Earnings call transcript: Astor Group Q4 2024 reports strong sales growth

Astor Group reported a significant increase in net sales for Q4 2024, reaching over 90 million SEK, alongside a robust adjusted EBITDA growth of 1600% year-over-year. Despite these strong financial results, the company’s stock saw a decline of 1.13% in early trading, reflecting investor caution amidst broader market trends. According to InvestingPro data, the company maintains an EXCELLENT financial health score of 4.71, with strong liquidity metrics showing cash reserves exceeding debt levels.

Key Takeaways

• Astor Group achieved a year-over-year net sales growth of 329% in Q4 2024.
• The company reported a full-year adjusted EBITDA margin of 13%.
• Astor Group is targeting 400 million SEK in revenue by 2026.
• The defense market’s growth, especially in electronic warfare and counter-drone technologies, presents significant opportunities.

Company Performance

Astor Group’s Q4 2024 results highlighted its strong position within the defense technology sector, with net sales surpassing 90 million SEK and a notable EBITDA margin of 20-22%. The company demonstrated exceptional growth, with net sales increasing by 329% compared to the previous year. This performance aligns with the broader trend of increased defense spending in Europe, particularly in Sweden.

Financial Highlights

• Q4 2024 Net Sales: Above 90 million SEK, reflecting a 329% year-over-year increase.
• Q4 EBITDA Margin: 20-22%
• Full-Year Adjusted EBITDA Margin: 13%
• Net Debt: 19 million SEK (excluding leasing), 41 million SEK (including leasing)

Outlook & Guidance

Looking ahead, Astor Group aims to achieve 400 million SEK in revenue by 2026, with an EBITDA margin target of above 15%. The company is exploring expansion opportunities in Germany and potentially Norway, and has shortlisted over 50 companies for potential acquisition. This strategic focus on growth and diversification underscores Astor Group’s ambition to transition from a small-cap to a mid-market player. InvestingPro analysis reveals strong market confidence, with analysts maintaining a bullish consensus and the stock delivering an impressive 81.82% YTD return.

Executive Commentary

Victor Bilstrom, CFO of Astor Group, emphasized the company’s positive trajectory by stating, "We are back in black" and expressed confidence in future growth, noting, "The best is still ahead of us." These statements reflect the company’s optimistic outlook and strategic focus on becoming a leading player in the defense technology sector.

Risks and Challenges

• Supply Chain Disruptions: Potential delays in acquiring raw materials could impact production timelines.
• Market Saturation: Increased competition in the defense technology sector may pressure margins.
• Geopolitical Tensions: Fluctuations in defense spending due to geopolitical instability could affect revenue projections.
• Technological Advancements: Keeping pace with rapid technological changes is crucial for maintaining competitive advantage.

Astor Group’s Q4 2024 results indicate a strong performance in a growing market. While the stock’s slight decline suggests some investor caution, the company’s strategic initiatives and robust financial health position it well for future growth.

Full transcript - Astor Enerji AS (ASTOR) Q4 2024:

Filip, Moderator/Host, Astor Group: good morning and a warm welcome to everybody listening to today’s earnings call of Scandinavian Astor Group. The CFO, Victor Bilstream, is with me today and will guide you through the presentation in the coming, I think, half an hour, forty minutes. Let’s see. This will be followed by a question and answer session, where you can ask your questions either via text or audio line. And without further ado, I will hand over the word to Victor.

Go ahead, please.

Victor Bilstrom, CFO, Astor Group: Thank you, Filip. So, hi, everyone. Welcome to this, earnings call, you know, analysts, investors, you know, and fellow shareholders in Astor Group. So, you will join me for the coming hour here and, you know, going through the twenty twenty four numbers and we will have some q and a in the end as well. So, please prepare some questions during my speech here if you would like to ask them in the later stages.

Yeah. For the ones that don’t know me, you know, my name is Victor Bilstrom. I’m the CFO of Astor Group. I started in the Board of Directors, but I saw that the biggest, you know, impact and contribution I can make is by working as CFO. So, for about, since about two years, I’m the CFO, at Asta Group.

And my background is from asset management, you know, finance insurance. And I previously worked as a CFO for a battery company in Uppsala called Altice. I am also the fifth largest shareholder in Astell Group. And, you never know, I might be the fourth largest in the future. Now this is important to start the presentation.

We are very happy to announce that our story is back in black. It’s in Q4, it’s with capital letters. On the full year, we made the cut. So that’s the most important thing. And here, I think, a big thank you is in place to all our 150 employees, you know, for making this possible.

You know, I’m, I’m merely the numbers guy. So I don’t sell. I don’t produce. So, so, that has been your hard work that made this possible to get us into black numbers. And why is this important?

Yes. It’s important because it increases the interest to invest in our store and it increases the interest for us to be able to acquire new companies. They see us as a good owner. And above all, it makes us more interesting to, for us as an employer, for hiring key, attractive, new employees that can contribute to our success story. So I’ll start in brief for those who are not acquainted to us.

