Q&A

Frequently Asked Questions

09 June 2020

29 August 2019

Questions and answers

Q:

Can you elaborate on the work that has been done on M&A? How would you describe your progress in this area?

A:

It is an ongoing process and we move ahead when we find an opportunity that will benefit our business. To add to that, we have been looking at possible acquisitions and joint ventures over the last year, but we will only move when it makes sense for the company.

Q:

Regarding Kepler - Is this a closed chapter on your part, or will you deliver parts in any way?

A:

Kepler has chosen its strategy for the future and we remain open to support them when and if they so wish. In the meantime, we are looking forward to the launch of Kepler TARS and it will be good to once again work with our colleagues from Kepler.

Q:

Is there any news on the change of marketplace, from First North to OMX Small cap?

A:

We have done a readiness assessment by an external consultant with a list of actions as a result. The actions will be implemented over time. The ambition to transfer the listing to the main market remains.

Q:

Can you give an overview outlook on how the second quarter is looking so far. I know you cannot tell in number and specific. But more generally, are you affected by the corona virous, or is business and projects progressing as expected despite the turbulence?

A:

The impact on our business performance has thankfully been rather limited to date. Manufacturing is up and running, business development have managed to stay active despite cancellation of trade fairs and are replenishing our prospect pipeline at good pace. We have press released several contract wins since March, so I would say we are doing ok.

Q:

You had said in May that you had seen not much slowdown from Covid-19. A month later, is that still the case in terms of 2020 expected results?

A:

The impact on our business performance has been limited to date. Looking forward, manufacturing is up and running, business development have managed to continue to engage with customers and we continue to see a good pipeline of opportunities.

Q:

Have you had any indication if the shares still owned by Fouriertransform will be gradually sold on the stock market or if the intent is to find a new institutional owner as they are set for ending their ownership?

A:

We can't comment on Fouriertransform's plans.

Q:

Could you please comment on current business activity? Offer request ect?

A:

The pandemic has led to the cancellation of many trade shows and changes in the way we interact with customers, but we have moved our business development activities on-line and we have seen very positive results from those. Our pipeline remains strong and we have not seen a reduction in interest in our products.

Q:

A question specifically for the CEO. Can you please comment why your commitment regarding ownership is so absent? It sends bad signals on the market.

A:

Although this is frustrating to myself, I buy when the time is right, and I am allowed to do so.

Q:

Someone or some are selling large number of shares from UBS account(s), resulting in a downwards pressure on the stock price. Do you have any comments on this?

A:

We don't comment on shareholders trading.

Q:

Has your collaboration with Ball lead to something and/or is this still an ongoing process?

A:

A Memorandum of Understanding was entered in 2018 with Ball to conduct open-ended discussions on various topics. Nothing has materialised as of today.

Q:

AAC Clyde Space has grown significantly, but in common with other CubeSats manufacturers has revenue that would be a rounding error in conventional satellite manufacturers' accounts. How can CubeSat manufacturers transition to the mainstream?

A:

We want and expect to grow our business strongly, but we do not want to be 'conventional' satellite manufacturers. Our value is in innovating faster and being more agile and creative then the 'conventional' manufacturers. We see our market growing strongly and we will grow with it by being technically strong and commercially aggressive.

Q:

Why is are you noted in the us market otc list under aacmf Nasdaq otc foreign? Can find you also in Frankfurt mic list?

A:

AAC Clyde Space is only listed at Nasdaq First North Premier Growth Market.

Q:

Is it of practical reasons (estrange) that the company start to build in Uppsala as well. Or is it that the company wants to scale up the production?

A:

We are planning to increase our capacity.

Q:

Are there any big contracts you are competing for right now that is not yet won but that you can comment on?

A:

I'm afraid we cannot comment on any on-going business.

Q:

What impact will the GBP 2.3M grant from Scottish Enterprise have on your production capacity in the future (ie number of satellites per month) and your overall competitiveness? Will it increase your chances to win contracts already this year or first in a couple of years?

