Half Year 2026 Electro Optic Systems Holdings Ltd Earnings Call

August 25, 2026

Speaker #1: Thank you for standing by, and welcome to the Electro Optic Systems 2026 Half-Year Results. All participants are on listen-only mode. There will be a presentation followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to the Electro Optic Systems 2026 H1 results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you would like to ask a question via the phones, you need to press the star key followed by the number 1 on your telephone keypad. If you would like to ask a question via the webcast, please enter it into the ask a question box and click submit. I would now like to hand the conference over to Dr. Andreas Schwer, Managing Director and CEO. Please go ahead.

Speaker #1: If you'd like to ask a question via the phones, you need to press the star key followed by the number 1 on your telephone keypad.

Speaker #1: If you'd like to ask a question via the webcast, please enter it into the Ask a Question box and click Submit. I'd now like to hand the conference over to Dr. Andreas Schwer, Managing Director and CEO.

Speaker #1: Please go ahead.

Speaker #2: 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 for the first half of the 2026 year results presentation, and we are very proud to announce that the first half year has been exceptionally good.

Andreas Schwer: 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 for the H1 2026 year results presentation, and we are very proud to announce that the H1 has been exceptionally good. It has been a record year for Electro Optic Systems. Please move to slide number 4. The agenda looks like the following. We will first summarize the highlights of the H1. I will put you then into the strategic context, what has happened in particular in the H1 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.

Speaker #2: It has been a record year for Electro Optic Systems. Let's please move to slide number 4. So, the agenda looks like the following: we will first summarize the highlights of the first half-year.

Speaker #2: I will then put you into the strategic context: what has happened in particular in the first half of 2026, with a focus on the high-energy laser vaping business, and then a very strong focus on the MASS update, MASS, or recent acquisition.

Speaker #2: We then have looked at the order book, and I will give an outlook on our business development—what will happen over the next few months.

Andreas Schwer: We then have looked at our 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 are on slide number 6. To put you into the context, EOS is operating in very strong market. The H1 has been exceptionally strong from a market perspective. The conflict in Ukraine, but also in particular in the Middle East, was helping us a lot to get more traction and to achieve the results which we have achieved.

Speaker #2: I will then hand over to Clive Cuthell, our CFO, who will give you an overview of our financial performance, down to division level, and address some aspects of the cash flow. Then I will summarize the presentation by giving you a strategic outlook before we move to the question-and-answer session.

Speaker #2: Please move on. We are on slide number 6. So, to put you into context, EOS is operating in very strong markets. The first half of the year has been exceptionally strong from a market perspective.

Speaker #2: 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.

Speaker #2: 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 and core markets.

Andreas Schwer: 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 H1 of 2026. We 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. We could operate in a very complex and demanding supply chain environment, an environment where internationally lots of challenges were to be 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. This could be done because of some strategic investments which we did in the past.

Speaker #2: 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.

Speaker #2: 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 were to be faced.

Speaker #2: 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.

Speaker #2: And this could be done because of some strategic investments which we made in the past. Some of you might remember, we invested some years ago into a framework agreement with Northrop Grumman to secure the supply of a very strategic component—the 30-millimeter cannon.

Andreas Schwer: Some of you might remember, we have invested some years ago into a framework agreement with Northrop Grumman to secure us the supply of a very strategic component, the 30-millimeter cannon. That is one example why it is paying off now. We can deliver quicker than some of our competitors, and that is giving us a strategic lead. 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. We are well-positioned to capitalize on all those factors and all those framework conditions. Let us move on, please. I would like to hand over to Clive to give you the highlights of the H1 2026 financials. Please, Clive.

Speaker #2: And that's one example of why it's paying off now. We can deliver quicker than some of our competitors, and that is giving us a strategic lead.

Speaker #2: So we expect the growth to be very sustainable and robust, and we are very optimistic about the outlook over the next few months and years.

Speaker #2: So, we are well positioned to capitalize on all those factors and all those framework 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.

Speaker #2: So please, Clive.

Speaker #3: Thank you, Andreas. And good morning, everyone. 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.

Clive Cuthell: Thank you, Andreas, and good morning, everyone. As this slide shows, it has been quite a positive H1 in many respects. The revenue of AUD 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, particularly in our remote weapon system business. We are extremely pleased that in the H1 we are able to report an underlying EBITDA of AUD 21 million. As we have said previously, we have been targeting profitability for some time. The strong markets, combined with the order book and then particularly the agility that Andreas mentioned, has allowed us to achieve the revenue that has driven this positive EBITDA for the H1 of the year. The cash position and the funding position of the business has never been better.

Speaker #3: Gross margin at 58% continues a trend of positive development, particularly in our remote weapon system. We're extremely pleased that in the first half, we are able to report an underlying EBITDA of $21 million Australian dollars.

Speaker #3: As we have said previously, we've been targeting profitability for some time. The strong markets, combined with the order book and, in particular, 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.

Speaker #3: The cash position and the funding position of the business have never been better. At the end of June, we had $256 million in the bank.

Clive Cuthell: At the end of June, we had AUD 256 million in the bank. We also had undrawn debt facilities of AUD 30 million. In July, after the end of the period, we received the final tranche of the equity raise, which was a further AUD 30 million. 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 will 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 AUD 360 million to AUD 400 million, including the benefit of the MARSS business which we acquired in May. We are going to talk about that a little bit more as we go on.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: The other highlight that I'll come back to later on is that this morning we are announcing that for calendar year 2026, the range is now $360 million to $400 million.

Speaker #3: Including the benefit of the Mars business, which we acquired in May. We'll talk about that a bit more as we go on.

Speaker #3: But I will hand back to Andreas, who's going to talk more about the environment that we're dealing with and the opportunities ahead for the company.

Clive Cuthell: I will hand back to Andreas, who is going to talk more about the environment that we are dealing with and the opportunities ahead of the company.

Speaker #2: Thank you, Clive. We are on page number 8. So, EOS is active in four segments, following our strategic imperatives of becoming the number one global provider of integrated counter-UAS solutions, and secondly, to become the worldwide leader outside the US on space control and space warfare-type systems.

Andreas Schwer: Thank you, Clive. We are on page number 8. EOS is active in 4 segments following our strategic imperatives of becoming the number 1 global provider of integrated counter-UAS solutions and secondly, to become the worldwide leader outside US on space control, space warfare type of systems. In order to achieve that, we are active in the following 4 domains. Two of those domains are effector type of domains, and the other two domains are system-level type of domains. I start with the effectors. 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.

Speaker #2: In order to achieve that, we are active in the following four domains. Two of those domains are effector type of domains and the other two domains are system level type of domains.

Speaker #2: I 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.

Speaker #2: 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.

Andreas Schwer: 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 weapon 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 acquisition time, in Monaco. We have transferred the company meanwhile to France, to Nice.