If you look at the pro form a numbers, we are about 300,000,000 Swedish last year. You know, as if it were all the companies we own today, as if we owned them the full of last year, we would have had a revenue of 300. We have a market about sixtyforty split, defense, civilian. We have we are present in three countries, you know, Germany, Sweden, Finland. We have a market cap about 1,000,000,000, maybe a little less today, but we hope that will soon be up to 1,000,000,000 again.

Employees, we are about 150 employees, all the new companies counted. We have nine production sites. We have two business areas and we have a lot of shareholders, fifteen thousand shareholders. And where are we based? We are based in Finland, in Vasa.

In Sweden, we have eight locations, you know, from Malmo in the South to Avista (NYSE:AVA) in the North. We also have a sales office in Munich, Germany. Then we have several sales agents around the world that represent a lot of the subsidiaries we have. So moving on, this is a very important picture. You know, Astor Group has only been listed for about two years now.

We made the IPO in 2023 with the market cap about 50,000,000 and sales about 50,000,000 as well. So we made a big journey to where we are today, and we still see us as a small cap, but in the future, we want to be a mid market player. We want to be much bigger than we are today. And we see the market has a lot of small caps. There are many defense companies that are very small with only maybe a few millions in sales in Swedish, and we see maybe that there are at least a couple of hundreds or maybe a thousand companies that, you know, could, could be interesting that have, you know, defense business or, interesting dual use products.

We can be, we can be the acquirer of those and and move on to the position to be a mid market player. And there are not too many companies there today. I think MILDEF is getting there, Invisio is maybe there, but we have a broader perspective, than they have. We can acquire a broad range of businesses in our business areas. Moving on, maybe this is no news to most of you, but we have a target of 400,000,000 Swedish in 2026 with the EBITDA margin above 15%.

And most of the companies, or all of the companies we own actually, are niche players. They have a very strong niche, and some of them are the dominant company in their respective segments. So moving on to the business areas. You know, we have two business areas today, as I mentioned. We have Astor Tech and Astor Industry.

And, you know, in AirSafe to the left, you know, we manufacture and sell aviation security in the form of parachutes, you know, for special cases like light grenades and special people like paratroopers. They, they are the customers to AirSafe. So, so this, we see this as, you know, a pearl that that could be a really big in the future. And and with some add on acquisitions, this could be very interesting. And we have a zillion, where we came from, you know, our electronic warfare business, we make, jammers to jam, jam everything really, but to jam drones is one thing we are currently, looking into the most, I would say.

So, Cilion have a very bright future, we think. And we have Scandiflash. I will come into more into Scandiflash later, but it’s a fantastic company here in Uppsala who make a light x-ray, which can see through steel. And then we have Astor Industry which supports the tech side and sells to other blue ships, blue ship defense companies. So we have, Maastrichtram to the left, they make, hard composite products.

They make the, you know, composite products with autoclave based. There’s no air bubbles and it’s the hardest, lightest, you know, composites to find. They have a world market, they are selling to, everyone wants to buy from Nordstrom (NYSE:JWN) because of their high quality. And then we have my proponent, who is, based in the South Of Sweden. They make etching and laser cutting.

There are only two etching companies in Sweden, actually, and Mikri Ponant is one of them. The other one is not selling to the defense industry and will not do that. So we have a key player here. They make parts to ammunition and parts to other defense material. Moving on.

So now we come to the financials. So the recent highlights. We had a very busy Q4 here with net sales above 90,000,000 with the EBITDA margin of 20% to 22. We end the year with the order book of 190,000,000 and the growth to last quarter or the quarter in 2023 was 329%. And we also listed ourselves in Borussia Stuttgart, up there in the right hand corner.

We made some visits to our friends in Ukraine. We also announced two acquisitions in I Demodeler in the South Of Sweden and in Vialas, in Finland. So moving on to the numbers, there’s a lot of numbers here. But if I want to highlight a few of them, it’s, it’s of course, the net sales growth is very strong, and the EBITDA margin for the quarter is also very strong. And, you know, on full year basis, we have adjusted EBITDA margin of 13%.

And when I say adjusted, we don’t include anything special in adjusted. We included the cost for the acquisition of Scandiflash and a few minor things. So we don’t put in a lot of things in this adjusted number. It could be a lot higher if we did that. So we also have a strong cash flow in Q4.

That’s also very important. So, so the cash flow is supporting our journey we are on. So, so we, we just with the cash flow, we can do, do some CapEx. We can do, we can do small acquisitions, just by our own cash generation. So that’s very important.

So a very strong Q4 here. And also, you can see in the bottom here that the net debt is not very high, you know, we have a net debt excluding leasing that actually decreased a little bit, year over year. So we have a net debt of about 19,000,000 end of Q4 and and 40 about 41,000,000 if you include the leasing. So there’s room to, to finance more of the things we’re doing, by loans. So moving on to the segments we have, you know, we, we, we also maybe I forgot to measure that, but we moved over to IFRS.

That’s also very huge, huge thing, last year. And when, since we did that, we also started to report segments, so the industry and technology segments. So we can see there that we have, a good EBITDA in the in both the industry and the technology side. And of course, Scanly Flash is contributing a lot, for the technology side, where, where, where we included them from Q4. So, so we expect this segment to, to be, continue to perform very well in, in, in, 2025.

