Ladies and gentlemen, we warmly welcome you to the Q1 2026 earnings call of the Gabler Group AG. I am pleased to welcome Gabler's Chief Executive Officer, David Schirm, and Chief Sales Officer, Ole Johannsen, who will guide us through the presentation shortly. After, we will switch over to the question-and-answer session. Please note that we only allow questions via audio line today. With that, I am handing over to you, David.
Thank you. Welcome from our side, and welcome actually to our first post-IPO group call in this year. We are very happy, very excited to have the opportunity to go with you through the happenings, what has been going on in Q1, and to give you guidance for this year, 2026. We like to introduce you to the key highlights, the key milestones that we achieved, to the operational updates we can give you, and, as mentioned, it is about the guidance, a little guidance for H1, but also, of course, the guidance for 2026. Before we start, we would like to introduce you a bit back to what I think most of you has been heard or reading or listening to in the equity story about our products, about the network that we are creating in subsea. We would like to start with that.
Afterwards, we go a little bit into the products as well, and then we go to mentioned highlights, milestones and guidance. The Gabler Group is a leader for submarine systems, for subsea communications and data, subsea power. We enable critical subsea missions. As mentioned, we are combining all those assets in subsea, whether it is an AUV, it is a UUV, it is the Gateway Buoy, it is a USV for different purposes, for surveying pipelines, infrastructure in general in subsea areas like submarine cables, et cetera. Being able to communicate underwater and connecting all the assets is something how we tackle the technology that is needed for current demands, specifically in geopolitical situation like we are in right now. It is also about the powering, so the backbone of all the techniques that we are delivering.
With that, Ole, give us just a little update or a review and wrap up on the products, and we are going to start into the milestones.
Yeah. Thank you very much. Welcome as well from my side. It is a pleasure to talk to you today as well to the new investors in this call. We give you a brief update on our portfolio or for those who are new in this call, a brief, let us say, overview about our portfolio. The submarine business area is all about the platform submarines. With more than 60 years, we are delivering the mission-critical hoist and mast systems, which are an integral part of the submarine. We belong to the top three most critical items of the submarine, which makes our role very indispensable. With this, we have the biggest portion to our overall revenue so far. This is historically wise as well with regard to the business model. Of course, we have here very interesting long life cycles.
Once in a submarine, we gain very attractive margins from very plannable revenues to different refits of the life cycle. As well, we have different other portfolios, and since the last years, we developed more portfolio to increase the overall portion of one submarine. Then jumping to the next business area, which is all about subsea communication and data. Here, it is all about subsea communication via acoustic or via optic. The hero product is the Modular Seafloor Lander. You can see it at the bottom of the slide in the middle. This is a lander system where we can deploy our system with our single products, and then it is a data acquisition center, and by that, we can assure that the data which needs to be acquired will get to the desktop, to the customers.
We have as well a company with minority shares which are capable for the big data maritime management. This is where we have a more diversified portfolio. It is a dual use product. We are here not only the submarine and the military business, as well, we are in the industry and in the offshore business. The subsea power, which is the backbone of our group as well for the missions. Here we supply battery systems for vehicles, and we have as well equipped a bunch of several vehicles. This is, of course, a scalable business. It is a huge demand. Next to this, we deliver as well the biggest energy storage systems in the world, securing offshore applications as well, which are DNV approved, and they are military approved.
Therefore, in regards to battery systems, we are unique, and we have as well a diversified applications and customer base. Oh, sorry. Then jumping to the key milestones, which has been reached in the Q1. In regards to the left pile, it is all about the business. We achieved to pay back all our loans. We are repaying all the debts we had completely, which is as well part of the equity story and use of proceeds. In regards to sales, we have been recently to the U.S. personally. We are close to operational, be operational in the U.S. We hired a business development, and in Canada as well, we are close to being operational soon as well with regard to the biggest opportunities in U.S. with regard to the big fleet as well.
