Hello everybody, welcome you all to this session here with us at Nordic Unmanned, which reported their Q1 2021 numbers today. My name is Jon Christian Harestad. I am working with Investor Relations here at Nordic Unmanned. Today I have with us our CEO, Knut Roar Wiig, which will 1stly have a short or a longer company presentation, and then we will have a Q&A session at the end. Feel free to ask questions in the chat dialogue box to the right. Without further ado, Knut Roar Wiig, let's go. Hi everyone, welcome to the Q1 presentation of Nordic Unmanned. I'm pleased to hear that so many of you have joined the presentation. I'll take you through the Q1 events, feel free to ask questions on the way, I'll answer them at the end of the presentation. I'll take the highlights 1st. In Q1, we grew the revenue by 73% compared to last year. We increased the number of flight hours by 157% compared to last quarter. We had available cash and credit lines in the end of the quarter of NOK 166 million after the private placement we did earlier in the quarter. We achieved full operational capability on the Camcopter S-100, which is very important for us. It's paving the way for the planned growth. We received the Light UAS Operator Certificate, which is necessary for the future scaling that we are planning. We started the strategy update process, where we are targeting a 2025 revenue of NOK 4 billion. I'll get back to that later. On the different stock announced events, we started our deployment in Lithuania with the Camcopter. The deployment followed after we received the 1st Camcopter from Schiebel earlier in the quarter. We did the NOK 100 million private placement for new investors and existing investors, and then a NOK 3 million private placement for employees. After a long work in the quarter, we finally got awarded the LUC, which is a major event for us, and I'll explain a bit more on this as well. We announced the teaming up with Textron Systems, where we are now also targeting the fixed-wing segment in Europe, not only rotary wing as we do with the Camcopter. We announced a MOU with Schiebel for a closer partnership on specific opportunities. We did the 1st sale in Eastern Europe in the quarter. On the revenue side, we grew the revenue to NOK 16.6 million. We are looking now on our 1st half of 2021 with a total revenue growth of 200%. We are on track to meet the growth rate that we have communicated earlier for 2021. We have had some more operational difficult environment in the quarter. The new drone regulation, the LUC regulation, came into force on the 1st of January. This has been a period of going from existing regulation to a new regulation, to a common European regulation from all the national regulations, and that has led to some delays in the start of our operations. The situation was permanently overcome earlier this year when we got LUC. We have some delays in commercial decisions. Things are taking a bit longer time for planning. We have a totally postponed delayed revenue of NOK 11 million, which we will recover in Q2 and Q3. If you look at the revenues by segment, a lot of work we did in the Q1 was within the System Integrator side and the Defense & Security side. That is related to the contract we have with the Norwegian Defence Materiel Agency. Norway represented 66% of our revenue. In that 66%, there's also the general activity in Norway and the ramp-up on the R&D activity for the rail robot project we have with the Norwegian Railway Directorate. On the Green Solutions side, it's driven by the non-Norwegian activity. The largest country is Spain, followed by Belgium. The combination of System Integration, Drone as a Service is 50/50. We see that as not our normal split. Drone as a Service will be a lot higher in Q2 and in the 1st half of 2021 and in total. If you look at the EBITDA side of the business. Obviously, the EBITDA gets affected by the postponed and delayed revenues. We will recover part of the affected EBITDA in Q2 and Q3. We have recruited 24 new employees in Q1. Of those, 15 are already onboarded, and the recruitment activity reflects the ramp-up and the scale-up activity that we are scheduling for the next quarters. We are still in a COVID-19 situation, which is affecting us negatively in this quarter as it did in the last quarter with a higher cost level. The cost is, as before, driven by medical costs, insurance costs, ineffectiveness of better planning. We have had 50% of our employees have been outside Norway in Q1, there are different travel restrictions between different European countries and different quarantine regulations. In some cases, we have had employees that are working two weeks or 14 days on, and then they have been 10 days in quarantine and four days off. It's not a long-term situation, but it's the way we need to overcome this for now. We are expecting a Q2 bump, but it's more or less in line with Q1, but the Q2 will have a higher activity, so the costs will go up. We also have an extraordinary bonus paid to the employees, something we announced in the annual report as well. The adjusted EBITDA is giving us a negative EBITDA of NOK half a million. The unadjusted is giving us an EBITDA of NOK -3.9 million. If you look at our financial position, we did raise new equity in March, with a total gross proceeds of NOK 103.5 million, where we communicated the use for this as value-adding strategic M&A activities. We have our 2nd Camcopter S-100 system to be delivered in May. There are not that many days left of May, so it will happen very soon. We have total available cash and credit lines by the end of this quarter of NOK 166 million, and it's split out on NOK 97 million in cash on the undrawn overdraft facility and the undrawn credit facility. The number of shareholders have gone from 1,748 to 