I also want to highlight here that we, we, at least from my view, we, we see it as, we, we, we are not adding a lot of extra costs, on, on, on the, on the mother company. So, so we’re not the group wide costs. The overhead is, is, is not that big. And we, we try to make it, and continue and make it as slim as possible to, to be able to, make the, the, the profit go up as much as possible, of course. And we also want to support, it’s important to show for the subsidiaries we have that we are not, using up their money.

I see that someone is raising their hand, but we will take questions in the end. So please remember your question. So yearly numbers. You remember we have a 400,000,000 target in 2026. So is there a big gap here or is it not?

So if we look from the left to the right, we can see that. Our reported figures was about $220,000,000. We will reach 400,000,000 next year. But if you include the 2024 acquisitions, the pro form a, we are at $2.70. And if we include the acquisitions we made this year as if we owned them last year, we are actually above 300.

So, the gap to 400,000,000 is not very big as we see it. This is a Q quarter numbers again. We have net sales for Q4 increasing by 329%. We have the adjusted EBITDA increasing. Yeah, it’s a big number, of course, but 1600%.

Yes, we continue. So looking at the outlook for 2025, and beyond, you know, we, I got this picture from pottery dream at all at Swedbank. He made this a very nice picture where we can see the disarmament from 1995, you know, Sweden were, a much bigger military force back in the Cold War. And, but after the wall went down, and you can see here from 1995, we actually have decreased almost the most, our, you know, military spending, based on GDP. So there’s a lot of room for increasing this number.

And here we have that number. So here we can see that we are so this is Sweden’s budget for military spending in the coming years. So we can see that we are increasing them a lot. And that, of course, means a very nice thing for being in this business. It’s a bad thing for the world, but you have to be realistic and see that you have to spend more.

And when you look at these numbers, of course, they will support our growth agenda very well. So, you know, when we started our store, there were a lot of speculation, you know, if we’re we, if we were another of those buy and build stories, that, that would, you know, do a boom bust, kind of story. But we have the market with us, for many years, as long as we can see, actually, as long as we can foresee. So, so that’s a big thing, compared to the other buy and bills, I would say. And I would not say we are a buy and build, but if you make that comparison, if you want to, we are, I see another question, but we have to wait, Christian.

So we are very it’s very supportive. So you need to remember these figures. And I think a lot of Swedes and a lot of Europeans haven’t really thought about this. But this is, of course, very positive for the business

Filip, Moderator/Host, Astor Group: we are

Victor Bilstrom, CFO, Astor Group: in. So what will this mean for us? You know, I think this, works very well for us. You know, we have a strong acquisition pipeline to, to continue to work on. We will continue to expand in Northern Europe.

We are also moving to a regulated market here in 2025. We have started up that journey and, we, we see, we see that we will make it to a regulated market here in 2025. And, you know, the, the global polarization, they, they are self explanatory, these pictures, of course, but, you know, the global polarization is driving our defense business, of course. We will increase our production capacity. We will continue to, to do a lot of CapEx and invest in our businesses, but I think it will not be more than we have where it will continue in the same pace as we did last year.

And, you know, this is also self explanatory. We have, you know, 25 plus of underspending in the defense sector and as I showed you, especially in Sweden. So I think this feeds very well into our our M and A agenda. We have more than 50 companies shortlisted. There are a lot of them we have contacted, we have discussed with them, but at the moment we are eight subsidiaries in the group.

And the pipeline, split with those 50 companies is about 15% Europe, I would say, you know, ex, ex Nordic. And then we are looking into UK as well a little bit. But I I would say, you know, short term, we would like to expand in the markets we are in, and maybe, looking into our closest neighbor as well, Norway. And here are some comparative figures. I think that maybe a few of you have seen this, but it’s important.

We I think we made a lot of prudent acquisitions. We don’t overpay. We bought a lot of really good companies here the last couple of years. You know, here are four examples. The first one we made, Marstrom, when I came in actually as an investor, we bought in 2022.

You know, the multiple looks a bit high, but it included property. We we have a big property in Vestervik in Sweden, which is valued at 30,000,000. So we actually just paid for the property and got the business, for nothing. So it was a very good acquisition. And we will continue to make good acquisitions.

But of course, the recent political turmoil and the rise of defense shares will probably mean that we maybe have to pay a little bit more than we have done previously. So, but, don’t be afraid of that. So building the next powerhouse in your Northern Europe, what, why should you be part of Astell Group? So this is also important. You know, we, we, we know that, this is important for you to understand what we are doing, but it’s also important for, the companies we are, we are talking with to understand, and, we, we treat them with a lot of respect, of course, but, we, we make, we give them autonomy, you know, we, we are not, we don’t put ourselves in there and make a lot of changes.

We, you know, we, we, we try to buy companies that, that are already performing well. So, so, it’s, it’s not necessary for us to, to put ourselves there and and change things. So so but we we want them to, you know, as I said before, we want them to think big, you know, have a long term vision, invest, in their companies. And, a lot of them have been afraid to do that because of the disarmament for, for twenty five years plus. But now they are, they, they dare to do that and we should help them with that.

