Welcome to today's presentation where we have the pleasure to present GomSpace. To help us through today's presentation and answer questions, we are joined by CEO Carsten Drachmann. Today's topic, of course, the Monday released market update with some preliminary figures showing strong progress in your strategy transformation. As always, you're very welcome to ask questions in the box down below. We have already got a lot in. Do it in Danish. I will try and translate to the best of my ability to English. But for now, I think I will hand it over to you, Carsten, and I think for the first time we are really seeing what GomSpace is about in the background.
Yeah, exactly. Thank you, Michael. I thought it would be interesting to you can see a bit more of what we're doing here at GomSpace. What you see behind me is our clean room, which is actually quite big. You can see people have little hairnets on and white coats to keep it clean. Right now they're actually working on some battery packs right here to my left-hand side. Over on the other hand side is actually assembly of a satellite for the Juventas mission, which is going to go out to a meteorite. So all very exciting, all progressing here. Let's talk about the Q4. Before diving into the details, let's just address it. We have delayed the Q4 report. It is what it is. There's nothing nefarious. There is nothing hidden behind it.
I simply decided not to disclose it because I could see there are a few numbers that may change, and I didn't want to have to go out with a correction. However, I still wanted to share with you good news on cash. As you know, this has been my main focus for the years. So we have good news on the cash for Q4, and I didn't want to delay that. So in the interest of transparency, continuous communication, let's dive into it. I'll give you the Q4 key highlights, and we'll talk about 2024 focus. So how do I see us executing through 2024? But first, what did we do in Q4? So free cash flow positive +SEK 21 million. Yes, check in the box. Really, really good. This was our focus for the year. We achieved it even better than we had potentially hoped for.
So that's really good. Another measure is cash in bank. We have about SEK 61 million in the bank by the end of the year. Just to compare to Q3, we had about SEK 46 million. So that's good. So we improved our cash position. And those of you who would go back and say, "What was it in Q2?" It's about SEK 54 million. So we've actually improved our cash position in the bank from the end of the second quarter to the end of the fourth quarter. Very good. Our product order intake continues to trend in the right direction. We had in total, including North America, SEK 39 million closed during Q4 2023. Very good. It's an improvement for already a good quarter in Q3 of 22 million.
North America, mainly product sales there, actually closed SEK 7.5 million in the fourth quarter, SEK 15 million on a full year. So there was also a nice acceleration towards the end of the year. We see not big yet, but we see a steady growth in North America as well that we want to continue. Revenue, I communicated about that in the Q3 report. We are expecting a record high. Sorry for not having the number today. But it would be a record high, which the last high was SEK 214 million in 2021. So that's also an excellent achievement here. Now, Startical. I'll talk a bit about it later, but just highlighting it here. We have signed a new agreement with Startical. This is a deal that was back from 2021, 2022. Has created some issues. This is signed. So let's get back to that.
Further, we closed SEK 27 million in orders for our mission and control software, HOOP. It's also very strong. It's following our strategy to develop more software on this mission and control system. So good news for Q4, I think, checking in on the cash flow and the order intake that we are focused on. Going back, looking at the free cash flow, I like looking at the graph, and it looks like this. So we have really improved throughout the year, quarter by quarter. We were actually quite good. I was very happy with the Q3 at SEK -6 and now at SEK +21. Excellent. What does it mean? Obviously, it means we've been executing well. It also means we start to understand the link between our cost base, which we have reduced, as you know, throughout the year with quite a lot.
We understand what kind of effectiveness level we need to have. And I think we have now reached a level where we're not going to see these big swings on free cash flow, but it's leveling out. Nevertheless, I'm more ambitious than just one quarter of positive free cash flow. So we still maintain our guidance for second half 2024. We want to be free cash flow positive. And by that, I also mean a little bit more stable. So it's not dropping below zero, going beyond that. But we are trending absolutely in the right direction, and we have a good cash position opening into 2024. And especially on products, we have a very good situation. Okay. So let's see. What about 2024? What are we going to do? What do I see? I see a couple of things. First of all, no big change in our focus.
