Hello, and welcome to today's webcast with Gapwaves, where CEO Jonas Ehinger will present the report for the first quarter of 2024. After the presentation, there will be a Q&A. With that said, I hand over the word to you, Jonas.
Thank you, Martin. It's very nice to join you again to present our first quarter this year, 2024. I will have a short presentation on the Q1 report, and also some highlights from it, as well as addressing some questions that we have received ahead of this report publication. Just a recap on Gapwaves. It's a company focused on high-performance antenna solutions. The technology was incepted at Chalmers University of Technology, and the company was founded in 2011 by Professor Per-Simon Kildal. Nowadays, we're focused on radar and wireless communication applications, and especially in the automotive segment, as well as mobility segments or vehicles outside passenger cars, that can also be automated or use our antenna technology in advanced radar sensors.
The company has a very strong technology, of course, in the antenna field, waveguide antennas, and we have a strong focus on continuing our innovation and also applying for patents. We have a very strong patent portfolio today, and it is also growing. Currently, we're at more than 44 patent families. The company was listed on Nasdaq First North in 2016. Now, moving over to the first quarter of this year, I'm really happy to communicate a very strong quarter for Gapwaves. It's been a busy quarter for the entire company, and it's also nice to see that this is being displayed in the numbers. Our net sales this quarter was SEK 15.6 million, compared to SEK 4.9 million, same quarter last year.
Our EBITDA was SEK -13 million as a group, including our holding in Sensrad, which is an associated company of Gapwaves. Excluding associated companies or Sensrad, our result was SEK -8.8 million Swedish kronas compared to SEK 16.1 million the same quarter last year. We have a strong cash position at SEK 69 million or almost SEK 70 million. We're currently 42 employees in the company. And during the quarter, of course, improving strongly on sales, more than 200% increase, and also gross profit has a significant impact on the EBITDA. We're still investing in Gapwaves. We're still on our scale-up journey to scale up the company towards a full-fledged supplier position to our customers in current contracts and the current order book.
The cash flow was affected by increased working capital, and we also, which is fairly normal when you grow strongly in a quarter, we also have a fairly significant account receivable position. The FlexLine investment in a location adjacent to Gapwaves' headquarters is moving forward as planned, and we also expect significant growth in the rest of the year as per current outlook. Some of the highlights during the quarter. Of course, I want to emphasize the strengthened partnership with Frencken. Frencken is a key partner of Gapwaves producing the antennas. And they've also placed a large order for additional production equipment for the automotive antenna, which will be produced at the Frencken facility in China.
Furthermore, we have also received additional orders from the undisclosed European Tier 1 that we have been working with for around 15 months. And this is important because it also shows that the project is progressing, and that the Tier 1 customer is continuing its effort together with Gapwaves to finalize the development and design of an antenna that later can go into production. Right now, it's a development project.
I'm really happy to announce that we are entering into production with the first automotive antenna that we designed for HELLA in 2021, and now the large-scale production is starting, obviously, in a scale-up phase, but right now the production is running at around 6,000 antennas per month, and the scale-up phase will continue well into next year, where the plan is to reach 1,000,000 units per year in volume. SOP, start of production, is really important for our automotive customers, and this is a clear sign and proof that Gapwaves' antenna technologies and antenna products meets the requirements, the very strong and tough requirements of the automotive industry. Let's take a quick recap of the market. It has not really changed for Gapwaves.
We're still in a very strong market position, where the market is driven by legal as well as technical regulations in the marketplace. We still expect to see more than 25% growth of radar sensors for automotive use and driver assistance systems in the coming years, in fact, throughout the decade. Of course, there's a need for higher resolution radar sensors at the 77 GHz band. This is a perfect spot for waveguide antennas, especially Gapwaves, because our waveguide antennas have several very significant advantages, such as more effective and scalable production methods, as well as more cost-effective materials that can be used in the antennas. We also have two different gap waveguide antenna technologies, that both have their unique set of advantages, catering towards the automotive industry.