3,315 during the quarter. If you look at the operational activity in 2021, with the increased number of flight hours, it also means that we've had a relatively high activity. We have been in many European countries as before flying. The process of achieving the full operational capability of the Camcopter and then putting it into operation has been a big part of what we are doing. We started the operation in Lithuania, which was not the original plan, but due to the regulatory side, we had to change our plan slightly of where we started 1st. We also started or restarted some operations again for the Lockheed Martin Indago. Many of these were stopped in the end of the year, waiting for this new regulation to come into force or how it was to come into force. We have had quite a lot of activities going on in Norway as well. As you now see off the map, the entire Europe is green for us. There are two types of colors there. If we start with the dark green color, those are countries that are under the old regulations, so we haven't transferred into the new one. You have the countries where there's light green, which are our flight permits under the new LUC regulations. Many of our large flight countries are now under LUC, and many new countries have been added. I'll tell a bit more about the LUC or the Light UAS Operator Certificate. For those of you familiar with manned aviation, this is the same thing as the AOC in manned aviation. Our LUC has been issued by the Norwegian Civil Aviation Authority, and it's valid in all EASA member states. It's more than the EU member states. It's all EASA member states. It's a common European regulation, so it's the 1st time that there is a common regulation in Europe. Actually, it's the 1st time that the continent has one joint regulation in place. It started 1st of January, and it will be replacing all existing flight permits during 2021. As you see on this quite simplified but still kind of complicated flowchart from EASA. What we have is the highest level of operational certificate, the LUC, and it gives us the privilege to do a self-assessment and to issue the permit to operate ourself. We no longer have to ask the different flight authorities or civil aviation authorities, but it's issued by ourself. As you can see of the example template that we're showing here, this is how the new permit to operate looks like. It's basically approved and signed by our accountable manager and COO, Lars, unlike before when this was a process that was outside our control. The scalability in this is very different than what we have seen before. The rest of the world is looking closely at what Europe has done because of this process. Originally, this whole LUC system should have been implemented last year, but due to COVID-19, it got postponed. This is now coming into force. During the quarter, we did 281 flights, which is an increase of 119% on the number of flight level. We participated in one national search and rescue exercise. We did 24 environmental flights. We started a new activity, which is surveillance of marine litter or maritime littering, which is looking at the general levels of litter, both of dumping of fuel or plastic or other type of litter that is observed over water. When we are looking at the flight hour revenue, we have a slight increase from Q4 in the flight hour revenue. When we are looking at the number of flight hours, we have a quite big increase from Q1 last year. When we are flying with the Camcopters, our typical flight would be four hours. Those types of flights are driving the flight hours dramatically, and that is part of our fast growth as well. Pilot here from our vessel in the quarter with the new personal equipment, including the face mask. You can see the Indago in the background on a modified landing platform adapted to the vessel type. If you look at the market, we have a solid backlog as before. In the end of the quarter, it was EUR 284 million. We have used EUR 12.8 million during the quarter. We have a currency effect. With the strengthening Norwegian kroner, the value of the backlog has gone down by NOK 18.2 million. We're going to see changes depending on the currency, similar like that going on for the new quarters, as we are reporting in Norwegian kroner and our backlog is mainly in euros. If you look at the CRM pipeline, which many of you is tracking and asking questions about this to us, we are now looking at identified sales pipeline of NOK 8.4 billion. That's an increase of 18% during the quarter. If you look at the last stage or the RFQ stage or ITT, Invitation to Tender, RFQ offer stage, it has increased by 76%. We now have NOK 950 million in that stage. Tender answers or quotations and offers submitted, and we're waiting for evaluation. We have done a definition change in this. The historical win rate has gone up because we have now taken out everything that's below NOK 2 million, as we are targeting higher and higher sales opportunities. In reality, nothing's changed during the quarter, but it's simply the way we're going to report it going forward. The interesting part here is the low prospect side and the high qualified lead side. It's the 1st quarter that we are experiencing that we don't have enough time, and we need to prioritize the incoming requirements and requests from clients. We are now seeing more requests than we can handle in the short term. We have had to say no to several opportunities lately. The qualified lead side, it's mainly driven by leads that are confirmed or received from the client. We are seeing a very high market interest. It's starting to be more global than just European. It's spread out on all business areas. After announcing the LUC, this has also increased as the clients are recognizing the value of operator with our LUC certification. If