A:

The introduction of the Platform Functional Unit (PFU) will change dramatically our approach to satellite design and manufacture. As a standard, very flexible unit, we can reconfigure designs without needing to change the core of the hardware. That will improve our competitiveness in both cost and schedule. My expectation is that the main impact will be seen next year and the years after.

Q:

Several of the smaller shareholders keep seeing the value of the share being pushed down by massive dumps following almost all major positive news. One or more major owners are dumping shares, keeping the value down. Is this not a risk for becoming an acquisition target at a very low valuation? Have you considered meeting with these larger shareholders and make a deal outside the public market so that the share value is not so adversely affected?

A:

We aim to diversify our shareholder base. It is a long-term effort, where we expect to see gradual results. These efforts have high priority.

Q:

Why does it take time to get orders?

A:

The underlying trend for us as well as for the industry is clear, there is a strong demand for data and services from space that is fueling good growth. However, the sales process is long, what is common in not yet fully developed growth industries. We have a healthy and growing pipeline with potential customers.

Q:

When do you expect to get orders for constellations?

A:

We have for some time delivered satellites to customers who intend to create larger constellations. We expect several of these customers to return with larger orders in the long run, but it is up to them to decide when it is time to take this step.

Q:

What funding opportunities do those who want to send up constellations into space have?

A:

The customers are very different, and therefore have different opportunities. There is everything from established and well-funded commercial companies to startups that need funding before they can move on. Our view is that it is possible to finance a good business plan on reasonable terms.

Q:

What is your main challenge right now?

A:

Our main focus is on scaling up the production. We are actively working on this and have recently strengthened the logistics function, quality assurance and delivery capacity.

Q:

What are the plans for expansion?

A:

We are focused on growing both organically and through acquisitions to fortify our leading position within small satellites.

Q:

You have said that you are looking for acquisitions. Why does it take such time?

A:

We are actively looking for suitable acquisition candidates and have evaluated several opportunities. For us, it is important to find a partner that really suits us, with our focus on the small satellite sector.

Q:

Is there a special market that is particularly interesting for acquisitions?

A:

We have said that we would like to establish more clearly in the US, which could be done through acquisitions. The United States is the world’s largest space market, so it is natural for us to have a proper establishment there.

Q:

What is your view on the increasing competition in the market where both China and the US are investing billions in small satellite development?

A:

This shows the strong interest in small satellites and will help to increase growth. AAC Clyde Space competes very well in today’s market and has a stronger “flight heritage” than most others. We will use this to maintain a very strong position. Our goal is to be leading in the market.

Q:

Do you think China can take over the market through very low prices? If not, why?

A:

Customers weigh a variety of factors when choosing partners in space, and do not solely focus on price. These factors include reliability, performance, flight heritage and, not least, data security. If you can deliver strongly on these factors and also offer a good price, you are standing on good ground.

Q:

Security seems to be increasingly important and there are many articles about satellites being easy to hack. Have any of your satellites been hacked? What does your security look like and what is the plan going forward?

A:

Most satellites, AAC Clyde Space included, have unique features in their design, which means that very specific knowledge about each satellite is needed to be able to access it. Such knowledge is not publicly available and only authorized people have access to it. This leads to the level of security today being judged to be satisfactory. At the same time, we are preparing for the stricter security requirements that come with larger constellations and an increased degree of standardization.

Q:

Are cube satellites really the way forward?

A:

Cube satellites will play a significant role in the small satellite market for several years to come. Through these, a technological development and standardization takes place which helps to reduce costs and thereby create a commercial market based on data from space.

Q:

How are ongoing projects developing?

A:

We share information when we win bigger projects, deliver ready-made satellites and most often when they are launched into orbit. In the interim reports we also share information on how the business is developing on an overall level and comment on any deviations. However, we do not normally comment on how individual projects develop on an ongoing basis, neither in interim reports or elsewhere.

IR Contact

Mats Thideman CFO and Deputy CEO
+46 70-556 09 73 mats.thideman@aac-clydespace.com

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