Speaker #2: And that is the baseline of our business success in this particular business area. Our high-energy laser weapon business, where we succeeded in 2025 with the first worldwide 100-kilowatt laser weapon contract for export, is a domain where we expect very substantial growth in the future.

Speaker #2: This is becoming a backbone of our business, and that’s an area where the competition is not that strong. There are only a very few players in the market competing against electro-optic systems.

Speaker #2: I will come back on all those segments in a few minutes again. Most notably, here is our recent acquisition of the company Mars—the company which was, at the acquisition time, based in Monaco.

Speaker #2: We have transferred the company, meanwhile, to France—to Nice. Now, the company is active with operations in France, the UK, and Saudi Arabia. And this pillar, which was always promising, promising from day one, is now turning into an extremely positive growth area for the business.

Andreas Schwer: They are active now with operations in France and in UK and in Saudi Arabia. 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.

Speaker #2: We are now in a position to offer integrated counter-UAS 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.

Speaker #2: So that is our business which is driven by Mars and Mars is backed by its own proprietary NIDAR AI driven command and control system, a system which is fusing 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.

Andreas Schwer: 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 fusing any kind of sensor information and creating an integrated picture for the operator in order to decide automatically on which sensor or 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.

Speaker #2: I will also come back to this a little bit later on. The fourth pillar of activity is our so-called space control system, or our space business, where we are developing systems that are able to interact with any kind of space object. Interacting could go so far that we are able not only to move space debris, but also to blind satellites, temporarily or even permanently.

Speaker #2: We can disable satellites from the ground. That is a business which is coming sooner than we had expected and which we believe will become a very strong pillar as well.

Andreas Schwer: That is a business which is coming sooner than we have expected, and which we believe will 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. That is also business where there is hardly any competition outside US in a marketplace. Let's move on, please, on slide 9. Let's recap the first mega-trend, the drone warfare. I cannot repeat this often enough that the appearance of the drone in the battlefield is causing a substantial change in the overall warfare scenario. Month over month, we can see this in Ukraine, but also in the Middle East, that this kind of threat is dominating the airspace.

Speaker #2: A little bit later than the high energy laser weapon business and the Mars business, but with the same level of potential in the future.

Speaker #2: And that's also a business where there is hardly any competition outside the US in the marketplace. Let's move on, please, to slide number 9.

Speaker #2: So let's recap the first megatrend, drone warfare. I cannot repeat this often enough: the appearance of the drone on the battlefield is causing a substantial change in the overall warfare scenario.

Speaker #2: 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.

Speaker #2: It is creating a zone of up to 40 kilometers, the so-called kill zone, in between the front lines, causing almost a standstill in ground-based operations.

Andreas Schwer: It is creating a zone of up to 4 kilometer, that so-called kill zone, in between the front lines, causing almost a standstill in ground-based operation because of loitering munition, because of attacking kamikaze drones. This is becoming the threat scenario number 1, and that is the reason why the defense number 1, the defense priority number 1, will be on counter-UAS in anti-drone weapon systems. That is exactly where EOS is active, where we put all of our efforts in, and where we are so strongly positioned. Let's move on. Number 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.

Speaker #2: 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 priority number one will be on counter-UAS and anti-drone weapon systems.

Speaker #2: And that's exactly where EOS is active, where we put all of our efforts in, and where we are so strongly positioned. Let's move on.

Speaker #2: Number 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.

Speaker #2: To defeat, in the long term, those kinds of drones, nobody can afford to shoot with missiles costing up to three or four million US dollars each.

Andreas Schwer: Nobody can afford to shoot with missiles costing up to 3, 4 million of US dollars, of course, to shoot them against drones for a few thousand dollars. Not even the rich and wealthy Middle Eastern states can afford that long run. That is the reason why also those states are heavily investing into integrated counter-UAS systems such as ours, being able to offer with more affordable effectors to go against those drones with more affordable effectors. The second point is traditional 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 kind of threats that quickly. This kind of slow response, the traditional slow response, is not adequate anymore in this upcoming drone warfare, a warfare where drones can be launched in your nearest vicinity and giving you only a few seconds to react.

Speaker #2: To shoot with them against drones for a few thousand dollars. Not even the rich and wealthy Middle Eastern states can afford that in the long run.

Speaker #2: That's the reason why those states are also heavily investing in integrated counter-UAS systems, such as ours, being able to offer more affordable effectors to go against those drones with more affordable effectors.

Speaker #2: The second point is, traditionally, our 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.

Speaker #2: And this kind of slow response, the traditional slow response, is not adequate anymore. In this upcoming drone warfare—a warfare where their drones can be launched in your nearest vicinity, giving only a few seconds to react.

Speaker #2: Such a short period of time, which even requests 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.

Andreas Schwer: Such a short period of time, which even requests 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. 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 then mostly in the software area. Please move on. Slide number 11. The EOS solution is now with the acquisition of MARSS, that we can offer this kind of complete counter-drone platform.

Speaker #2: 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 and adaptation of our effectors, which happens then mostly in the software area.

Speaker #2: Please move on. Slide number 11. So the EOS solution is now, with the acquisition of MARS, that we can offer this kind of complete counter-drone platform.

Speaker #2: And I want to remind everybody that EOS is active in particular in the Middle East, with more than 60 installed bases. That means EOS is protecting more than 60 critical infrastructures in the Middle East successfully over the last few months.

Andreas Schwer: And I want to remind everybody that EOS is active, in particular in the Middle East, with more than 60 installed bases. This means EOS is protecting more than 60 critical infrastructures in the Middle East successfully over the last few months from being affected and impacted by attacks of drones or cruise missiles or rockets. We have shot down with our systems hundreds of Shahed drones and dozens of missiles 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 one and only customized and dedicated anti-drone platform. We are not competing in those markets with the traditional C4I platforms coming from the big OEMs, such as, for example, Raytheon, Lockheed Martin, or Thales.

Speaker #2: From being affected and impacted by attacks of drones or cruise missiles or rockets, we have shot down with our systems hundreds of Shahed drones and dozens of missiles and rockets.

Speaker #2: If anybody needs the testimony, we can provide firsthand testimony from the top leaders of those countries there. And what makes us extremely proud is we seem to be the one and only customized and dedicated anti-drone platform.

Speaker #2: We are not competing in those markets with the traditional C4I platforms coming from the big OEMs, such as, for example, Raytheon, Lockheed Martin, or Thales.

Speaker #2: Systems which have been developed in a very complex environment to operate very complicated systems such as Patriot or THAAD systems, which are interconnecting the different domains—land, space, air, and sea.