So, so we, and we have a lot of strategic support. We have a lot of defense industry knowledge, and of course we have the scale benefits, etcetera, and the networks. So what we’re looking for, when we are making acquisitions is, you know, they, they should be profitable. You know, it should be great teams, you know, the, the, they, it’s great if they are a niche company in the, in their sector and the long term potential. But we’re actually, we also looking into once, you know, this back in black, as I mentioned, you know, it’s important as well that we can start to buy into companies that are maybe not profitable.

Maybe they have a very interesting dual use product, that could be used, in, in, in in, in a war situation, or or other, other stuff in in the in the future. So so we we have to dare to be, to drive innovation as well. So, but, yeah, I think we can be that, player now when we have reached reached profitability. So here is a little bit more in-depth. You know, we have one of our latest acquisitions, Scandiflash, a fantastic company here in Uppsala.

We bought it for 95,000,000, that corresponded to a EBITDA figure of 5.7 for 2023. They have a market share of about 70%, and they actually, during the cold wars, used to be government owned. So they were a spin out from a Swedish Defense Research Agency. So we are very happy to have them aboard. And here’s here’s just a picture to show, how you, what kind of pictures you can take with this flash x rays of scanned flashes.

So here you can see, you can see a bullet going through, active armor and you can see what happens, with the armor. And of course, some of it you can see with, with, with the, with the, with the camera, you know, the camera developments is moving fast, but often when they done comparisons, you know, they, they see something happen with, with the regular camera, but they see something else when they see it in a flash x-ray. And and that’s the truth. So so so we we see this as a very great company for for us to to, to expand on. And then you can see in the background, there’s also the the space, you know, there’s, maybe as you’re aware, it’s a it’s a crowding space out there with a lot of satellites and other things.

And you need to understand if there’s a debris, you know, hitting your, your satellite, how will, how will the impact be? And that is something you can measure with the Scan2Flash system. So we see a great potential for this, for this company. And, yeah. And, you know, if you were asking me, you know, ScanIFlash themselves would be valued as much as our stories.

But of course, that’s my personal opinion. And here is another, acquisition we made recently. You know, it might be, you might be asking why did we acquire a company in, in the South Of Sweden making molds, and other things. And here’s why, you know, we, Maestro, they are a great company. They, they, you know, they are off, together with they can be the full service supplier to, to the defense industry.

You know, you, you, you can come, you know, the, our defense clients, they can come with to Marshall with an idea. We, we draw it, we cut it. And now with EDEM Modeler, we, we make our own mold. So we, we can have rapid, you know, rapid response if you want and not, you know, trying to find a mold partner and, you know, how can you make this mold for us? So it would be much quicker.

We can make, you know, test products. We can make everything will be a lot smoother. And Marstrom will, you know, as I show here in the middle, they will have the full, value chain, of this. So so, our defense partners can come to us and get to, you know, from an idea to finished product, we can help them with that. So that’s very important then to the right there.

We have, Abelotti, you know, the five axis machine we talked a lot about. This is a recent picture from, Vestewijk. You can see the new building there, nice lights and everything. You can see the machine there, and it’s ready to be commissioned here in March. So we hope we see a lot of potential for that, for that machine and either modeler, they have the expertise in, in, in, in this kind of production, with this kind of machines.

So, so we are also, we bought, we bought the know how about these machines. And another thing to the left there, maybe to wrap things up, you know, the, we, we bought it for about 30,000,000. They had the asset value, in their books of about 12,000,000. But if you would need to replace all the machines with new machines, and some of them are new, but if you need to replace them, with all new machines, it would cost roughly 40,000,000 Swedish. So we, we are very happy to, you know, have ED modeler aboard.

They have a great team in, in Junti, in the South Of Sweden. So with that being said, you know, I think, we we dare to believe that, the best, is still ahead of us. So you ain’t seeing nothing yet. So that’s, that’s all for me. Over to Q and A.

Filip, Moderator/Host, Astor Group: Perfect. Thank you very much, Victor, for the presentation. As outlined in the beginning, you have two options to ask you questions. You can either raise your virtual hand, which some of you already have done, so you can ask questions via audio line. What else you can do and what else, some of you already have done is ask your questions via the Q and A section.

I will then read those questions out and Victor will answer them. We will start with the audio line questions, which will be followed by the questions you sent in, before the call. And lastly, we will answer the questions in the Q and A. And I’ve seen the hand of Christian is, up for quite some time. Christian, please unmute yourself and ask a question.

Christian, Analyst/Investor: Hi, Victor. Thanks for taking my question. So the first one I have would be on the margin in the fourth quarter. I’m trying to understand a bit more how sustainable that margin is. Right?

And so how much seasonality is baked into that, and were there any one offs that benefited it?

Victor Bilstrom, CFO, Astor Group: Yeah. Sure. You know, of course, in the business we are in, you know, the the fourth quarter is, is one of the strongest we have. You know, I would say fourth quarter and the second quarter, is is a bit stronger. But, I I would say that that the margin is, you know, over a year is, is, is as strong as as, it can be even stronger than that, I would say.

