarize, the markets are extremely supportive and promising. We have divested our noncore business, and we are concentrating now on our core strategic focus areas, which are the anti-drone business which are the High Energy Laser Weapon business and the Space Control business. We've strengthened our balance sheet to support this kind of growth. We are ready for some kind of M&A transactions. And we have delivered as promised, we have done what we said, we will continue being extremely disciplined on the allocation of capital. We will not invest heavy money into own developments, but instead we use customer-funded initiatives and customer funding for those kind of research and development programs.

We have announced already and that is underlining once again, we expect that the 2025 revenue will be extremely biased towards the second half of this year, but we remain very confident in that and we continue to build up our contract backlog with some very promising contracts, which we hope to be able to sign before end of this year. This is concluding the presentation part of our today's call.

I would like now to go into the Q&A session. So it's open for questions now.

[Operator Instructions] Your first question comes from Owen Humphries from Canaccord.

It looks like opportunities there are plenty here. Let's just go straight to the elephant here around the High Energy Laser. So it's signed in 2025 for completion in 2028. So it's going to take 4 years to build to have a live product in the market. Can you just talk us through how other nations or governments or defense departments are looking at this? Do they want to see a live product in market in 2028? Like how will you layer the signings and contracts? Will they say, wait for the product in market before they actually start paying you money? Or do you think that will be part of the product development process?

So let me answer the question. So first of all, the build on delivery time is not 4 years, it's about 2.5 years. So revenue generation is predominantly happening in 2026, 2027. We also aim to deliver the product earlier than contractually required. So we are very optimistic from that respect. We have in-house -- an in-house laser demonstrator, which is our 36-kilowatt demonstrator, which we use to showcase the base technology to our clients. Our laser technology is a modular technology.

So if you show them a 30, 40, 50, 60-kilowatt version here understands how the system is working. And you can understand if you scale up the system by adding more modules and by clustering more modules, you can easily understand what the resulting effect on range and power would be. So he does not need to see 100 to 150-kilowatt version to be convinced about the maturity of the product.

Nevertheless, we are trying to build our own 100-kilowatt laser weapon demonstrator, which we own and with which we can do demonstrations across the globe. That is what we have mentioned under the M&A and investment opportunities. We want to build our own demonstrator because we believe we can trigger more sales. And you're right to that respect, we can trigger more sales if we have a high-end laser demonstration -- demonstrator. And then if we have 2 models at hand that we can do even parallel demonstrations at the same time in different countries. That's our objective.

So the market wants to see some tests, most of the clients, but not all. Some clients, they are simply happy to see that a NATO client has signed a contract that is more than enough in terms of an evidence plus the client with whom we have signed this contract is a very well-established organization, very stringent and very demanding in terms of quality, maturity of the product. So this kind of quality [indiscernible] coming with this contract is for many clients enough to just say we hook on this contract and we also click in and order to the same terms and conditions, our systems from within this contract. And the contract is structured in such a way that other NATO clients can easily click in and more or less say, we want to have another 1 or 2 following the same kind of contract scheme. It is a kind of NATO best practice to structure contracts like that, and we will benefit from that.

So I'm just trying to understand like how the contracting and ordering process work while there's many opportunities countries talking to you will they take a wait-and-see approach? I'm just trying to like they may sign up that the heavy lifting is done by this partner right now in 2.5 years of your product in the field. I'm trying to work out how the timing kind of plays out here, like everyone is kind of watching or do you expect FY '26, there will be -- people get comfortable that this is live and then there'll just be an ordering process in 2026, '27 to deliver in '27, '28.

So multiple countries have ongoing procurement programs in plan, tenders coming up, sometimes even tenders being released to the market for laser weapon systems between 30 and 150 kilowatts. So we can immediately apply with partners or without partners to those kind of tenders. Those kind of tenders usually come with a kind of request for demonstration, which we can fulfill because we have those demonstrators at hand, whereas our competitors, most of them don't have demonstrators at hand because they have to go through real development programs. We do not need to go through a development program because our system is ready. It might be customized for specific needs, but the base product and the base technology is there, and that's the convincing argument.

Again, so some clients will ask for demonstration as being part of this overall tender process. Some other clients are happy with what they have seen with the signature of this NATO country contract and some other clients first want to see the laser weapon in operation with our demonstrator. We can do that before they give us in a sole source procurement mode of contract without going through a tender. That is typically happening in the Middle East.

