Good morning, ladies and gentlemen. Welcome to the conference call of OHB regarding our nine months results for the current business year. My name is Martina Lilienthal, and the members of the management board, Marco Fuchs, Kurt Melching, and Lutz Bertling, are present here in Bremen to answer your questions after the presentation of Marco Fuchs. As always, we will do a recording of this event, and we will provide it on our homepage afterwards.
Well, thank you. Thanks, Martina. Good morning, everybody, welcome to the Q3 nine-month report. I'm sure it's a busy day today. I saw that a long list of companies are reporting today. We have put our documents already out. I hope you have been able to retain them. As always, I'd like to quickly walk you through the slides, and obviously, we have a Q&A. Of course, it's a little bit different today because it's the first quarterly report after the tender period has been completed.
It's obviously now on our way to going private, a little bit different notion, but I guess we'll have some time to discuss that, and I will also give you a little update on where we stand on that. So again, I walk you through the slides. Of course, the group is always the same, more or less. The three business segments have not changed in the last couple of months: Space Systems, Aerospace, and Digital. I don't think even in small details we had any changes. I guess the only real change is no, it's. We have changed the name of Cosmos International to OHB Orbital Access over the summer.
It was already-
It was already-
Last quarter.
Already last quarter, so nothing has changed. Very good. And actually, this slide, Strategy OHB2025: Shaping the Future, has also not changed. I mean, I'm including it here because this is the basis of what we do since a couple of years. This is the strategy we started to develop in 2019 under Lutz's guidance, and we have updated it in 2021, and it is also the baseline of what we are now doing with the going private and the different growth initiatives. So this is more or less unchanged, and by showing it, we believe it's the right strategy, and by showing it, we believe we are making good progress in implementing it. But of course, now the structure of OHB is changing.
We welcome KKR to become a minority investor in OHB. There will be a transaction with three steps. I'm sure you have been able to look at this. There will be a capital increase in OHB of 10%, at a price of EUR 44 per share, that results in 77 million capital injection. That's what is A here, that is on its way. It is waiting, its implementation is waiting a foreign direct investment authorization in Italy, which is on the way. The second part, B, that is going on is a voluntary public takeover offer by KKR, all the free float, also at a price of EUR 44 . My family will not tender. We have not tendered. We will remain a shareholder.
Nobody has tendered, not even the shares that my sister holds outside of the Fuchs pool. And then now the next slide, I will give you a quick update on the, how this is proceeding, because this tender has closed, a couple of days ago, and, I think it's in the public domain how this resulted. It's a good result. The third part of this transaction is a direct investment, via a convertible bond, of EUR 30 million into Rocket Factory Augsburg, directly by KKR. First tranche has already been, invested, and the next tranche will be invested early next year. That obviously helps, RFA a lot to move on, and, we're very happy that these, investments have been done because it's an exciting time for, micro launchers.
We're very optimistic about what's going on in the overall European launcher environment, and RFA, obviously, is working very hard with this money now to be able to launch its first rocket next year. So, why are we doing this? We are obviously enhancing our financial flexibility, we're strengthening the equity base. We believe KKR is the ideal long-term partner for us to reach our strategy that I just quickly mentioned. We want to become the leading European space company.
We have been building up the company over the last years and decades to become a leading satellite manufacturer in Germany, and now, obviously, our goal is to become a relevant player, a leading player all over Europe, and of course, not only for satellites, but also for rockets and for ground infrastructure, for downstream solutions, and for many of the things that we'll talk about a little bit later in the digital part. We believe that this investment will strengthen our growth chances. Obviously, RFA is the most tangible example for that. Obviously, the other components of our OHB 2025: Shaping the Future strategy are as important as the rest. We want to be an independent partner for our governments and institutions here in Europe.