you look at the contractual triggers, that's not the point where we are receiving a lot of questions. We're trying to answer as good as we can during the quarter for those of you that are contacting us. We have some that are the same as before. We have the emission monitoring. The MOU was announced with Schiebel. It has taken longer time than what we expected. We are still in the process of negotiating our final subcontract. The scope has been slightly increased by now, also including maritime surveillance. We have OP 27, which is another question we are receiving. It's a contract that we have been bidding on jointly together with Schiebel. We are expecting news on that in Q2. It's taking longer than I think what we and everybody else expected to hear back. We have another new contract that we have been bidding for, OP 46, which we talked about before, and we have a new one called OP 1 that is also for the European Maritime Safety Agency. We have offshore energy opportunity, which is for the future offshore logistical concept trials. We have our joint police tender for system integration activity for the Norwegian and Swedish police. That's ongoing. All along these six opportunities, this represents more than NOK 500 million worth of contract value. These triggers will be in Q2 and Q3. We will be reporting them obviously when we hopefully win this. We have a historical win rate that we have talked about, so we're not going to win all of them. We're quite confident that we're going to win some of them. We have started a strategy update process. I'll give you a bit insight of the background why we have done so. We have new perspectives at this stage in the company history. When we started the company, we set some targets, and we set a strategy. During last year, we basically achieved a lot of the strategic goals of the company. When we set the initial strategy, we had constraints and restrictions on how we could think based on the amount of liquidity we had available. We're now in a different situation, and we are targeting bigger clients. We're still going to solve the client's problems, and we're still going to have the client in focus, but we're now targeting bigger problems, meaning bigger opportunities. We are still looking at the market from bottom up, but without restrictions. If it's a market opportunity, we will look at the opportunity and not disregard the opportunity due to prioritizing between our resources. We're still going to stay entrepreneurial. We strongly believe that to think entrepreneurial, be agile is very important even though we are becoming a bit bigger company. Now we are a listed company, and we are adapting to that and see how we can maintain the entrepreneurial spirit. We are looking at Nordic Unmanned as a platform. We are a platform, and we are looking at how can we push it further. The M&A is part of it. It's now in our historic strategy and in the growth we have described in the market before. We have not included M&A as part of our growth strategy. We are looking into how we can further scale within the European market. One of the markets that we are looking closely at is the U.K., and with Brexit, we think it's natural to establish Nordic Unmanned UK. That's going to happen. We're looking at how to enter the North American market or the South American market and the Middle East, and the models of doing that. We see a strong interest in our platform as an operator and as a System Integrator. When COVID-19 started, we were quite optimistic about this opportunity that could come out of the ongoing crisis. We are looking at what are the long-term opportunities that would basically come out of the post-COVID-19. We are clearly seeing that the era of drone logistics will arrive. Sustainable and same-day shipping is something that has been much more relevant over the last year or so. We've all seen how effective e-commerce has been the last year, and this is going to continue to grow. It's going to be business to consumer, it's going to be business to business. We are looking into several opportunities in that area and see a lot of growth opportunities in that area. In 2025, we are targeting our footprint on four continents within logistics, within intelligence. We have Green Solutions intelligence, we have rail intelligence, we have port intelligence. Our System integration activity is going to maintain strong and it's going to grow as well. It's going to be organic and inorganic growth. The inorganic opportunities or the M&A opportunities we are looking at now, we are looking at them from the perspective that they will contribute in our long-term organic growth, including 2025. That's very important for us. How we can scale as quickly as possible through the use of strategic partners that have presence on the ground or in the air already or in the future. As I said, we have several conversations ongoing for different large strategic partners outside of Europe. The updated strategy and the execution plan of the strategy will be presented in Q3, so basically during the Q2 presentation is what we are targeting. Overall, we are seeing a 2025 revenue target now of NOK 4 billion, which is a big number, but we're quite excited about that this is actually possible. It's been a very interesting start to the strategy process, basically with this new perspective we have. On the M&A status and opportunities, we did get some questions there as well. We gave a clear signal to the market when we raised the capital about how we're going to use them. That basically gave us a lot of inbound companies coming to us and basically sharing our view on that it's time to consolidate in this industry. We have quite a lot of opportunities to assess. Currently we are reviewing around 10 potential M&A opportunities, and we