Andreas Schwer: Systems which have been developed in a very complex environment to operate very complicated systems such as Patriot or THAAD systems, which are interconnecting the different domains, land, space, air, and sea. That is an overkill for most of those applications. It is an overkill for what is demanded by the clients. What the clients are asking are flexible solutions, adaptive solutions to protect the single piece of infrastructure where a system which they can purchase for a much lower price is a much more appropriate solution. And this is exactly where MARSS is active, where MARSS has delivered since 2018 and 2019, and that is the reason why EOS is now at the forefront of this mega-trend. Again, not only a trend to protect military installations, a trend to also protect commercial and homeland security type of platforms. That is all possible because of our hardware-agnostic platform, MARSS.

Speaker #2: That is an overkill for most of those applications. It's an overkill for what is demanded by the clients. What the client are asking are flexible solution adapted solutions to protect the single piece of infrastructure where a system which they can purchase for much lower price is much more the more is much more an appropriate solution.

Speaker #2: And this is exactly where Mars is active, where Mars has delivered since 2018 and 2019, and that's the reason why EOS is now at the forefront of this mega trend.

Speaker #2: Again, not only is there a trend to protect military installations, but also a trend to protect commercial and homeland security type platforms. That is all possible because of our hardware-agnostic platform, Mars.

Speaker #2: Because of its history, it isn't absolutely hardware agnostic as a provider of those solutions. They can integrate any kind of sensor, whether it's a radar, electro-optic, RF, acoustic, or any kind of sensor.

Andreas Schwer: Because of its history as an absolutely hardware-agnostic provider of those solutions, they can integrate any kind of sensor, whether it is a radar, electro optic, RF, acoustic, or any kind of sensor, and any kind of effector. MARSS has 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 this, 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.

Speaker #2: And any kind of effector. MARS has integrated more than 160 different types of sensors and effectors. Nobody else has done this multitude of effectors.

Speaker #2: 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.

Speaker #2: Over and above the secret behind this, our AI-driven algorithms, we have a software package which is extremely user-intuitive and extremely flexible to handle complex types of threat scenarios.

Speaker #2: And the user-intuitive usage capability is a key point, allowing us to train operators within a few days. Everybody can operate those kinds of systems in no time, thanks to the concept of operation—a concept which allows you to operate those systems either from traditional command and control centers, war centers, but also from a simple platform like an iPad.

Andreas Schwer: 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 command control centers, war centers, but also from a simple platform like an iPad. It does not make any difference in terms of effectivity. It only depends on the customer preference. But it is extremely easy to operate. That is another key selling factor, and it is absolutely at the state of the art on how to operate those kind of platforms today and in the future. Please move on. You go to slide number 12. So this kind of operation of an integrated MARSS counter EOS system is following the following kind of action stream.

Speaker #2: It does not make any difference in terms of effectiveness; it only depends on 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 in terms of how to operate those kinds of platforms today and in the future.

Speaker #2: Please move on. Go to slide number 12. So, this kind of operation of an integrated Mars counter-UAS system follows the following kind of action stream.

Speaker #2: The system is always, continuously doing this data fusion from all those kinds of sensors I was just mentioning. It identifies any kind of intruder, any kind of object.

Andreas Schwer: The system is always continuously doing this data fusion from all those kinds of sensors I was just mentioning. It identifies any kind of intruder, any kind of object. It does then the identification to not only discriminate whether it is a hostile kind of threat, whether it is a drone or whether it is just a bird or a friendly force, it is doing the identification down to the type of effector. It can even identify the weaponry 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. This kind of library is learning day by day, and we give our clients permanent upgrades of those libraries.

Speaker #2: 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.

Speaker #2: It's doing the identification down to the type of effector. It can even identify the weaponry on those kinds of incoming threats, which is quite unusual.

Speaker #2: We are doing this by performing 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. We give our clients permanent upgrades of those libraries.

Speaker #2: That's a very good after-sales 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.

Andreas Schwer: That is a very good after-sales business to allow our clients to always be at the forefront of knowledge on what is potentially coming in and how to defeat those kind of systems in the most efficient way. This NiDAR system is giving then 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 is 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. Then the system will decide by itself on the engagement, and we shoot down those kind of drones.

Speaker #2: So this NIDAR system is then giving the recommendation to the operator to engage, and it is proposing which type of effector should take out which type of intruder.

Speaker #2: Again, this can be done with man or with a person in the loop, or it can be done autonomously. In the future, that's our prediction.

Speaker #2: It will be done more and more autonomously because there is no time for human interaction. In many cases, we will only have a few seconds for the decision-making process, requiring a fully automated robotic approach.

Speaker #2: And then the system will decide by itself on the engagement, and they shoot down those kinds of drones. That's the kind of circle of operation.

Andreas Schwer: That is 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. Again, EOS has a battle-proven system that is quite unique in anti-drone warfare. This is showing you or illustrating you how such a 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.

Speaker #2: 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 the anti-drone warfare.

Speaker #2: This is showing you just or illustrating you how such a 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.

Speaker #2: 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.

Speaker #2: 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.

Andreas Schwer: What you can see on the right side, that is more the kind of setup for a nationwide operation or an operation where you interconnect several critical infrastructures to keep the overview on what is ongoing over a certain number of sites, more than one. Please move on. Slide number 14, partners and clients. This is a collection of partnerships which we have active. You can see top-notch, first-class defense companies from all around the world, which are our proud partners, starting from Korean companies, European companies, top-notch American companies. We are partnering with them because they all appreciate our 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 two of them here. One is with BAE Systems, one of the world's leading providers of defense systems.

Speaker #2: More than one, so please move on. Slide number 14: Partners and Clients. This is a collection of partnerships which we have active. You can see top-notch, first-class defense companies from all around the world, which are our proud partners.

Speaker #2: From starting from Korean companies, European companies, top notch American companies, we are partnering with them because they all appreciate our high-end performance, our first-hit probability, and our survivability in the battlefield.

Speaker #2: We have signed a couple of new partnerships, and I just want to highlight two of them. Here, one is with BAE Systems, one of the world's leading providers of defense systems.

Speaker #2: BAE Systems has decided to use, for all its future counter-UAS applications, our NIDAR command and control software. That is an exceptional result, and it shows that one of the world market leaders has, after a very thorough review of all the options on the global market, chosen our solution.

Andreas Schwer: BAE Systems has decided to use for all of its future counter-UAS applications, our NiDAR command and control software. That is an exceptional result, and it shows that one of the world market leaders has done after a very thorough review of all the options on the global market. They've decided in our favor. They've 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 Electro Optic Systems. We also formed a partnership with a 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.

Speaker #2: They've decided in our favor. They've decided that our NIDAR system is the best of the best, and that's the reason why we are together now, shaping the future between BAE Systems and Electro Optic Systems.

Speaker #2: 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 anti-drone warfare.

Speaker #2: Those are just two 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.

Andreas Schwer: Those are just two examples of how we go into markets to minimize the time to market and to minimize the capital exposure. Let's move on, please. High-energy laser weapon. We have signed the first contract in the middle of 2025. This contract is not only running according to schedule, we are about one 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.