Once we’ve reached even more, you know, economies of scale. But, we have our long term, target of 15%. So, that is what we have, you know, communicated in, in, margin going forward. So, so, so we will not promise anything, but, I think it can be, it could be a higher action.

Christian, Analyst/Investor: Yeah. Okay. So it sounds a bit like the margin target is rather on the conservative side than on the optimistic side, the 15%.

Victor Bilstrom, CFO, Astor Group: Oh, it depends, you know, q three, you know, with, vacation and everything is a bit slow, slower. So, so, so we will see, you know, where we, we grow very quickly. So, so we will, we will know soon, but, but as of now, you know, our communicated target is, is, about 15%.

Christian, Analyst/Investor: Okay. And then another question on the recent announcement of the first order that you received, at your German subsidiary, What is your expectation? How important is Germany as an end market for you to become over the next few years? I mean, from a news flow perspective, I mean, Germany is booming in terms of defense spending. Yeah.

I mean, there’s discussions about 200,000,000,000 additional defense spending. So this should benefit you, but how do you see this in terms of KPIs for our store?

Victor Bilstrom, CFO, Astor Group: Yeah. Sure. Sure. Good question. You know, we we wouldn’t, have have set up a flag there if we if we didn’t see, it is very important for us.

You know, there there’s a a long history with, cooperation between Swedish, Swedish people and German people. And, you know, we, we, we think we, We should definitely be, be present in the German market, and we, we will try to grow as quickly as possible. We can there with, you know, with some business, or or other current subsidiaries or or, you know, looking into acquisitions. We we all already met a few companies there, and, we would like of course to, expand there as quickly as possible, I would say. And, and, another thing to mention is that, you know, our CEO is not, he’s not here today, but, But yeah, he has good knowledge from previous experience at Saab from the German market.

So, so, that is also very important here. So, so we are not, newcomers to Germany. We, we, we, we, we don’t just set up a flag and hope for business to come, but we drive business ourselves.

Christian, Analyst/Investor: Right. And then because we are just touching point on the topic of acquisitions, with everything going on, right, and NATO probably having to raise defense spending demand is is not gonna be really an issue. Do you see this impacting your ability to acquire companies at the multiples that you have been acquiring them? Because, you know, if if their other books are starting to fill up, I would rather expect the the the price expectations of the sellers to increase. Do you see this or rather not in the in the, I mean, super small company space that you’re active in?

Victor Bilstrom, CFO, Astor Group: Yeah. Sure. Sure. Yeah. I think, at some point, you know, the expectation will go up, as of now the acquisitions we made it hasn’t.

But of course, as I said in the presentation, I think, you know, given the, the, the, the last ten days of turmoil here, I think, expectations is, you know, likely to go up. But, but, It depends. We will not overpay. But, but if there’s a good business, we have to find common ground and maybe pay a little bit more than we used to have.

Christian, Analyst/Investor: Right. And do you have a set amount of acquisitions or a financial amount that you would like to spend over the course of 2025?

Victor Bilstrom, CFO, Astor Group: Yes. That’s a good question. No. No. We haven’t communicated anything separately on that.

But, of course, we we made a couple of acquisitions last year, and I don’t think we would, like to, you know, slow the pace, down. So, so maybe similar to last year, at least, you know, if you look at, maybe, maybe a bit, larger acquisitions and then, maybe if you look at the total amount of, you know, sales, we are adding to our store, maybe that’s, that should be a, you know, a bottom line that we want to add this year as well.

Christian, Analyst/Investor: Okay. Perfect. Yep. That’s it for now. I’ll jump back into the queue.

Thanks.

Filip, Moderator/Host, Astor Group: Yep. Thank you, Christian. And, I see another hand up there from Robert. Robert, you can unmute yourself now and ask a question. Yeah.

We can hear you. Oh, good. Good.

Robert, Investor: I’m thinking about what Matiasi talking about. This says a lot of he says a lot of he’s talking about the sorry, we’re talking about the cooperation, co op, working together with other companies. So the question I have is, are there any plans for us to to cooperate with other companies such as Lindeft and Saab?

Victor Bilstrom, CFO, Astor Group: Yeah. That’s a that’s a good question. And I think, you know, what Matias have said is absolutely right. You know, we, we should cooperate more. We, we should work together instead of separately as much as we can, when, when there’s common ground or if there’s, you know, if there’s a, if there’s a similar product that we are developing or, or, or otherwise, but, of course I cannot go into any, you know, specific discussions we are having, those, it will be for the future to show, if there’s anything.

But, but, yeah. Good question.

Robert, Investor: Yeah. I know that Milledef is open to cooperate with us here. I’ll talk with some over LinkedIn and let’s say, oh, we know about them. Yeah. Why not?

Victor Bilstrom, CFO, Astor Group: Yeah. Yeah. Sure. Yeah. Of course, we have, Ulla in our board of directors who used to work at Ulla Alfredson, who used to work at MilDef.

So so, of course, the the the you know, there, there are a lot of the communications, going on between, the, the defense companies. And, and of course that that’s also important for us to, we, we want to be, you know, as, as I said, you know, a bigger player. So, so, so for us, it’s even more important to, to have these, discussions.