We want to foster a European security and sovereignty in space. I guess I don't have to repeat this since, more than 20 months, we're all living in Zeitenwende, as we call it here in Germany. So we see a lot of opportunities there, and we feel this is a very good way of achieving this. My family will continue to hold the majority, as you saw in the previous slide. We don't want to sell. We believe this is good for the company, we believe this is good for the customers, and actually, I believe this is also good for the family, because I strongly believe in the future of OHB as an attractive investment.
I myself have committed to extend my contract for another five years, a couple of months ago, so I'm in it until 2028. Talking about the public takeover, of course, the price we believe was an attractive price, is an attractive price, significant premium. Just to explain the takeover offer, there is no minimum acceptance threshold. Customary closing conditions, mainly foreign direct investment approvals of a number of countries where we are active. So, this taking private, I guess, helps everybody to release value. Of course, the free float shareholders now with this significant step-up from around EUR 30, where the stock was before, and now EUR 44.
So this is the way you look at it, it's between 37% and 39% ish premium. Yeah, KKR we believe is the ideal partner. We're very happy to work with them, and so we're looking forward to closing the transaction, because that's obviously a complex process. Here you see the steps of the public takeover. Bottom line is, most of the stuff you see here has already happened. We are now at the red part, announcement of final results. They have been announced publicly yesterday, and I will come to that in the next slide. The offer price will be paid upon closing of the transaction, and again, this is, let's say, requiring some regulatory approvals.
The closing might go into next year, depending on a few judgments, so we're not actually fully aware. We believe it will be earlier, we believe it will be in Q2, but we'll see how this evolves. KKR is underway to get to seek the regulatory approvals, and this is all going on quite well. So looking now to the final results of the voluntary public takeover offer. You see here a few information that you probably have seen also already yesterday at the publication. We, as the management board, the supervisory board and KKR, are very pleased with the high acceptance. My family has not tendered any shares. We retain permanent control.
The free float shares were largely held by retail investors, and about 3.6 million shares have been tendered. Combined with the 164,000 shares that KKR already owns, this amounts currently to 21.5% of the capital, and that is shares not held by my family. So it's more than three quarters of the free float. So control, if you, if you look at the combination between the shares we own and KKR will own after the tender, currently that stands at 94%, and we feel this is a very good result in order to complete the going private.
As you know, there are different thresholds, 90% and 95%, but obviously 94% now gives us a very good likelihood to also reach the 95% and of course the listing for that. The pro forma shareholder structure that you see here next, obviously, as the name it says, is pro forma because it already includes the capital increase. Currently, we're at 17.5 million shares. When we now draw the chart at 19.2 million shares, we already include this 10% shareholder, I mean, stock share increase, and we include that, again, pro forma, in the KKR part of 5.5. Otherwise, obviously, they would not have that, as we just saw, 3.6 plus 160. So this is the assumption there.
Obviously, on our share, Fuchs family, the 12.5 million shares is exactly what we hold now. It hasn't changed, will not change. What is really up in the air is the remaining 1 million free float shares. This is about 5.7% after the dilution of the 10% capital increase. And obviously, this is also... It is intended that KKR wants to obviously own also these shares. This has been the goal, and we'll see how this will go on, but obviously, the shareholders of this 1 million shares have decided not to tender their shares at this moment of time. We'll see how this continues.
In order to reach the 95% threshold combined between Fuchs family and KKR, there would need to be another 135,000 shares to be either acquired by KKR or by Fuchs family. But this 95% threshold, we believe, is very close. So we were very confident about the results of that. So that basically concludes my update on where we stand on the going private. So we believe we're on a very good path to achieve our goals, and we're very happy that the vast majority of our free float shareholder has accepted. Quickly, I'll run through the operating updates, space segment, space system segment. We are moving along with MTG.
We are moving along very nicely with Hera, so we will launch Hera hopefully next year. PLATO is going very well. We had the mating of payload and bus. MTG, by the way, is doing very, the first one, doing very nice pictures. You see them always on the cover page. Here, Martina and Marcel have decided that that's the front page of our quarterly results this year. And maybe they are not visually so nice because those are geostationary Earth observation images, so they are taken out of 36,000 kilometers, and they are obviously very high resolution for a geo image. But they are obviously, as you all know, they are for weather and other atmospheric and climate information. Anyway, what else we are doing?