Speaker #2: High energy laser weapon. We signed the first contract in the middle of 2025. This contract is not only running according to schedule; we are about one year ahead of schedule.

Speaker #2: 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.

Speaker #2: 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.

Andreas Schwer: Because of that, we will enter with the 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 advantageous market, and a market which will grow significantly over the next three years, where we can play now a very strong position. So the contract with the Dutch has had a value of €71 million, but you might recall that we are able to deliver in larger quantities systems at the price of down to €30 million. So that is giving the client a huge advantage because of the large-scale opportunity.

Speaker #2: 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 make.

Speaker #2: It puts us at the forefront of this very prestigious and advantageous market. And a market which will grow significantly over the next two years, where we can now play a very, very strong position.

Speaker #2: So, the contract with the Dutch has had a value of €71 million, but you might recall that we are able to deliver systems in larger quantities at prices down to €30 million.

Speaker #2: 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.

Andreas Schwer: As I was mentioning before, we passed successfully the so-called critical design review. That's a kind of standard review you have to pass in any kind of military procurement process. That is a strong quality stamp, which we got by the client that they consider the system being ready for production now. That is the reason why we can increase or decrease the time scope delivered earlier than expected. The customer is also considering to increase the scope of this standing contract by adding other features like navalization, for example. All that, again, is a testimony of our quality, even in delivery, not only in development. Please move on. MARSS has secured in 2026 contracts for more than AUD 200 million.

Speaker #2: That's a kind of standard review you have to pass in any kind of military procurement process. That is a strong quality stamp, which we got from the client, that they consider the system to be ready for production now.

Speaker #2: And that is a reason why we can increase or decrease the time scope, deliver earlier than expected. And the customers are also considering increasing the scope of this standing contract by adding other features, like navalization, for example.

Speaker #2: So all of that, again, is a testimony to our quality—not only in development, but also in delivery. So please, let's move on. Mars has secured, in 2026 contracts, more than $200 million Australian dollars.

Speaker #2: And you might recall that we are very optimistic to be able to sign for MARS orders of up to €1 billion, which is around A$1.6 billion of orders within the first 12 months.

Andreas Schwer: 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 is the reason why we have increased the CapEx 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. 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 primes in the delivery of turnkey solutions, 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.

Speaker #2: That's the reason why we've increased the cap in earn-out from originally €500 million to €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 Mars was a turning point for Electro Optic Systems.

Speaker #2: It is giving us not only the position of being able to compete against other primes in the delivery of turnkey solutions, but also to be able to significantly scale up our revenue base, as the MARS contract size usually is higher than if you sell just normal type of equipment, normal type of effectors.

Speaker #2: So Mars, 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 $459 million and end of 2024 $136 million to now more than $846 million Australian dollars.

Andreas Schwer: 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, 459 and end of 2024, 136, to now more than AUD 846 million. That is an exceptional success. What makes us extremely optimistic, it is not only the MARSS business coming on top of it is 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. 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.

Speaker #2: That is an exceptional success. And what makes us extremely optimistic is not only the Mars 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 near future.

Speaker #2: 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 near future by European programs coming into play—also very significant programs and acquisitions coming into play.

Andreas Schwer: 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 one-third going to the Middle East, one-third at least going to Europe, and another third 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. 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.

Speaker #2: Where we expect long-term to have a balanced order book with a kind of one third going to the Middle East one third at least going to Europe and another third going to the United States and the rest of the world.

Speaker #2: So that gives us a more robust position in the market. We become less and less dependent on a single client or a single region. Please move on.

Speaker #2: This is the order book. You can see here that we have added some more lines—some more lines of very substantial opportunities, large-scale opportunities.

Speaker #2: Some of them, but not all of them, are coming from the Mars type of business opportunity. Mars has so far been only active, or predominantly active, in the Middle East, with its over 60 installations.

Andreas Schwer: 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 NATO countries, will reach out to European countries. Most of you will have been informed that there was, some days ago, the first aggressive drone attack on a European airport. It was in Leipzig, Germany, where a drone with explosive on it was attacking an Antonov aircraft. It was the first time that a weapon system was really attacking in a direct manner on a commercial airport, an 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.

Speaker #2: What will come now very soon, and much sooner than expected, also: Mars will reach out to NATO countries, will 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 a European airport.

Speaker #2: It was in Leipzig, Germany, where a drone with explosives on it was attacking an Antonov aircraft. It was the first time that a weapon system was really attacking in a direct manner at a commercial airport.

Speaker #2: An aircraft. That is, of course, causing lots of panic with most European airport operators, as well as many operators of other types of civil infrastructure all across Europe.

Speaker #2: We are overflooded by inquiries from those types of operators. We are now in very intense contact and dialogues not only with the ministries of defense across Europe, but also with the ministries of interior, with the homeland security ministries, with the police forces, and all the commercial operators all across Europe.

Andreas Schwer: We are now in very intense contacts and dialogues, not only with the ministries of defense across Europe, but also with the ministries of interior, with the homeland security ministries, with the police forces and all the commercial operators all across Europe. We expect this business to pick up in a much stronger way than we were ever expecting before. 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 cannon-based air defense, but where you can use laser weapons. That is, where you can use interceptor drones. Our interceptor drone is a drone which is not based on an explosive warhead, but which is just operating by the pure kinetic impact by hitting the attackers.

Speaker #2: And we expect this business to pick up in a much stronger way than we have ever expected before. And thanks to Mars, and thanks to our ability to deliver solutions which are also customizable for those kinds of infrastructures where you cannot use missiles, where you cannot use cannon-based air defense, but where you can use laser weapons.

Speaker #2: That is where you can use interceptor drones, and our interceptor drone is a drone which is not based on an explosive warhead but which operates purely by kinetic impact—by hitting the attackers.

Speaker #2: Those kinds of effectors—we play a dominant role with those kinds of installations. So Mars is perfectly positioned to also go into those kinds of markets, which is creating another layer of growth potential in the short run.

Andreas Schwer: Those kind of effectors will 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. 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. Please move on. Space is also getting more and more traction. I just want to highlight one country. The German government has decided, and they've 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 sub-line of this EUR 35 billion budget is denoted for our type of capability to protect space-based assets by ground-based systems.

Speaker #2: And all that has not been expected when we were starting the acquisition of Mars. That is the reason why we are more optimistic than we've ever been before.

Speaker #2: So, please move on. Space is also getting more and more traction. I just want to highlight one country. The German government has decided and they have allocated a budget of more than €35 billion, which is more than $60 billion Australian dollars, for an expanded job to defend and to protect their own space, their own military space infrastructure.

Speaker #2: A significant supply of this €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.

Andreas Schwer: This is giving us a strong outlook for our space business. We believe that, not only on the German example, because other governments will follow this example, that our space business will pick up business much earlier than we have ever expected before. We expect the space 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 precision 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 US to this kind of extent. Our ability now to combine our high-energy laser weapon technology, which we have available up to 150 kilowatts today, and which we expect to scale up up to 300 kilowatts over four years.