Robert, Investor: Good. Thank you.

Victor Bilstrom, CFO, Astor Group: Yeah. Thank you.

Filip, Moderator/Host, Astor Group: Perfect, Robert. Thank you very much, for your questions. As we have no hands raised for the time being, I would suggest let’s dive into the questions you asked beforehand. If you want to ask questions via audio line, please raise your raise your hand. We will do this then afterwards.

So, first question that was asked before the call, Victor, was Q4 one off given the good results you delivered? Maybe you answered this already before, but,

Victor Bilstrom, CFO, Astor Group: some work to

Filip, Moderator/Host, Astor Group: do with it.

Victor Bilstrom, CFO, Astor Group: Yeah. Yeah. Sure. Yeah. Of course, as I said, there are some seasonality, you know, Q4 and, you know, Q2 being one of the stronger quarters.

So so but I would say, you know, there there is a possibility for for the quarter to to have been even a little bit stronger on some some sense. But, of course, all the companies delivered and delivered very well, all the subsidiaries during the quarter. So so, it was a, you know, a very successful quarter for us. But as as we grow, as I said before there, we grow so quickly. So, of course, things could be different another quarter.

You know, if we invest and things are, you know, stationary for a little while or, or so, so if, you know, of course, It’s, it’s a difficult questions, but I think the future will tell us, how it will be.

Filip, Moderator/Host, Astor Group: Yeah. Thank you very much. The next question rates, how is the order book distributed across different customer segments and geographical regions? What types of orders dominate currently?

Victor Bilstrom, CFO, Astor Group: Yeah. Yeah. Yeah. So our order book, you know, it’s, it’s, it’s well diversified. You know, we have various customer segments, geographical regions, a lot of the subsidiaries we have, they sell globally, and not just local.

So, it’s, it’s, and it can change a lot just in one quarter, you know? So, so it’s, it’s difficult to answer that question, right. You know, in any other way than that.

Filip, Moderator/Host, Astor Group: Understood. Thank you. The next question, what is the expected timeline for converting the existing order book into revenue?

Victor Bilstrom, CFO, Astor Group: Yes. Yeah. So that that’s and that’s actually in the our quarter report. So there there is a split there between 2025 and 2026. So so we are we are already booking, sales in 2026.

Filip, Moderator/Host, Astor Group: Perfect. Next (LON:NXT) one. How do you view the possibilities of maintaining or improving, the strong margins you achieved now going forward?

Victor Bilstrom, CFO, Astor Group: Yes. That’s a good, that’s a good question. But I think, we will continue to, invest in automation. We, we will not, we will try to, increase our, our sales per, per personnel, our sales per person. So, so, I think, we would like to have, you know, at least on the industry side to see that, and the goal is to, you know, expand the margins, on the industry side, you know, to make it more, more, more efficient, more automated.

Filip, Moderator/Host, Astor Group: Perfect. Thank you. Halfway through the questions that we received before. Next, how have the recent acquisitions affected the overall business strategy and, synergies within the group?

Victor Bilstrom, CFO, Astor Group: Yes. So, I think I I, I explained it a little bit, when I talked about at least the last one there, the, the last acquisition we made here just this month, we, we took over the company. So there are a lot of synergies there. And, we, we are also in that sense becoming a bigger, a bigger supplier for the big defense companies. So there there’s, some synergy in that as well.

But, you know, if, if you talk, you know, group wide, you know, there are a lot of synergies. We try to make a cross selling, w there are a lot of interaction between the companies, you know, all the companies we have subsidiaries we have today, they used to be, you know, standalone companies, you know, CEOs, no one to talk to, no one to, you know, dentilate their problems. And then now they have a lot of other CEOs. So that is a classical, classical thing when you’re a part of a group. And, and, and also, you know, we, you know, it and, you know, security, you know, it’s, it’s, growing in importance.

So, so we can, do economies of scale of that. We can, we can hire, you know, it security for all the companies in one, and get a good, get a better price and so on and so on and so on. So, there, there are a lot of, you know, interaction and, especially with the defense industry knowledge, we, we, we, we, we hired this Freddie Baimman in the autumn area. He, he’s a very, a very well connected person and very, you know, he’s, he’s, very energetic and very, you know, he, he helps all the companies as well. So, so he’s, it’s very good to have this group of, subsidiary CEOs, that, that can work together and share, between them.

Filip, Moderator/Host, Astor Group: Okay. Thank you. The next one reads, which markets do you see the greatest potential in for international expansion and what is your strategy for establishing yourself there?

Victor Bilstrom, CFO, Astor Group: Yeah. So I think I said that as well that we’re we’re, you know, we’re we’re we’d like to expand in Germany as quickly as possible. We would also like to add another another country, and maybe our closest neighbor Norway would be a good, good starting point. So so, but of course, Europe is our focus, to to help Europe, increase their defense spending and, to to help our our our close neighbor in the East.

Filip, Moderator/Host, Astor Group: That sounds good from all perspectives.

Victor Bilstrom, CFO, Astor Group: Yeah.