are guiding on that we will announce one to three transactions during the 1st half of 2021. We are looking at both. Strategically it's important for us, teams are important for us. The combination of shares and cash in the transactions is important for us. Also how to scale as quickly as possible is important for us. We are looking into technology, distribution, and teams that would have a good fit with our existing team. We are maintaining our 2021 growth guiding. The staff is increasing according to plan. We are targeting 70 employees by the end of 1st half, and then 100 by the end of 2021. Basically, this gives us all the resources we need to deliver the growth we are targeting. We are maintaining the EBITDA margin expectation for 2021 of around 20%. One to three M&As expected to be announced 1st half. We are now introducing our 2025 growth target of NOK 4 billion. We haven't been that clear before, but we are quite clear right now, and we are targeting to continue the increase of fleet value. Okay. That was the Q1 presentation from my side. I am looking forward to answering your questions. Thank you very much, Knut Roar, for your presentation. As you said, we will now have a short Q&A session. I do want to remind the viewers that it is possible to answer questions through the chat dialog box to your right. Without further ado, we'll start with the 1st question that's come in. What are the main drivers of the expected 2 00% growth in H1? The main drivers is basically existing ongoing operations on existing contracts, using already purchased equipment with employed employees, basically. It's basically the day-to-day business that is happening and has been happening from beginning of April and is going to happen until the end of June. We will very shortly start our 2nd deployment, and we will change deployment from Lithuania to another big European country later in June. We are going into a full utilization of all our equipment very shortly. That's basically the main driver. It's very high activity on our existing contracts and in our existing operations. Next question. Revenue grew by 73% compared to Q1 in 2020, while flight hours increased by 157% compared to Q1 2020. What is the reason for the under proportionate development in revenues? Yeah. As I said, our flight hour for our large systems, the Camcopter system, one flight would be in average around four hours. With the smaller systems, like with the Indago system, a flight would be an average of 25 minutes. When we have not been able to fly the expected amount of flight hours or start operations to fly the amount of flight hours on the Camcopters, the increase in revenue will not follow the increase in flight hours. That is the reason. If you look at the numbers, there is a dramatically difference between flying these large air vehicles and the small air vehicles. That's the main driver behind it. All right. Next question. According to the revenue split, Defense & Security contributed significantly more to revenue than Green Solutions. Defense & Security in Q1 2021 had NOK 8.5 versus NOK 12 million in 2020, as well as Green Solutions in Q1 2021 with NOK 4.5 million versus NOK 42 million in 2020. Defense & Security has thus already achieved 70% of the 2020 revenue after three months, while Green Solutions has only achieved 10%. Did the postponed revenue thus essentially relate to Green Solutions sales? Why was Green Solutions so weak and Defense & Security so strong in this? Yes. It's a right observation that most of the delayed revenue is related to Green Solutions. Everything to the delay related to the new regulation of the LUC is related to Green Solutions. The Green Solutions business area is 100% operations. That is why it's so weak in Q1, due to late start off. It's also why we are saying that the revenue is postponed and not lost, because it's also an area where we have long-term framework contracts. The annual budget from the client's point of view is unchanged. We basically have to recover the flight hours later this year. Going into Q2, the split is going to change dramatically, and Green Solutions will be the biggest business area by far. Drone as a Service will be a lot more than 50% in Q2. This will be normalized back into a more similar situation as we had in the 2nd half of 2020. Okay. Thank you. Just touching on the Drone as a Service there, could you please explain the difference between Drone as a Service and system integration revenue? System integration revenue is basically revenue we have from integrating and delivering Lockheed Martin drone systems, where we sometimes are doing modifications. We sometimes do retrofits. Sometimes we include radio systems before we deliver to the customer. There are life cycle support, training, maintenance on new and the existing fleet of systems that we have delivered. It also includes our R&D activity that are paid by customers. In this case, the Norwegian Railway Directorate is also included in that activity. Whilst on the other side, Drone as a Service is basically everything related to the operation of the drone, the data capturing, data analysis, post data processing. That's all included in that side. Okay. Next question. Have costs already been incurred in Q1 with regards to the sales of the NOK 11 million that were postponed to Q2, Q3? Have the costs been registered in Q1 even though the revenue has been postponed to Q2, Q3? Basically, we are building up capacity and to match our capacity to deliver to customer when the customer wants it and when we have the possibility to deliver it, gives us a small offset. We are saying that we will recover all of the postponed revenue, but most of the EBITDA effect of the postponed revenue. That most basically reflects that some of the cost has been taken in Q1. We have also