Speaker #2: So we believe that not only, based on the German example, but also because other governments will follow this example, our space business will pick up much earlier than we had ever expected before.

Speaker #2: And we expect the space business to become very substantial not only beyond 2030, but even before 2030. That is, again, based on our capability to track with unmatched precision 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 US to this kind of extent.

Speaker #2: And our ability now to combine our high-energy laser weapon technology, which we have available up to 150 kilowatts today and which we expect to scale up to 300 kilowatts over time.

Speaker #2: For years, to be able to combine all that together will allow us to engage against satellites from the ground, irrespective of the orbit of the satellite.

Andreas Schwer: To be able to 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. It will require localization, and that's one 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 counter space type of business. We can do that because we own all IP from A to Z. Let's move on, please. Coming up to the financial side, I would like to hand over to our CFO, Clive Cawthie, please.

Speaker #2: 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 one reason why we are able and prepared to localize—not only this kind of space-type business in NATO countries such as Germany.

Speaker #2: We will also do that in any kind of request for laser for country-based space type of business. And we can do that because we own all IP from A to Z.

Speaker #2: So, let's move on, please. We are coming now to the financial side. I would like to hand over to our CFO, Clive Cuthbert, please.

Speaker #1: Thank you, Andreas. So, on the next slide, there 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.

Clive Cuthell: Thank you, Andreas. On the next slide is a little bit more detail on the financial results for the H1. Overall, the revenue of AUD 169 million, which was announced a few weeks ago, as the chart on the right-hand side shows, that H1 revenue is the highest H1 revenue that EOS has ever achieved. 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: The other things to highlight include, obviously, the underlying EBITDA of $21 million achieved during the period. The company has, as I said earlier, been focused on profitability coming from scale for some time, and we're obviously pleased to see that being operationalized.

Clive Cuthell: The other things to highlight include, obviously, the underlying EBITDA of AUD 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 are obviously pleased to see that being operationalized. The result includes a gross margin of 58%, as the table shows. Ignoring the very unusual one-time result of 76% last year, this 58% continues the positive trend that we have seen across different parts of our business, which is attributable not just to the strong markets that we are in, but also the pricing discipline and the execution discipline that we have 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.

Speaker #1: The result includes a gross margin of 58%, as the table shows, and, ignoring the very unusual one-time result of 76% last year, this 58% continues the positive trend that we've seen across different parts of our business. This is attributable not just to the strong markets that we're in, but also to the pricing discipline and the execution discipline that we've been establishing over the last few years in EOS.

Speaker #1: 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 MARS business but also includes the results for High Energy Laser and for Remote Weapon Systems.

Clive Cuthell: 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 H1, more than 80% of the revenue in the H1 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. 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 two or three things impacting margin in the business.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: Maybe just a couple of comments on the margin mix in the business. Over the next 12 months, we expect to see two or three things impacting margin in the business.

Speaker #1: 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.

Clive Cuthell: 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 have taken over ownership, that will have a lower gross margin, but we still expect 20% EBITDA. We are not providing guidance on margins overall, but as we have indicated previously, in our industry and in our business in particular, we continue to aim for a 20% EBITDA margin overall. On the next page is the cash flow. As people who have followed us for a long time know, cash flow is very important at EOS, and it has been a strong focus for us over the last few years.

Speaker #1: On the other hand, the growth in the Mars business that we are expecting over the next 12 months, as we've taken over ownership, will have a lower gross margin, but we still expect 20% EBITDA.

Speaker #1: 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 continue to aim for a 20% EBITDA margin overall.

Speaker #1: On the next page is the cash flow, and as people who've 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.

Speaker #1: 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.

Clive Cuthell: 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. As Andreas mentioned, MARSS is a prime contractor, which is a little bit different from an OEM manufacturer that our traditional business has been. Larger projects when you are a prime contractor can be a little bit lumpy. That said, I think it is 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 have been careful with cash over the last two to three years. Over the next 12 months, we do expect to deploy capital, particularly in growing the MARSS business.

Speaker #1: Our business is evolving a little bit with the acquisition of MARS. So, as Andreas mentioned, MARS is a prime contractor, which is a little bit different from an OEM manufacturer that our traditional business has been.

Speaker #1: So, larger projects, when you're a prime contractor, can be a little bit lumpy. That said, I think it's safe to say that EOS will continue to be very disciplined in managing the cash flow, profitability, and execution on prime contracts over the next 12 months, in the same way that we've been careful with cash over the last two to three years.

Speaker #1: So, over the next 12 months, we do expect to deploy capital, particularly in growing the Mars business. Some of that will be bank guarantees.

Clive Cuthell: Some of that will be bank guarantees, some of that will be working capital. Typically, we can sometimes see in the MARSS business investments in the first few months of large contracts. With the existing MARSS order book, we may see a little bit of that over the next six 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 30 million of undrawn debt facilities, so a total of almost 300 million. 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.

Speaker #1: Some of that will be working capital, and typically, we can sometimes see in the Mars business investments in the first few months of large contracts.

Speaker #1: And with the existing Mars order book, we may see a little bit of that over the next six to twelve months. The company is well-funded.

Speaker #1: As mentioned earlier, we had more than $260 million Australian dollars in the bank at the end of June, and $30 million of undrawn debt facilities.

Speaker #1: So, a total of almost $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.

Speaker #1: We will continue to focus on scale, profitability, and cash flow. Finally, and 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.

Clive Cuthell: Finally, naturally, we are obviously very pleased that the H1 result has operationalized the growth that we have talked about over the last few reporting periods. The revenue outlook, as Andreas has indicated, is stronger than we previously expected. That is a factor of market growth. It is driven by our strategy to focus on counter-drone activity, and it is 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 H1 performance. As a result of all of these things, the full year growth outlook has been increased. The revenue that we are guiding for the full year, as I mentioned earlier, is a range of $360 million to $400 million, including the MARSS business. I am going to hand back to Andreas now for some wrap-up comments before Q&A.

Speaker #1: 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-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.

Speaker #1: 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 $360 million Australian dollars to $400 million Australian dollars, including the Mars business.

Speaker #1: I'm going to hand back to Andreas now for some wrap-up comments before Q&A.

Speaker #2: Okay. Thank you, Clive. As you have seen, our business is very stable and robust. All of our segments are performing really well. We are extremely confident in our ability to increase our growth year over year and our revenue base year over year, as the strategy is working out in a very positive manner.

Andreas Schwer: Okay. Thank you, Clive. 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 two 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 position 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 the metal bending company.

Speaker #2: The decision to focus our strategy on the two pillars—counter-drone and the so-called space controllers/space warfare—is paying 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.

Speaker #2: We are not seen as a traditional player. We are not the metal-bending company. We're the company working and being active in areas such as the anti-drone business, AI technology, software technology, high-tech technologies such as lasers, and this anti-satellite business.