So, it's safe to say that we can see market growth, significant market, market growth in the coming years in this industry. As I mentioned, SOP is really a key moment in this industry when it comes to automotive products. And you can see here on the slide, which we have shown and communicated before, the planned start of production for several of our communicated and announced partnerships and projects. And SOP in 2024 will happen for several of these customers. In fact, I already mentioned HELLA, which we're very excited about, to finally have entered into production, the production phase of that automotive antenna. But also smartmicro antennas will go into production, serial production this year, as well as for Sensrad, obviously.
Of course, there are more projects that will enter into this production phase in the years to come. You can see some examples here, and obviously the company has a very high priority and focus in adding more customers to this list moving forward. As I mentioned, FORVIA, which is now HELLA is part of the FORVIA Group. SOP has taken place as planned in 2024, in early 2024, so it has started now. We'll continue to scale up into well into next year. smartmicro will start also this year, in 2024. And then obviously, Sensrad, which is about to commercialize and launch their first commercial version of the high, very high resolution or 4D imaging radar sensor. So that's not less than three projects coming into production this year.
Again, looking at this list is probably the most important piece of information in this presentation and other presentations that we've made before. That's the timeline of the SOPs for these customers and the projects. We expect to add more customers and more very large and significant contracts to this list. So, to summarize here before we move into the Q&A part, Gapwaves is very well positioned for very strong growth, as I mentioned. We have a strong technology, and we can now offer a complete antenna solution for our customers. Technology, design, industrialization, and management, and high volume production for our customers. And we have also strong partnerships with production partners, which means that Gapwaves doesn't have to build its own factories in various places.
We can partner, qualify, and certify certain companies that already have these infrastructures. Our customer relationships with these customers, such as HELLA, Bosch, and Veoneer, and others, are very long-term and are also including or will mean that the antennas that we design and develop will be produced during a very long time in very high volumes. Thank you so much, and I think it's time for the Q&A.
Thank you so much, Jonas. We jump straight ahead to the Q&A here. Uhnder is an old customer who has now launched a partnership with bitsensing regarding 4D imaging radar. Is Gapwaves' first commercial customer a closed chapter who has chose a different path here?
No, in fact, Uhnder has changed strategy a bit. Uhnder is now focusing solely on providing the chips, the chipsets, to automotive industry, but also to other market segments, normally what we refer to as mobility segments. And we have a close, frequent dialogue with Uhnder, of course, because when they promote their chip solution to different potential customers of theirs, they also need an antenna. So of course, they do this in partnership with us. So I would say that Gapwaves is quite close to Uhnder in offering combined solution, including both chip and antenna to customers. That will produce the radar sensor and buy chip from Uhnder and hopefully antennas from Gapwaves.
Thank you. Gapwaves stock price is minus 30% during Q1. How does the company view the fact that it's HELLA that has sold 200,000 B shares, and as a owner, pressed down the price?
In fact, HELLA has also acquired 200,000 A shares, which is a very positive sign, because A shares carry a lot more votes per share. And this means that HELLA sees an increasing engagement in Gapwaves, not only as a customer, where they've increased quite a lot in their commitments towards Gapwaves as a customer, but they are also acquiring A shares, you know, to be able to support and influence Gapwaves further. So I think overall, it's a good sign, and especially since the total shareholding has not really decreased.
Thank you. When can we expect more info about Sensrad and how Gapwaves will do with its ownership? Dismantle, expand, or renegotiate?
Sensrad is about to launch a commercial product. That's very important for Gapwaves. So we need to see that happen before we take the next step. Our intention with Sensrad is the same as before. I don't think we will exercise that option in Q2, as it looks right now, but of course, we're in close contact and discussion with the owner. But for Gapwaves, it's really important, as we have communicated since last year when we entered into this investment, that Sensrad can start their commercial expansion and commercial journey. And at that point, it will be relevant for Gapwaves to consider increasing the stake and the investment in the company to accelerate the commercial growth of Sensrad.