Actually, we are about to launch SARah this year. Then we're moving along. That's a good progress we're doing. We had a little acquisition a couple of weeks ago. We invested 20% in a company called Berlin Space Technologies, BST, a manufacturer of small satellites in Berlin, obviously, as the name tells everybody. They have a joint venture in India. They will open up a new facility next year in Berlin, where they manufacture small satellites. I think it's a good addition for us. We do have a similar product range in our European entities, but we believe this is a very talented team.
We're very confident that they are going to be a successful micro satellite company, and we want to help them, and we want to also learn from them on how they innovate certain things. So I guess it's a good deal for both, and maybe in the next weeks and months, we'll have more news flow from that. On aerospace, obviously, the big change on aerospace, you see here the photo of an Ariane 6. It is the Ariane 6. It's a real photo of Ariane in French Guiana in Kourou. And the message is, Ariane 6 is moving along well. We're about to do the final testing, not we, the Ariane overall industrial team, ArianeGroup, and ESA, and CNES, obviously.
But we are a proud partner of the Ariane family, of the Ariane Industrial Consortium as a supplier with MT. And those tests will evolve by late November, so I guess then we will also know exactly when in the upcoming year there will be the first launch. But overall, the program goes very well. And what has happened earlier this week was very significant. There was a space summit in Spain, Seville, there was an ESA Council, but also a space summit together with all the ministers in charge of space activities of the European Union. So it's a ESA European Union minister meeting, which regularly takes place. But obviously, that is very significant because those two organizations are separate organizations, obviously.
ESA is the more specific space agency that we all know since a long time, but the European Union has become a very, very important player in European space. So we're very happy that on the launcher segment, specifically, there have been very, very important decisions made. First one, Ariane 6 support. So Ariane will be completed, it will be introduced to the market. And for the next years, actually, for up to the 42nd rocket, there has been a so called exploitation scenario agreed. There will be further support, up to EUR 340 million per year. That's very good news for the overall Ariane 6 community and, of course, also for MT Aerospace, because that secures the commercial viability of having Ariane 6 as a large European rocket for the next years.
What also has happened is changes to the overall setup of European launchers. Vega will in the future be directly operated and marketed by Avio, that's a significant change. And for the micro launchers, there will be an opportunity opened, a so-called European Launcher Challenge, at the next Ministerial Conference in 2025, that will take place in Germany. There will be a European Launcher Challenge, where micro launchers will get the opportunity to be substantially supported to develop out of their micro launchers mid-sized launchers, for also institutional applications. So I'm very happy to hear that. Obviously, that's great news for Rocket Factory. Obviously, that's great news for the other European micro launchers.
So in Germany, we have, of course, other than RFA, also very successfully, Isar Aerospace and HyImpulse, and all of these companies hopefully will benefit and will change the ground rules of European access to space from a more monopolistic scenario, as we have it until now, into a really open, market-driven, competitive scenario. That's, I guess, a very fundamental policy change, and we're very happy to be part of that. Rocket Factory, I already said, also have benefited through the investment of KKR, and so we're doing very well there. Also, a nice progress, our GOSA joint venture, is now planning next year to have its first sea launch.
It's not orbital rockets, suborbital rockets, but importantly, this has been approved by German government to be funded by the Ministry of Transportation, and we're very happy to move along this line. So a lot of excitement in our aerospace rocket activities. On digital, I don't know, Lutz, you want to take this slide or shall I quickly walk you through?
Yeah, yeah.
As you like. Maybe you take it. Digital, I guess, is better, better done by, by Lutz.