Andreas Schwer: We are the company working and being active in areas such as anti-drone business, AI technology, software technology, in high-tech technology such as laser and in the anti-satellite business. Those are all key drivers which make EOS very attractive for clients, for industrial partners, and also for investors. This is giving us all the confidence to be able to execute this growth path, again, based on the more weapon systems. Much further pushed with the AI-enabled C2 command and control system capability by MARSS, further pushed by our high-energy laser weapon business, then in a 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 number 27. That's the kind of growth story which we will continue to be executed.

Speaker #2: 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.

Speaker #2: Again, based on the more weapon systems, further—much further—pushed with the AI-enabled C2 (command and control) system capability by MARS. Further pushed by our high-energy laser weapon business, then in a third step by our space warfare type of capability.

Speaker #2: This is the growth story which we have told you we will go through, and if you please go to slide number 27, that's the kind of growth story which we will continue to execute.

Speaker #2: We are currently riding an exceptionally strong wave, and we expect this wave to continue. We will benefit, with all of you together, on that wave.

Andreas Schwer: We are currently riding 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. To conclude my statements with my stand-up 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.

Speaker #2: 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.

Speaker #2: Thank you very much for your attention, and I look forward to further collaborating with all of you.

Speaker #1: Thank you. If you would like to ask a question, please press the number one on your telephone keypad. If you would like to cancel your request, please press star two.

Operator: Thank you. If you would like to ask a question via the phone, you will need to press the star key followed by the number 1 on your telephone keypad. If you would like to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset before speaking. If you would like to ask a question via the webcast, please type your question into the Ask a Question box and click Submit. Your first question from the phone comes from Owen Humphries from Canaccord. Please go ahead.

Speaker #1: If you are on a speakerphone, please pick up the handset before speaking. If you would like to ask a question via the webcast, please type your question into the "Ask a Question" box and click Submit.

Speaker #1: Your first question from the phone comes from Owen Humphreys from Canaccord. Please go ahead.

Speaker #3: Well done, guys. Great set of numbers, and it looks like the pipeline's building strongly. I've got a couple of questions here. One relates to the guidance upgrade here relating to Mars.

Owen Humphries: Well done, guys. Great set of numbers and looks like the pipeline's building strongly. 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?

Speaker #3: How much of the upgrade relates to contracts you have not secured yet?

Speaker #1: 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.

Clive Cuthell: Thanks, Owen. I will 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. If we sign additional contracts over the coming weeks, there is the possibility that they would benefit 2026. Albeit, as time passes, naturally, that will be of limited benefit to 2026. Does that cover it, Owen?

Speaker #1: These 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, naturally that will be of limited benefit to 2026.

Speaker #1: Does that cover it Owen?

Speaker #3: We got, yep. The guidance in the second half of the core businesses, call it $110 million. You've just done $170 million in the first half.

Owen Humphries: Yep. The guidance in the H2 of the core business is, call it, AUD 110 million. You have just done AUD 170 million in the H1. Is that related to supply constraints for the core business?

Speaker #3: Does that relate to supply constraints for the core business? Or is that...

Speaker #1: Yeah, thanks, Owen. We've given guidance in total of 360 to 400, which obviously includes both businesses. The first half was especially strong, Owen.

Clive Cuthell: Yeah. Thanks, Owen. We have given guidance in total of AUD 360 million to AUD 400 million, which obviously includes both businesses. The H1 was especially strong, Owen. I think it is more a reflection of the lumpiness of some of our contracts. We are expecting, as you have indicated, that the core business may not be quite as strong in the H2 as it was in the H1. Although, that is just more due to the timing of deliveries. We continue to manage capacity and supply chain constraints, and we are very comfortable about our ability to grow over the next 12 to 24 months.

Speaker #1: I think it's more a reflection of the lumpiness of some of our contracts, and 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.

Speaker #1: Although that's more due to the timing of deliveries and other factors. 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.

Speaker #3: 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, when you sign a contract, how much is required upfront for a security deposit?

Owen Humphries: Just checking the notes, the account, it looks like you have put through a AUD 77 million security deposit. Historically, can you guys give us a range of how much, when you sign a contract, how much is required up front for a security deposit? Not a number, maybe a range.

Speaker #3: Not a number, maybe a range.

Speaker #1: Yeah, 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 the 30th of June.

Clive Cuthell: Yeah. Thanks, Owen. That is right. In the detailed financial report, we have indicated that the company provided a guarantee to a potential future customer after 30 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. Just for context, the guarantee that was provided is in relation to an opportunity that is presently unsigned and unannounced, and if it results in a material contract being signed, then naturally we would update the market immediately.

Speaker #1: Typically, in our industry, we can give guarantees to customers or prospective customers sometimes, and the guarantees can sometimes be 5%, 10%, 20%.

Speaker #1: 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 unannounced, and if it results in a material contract being signed, then naturally we would update the market immediately.

Speaker #3: And then if you go to your Outlook, your business development update there, that's a new slide that's getting bigger. To me, particularly the bottom three—say you do sign a material contract, call it one of those big three there.

Owen Humphries: If you go to your outlook or your business development update there, that is a new slide that is getting bigger. To me, particularly the bottom three. Say you do sign a material contract, call it one of those big three 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 are the lead times between order and delivery and payment?

Speaker #3: How does the working capital nature go? I know most of the revenue side comes in the first year, but with procurement, what's the lead time between order and delivery, and payment?

Speaker #1: Thanks, Owen. Yeah, I think it's fair to say that we're, as Andreas has indicated, the outlook for the Mars business that we acquired is stronger than we expected, and some of that is shown on the bottom of slide 19.

Clive Cuthell: Thanks, Owen. Yeah, look, I think it is fair to say that we are, 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 H1 of the year, and as a result, balance sheet is very well positioned to support growth outlook, including the operationalizing of future opportunities such as those listed on page 19. So I hope that answers the question, Owen.

Speaker #1: We see quite a lot of opportunities to grow that business, and we do think that there may be, on some opportunities, some initial working capital investments that are modest and well within the funding position that the company has.

Speaker #1: I think, as you know, we did raise equity in the first half of the year, and as a result, the balance sheet is very well positioned to support the growth outlook, including the operationalizing of future opportunities such as those listed on page 19.

Speaker #1: So, I hope that answers the question, Owen.

Speaker #3: Yeah. Well done, guys. Great outlook for the next couple of years.

Owen Humphries: Well done, guys. Great outlook for the next couple of years.

Speaker #1: Thank you.

Clive Cuthell: Thank you.

Speaker #3: Thank you. Once again, if you'd like to ask a question, please press star one on your telephone, or if you'd like your name to be announced.

Operator: Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Baxter Kirk from Bell Potter. Please go ahead.

Speaker #3: Your next question comes from Baxter Kirk from Bell Potter. Please go ahead.