In Canada, for instance, only on the subs, there is one of the biggest new building programs in the world. To be there locally is of essence for us. As well in sales, we hired 33% of the planned sales managers, which was our target, which we planned in the equity story as well. In regards to the order backlog, we have EUR 376.8 million total order backlog, which corresponds, you can see it as well on the 5x of our full year revenue forecast. What we like to highlight here is that we are very close to signing, and near term fixed orders are three orders in year with shipyards and navies. This is what brings us to the confidence to have EUR 110 million half year fixed order backlog.
In addition, and this is not whether in the soft order backlog or in the fixed order backlog, so out of the total order backlog volume, we have roughly EUR 80 million just in this energy storage systems from the subsea power business area. This is still a high demand, even in the first quarter. On product, I like to highlight that we had a successful first sea trial of our TTL USV, this Torpedo-Tube-Launched Uncrewed Surface Vessel. We have prepared as well a slide after this one, and the first delivery is in Q4. As well, we have hired 40% of our annual planned R&D or technical personnel, R&D developers. In the production capabilities, we moved to the new production site in Kiel. This week we signed the production site movement to the submarine business area, new production site.
In regards to-
Sorry, just one additional information. I think what is really important to mention right here is that the order backlog and all the sales leads that are coming in, that this is really a crazy situation. From just the time that we've been now, having also used this IPO as catalyst for all the opportunities that raised as well. You probably heard it is in media, the company of DSME, they acquired six submarines orders from Indonesia. We will be in Italy, Ole and I, next week, talking about our part. This is something that has been hidden so far, but it is an absolute additional opportunity that could be in order intake already this year. Executed, of course, will be a bit later. But this is just one huge thing. We had a delegation from India here, in our headquarter.
It was about how to gather together with a partner, creating local content in India for the P75I. Beside this topic, that we will be part of this huge project together with a partner, it has been raised the question whether we are able to replace more than 40 masts of the existing Indian Navy from old Russian subs. This is something that has just raised as an opportunity. Of course, just having in mind EUR 1.5 million roughly in average. This is also a huge opportunity not mentioned in the order backlog or total order backlog so far. We have a lot of more information, not only from the submarine. It is as mentioned, the EUR 80 million from energy storage systems, that is just a huge package, like EUR 50 million for a Nordic oil and gas company.
For a Brazilian company, we have the request, it is a copy-paste of the system we delivered to Australia. Just the amount of requests we get in, the amount of the ticket sizes we generate, this is just really absolutely crazy. Just supporting our, I would say, conservative view we had, but also to be sure that working hard and overachieving our targets also on midterm.
Thank you, David. Jumping to the Ranger radar torpedo tube launcher USV. I mentioned already that we had the first sea trial. We worked really hard to have as well, the success in presenting two of those vehicles in Q4 this year, deployed from a submarine and certified to be the first serious product. We face a huge demand as well from other navies because we presented it some month ago already in an event and a show. By that, we are 100% convinced that this is, of course, as well a scalable business in the submarine business because it belongs to the platform submarine. Next to this, we have as well another project where we develop as well other vehicles like remote operated vehicles or as well other lander nodes from a submarine. This is just the beginning. Some words about our expansion.
We went to U.S., I mentioned it some minutes ago, and we have hired in a senior business development guy who cares about the U.S. expansion. We are close to sign MOUs with production capability or let's say existing companies which are already in the life cycle of the U.S. Navy. As well, we are close in regards to Canada. As I mentioned already that there is this CPSP, this biggest Canada project of about 12 submarines in total. By that, we will have by end of May, as well, Gabler Group Canada Limited then on the green light. As well, we are looking for some local production because of local offset requests from the Canadian government.
Next to this, we are in talks with Australia, with regard to U.K., Norway, Brazil, Middle East, and all the other countries where we believe we have potential, we will build up representative. This is just one part of our expansion story. Now I hand over to David regarding some figures.