Yeah. So what you see in the picture on the right is our multi-mission control center here in Bremen, which we have built up to become a fully independent operator of satellites and satellite constellations. We've completed this, we have first satellites with which we are directing from there, so that's an additional capability for OHB. You don't see how many seats it is. I should have taken it with a different perspective. Like, you can a bit see the different rows of computer behind us. So it's quite a large facility, satellites and satellite constellations can be controlled from Bremen.
I don't want to go too much into the data-driven portfolio, and that's actually capability, extending additional competencies, and bettering the commercial position of our services, in particular in the AIS segment, and in the usage of Copernicus data for commercial applications. Important for me is the last point. We have decided, besides one more German technology company, which is IABG from the Munich area, to invest in UNIO. UNIO is a startup and one out of two, from our point of view, two startups, which might be successful in providing seamless connectivity for any kind of mobility solution in Europe. There's one in France, one in Germany. We believe the German one is much stronger and has much better connection to the leading innovators in this area on the automotive side.
And we have decided, together with, or parallel, let's say, to, with, with IABG, to invest here through a convertible loan, which will be then converted if we decide so in, in, in the seed round. We are together with some other German, mainly German startups, but as well with one of the most important operators in Europe, which is SES. SES was one of the founding partners, but has invested again now in this round. And we really believe that, with, with this, we are opening a door for us into the, connectivity for, any kind of mobility solution, if it's rail, if it's automotive, if it's ships or, or aircraft. Very promising, enterprise and, yeah, strong opportunity for the future.
Thanks, Lutz. I don't know, you want to take that slide as well?
I can take that one as well. Honestly, 2023 is a bit of strange year. It's a strange year because our order intake is not where it should be, but this is not because we are losing any kind of contract. It's not because contracts will be canceled by our customers. It's just that because across the board, from commercial customers to national institutional to European institutions, our customers are super much in delay in awarding contracts. If you see what or if you look at what has been awarded out of the decisions of the Ministerial Conference 2022, it's practically nothing by ESA up to now. Even offers which have been handed in mid of the year are still not evaluated yet, there's still no decision. Many tenders are not even out.
So we are in the same in Germany. Next military and telecom satellites, contract award would only be next year, and so on. We see very, very delayed contract awards. Once again, we have not seen any major cancellation of any project. We have not had any major loss of contract. It's just that contracts are not awarded. This means we are standing at the moment at the end of Q3, at an order intake of only EUR 500 million. We expect by the year-end to be at EUR 700 million-EUR 800 million, which obviously is a book to bill below one. But we expect as well that if you combine 2023 and 2024, within the two years, we will be back to billion, likely even significantly above EUR 2 billion.
2 billion for the two years is our conservative scenario. So the one where we are really sure that we will make it, there's a real and an optimistic scenario above it both. So likely, if you combine the order intake of 2023 and 2024, it should be significantly above a Book to bill of one. It's very strange because across the board, even in business like our railway business, even Deutsche Bahn is late in ordering. So it goes across the board, that project awards are very much delayed compared to what our customers originally had planned and announced as their planning for competitions and project awards.
Good, and this is the chart that comes out of this.
Yeah.
But again, we see the mountains and valleys according to ESA ministerials, and I guess the next mountain will come.
The only thing is that normally 2023 should already be the mountain, and the mountain will be 2024. Because the budgets are there, they are committed at the European Space Agency, they need to be awarded. Nothing has been canceled. 2025 is already the next Ministerial Conference. They have to come to conference in 2024, and we will benefit a lot. We expect that, in particular in Earth observation, again, we benefit a lot from it. On the military side, we benefit a lot from telecom and so on. So, there is a very good, very well-filled pipeline. No, we need to be concerned because we have enough food to eat for the year to come, and very well-filled pipeline.