Filip, Moderator/Host, Astor Group: Next question, which technological trends in the defense and security sector are you focusing on the most, and how are you investing in them?

Victor Bilstrom, CFO, Astor Group: Yeah. Yeah. So actually, I I would say the the technological trend in defense and the one we’re focusing on the most at the moment is the counter US systems that that we we, we, for example, we we we launched it, late last year, this Aster Eclipse. Yeah. And we we we see a great future for that product.

And, it’s actually like you can say it’s a spin spin off product from, the Astro four. So we use the same technology as we developed for Astro four. And we use it in the Astra Eclipse, but more, you know, it’s smaller, much, much, much smaller. And, we see it as a great potential to, to counter the drones, the drone problem where we see, that, that especially our neighboring East have, but, maybe we will have in the future.

Filip, Moderator/Host, Astor Group: Perfect. Thank you. How does your business contribute to society at large beyond delivering products and services?

Victor Bilstrom, CFO, Astor Group: Yes. That’s that’s a good question. I think, you know, in the short term, our main priority is, you know, to to to to contribute to a neighbor in war. But in the longer term, you know, everything we do is actually there’s some sense of greenness into it, you know, you know, the, in the, in the carbon fiber, everything is, you know, it needs to be more lightweight. It needs to be, you know, battery driven.

And, so, so the carbon fiber business, there’s immense potential in the long run for, for good quality carbon fiber. But of course we, we would like to, give back to society at large at some point to where probably we, we, that would show in the in the future. But but in the short term, we focus on, on helping, our neighbor there and decrease the defense spending.

Filip, Moderator/Host, Astor Group: Perfect. Sounds good. Thank you. And the last questions from the questions we received before the call, reads like this. What is the competition like in the international markets and how do you plan to compete?

Victor Bilstrom, CFO, Astor Group: Yes. So that’s a good question. A lot of good questions, but, but this one is, you know, if you look at Scandiflash, they already have, 70 of the market. And we, we are not at the moment, we don’t see that changing. We, we, we hope it will increase.

But, but of course we need to add new products. We need to, to, to update our, our, you know, product offering and, you know, all the time to, to keep it competitive. But, you know, especially in the electronic warfare business, of course, there’s a lot of good, very good companies. There are a lot of competitors, but, a lot of them are American. So so the, of course that could mean that, if we focus on Europe, you know, it could be even more positive, for us.

Yeah, I think that’s, and you know, that that’s also important in this, carbon fiber business that, that we are now, you know, we are an in house, you know, full service supplier. So, so, so we, we can be that, supplier with which, which you can come to and, and, develop new products quickly.

Filip, Moderator/Host, Astor Group: Perfect. Thank you. Thank you very much. In the meantime, I’ve seen that, we, we have another raised hand, from, Shashi, I hope I pronounced that right. Please unmute yourself and ask a question.

Shashi, Investor: Hey, thank you, Philip. Hi, Victor.

Victor Bilstrom, CFO, Astor Group: Hello.

Shashi, Investor: Hi. Very nice presentation. Thank you so much. I’m so happy to be with Astor.

Victor Bilstrom, CFO, Astor Group: No problem. I

Shashi, Investor: have a question about the Astor IV. I mean, it has been promised for a very long, but we haven’t seen any news. I mean, do you have any update about that?

Victor Bilstrom, CFO, Astor Group: Yes. Thank you, Suchar. Good question. As I said, I think the the priority in the short end, or or for for the time being is Telstra (OTC:TLGPY) Eclipse to make that into a success story. That’s where we see the closest, in the short term, the biggest potential.

And we don’t see any less interest for Astro four. You know, in the long run. It’s a it’s a great product. And as we said, I think we we mentioned that in the in the quarter report. We we we, we we we see that we are, you know, getting close to, to a good testing, testing scheme here in, down in France.

So so we just have to to wait. And we we we we don’t see any negatives. We only see that it’s, you know, it it takes a little bit longer than we have, would have wanted. But, in the meantime, we have developed this, Aster Eclipse, you know, as a spin off from us to four. So I think, I I I think we managed the situation well.

Shashi, Investor: Okay. Thank you so much.

Victor Bilstrom, CFO, Astor Group: Oh, thank you.

Filip, Moderator/Host, Astor Group: Thank you very much, Shashi, for your questions. So, now I would say let’s dive into, into the questions, that we asked in the q and a. I’ve seen we are seeing a lot of questions, so let’s try to get through them. Let’s start with the first one from Alexander, which is in Swedish, but thank you, Luisa, for the translation. What strategic initiatives do you plan to implement in 2025 to further strengthen your market position, including potential acquisitions, expansion into new geographical markets or development of current product areas?

You said earlier that you plan to become a mid cap player. How will you work towards further?

Victor Bilstrom, CFO, Astor Group: Yeah. For us, it’s important to grow, you know, both organically and, you know, and through acquisitions, you know, maybe I, I forgot to say that, but, but there also, there’s this aspect that we can pay with for acquisitions with, you know, giving out shares. That that’s where we that’s where we wanted to be. And now we are there. So we don’t have to, you know, always, raise, raise, cash, through, a direct to rise issues similar.