Thank you, Ole. I will take over. The total order backlog has been increased, or is still increasing coming from EUR 359 million that has been published for the end of 2025. It has been increased again, EUR 376.8 million, as mentioned by Ole. The expected H1 net sales will be EUR 24 million. That is also in the level of expectation, a bit more average. Beside, it is also an expectation that with EUR 5.5 million in the first quarter, this is, as we know, we have the backloaded business. We are absolutely on track. This is what has been expected from us, and looking to H1 a strong Q2, that will lead to this EUR 24 million. Net cash, we said we are loan or debt-free right now, so having EUR 38 million of net cash gives us a perfect position right now.
As we said, of course, use of proceeds to invest, whether in the growth of the capacities, but also in terms of capacities on the sales side. This is why we are totally pushing and taking the energy and the speed that we have also to the coming months and years, for our, we call it internally, Road to 100. With regards to the guidance, and as you have been, I guess, seeing in the corporate news this morning, we have a clear target in net sales for fiscal year 2026 for the group of EUR 69 million- EUR 71 million in net sales and an adjusted EBIT of EUR 17 million- EUR 19 million. This adjustment only correlates to the IPO-related expenses and, as mentioned month before, the goodwill amortization. That is the difference in IFRS and German GAAP.
That is equal an adjusted EBIT margin of 23.5%- 26.8%. With the focus on M&A, we are clearly on track also here, having a lot of positive discussions. The list has been developing on the one hand side, but also clear discussions are made. Nothing to publish already, but we have the target for us to complete the next acquisition in the first half year of 2027. With regards to the revenue and the shares for each of the business areas, as you may remember, and I am going to show you on the next slide, we see that submarine, in midterm, the share will drop down to 55%. For this year, we see still a strong market in submarine.
Of course, the replacement, as mentioned, and the cycles for refits are pretty strong still, so that we have the 17% in submarine systems, subsea power 12%, and subsea comms and data about 18%. The midterm group target as guidance, again, now taking it into the entire idea of where we go to, as I said, our Road to 100, it is net sales over EUR 100 million. I just remember, it is all about organic growth. All acquisitions would come on top here in this net sales. We are having a midterm target for the gross margin between 70%- 75%, personal expenses below 30%, and other operating expenses below 13%. CapEx level, lower 3%, and D&A about 2%.
Here, what just have been mentioned, midterm business area targets the share in revenue coming to 55% in submarine systems. 30%, the strongest growth just underlined by the examples from the market, for the ESS, specifically the energy storage systems, of 30%, and the subsea communications and data of about 15%. All in all, if we take it together, the execution is totally on track, when it is all about now pushing not the idea we have, but the strong potential on the market into growth. This is where we are, I would say, really, really strong right now by creating the capacities we need, by creating quite fast the structures and sales we need so that the demand is being joined into a backlog in the sales on the other hand side.
We of course, still have the tailwinds. It is not only the naval part, it is also oil and gas. As we all know, the prices in oil and gas are increasing. That helps also quite a lot in the area, with regards to invest from the oil and gas companies. High-quality backlog still even higher than mentioned here with regards to all the opportunities that are not higher than 50% our limit before we are going to put it into the soft order backlog, and multiple near-term catalysts. This is, of course, a lot of generating of order intakes and revenues.
That is what we can tell you. We are totally on track in the points we are doing. Our story is quite clear, and we know what to do, what to do next, and still excited and full of power in driving the business to our target in midterm. Thank you.
Thank you very much for your insights, David and Ole. Ladies and gentlemen, now it is your turn as we are moving on to the question-and-answer session. Please note that we are only allowing questions via audio line today. To do so, please click on the Raise Your Hand button, and if you are dialing in by phone, please use the key combination star nine to enter the queue and star six to unmute yourself. Please introduce yourself with your full name and the institution you are working for. With that, Ms. Gruener, you should be able to speak after you unmuted yourself.
Do you hear me?
Yes, I do.
Hello, do you hear me now?
Yes, we can hear you.