Thanks. So here we see the numbers. I mean, if you look at the numbers, I guess, I mean, the overall statement is, we're doing, we're doing good on revenues, but profitability, we're pretty cautious on it. Because you see here, the backlog, Lutz just explained, the total revenues was EUR 737 million. It's a good development, it's a record development. EBITDA and EBIT are a little bit lower than in the last year at this stage. And I'm sure we'll discuss that later on, and Kurt will answer that. And if you go to the net profits after minority, obviously, we also have an interest effect that significantly hits us there.
So overall, the earnings per share is lower than in the last year. And that basically resulted in the cautious outlook that we made this morning. In terms of headcount, we are growing more than 3,200 people. That's a record number. So the overall OHB Group is growing strongly and is pretty optimistically looking into the future, obviously, because of the positive things we see around space. Now, here are the numbers again. You see, revenues at a record high. Profitability, pretty much, at the second-best result we had, but lower than the previous year, but higher than any time before. So, we're not happy with that, but it is what it is.
But what is important, we had some order delays, Lutz explained. We had some inflation-related issues, and what you need to understand is these are not adjusted numbers. Non-adjusted numbers, one-time effects, transactional costs, everything that typically would lead to an adjustment is all included here. So we're not making any things here. We might have to change that at year's end because of the transaction, because of other one-time one-off effects, but this is a let's say unadjusted set of numbers. So following through this way of reporting in 2023 resulted in this set of numbers. Basically, our outlook and our guidance from the early of the year, we are confirming our top-line number. And there are some risks, but we feel comfortable to be in this range.
We'll clearly see a path to 1,100 plus, or not 1,100, EUR 1.1 billion plus. So we're comfortable with this guidance here on top line. On profitability here, EBIT and EBITDA, we're not that comfortable. There are uncertainties, as I just mentioned, in terms of order intake delay that has some profitability changes. Lutz talked about it, I mean, really in all dimensions. Also, in stuff like, I think you mentioned it also in the digital with regard to our Teledata rail stuff and so on, that has also impact on profitability if these orders
Yeah
... don't come in. So as we said here, this might lead to falling short of the guidance of the ongoing year for this year. And again, the points we see is what you just said, order intake, inflationary effects from payroll to energy costs, but also transaction related activities. Of course, we are, since many months, focusing big efforts and big team on the ongoing transaction, so these type of onwards are also part of our accounting. So this concludes the slides. You saw we have shortened our deck a little bit, because obviously, being a company on the path to going private, we don't believe that all the details we had in the past need to be presented.
It's all in the Q3 reports that has been released, so all the detail is there. And I'm sure some of these points will be now mentioned in your questions. So I'm turning it over to Martina again to moderate the Q&A session.
Yes, we will now start the Q&A session. If you would like to ask a question directly, please raise your hand, as Henry Wendisch has already done, so he will be the first speaker in a moment. And the other option would be to put the question in the chat, and then I would read it out. Good morning, Henry.
Hi, good morning. I hope you can all hear me fine. Thanks for the presentation and for the results. I have a couple of questions regarding the tender offer.
... As far as I can see that the regulatory approval by the investment and subsidy control of each country that you operate in is still pending. Do you have a rough time estimate for this? How long could this take? Maybe, maybe early as Q1 next year, or rather the second half of next year. And then following up, is the capital increase about to happen right after the closing of the tender offer, or is it going to happen in between?
Yes. Thanks, Henry. I don't, I cannot hear you now anymore. Did you, was that the only question, or it's just the-
No, I have a couple of more questions.
Okay.
Do you want to take them all at once or one after the other?
Well, I'll, I'll answer those, otherwise I'll forget them.
Okay.
Because I guess this is my question, the others might be... That's okay. Yes, we are awaiting regulatory approval, and yes, we have a list of regulatory approval basically in every country where we operate, including small countries like Austria, and Czech Republic, and obviously Italy, Sweden, Belgium, France, of course. Germany is the obviously most significant one. And foreign direct investment processes are all going on. We believe... And it's different from country to country. In some, we make quick progress, in others, it takes a long time. The early stage in the last three months has been making these filings after the announcement of the deal, and then receiving questions and answering those questions. So we're in all of these jurisdictions, we're basically in the process of providing more detailed information.