done training, and the setup period we had on Camcopter got longer than what we expected, which gives us a better basis for flying more later, basically. Far, we have delivered 100% of the flight hours that we are supposed to deliver during three months of deployment, or three months since we started flying with the Camcopter. We are very satisfied with that because a big part of our revenue is related to the number of hours we fly. This process of being fully operational capability and the training, and the internal operation period has already showing a good stability in the deliveries within the business area. Thank you. Next question: Can you talk a little bit more about the organic growth in 2021 and 2022? What are your expectations and ambitions? Yeah. In 2021, we have all of our growth is going to be organic growth. As I said, we are not changing our guiding on growth for this year. We are maintaining it, all of it is organic growth. For next year, we haven't given any guiding for next year organic growth. We are seeing a very high capability to grow from an organization and equipment point of view, and then a very high market interest. If you look at our CRM now, I would say that most of what we are looking at would be related to revenue from Q4 and mainly from Q1 2022. The wins we are looking at is targeting the end of the year and not the next six months. The next six months, we are very busy just delivering on what we have, especially in Drone as a Service side. We're not seeing any change in the growth rate organically that we are very happy with, I think. Okay. Next question. Is the LUC a competitive advantage? It's a huge competitive advantage, and I think it's a bigger competitive advantage than what we believed before we received it. As far as we have seen, there's only one other company in Europe that has received a LUC so far, and we're now in almost the fifth month after the regulation come into force. The other one is our strategic partner, Schiebel, and they have it only for the Camcopter. We have it for our entire fleet of drones, and everything is done on the Shuina site. We're also seeing interest in the market on the advisory side to support on the governmental users or agencies as a result of announcing the LUC. We're also seeing a possible global recognition of the LUC as the 1st globally recognized permit to fly. As in the lack of something else, this is also the way that the AOC in the manned aviation has gone. We are seeing it as also in the ongoing tenders where it's a key advantage to have a LUC as part of the tenders. In the short term, yes, a big opportunity for us. Okay. We're getting a lot of questions now, so we're trying to get to as many of them as possible before we soon end here. Next question is, what is a typical M&A target? Is there something in terms of size, segment, financial profile, or et cetera? Yeah. I would say below NOK 100 million in total value, and as close to profitable as possible. With a team that has achieved something, and with a value prop that's unique and fits with us, basically. It's very hard to say what is typical in M&A as it's so fragmented. It's something that we could look at and see how this would contribute to our organic growth to 2025. That's the overall approach. Okay. Organic growth with the new 2025 revenue target of NOK 4 billion, how much do you see being organic and how much is inorganic? We are looking at it. Of the M&A activity that we're going to do the next 12 months, how much will they contribute to our organic growth in 2025, and how much will be done internally? There are synergies between them. I'm not going to be very specific on that just now as we are in the middle of the process. It's quite obvious that at this stage in our industry, there are very few companies with a big revenue. We're not looking at revenue-driven M&As, so basically buying the revenue. We are more looking at how we could build this platform into something that will generate organically the revenue and fitting the M&A activity into that. Okay. Are there any other drone operators with the Camcopter S-100 in their fleet, and what are your moats in comparison? There's a heli operator that has the Camcopter in its fleet doing flights. It's Bristow in the U.K. People do some flights as well, as we know, with it. We haven't heard about anyone else that is currently using it in Europe. There is a Canadian-U.S. company that is flying it as well for governmental users. Besides that, it's only governmental navies or land-based forces that are flying it. Okay. I think we'll take this as the last question. We're closing in on the 45-minute mark that we talked about. What does it mean when the contract backlog is defined as maximum, and it says contract backlog includes the maximum remaining estimated value of signed contract? Many of our contracts are long-term framework contracts. The clients are doing call-offs on the contracts. We're looking at the framework contract value, and our specific contract would be a call-off of the framework contract. That is what we mean. Okay. I think that was all we had time for today. Thank you very much, Knut Roar. Yeah. Thank you very much to everyone joining us today. Do you have any closing remarks? Yeah. Thank you all for your good questions. Feel free to send those questions on ir@nordicunmanned.com. We will try to answer as best as we can. If you want to follow our flight ops with the Camcopter, use flightradar24.com, and we will appear with a drone icon when we're flying. Look outside Lithuania for the time being, and then follow us as operator. We are really looking forward to this quarter, the Q2 activity, and our ongoing other activities. You will hear from us soon. Thanks a lot. Thank you very much. Have a continued nice day. See you.