Wonderful. It took like three sets of typing on my phone to get there. A quick question. Regarding the orders you were mentioning or the opportunities you were mentioning in Italy and in India, the DRASS opportunity, I was wondering if you could give us a range in terms of order intake expected and when we can expect this order intake. The same for India, of course, which seems like a large program in terms of when we can expect the order and how big is it.
Yeah, absolutely. As we know from navies and public institutions, a clear date is always hard to find. But the range. Starting with DRASS. DRASS, as I said and as it is announced in the newspaper, they received the contract. So that normally takes something like three years to four years for the first delivery. We normally deliver two years before the delivery of the submarine. So this is something within two years to deliver and normally it is something in the order intake that if we are fast, so fast means it is DRASS and us that needs to be fast, it could be this year, but latest beginning next year.
That is what we assume would be the right time. In terms of content, and that is specifically with DRASS, really exciting because it is not only about the masts, it is really the entire portfolio we are talking about. It is about the rudder machines. It is also about the pressure-tight hydraulic drives externally. It is also about discussing the battery system we can provide from the business area of Subsea Power. So it is even more than what is normally the standard in terms of masts. Really exciting. The Indian project, that is in parallel to the new build of the P75I, and it will not be a contract that has to be executed within one or two years. So having the 40 masts, that is an equivalent of five submarines.
Having change on five submarines needs normally something between 1.5 years to two years per submarine. So that is actually the range we are talking about. Means for the first sub, we expected first order intake in 2027, and then it will be by batch, each two boats or three boats, or probably per boat. That has not been defined yet from government.
Thank you, David. I was wondering if you could quantify. I know it is probably a bit difficult or delicate, but could you give us a range in terms of the order size in million EUR for both opportunities, please?
The rough assumption, and to be aligned to what we have said in all the investor meetings beforehand, assuming EUR 1.5 million per mast multiplied by 40, that is the entire potential of the mast business replacement probably in India. We are talking about EUR 60 million. It is about, on the other hand side, the DRASS system, as I said, it depends on the scope we are focusing on, whether that is purely the mast. We think it is even more. If we take the entire systems that I just mentioned, it could be something about EUR 40 million. If it is only the mast system, we are talking about half of it probably. That is the-
The EUR 40 million per sub or in total?
No, per sub with the total portfolio. Yes.
Per sub multiplied by six.
By six, so EUR 240 in total, right?
Right.
Okay. Thank you.
But here, please also keep in mind, they do not build like other shipyards. They do not build six in one year. They build it normally one a year or one per 1.5 years. So that gives us the high visibility we know for future.
And please, can I add something? From our point of view, it is as well then important as well to give a note that such a vehicle is as well a niche vehicle, and especially countries where we already have contact to, or as well new countries with not a big submarine or no submarines already. These are addressable with such a vehicle, and by that we are 100% convinced that we can have as well sales success with trust and being the prime supplier of most of the assembly groups. So just as a note for your skeleton.
All right. Thank you very much.
You're welcome.
Thank you, Ms. Gruener. With a view on the participants list, I see that we don't have any more hands up. I will hold the room another moment in case somebody wants to ask a question, but you might have been very clear. Okay. With that, we come to the end of today's earnings call. Thank you very much for your interest in Gabler Group AG. If you have any further questions at a later date, please feel free to reach out to investor relations. A big thank you also to you, David and Ole, for your presentation and your time.
Thank you.
I wish you all a successful day around the world, and handing back over to David and Ole for your final remarks.
Yeah.
Thank you also for moderating this. As mentioned, if there are any further question, I think you were aware of it already, it's our Patrick Jacobs, Vice President Group Finance Investor Relations. So he will forward the question or directly answer the question, however, and whatever kind is needed. We also like to say thank you to the participants. As mentioned, I'd just like to emphasize the opportunities we see. I hope we were able to communicate it like we see it in the positive momentum. Not only positive momentum, the long-term momentum we see for the growth path we are going. We are more than confident, and working hard on overachieving this path as well. Thanks a lot. With that, have a nice evening and see you soon.