The first round has been provided, now there comes the next set of questions. And this is going very well. It's very professionally managed by the attorneys. And it results currently in a timeline that we foresee somewhere in Q2 next year to close. Different here, in one country it's maybe April, the other one is maybe May, whatever. And we're tracking that closely. So the overall transaction will close then, and the overall transaction is really two things. It's the tender becoming effective, and then obviously the shares, the 3.6 million shares that we just earlier saw, will really be transferred and really be paid. That requires the regulatory approval.
And independently from that, the capital increase, which is a 10% capital increase, free money, I mean, based on the current shares, and it will result obviously then afterwards in a stake of about 9.1 share, 9.1%. So, it's below most of the countries' threshold, but in Italy, the threshold is lower than that. So in Italy, in order to do the capital increase, there needs to be an approval first, and it has the lowest threshold. So, bottom line is, in order to implement the capital increase, there needs to be the Italian foreign direct investment approval. Only the Italian foreign direct investment approval, not from any other countries, because the other countries have a higher threshold than this 10% threshold.
And that's monitored, obviously, very carefully, and we believe it will be done earlier than what I just said. We currently believe that this should take place in the early weeks of before. So we believe the sequence will be, at first we will have a capital increase of 10%, and then a couple of actually months later, we'll have the closing of the tender. I'm just looking to Kurt and Lutz, if you have any other information, or Martina, but this is how I see the process, not being totally directly involved in this, but I'm pretty confident that that's the part of it.
All right. Thank you very much.
Any questions?
Yeah, it's maybe more of a speculative question regarding the squeeze out. Do you know the remaining shareholder structure of this, the 6% that are still remaining as of right now? And do you think, like... Because I think KKR is not going to be able to buy the 1% over the stock exchange. Do you think that maybe there are some institutional shareholders left who might be willing to trade a block? Or maybe on a more speculative side, that you feel that KKR might to increase the offer price in order to attract the remaining 1%. I just want to have a feeling of how you feel about the situation.
No, I don't believe that the offer price needs to be increased. I think this is a good offer price, and the process so far has proven that that's the case. It's actually not 1%, it's really just 0.7%, because we own already treasury stock of about 0.3%. So what is outstanding to reach the 95% is about 135,000 shares out of the 1 million, or 1.1 million shares that I just saw, showed, as outstanding shares. I am not, personally, I'm not aware about who owns those, those shares, but I believe that KKR's consultants are. I mean, I believe they have a pretty transparent understanding who owns those shares.
Obviously, it remains to be seen how to attract out of that another 135,000 shares to join, let's say, the team. Because, yes, of course, we want to reach the 95% threshold in order to have a, let's say, a going private completed from that threshold with that, that route. How that exactly will be approached is not decided yet, according to my understanding. But what I feel, my personal judgment is, is very certain that that will be successfully completed.
Okay, thanks very much. So bottom line is, you, you're gonna delist anyway, and if you manage to get above the 95%, you're just gonna have it a little bit easier?
Yes. Look, we, we never had any complications. There was not in the more than three months after the announcement, the stock price hitting close to EUR 44. There are no games going on. There have been the stock price has always been very, very easily to explain. It was EUR 44 minus the upsiding. How do you say that.
You're right. The discount of the time, I guess. It's the time value of the money. The net present value of the 44 has been basically the stock price. So there has been no games, no initiative. We have not seen any things. Again, I don't know, obviously, but at least I'm not aware of any of that, and I find the level of acceptance for such a small free float with such a high retail part, and we are really highly retailer, retail shareholders. So we have people that are not carefully monitoring these things.
We have emotional attachment to the company, so some people just say, "No, I'm waiting, I'm sitting it out." And obviously, being a retail shareholder, not tendering, you don't really run a risk that you don't get anything. If the intent, the public intent is to take the company private, obviously, there will be a moment of whatever type of sales opportunity. So the bottom line is, I see this process on a very good path.