So so, I think, we we would like to, you know, grow as quickly as possible. And, Yeah, I think I, I, I touched upon that a lot. You know, we, we, we, we want to expand in Germany. We want to maybe move into another Nordic country here. And, and, we want to see, our, our current businesses growing a lot and maybe we will add a new business area.

That is also something we are looking into. I just need to shut the window.

Filip, Moderator/Host, Astor Group: No, no, no worries. All right. And let’s continue with the next one. Short question. Are you allowed to sell to NATO?

If yes, what is the market outlook for on NATO level?

Victor Bilstrom, CFO, Astor Group: Yes. Yes. That’s a good question, actually, because it’s a bit it’s a bit special for, they they have a lot of cooperation in electronic warfare, in NATO. So so we see a lot of potential there being the electronic warfare player we are. So so we think NATO will affect us positively.

Absolutely. So that is something that will, it it will not, you know, change from one day to to the other. But, in the in the long run, yes, it it’s it’s very positive.

Filip, Moderator/Host, Astor Group: Thank you. We we touched on that before, your ’25 and ’26 outlooks. One, listener would like to understand, how will you ensure that you will reach your goals for ’25 and ’26?

Victor Bilstrom, CFO, Astor Group: Yeah. Actually, we haven’t set any communicated any external goal for 2025. So we just have the goal for 2026. And as I mentioned there, the gap is not, it’s not very big as we see it. So, but I I think I will not, I will not expand on that as of now.

Filip, Moderator/Host, Astor Group: Perfect. Thank you. Do you today own a company in the AM or three d printing sector, or are you looking into that?

Victor Bilstrom, CFO, Astor Group: Yeah. Well, this is the I showed a picture of this Bellotti machine. So that’s a three d printer, in in we have in Vestervik. And as far as we know, we are the only ones in Sweden which have a machine like that. We, we, we know there, there is a bigger defense company that has a similar machine, but it’s, it’s, it’s for hard materials, I think.

So, so, but, so we are, we are alone with this, with this, this machine. So we, we are, we see a lot of potential for it.

Filip, Moderator/Host, Astor Group: Thank you very much. So then there’s three questions from Thomas. Also referring to Germany again, I think we touched on it already, but I will read them out. First question is which subsidiary segments do you see as the most relevant in Germany and how do you plan to compete? You want anything to add?

Victor Bilstrom, CFO, Astor Group: You know, regarding Germany. I think I already answered that question.

Filip, Moderator/Host, Astor Group: So let’s maybe, skip to the third question of Thomas. Could you please elaborate on the expected development and overhead costs and also Acilions development costs?

Victor Bilstrom, CFO, Astor Group: Yes. Yeah. So if you look at the overhead cost, as I said in the presentation, we we we don’t want to add add any extra costs, unnecessary costs. We’re we’re, as I’ve said before, we’re we’re not trying to enrich in ourselves, but we we try to make make the make the profit per share as large as possible, for our shareholders. That, that, might of course mean that we need to invest in some development.

And I think we are at that stage where we can maybe add a little bit on development. I don’t think, Ocelium maybe, you know, Ocelium, they they are hiring more people. So in that sense, development cost will rise, but, we will hopefully meet that with new orders for for the for, for our sales, our sales agenda, you know, as as we mentioned there with Astro four, Astro Eclipse, and so on. So, I think it will be net positive. And and, also, we are looking into, we’re looking into, you know, there there might be, you know, consultants helping out, in the some of the subsidiaries, and we maybe will replace them with, on on top level, with a person.

But it it will be also be, you know, no extra cost. It will be a zero sum game, but we will get a much more focused individual, you know, focusing on our store.

Filip, Moderator/Host, Astor Group: Perfect. Thank you very much, Vicker. I think we have time for one more question. So what is the selling point of going into the Astor community as a company? How do you enhance scalability?

And does your company help each other does your companies help each other and grow? And does Astra support the single companies with strategic expertise in different areas, such as security, contacts, etcetera?

Victor Bilstrom, CFO, Astor Group: Yeah, I think, It’s yes to all those questions. The selling point, is coming into our store. I think I mentioned that, a few of them, you know, we, we have the network, we have the, you know, financial, power to help them, you know, invest in the, a lot of the companies we bought today, you know, this, machine, I talked about this, five X machine in investor week, you know, they, they talked about it for ten years, before we came in as an owner and now they have it in investor week, because we helped finance it. So, so, so we, we, we put in a lot of effort, to help them grow, we, we, on all levels. But, but we, we, we don’t want to change something that is working.

So, so we just want to give them everything they want to continue to grow.

Filip, Moderator/Host, Astor Group: Perfect. Thank you very much. We still have some questions in the in the Q and A here. I see that. In a separate document on the IR side at a later point.

Yeah, thank you from my point and, for closing remarks. I hand the word over to you again, Victor.

Victor Bilstrom, CFO, Astor Group: Oh, thank you. Thank you. Yeah. It’s, I think I already said, enough here. So, thank you for listening in.

If you’re not a shareholder today, I hope to see in the future and, please feel free to contact me directly. Also, if there’s any questions here afterwards.

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