But I can tell you that the contract which we have signed last week or 2 weeks ago was also a sole source procurement. The client said, there is no alternative on the market other than U.S. There's nobody who can deliver on those terms, 100-kilowatt solution. So there's no reason to go through a tender process. That's also a testimony of our unique market positioning. That's how we signed the first contract. And in those cases, usually, you have to undergo a financial audit to justify your price. That was the reason why this first contract was delayed by about half year. That's the price you have to pay if you are not going through a tender, but we were very happy to do that because it underlines our leadership position in the market.

So coming back to the time line, yes, we expect to be able to sign contracts in 2026, simply by the fact that we are now participating to tenders and that we have inquiries from countries which are ready to sign contracts without even going through a kind of demonstration process. But we are planning to do those demonstrations. We are planning to do a demonstration in Australia before end of this year, and we are planning to do a demonstration end of the first quarter next year in the Middle East, plus potentially some further tests. It depends on the time line of the other 2 campaigns. I hope that answers your question.

That's good. That's great. And just on Slide #31 there, just on the market development update. Just there's a large contract there with the Middle East R500, you talked about this for a little bit now. That's obviously a major opportunity as an existing customer. Can you just talk through any progress there in the last kind of 6 months or last little while? And the reason why I ask that is because it seems like a major catalyst or major opportunity in 2026.

This contract was planned to be a kind of successor contract of our R400 product to the Middle East or to the United Arab Emirates. The R400 to the UAE, the Finnish contract was not a counter U.S. kind of product. It was a kind of traditional Counter-Drone Warfare type of R400 product. And that was the baseline also for our R500 discussions. In the meantime, the customer -- the UAE customer has participated to various demonstrations to our live firing shootings, one we have done in Australia. And he also participated to this one campaign in the U.S., which I was mentioning some minutes ago, which was a big success for U.S. And he said that some of his internal clients want to have another R500 in the counter U.S. configuration because the market needs are changing. That is causing some more complexity in the contract negotiation. The contract is not a single client.

So we signed with the UAE armed forces, but behind that are the LAND forces, the Navy, the National Guard, the Royal Guard. So different clients are asking for different versions. So it's a complex overall setup and needs more care in the negotiation than it was originally planned, but we are optimistic, very optimistic to get this contract awarded in the first half of next year. And it will be, I would assume, the largest contract the company will have signed by that point in time.

Your next question comes from Baxter Kirk from Bell Potter.

I just wanted to touch on Clive's comment about investing in software capabilities. Can you maybe flesh that out a bit more? What does that look like from a headcount point of view? And how do you think about weighing up near-term profitability versus investing in growth?

Yes. Just a couple of comments, and I'll pass to Andreas. We have a world-leading Counter-Drone system that is very, very good at shooting down with a kinetic system of drones. The future challenge that is coming towards the market is when drones continue to get smaller, cheaper and they turn into swarms of 20 or 100 drones. And nobody has technology on the market at the moment that has the software capability to shoot down 100 drones in a short space of time.

So EOS is looking at different ways of developing software capability that could be organic in-house or it could be acquisition, and we are looking at both. Typically, we would want to do that in a way that is not a big cost drain on the organization. So we would want to do that in a way that is funded and supported by customers in some way rather than being a large cost strain. But we need to look at whether if we do it ourselves, it takes a couple of years, whereas if we do an acquisition, there will obviously be a way to accelerate growth. But maybe, Andreas, do you want to comment on the technology side and the...

I will do, before I do that, just a few more words. So yes, we have increased the team size in Australia on the software side. So I think it's almost a double -- we've almost doubled the number of software engineers over the last few months, at least the number of positions which we have opened and which we're trying to fit up with qualified software engineers. We've recruited software engineers into our Singaporean center, and we will also recruit software engineers into our U.S.-based Huntsville-based facility. So it's growing also in-house.

If you look to the technology in the past or up to today, the kind of fighting scenario was always a weapon station, a manned weapon station fighting a single drone or a single kind of threat. That was a kind of classical engagement mode that's changing now.

And if you look further into the future, the future is characterized by large quantities of swarm attacking a certain quantity of vehicles or weapon stations on ground. Those swarms are controlled by AI, by movement patterns, which you need to understand and which you need to be able to predict. It's impossible that the human being is able to do that. So we need to orchestrate our weapon stations on ground in a way that they can also be cooperating in a way that we have to have embedded command and control systems on each and any weapon station.