Okay, thanks. That gave a little bit more brighter picture. Then I have a couple of more questions regarding the operative side. I know it's not, it's not gonna have an effect on the share price, but just out of curiosity, I see a lot of progress in the RFA from the RFA in the news. The launch side is going on, the UK Space Agency is behind this. I would like to know the EUR 30 million investment from KKR into RFA, how much of assuming the debt will be converted to equity, how much of a stake would KKR own? So your stake would obviously go down from the current, I think, 55.7% to, I don't know, 30 or something else, right?
Yes. So behind the KKR's investment, the 30 million convertible, there are, there is a conversion right into 2 million shares at EUR 15. So it's 2 million shares, and I believe, I don't know, this is just out of my head. I believe the company, on a fully diluted basis with all the other convertibles that are out there, obviously now being in the money, they all have been below EUR 15, or at EUR 15 with the, the last round. If everything is converted, my guess is that we have another probably 15 million shares outstanding in all total, so this might be, 2 million, then out of 16, 17 million.
So it's more than 10%, whatever it is in detail. I'm not fully aware, and I'm just looking to Marcel and Martina, but they also know more. But I guess it's in that range of, I mean, I know it's 2 million shares, and again, I'm not completely aware of how many outstanding convertibles there are, but I guess it would be with the shares together, something like 15-16 million. So let's call it 2 out of 70 million or whatever.
So, that would last till the first couple of launches, right?
It's a good question, Henry. I'm not so sure. It's not rocket science. Don't overestimate the meaning of money in this. This is,
Okay
... engineering. We have invested much-
It will last quite some time for now.
I hope that the EUR 30 million is good for the first launch. This is our plan, but obviously, it means the first launch needs to be successful. Obviously, we are preparing ourselves with more than just one rocket, because you never know that the first one really works. I mean, you saw it was famous with the SpaceX and Falcon 1. They had, I guess, like, three launches before the first one was fully successful. I like to have failures early on because you learn. It's not good to have a rocket, and the first couple of launches are good, and then you start having quality issues down the road.
So I'm not gambling, and I'm not guaranteeing, and I'm not, let's say, telling anybody that we are very highly confident that the first launch will be successful. No. Our words are always, "This will get us to the launch pad." It doesn't mean that this will get us successfully to success, but we clearly follow the logic of, for example, SpaceX. That means testing it, launching it, trying your hardware. You never learn as much as you do on the launch pad. So don't be totally upset if this first launch is not a total success. We are not guaranteeing a first launch success.
We are guaranteeing with this money, we will come to this to the launch pad, and we will button to launch.
Okay, thanks. Maybe the second question would be, or the next question will be for Lutz. 'Cause you talked about UNIO, I would like to have a little bit more color on this. It's in the newspapers, they put the headlines out, it's a European Starlink. I think that's a bit of edgy headline, but what's your strategic thinking behind this? And you also mentioned the French competitor. What's the name of this competitor, and what really differentiates UNIO's approach compared to the competitor's approach?
If the name of the French competitor would have come to my mind, I would have mentioned it, and I'm so bad with names and so on. I can provide it later by email. The main delta for me is two things. One is, UNIO has already very good access to leading German car makers. And I don't take my own words, I take the words of the current CEO of SES, who just said, "You know what? If you want to be in innovation and automotive in Europe, be in Germany and not be in Paris." So that's one delta. It's the level of access to car makers, and the second is which car makers are the ones you're working with.
It makes a difference if this is Stellantis or if it's, BMW or Mercedes-Benz or so. The competing one, and still the name is not there up to now, is only dealing with tier one suppliers of car makers, but not directly with car makers. The second thing is we believe that the concept of UNIO; we assessed both very carefully, had long talks with both sides and so on. We believe that the concept of UNIO, which is not a purely satellite-based connectivity concept, but one which combines terrestrial 5G and 6G capabilities seamlessly with satellite connection. They have developed a special setup, I would say, technically, which allows you to switch seamlessly between terrestrial networks and satellite networks.