Thank you. Start of production, SOP, is planned during H1 2024. When will Gapwaves communicate orders in view of the lead time, so that production will start in 2024? You should know at the beginning of May 2024, if there are really any orders.
Yeah, and I'm happy to reiterate what I just mentioned earlier in the presentation, that the SOP for the HELLA automotive antenna has now started, and we will continue to update the market as progress during the scale-up phase happens. Right now, the production is running at around 6,000 antennas per month, but it's also HELLA and HELLA's customers who determine the pace of this scale up, but also the volumes in the production going forward. But now we're in that high volume phase, which typically lasts... We're entering into that high volume phase, rather, which typically lasts around three, six-eight years in the automotive industry.
Thank you. It's been two years since you said you had a new Tier one in the progress of signing an agreement. Can you please update the shareholders on what is happening and when the agreement can be reached?
Yeah, and it's actually been 15 months, approximately, since Q1 of 2023. Progress is ongoing with this customer. We've during the quarter communicated two new add-ons to the development project from this European and leading Tier one customer. So it's obvious that the project is ongoing and that this customer is spending time, effort, and money with Gapwaves. So it's very much a live project.
Thank you. Here comes a little bit longer question. The value of Gapwaves has decreased 75% last three years. Considering the weak commercial results, 2022-2024, the value is likely to decrease significantly further. Why cannot the board, together with the CEO, define, communicate, and deliver realistic and ambitious sales targets to reinstall commercial credibility in a falling company? If not, could you get an outlook? If not, outlook is needed for 2025.
As we have communicated before, Gapwaves is in a too early phase to really give solid forecasts and financial targets. And as you have seen, if you're following the company, the volatility is quite high in our sales number because most of our revenue is derived from development projects. Development projects have very long timelines, they have different gates and milestones, and they run over time at different paces. And that influences a lot on the revenues in a certain quarter or even a year. And last, like last year, you could see that obviously some the sales were. The sales revenue was a lot lower than we had hoped in the beginning of the year. And this is a challenge for Gapwaves. The best way to mitigate this is really to add more customers.
So there's more projects that run in parallel with different timelines, different milestones, et cetera. So they, so to say, even out each other, and it's a more predictable revenue stream, as well as, you know, result generation in the company. We're not there yet, but as you saw in the previous slide, we're now entering a very important and exciting phase for Gapwaves, where things go into production, and then we will see more predictable pattern going forward. But we're not quite there yet. Like I said, the first SOP has just been passed together with an antenna for HELLA. But we will add more of these during the year, but also in the coming years.
Thank you. Moving on to the last question here. Can you share your ambitions or estimates of sales value in the Chinese market as full year sales 2024, 2025, and 2026? Can you also indicate which cost you estimate it will be associated with in China the same years?
Yes, in a way, I already answered this question because, like I said, Gapwaves does not communicate specific forecast or financial targets. We're still in a too early phase, as I just explained. In China, we've chosen to set up a representation. We have strong belief in the potential of the Chinese market, but we act in China with caution as well, because some of the potential customers there need to be qualified to have the right motives and to be compatible with the Gapwaves business model. And also, we are cautious qualifying these customers to protect our IP and patents, so we don't end up in a partnership where knowledge and specific information is being extracted out of Gapwaves and then copied locally.
Gapwaves wants to be a full supplier partner to these customers, and that means that we have a local team that can qualify and certify these partners, that they are the right type of partners for Gapwaves with the right intention. Also, this is to combine both, tapping into the Chinese market in a significant way, but also to protect Gapwaves at the same time. In terms of cost, local cost, it's just representation office there. So the cost is really not significant, looking at the company as a whole.
Thank you so much for the presentation, Jonas, and thank you for asking... answering all our questions, and thank you all for tuning in. I wish you a pleasant day.
Thank you, Martin. Thank you very much.