Speaker #4: Morning. Morning, guys. Can you hear me?

Baxter Kirk: Morning, guys. Can you hear me?

Speaker #1: Yes.

Clive Cuthell: Yes.

Speaker #4: Yes, yes. Yeah, great. Great result and outlook there. This question's been partially answered, but I was just hoping to get an idea on future Mars orders.

Baxter Kirk: Yes. Yeah, 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 when it is actually being delivered? Or is that more reflecting the urgency there by the Middle East customer?

Speaker #4: Is the, you know, 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 when it's actually been delivered?

Speaker #4: Or is that more reflecting, you know, the urgency there by the Middle East customer?

Speaker #1: Yeah, thanks, Baxter. I'll answer that. So, we acquired Mars in May. It came with an order book of just over $200 million Australian dollars, most of which was signed in April and May.

Clive Cuthell: Yeah. Thanks, Baxter. I will answer that. Yeah, so we acquired MARSS in May. It came with an order book of just over AUD 200 million. Most of which was signed in April and May. 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. That is because usually contracts that MARSS wins are involved in setting up new anti-drone systems to protect assets 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.

Speaker #1: And in the MARS business, it is typical that 60% to 70% of the revenue—sometimes a touch more—is earned in the first 12 to 24 months of the contract.

Speaker #1: And that's because usually the contracts that Mars wins are involved in setting up new anti-drone systems to protect assets for the customers concerned. So the profile of having front-end loaded revenue that is earned over 12 to 24 months is normal.

Speaker #1: 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 MARS, and also there's some benefit in the first half for our Remote Weapon System business from urgent operational requirements.

Clive Cuthell: That includes MARSS and also there is some benefit in H1 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 are expecting them to continue.

Speaker #1: 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.

Andreas Schwer: Right. If you allow me to add one more point, I think it is important for the understanding. 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 is always working, it is all compatible. As MARSS has integrated more than 160 type of effectors and sensors over the last couple of years, we can just use on the market whatever is available on short-term delivery, whether it is a sensor or an effector. 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. They are really required to wait for the delivery time for those kind of few sensors and effectors.

Speaker #5: Light, if you allow me to add one more point, I think it's important for the understanding. So, the prettiness of the Mars system, again, is to be able to act such as the toy LEGO.

Speaker #5: 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 Mars has integrated more than 160 types of effectors and sensors over the last couple of years, we can just use whatever is available on the market with short-term delivery.

Speaker #5: Whether it's a sensor or an effector, we can combine these very easily, allowing us to deliver much faster than other players who are only qualified for the usage of very few types of sensors and components. They are really required to wait for the delivery time for those kinds of few sensors and effectors.

Speaker #5: We are more flexible, and we can use and integrate—again, whatever is available in the short term. This is giving us the leading edge and allows us to convert orders into revenue much quicker than anybody else.

Andreas Schwer: We are more flexible. 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 quicker than anybody else.

Baxter Kirk: Yes. Thanks for clarity. Just another question. I am just looking at the market development order book pipeline. I am curious to know whether the M1 Abrams product integration is that in that pipeline there, perhaps in the US Army follow-on opportunities?

Speaker #4: Yes, thanks for the clarity. Just another question: I'm looking at the market development order book pipeline, and I'm curious to know whether the Abrams product integration is in that pipeline—perhaps in the US Army follow-on opportunities?

Speaker #1: Yeah. So, page 19 lists the opportunities, and what is listed there at the top of page 19 is the nearest of the US Army opportunities, which we've listed at $20 to $50 million.

Clive Cuthell: Yeah. So page 19 lists the opportunities. What is listed there at the top of page 19 is the nearest of the US Army opportunities, which we have listed at AUD 20 to 50 million, and relates to some of the work that we have 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 2027 than 2026. But there are sizable opportunities there, as we have indicated previously.

Speaker #1: And it 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 million indicated here, but they are a little bit further away.

Speaker #1: So, potentially more in '27 than '26, but there are sizable opportunities there, as we've indicated previously.

Speaker #4: Yeah. So this business development update pipeline slide, it relates to, sort of, you know, potential orders in the next 12 months, would you say? Or 24 months?

Baxter Kirk: Yeah. Okay. So this business development update pipeline slide, it relates to potential orders in the next 12 months, would you say, or 24 months?

Speaker #1: Yeah. This is a selection of some of the most significant and 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.

Clive Cuthell: Yeah. This is a selection of some of the most significant and the nearest opportunities. Yes, some of these we would expect to sign over the next 12 months, and some will take a little bit longer.

Speaker #4: Yeah. So maybe this.

Baxter Kirk: Yeah. So maybe it is

Clive Cuthell: But it is not exhaustive, I think is what Andreas Schwer was about to add.

Speaker #1: But it's not exhaustive. I think that's what Andreas was about to add.

Speaker #4: Yeah. 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 US Army this to be the second phase of the pre production contract phase which we expect to get and we received the first pre serial contract order last year.

Andreas Schwer: Yeah. It is not the exhaustive pipeline as other companies are reporting. This is just a selection of some key elements out of our pipeline. Yes, the focus is on very short-term execution of contracts here. To come back on your question on the US Army, this will be the second phase of the pre-production contract phase, which we expect to get. We received the first pre-serial contract order last year. The second one, which is the one which you can see in the pipeline, we expect to receive either towards end of this year or beginning of next year. Then we expect the first high volume serial contracts to come into play towards maybe end of next year or 2028.

Speaker #4: The second one, which is the one you can see here in the pipeline, we expect to receive either towards the end of this year or the beginning of next year. Then we expect the first high-volume serial contracts to come into play.

Speaker #4: Towards maybe the end of next year or 2028. That is then a substantially bigger one, and that then really goes into high-volume production to serve our weapon systems for this particular platform, which you have seen on one of the slides before.

Andreas Schwer: 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.

Speaker #4: Okay, thanks. And can you perhaps detail, you know, your localization and your production capacity in the US? You know, obviously we've seen drone tariffs come through.

Baxter Kirk: Okay, thanks. Can you perhaps detail your localization and your production capacity in the US? Obviously, we have seen drone tariffs come through, obviously not relating to counter-drone. Can you just detail to what extent you have localized in the US?

Speaker #4: Obviously, not relating to counter-drone, but could you just detail to what extent you've localized in the U.S.?

Speaker #5: Yeah. We are operating a facility in Huntsville, Alabama, which has the same kind of capacity as the one in Australia. So, we can produce there, in a one-shift operation, around 300 systems per year. In a two-shift operation, up to 500 or 600 systems per year, depending on the product mix.

Andreas Schwer: Yeah. We are operating a facility in Huntsville, Alabama, which has the same kind of capacity as our one in Australia. So we can produce there in one shift operation around 300 systems per year. In two 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 Gen Five, 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.

Speaker #5: 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, Gen 5, which is government-owned.