We believe that this will be the much more promising approach, simply because if you want to have autonomous mobility, you always need to have redundancy. Which means, wherever you are, in the moment where you have only one path for connectivity, either terrestrial or spatial, you will always have reduced working modes of your autonomous asset. And the way UNIO does it, they have practically built in the car all the time, redundant and thus resilient connectivity. So it's the technical approach, it's the access to automotive, and it's the question with which automotives do you work?
Okay.
Makes it, like, directly with BMW and Mercedes-Benz and so on, or if you work with Valeo.
Yeah. Sounds like the way. Yeah, last question, that's, I saw also in the newspapers, the new proposed German federal budget for 2024 and beyond, and also some significant space budget cuts, from Mr. Habeck's ministry. I know that you're mostly depending on the ESA budget, so this should not have a big impact, but it's the German Space Agency and the German space sector as a whole might receive a bad signal. What's your comment on this political move? And I think it's gonna be decided this month, whether it's gonna be a cut or not.
How do you see this message from politics towards the German space sector?
At least it's, it's a coincidence, which is not fully logical, between announcing a new space strategy of, of the government and, at the same point in time, reducing the budget. But let's wait a moment. The final meeting in the parliament, at the end, budget is decided by the parliament. The final decisive meeting is the budget clean-up session, which will happen on the eleventh of November. And let's see what the outcome then will be. Every year we see surprising effects out of these cleaning sessions, because at the end, the different parties are coming to the budget committee for the session with different demands, there's a dealing, and so on. So let's see what the final outcome will be. Second remark, the big issue here mainly is, from my point of view, is DLR.
DLR will be hit by significant budget cuts if this comes as it is at the moment. So that's really a pity, because if research institutes like DLR see budget cuts, that's of course, with a delay of 2-3 years, it's bad for industry as well, because we benefit a lot from the developments they are doing. National programs are not that much important for us, in particular, not national programs from the Ministry of Economy. We don't see any impact on the German defense programs; this will go on. We don't see any impact on the contribution, which is by far coming from the Ministry of Transport to European programs like navigation or weather forecasting or so. Of course, we all hope in a next national mission.
This obviously is something which is under threat with the current budget cuts. So, yeah, we count a bit that at the end of next week, situation will look better than it looks now.
Okay, thanks very much. That's, that's been all.
Yeah, thank you, Henry. For the moment, I see no further raised hands, I see no questions in the chat. I would say, yeah, we're waiting for 10 seconds, and then we are going to conclude the call.
1, 2, 3, 4, 5, 6, 7, 8, 9, 10. So, I mean, it's 10 to 10. I fill the seconds.
Well, first, thank you very much for your participation. I know it's a busy day, as I said. We know that we took a little bit longer this time. And I would like to remind you, obviously, of next week's Space Tech Expo Europe, taking place in Bremen. So it's a big space fair taking place early day, I think Monday, Tuesday, Wednesday, right? I guess. So if anybody of you is in Bremen and visiting the Space Fair, make sure you drop by the OHB booth.
It's actually Tuesday to Thursday.
Oh, it's Tuesday to Thursday. So very good. And I guess the next event we'll have is our capital market day, which we of course will have, maybe, or Martina is shaking her head, maybe I shouldn't talk about it, but I saw it on the documentation. It is in the documentation. Martina, you put it into the Q1 report. And so there will be a capital market day according to our today's publication, and I'm sure that, we will all have a chance then, to exchange again. So from our side, thank you very much. Thanks for your support, and thanks for your coverage.
And again, we believe OHB is on a very good path, in many ways, and I guess this transaction is really, really good for our shareholders, for the company, for the employees, and for the customers. Thank you. Bye-bye. Thanks from Bremen.