The weapon stations are connected in a mesh type of network, allowing them to be as intelligent as the swarm is and to be able to defeat those kinds of drones. All this is software. It's not hardware. It's all software, and that is combined with AI competence. And that's the reason why we want to invest our money in this domain to keep our advantage and our leading edge over our competitors. That is the reason why this is probably at the top end of our strategic focus in terms of technical disciplines.

Andreas. So I guess the key there is shooting as many drones down as possible in a swarm, and that's kind of a key point that you'll touch base with clients on.

Absolutely. It's the key point because we will face innovations in the future that a certain quantity of drones will attack that there is no defense option left to shoot them all down because you have this oversaturation of airspace. And yes, in that case, it's all about shooting down as many as possible, and that needs a highly accurate, highly agile kind of engagement with no more man in the loop because it simply takes too much time. So it must be fully robotic and computer-driven for that, you need to have AI. That's the key.

Okay. Fantastic. Just moving on, I can see that the 2 or more than $500 million High Energy Laser Weapon contracts with their initial discussions. Can you maybe just talk a bit more about those opportunities?

We have 2 clients having asked us to start negotiations to provide the pricing for 100-kilowatt laser weapon systems. I mean you can do your own math what that means in terms of order intake. Obviously, the prices here go down at those quantities, but it also underlines the need and the threat scenario some countries are experiencing today so much at a stage that they say we cannot wait to go through a kind of staggered acquisition process where we just buy 1 or 2, we test for 2 years and go then for 10 and then another 50 and 100, it takes them too much time.

And they say the maturity is good enough now and the threat is so high. We want to immediately equip our key infrastructure with protective measures by your weapon system, the laser weapons. That is happening now. And I mean, it's not a contract which we will sign tomorrow. It's complicated. It's a huge investment by our clients. And it's also for us a huge not only opportunity because we need to be sure that we can handle those kind of contracts. It requires a very, I would say, delicate negotiation, and we have to take care for all kind of aspects. But again, it underlines the level of confidence of the market in the U.S. and the level of opportunities which we have ahead of us.

Your next question comes from [ Giuliano Sala Tenna ] with Bell Potter.

My question was actually just asking just about those 2 larger laser contracts?

Thanks Giuliano. Drew, can we move on to the next question please.

The next question comes from Ryan Kenny.

My question is about the production capacity and time frame for the High Energy Laser Weapon. So we've heard that significant numbers could be coming through. So I'd like to know what the current annual production rate would be, how that can change over time, how that would be executed and what the capital requirements after that?

So we will produce our High Energy Laser Weapon systems in the beginning in our new innovation -- at our new innovation center in Singapore, where we move -- we are just about to move into new facilities. Those facilities have also expansion potential. In total, we can carry on about 5 contracts in parallel.

But if you talk about this kind of mass production you were referring to, that would require a different dimension of production capacity, but that will not happen in Singapore because most of our clients are insisting on having a localized production site within their territory. For the simple reason that everybody is considering laser weapons as being a key enabling technology.

Nobody wants to be dependent from another government. They all want to have the supply chain under their own control. And if you go into those kind of large quantities, even more they will insist on settling down in the country and doing it locally there. So that means Singaporean capacities will not be affected by that. We have to set up quite a significant center in the host country. As we typically go into partnership with local champions, that means usually that our local partners is providing the required capital, is providing the necessary facilities. So usually we can produce within the existing facilities. So the overall CapEx requirements are quite small.

And even if that was to happen, how long would it take, for example, to deliver 100 systems?

So typically, customers are giving a time frame of 5 to 7 years to deliver quantities like that. So in the case of 100, I would say it's rather at the high end, so probably 7 years.

I'll now hand back to Dr. Schwer for closing remarks.

So ladies and gentlemen, thank you very much for spending your time with us. Thanks for your loyalty with EOS and your trust in the EOS leadership team. I think we could demonstrate once again that we do what we say and we execute our plans. We are extremely focused. We don't follow any kind of adventure to the left and the right. We simply stick to our strategy, again, which is based on the 3 pillars of counter U.S., High Energy Laser Weapons and Space Warfare. And we will continue on that. As all the indicators are positive, we are extremely optimistic to be able to deliver to your benefit with an increasing share price and growth in the company overall. Thanks for listening. Thanks for being with us. I wish everybody a good day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.