Speaker #5: In that facility, we will also be able to produce a couple of hundred 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.

Speaker #5: So that is the situation for remote weapon systems. Everything that relates to the Mars type of business is even easier to scale because our in-house value contribution to Mars is software.

Andreas Schwer: 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 do not need any kind of CapEx in order to do so. We just need to recruit some more software engineers. We need to increase then 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.

Speaker #5: 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.

Speaker #5: We just need to 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.

Speaker #5: But again, that is not a question of building up internal production capacity. So, the MARS type of business is extremely easy to scale. I hope that answers your question.

Speaker #4: Yeah. Yes. Thank you, Andreas and Clive. I'll leave it there.

Baxter Kirk: Yeah. Thank you, Andreas and Clive. I will leave it there.

Speaker #2: Thank you. There are no further questions at this time. We will now address any webcast questions. Your first question from the webcast comes from Amit Malik.

Operator: Thank you. 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. Amit asks, "What is the timeline for the German contracts, and who are the other bidders in for it?

Speaker #2: Amit asks, what is the timeline for the German contracts, and who are the other bidders in for it?

Speaker #5: So I assume this question relates to the so-called UTF tender that is to provide up to 4,000 R150-type weapon systems on top of military logistics trucks.

Andreas Schwer: I assume this question relates to the so-called UTF tender. That is to provide up to 4,000 R150 type of weapon systems on top of military logistics trucks. That is probably one of the biggest worldwide remote weapon system tenders over the next 10 years to come. We are in the lucky position to be one of the three 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 from the feedback we 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 one year of testing with a product.

Speaker #5: That is probably one of the biggest worldwide remote weapon system tenders over the next 10 years to come. So, we are in the lucky position to be one of the three remaining contenders. We are not permitted to disclose further information on who our remaining competitors are. We can only tell you that we are very confident, from the feedback we've 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.

Speaker #5: The client is now executing one year of testing with a product, so everybody has to deliver five units, which will be integrated on those platforms and tested extensively over one year.

Andreas Schwer: Everybody has to deliver five units, which will be integrated on those platforms and tested extensively over one year. We expect the clients to take a decision towards end of 2027. That will be also a multi-phase contract with a total volume of up to 4,000 systems. It is huge.

Speaker #5: And we expect the clients to make a decision towards the end of 2027. That will also be a multi-phase contract, with a total volume of up to 4,000 systems.

Speaker #5: It's huge.

Speaker #2: Thank you. Your next question comes from Glenn Mabet. Glenn asks, what is stopping Australian defense from purchasing CUAS for protection of local airports and infrastructure?

Operator: Thank you. Your next question comes from Glenn Mabbutt. Glenn asks, "What is stopping Australian defense purchase of C-UAS for protection of local airports and infrastructure?

Speaker #5: Nothing is stopping the Australian government from doing so. I want to remind you that we have been selected, together with Leidos and other partners, for the program called Land Rover 156. 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 operators have reached out to MOD and have declared interest in order to participate and to benefit from this program, which is coming into a kind of production phase pretty soon.

Andreas Schwer: Nothing is stopping the Australian government to do so. I want to remind we have been selected together with Leidos and other partners in the program called LAND 156 that we be the backbone for any Australian anti-drone application, whether it is for the military domain, which was the primary planned purpose in the past. 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. We expect also Australian will pick up in that 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.

Speaker #5: So we expect, also, Australia will pick up in that 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.

Speaker #2: Thank you. Your next question comes from Mike See. Mike asks, "Has Nadir from Mars been used in combat in the Middle East?"

Operator: Thank you. Your next question comes from Mike C. Mike asks, "Has NiDAR from MARSS been used in combat in the Middle East?

Speaker #5: Yes. As I was mentioning before, we have more than 60 active installations, and it's been in operational use since 2018. So that started after the Houthi rebels attacked, I think it was in 2018, some Saudi Aramco oil refineries in Saudi Arabia. That was the starting point for Mars to deploy those kinds of systems in Saudi Arabia.

Andreas Schwer: Yes, I was mentioning before, we have more than 60 active installations, and it is in operational use since 2018. That started after the Houthi rebels have attacked, I think it was 2018, some Saudi Aramco oil refineries in Saudi Arabia. That was the starting point for MARSS 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. Yes, we have 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.

Speaker #5: Today, we have in the entire Middle East more than 60 stations supporting more than 60 critical infrastructures, and yes, we have been shooting down more than 100 Shahed drones and dozens of missiles and rockets, and that is continuing.

Speaker #5: Day by day, we are defending those kinds 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.

Speaker #2: Thank you. Your next question comes from David Tobias. David asks, can HELWA shoot down ballistic missiles?

Operator: Thank you. Your next question comes from David Tobias. David asks, "Can Apollo shoot down ballistic missiles?

Speaker #5: Sorry. Who can shoot down ballistic missiles?

Andreas Schwer: Sorry, who can shoot down ballistic missiles?

Speaker #2: Rather, can the high energy laser weapons shoot down ballistic missiles?

Operator: Rather, can the high-energy laser weapons shoot down ballistic missiles?

Speaker #5: 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.

Andreas Schwer: 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 is one reason why we will go into the 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 classical missile, not against hypersonic missiles, but classical missiles. But that is 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.

Speaker #5: That's one reason why we will go into the 300-kilowatt domain—to be able to have a full C-RAM type of capability, which includes the missile segment. This will allow us to go against any kind of classical missile—not against hypersonic missiles, but classical missiles. But that's not our primary objective.

Speaker #5: Our primary objective is to become the number one anti-drone company, 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 10 years.

Andreas Schwer: There are thousands more drones being launched against targets than missiles, and that is the reason why the 100 kilowatt market will be the dominant, the kind of mass market over the next 10 years.

Speaker #2: Thank you. Unfortunately, that does conclude our time for questions today. I'll now hand the conference back to Andreas for any closing remarks.

Operator: Thank you. Unfortunately, that does conclude our time for questions today. I will now hand the conference back to Andreas for any closing remarks.

Speaker #5: 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 two pillars—two pillars of military warfare—which are now turning out to be in the center of all actions in the future.

Andreas Schwer: Ladies and gentlemen, thank you so much for being with us. Thank you so much for listening to this conference. I think the H1 of this year is providing the evidence which we have promised to deliver for a long period of time. It is the evidence and proof point that our strategy is 100% right in putting all of our efforts into a strategy which is focusing on two pillars, two 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.

Speaker #5: We will execute exactly this strategy moving forward, and as I mentioned before, we will always say what we think and do what we say.

Speaker #5: We will provide 100% transparency, and we are absolutely convinced that our growth path will be sustainable and stable to create more shareholder value.

Speaker #5: Thanks for being with us, and we are crossing our fingers for another half-year to come with great success.

Andreas Schwer: Thanks for being us, and we are crossing fingers for another half year to come with great success.

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

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