Strategy remains the same. We want to be free cash flow positive or stable by the end of 2024. We're going to focus on three areas: increase product business, we will focus on project profitability and increasing also programs and projects, and expand in North America. So this is the same we've been saying throughout the year. We continue to focus on that. I believe Q4 is a testament to starting slowly to have success in those focus areas. But a little extra information here. So what we have done for 2024 is we have created so-called business units, which means internally we have structured ourselves so that we can measure very precisely from a financial but also execution perspective how we're doing on products, how we're doing on programs, missions, if you like, building whole satellites, and how we're doing in North America.
I'll talk more about it in the coming weeks, about how we organized ourselves. I think there's some interesting things to learn there. But we do it in the interest of clarity and accountability. It's very, very clear what we need to do on products. It's very clear what we have to do on programs. It's very clear what we have to do in North America. Each of the business units have cash flow targets they need to achieve and order intake. So the accountability is also quite simple. So we are really dividing our business into better execution and better measuring. In the coming weeks, I'll talk more about the transformation that we've gone through in 2023. I know that it's a lot of, "Okay, these are the numbers.
We want to analyze the numbers." But I think it's worthwhile also looking at what are we changing in the organization. I've hinted towards people, clarity, focus, etc. We'll talk more about that in the coming weeks. Let's dive a little bit deeper. If you look at the product business for 2023, excluding North America, we had about SEK 80 million in order intake in 2023. Out of that, SEK 31 million in Q4. Yes, there's some seasonality in that, but it is actually a very positive trend. It's up 33% from 2022. Worthwhile highlighting is on December 15, we got a single order of SEK 6.9 million from a U.K. customer called In-Space. This is also very good. What it's showing is that we're trending when we're focusing, we're trending towards larger deals as well. We close more.
Sometimes we close opportunities of EUR 5, EUR 10,000 or SEK 50,000-SEK 100,000, or sometimes it's SEK 500,000, diverse. But we also start to see more of these bigger deals. Going into 2024, we have a very clear goal, and we are going to invest the necessary resources in outperforming our 2023 numbers. Remember, I've told you that product business is good business. There's a good contribution margin. It's easier to execute. We don't need to involve a lot of engineers into the equation. We basically can put it through our supply chain once a customer is happy to buy our products and then produce, deliver. So it's good for us. It scales well. So that's a key focus. And I also see the product business as a substantial contributor to company profitability going forward.
We need to push it up a little bit more, and it's going to be very visible on the bottom line of the company.
And Carsten, this is, of course, the numbers, but I'm thinking, getting more in as a preferred supplier, meaning in more supply chains, no matter whether you make the satellite or someone else, it doesn't matter. You are a preferred supplier and have some kind of visibility with your customers. If the business goes up, this will also go up. I don't know whether you can't see that in the figures here, so I don't know whether you can talk a little bit about that.
No, thank you, Michael. Absolutely, I can. So yes, we are focusing more on key accounts. We are also working more with our, let's call them, competitors that are also building satellites. And yes, we're working on becoming preferred suppliers. So whoever wins, whether it's us or our competitor winning the missions, building the satellites, we'll still go and sell the products. So we are having more focus on key account management to have a more continuous relationship with specific customers that we pick, five or six. Further to that, I'd say we never really had a product focus before. We have good products. We have great products for the market. Customers are coming back asking for our products. They know that they work. We have the flight heritage. But we have not been focused enough before, so there's been more requests that we have been able to deal with.
So by increasing the sales force, as I talked about last time, and improving our marketing and soon our website, we're actually growing simply because people come to us for our products. And then in addition to that, like Michael asked, we are also working on key accounts, including working with our competitors because they also need the products that we have. So that's how we'll build it up. And that's how, Carsten, why is it then moving from 60 to 80? Was it just a coincidence? No, it's actually a result of focus on doing this. And there is also a general market trend that this is a growing market. Okay, let's look at the second one here, programs, or focus on project profitability. We call it the programs business unit. So a couple of key deals. Let's deal with Startical for a second. Fantastic.
Wow, what an achievement of our team here. We managed to sign that in December. Some of you who have been with GomSpace for a long time will understand what it means for new people. We signed a contract in 2021 with Startical to deliver a solution for air traffic management and communication for airplanes anywhere in the world. We ran into some challenges with the customer in 2022, hence the rather poor results in 2022, if you go in and look at that. What's happening now is that we have actually come back with the customer. We have signed a new contract to continue and complete the project, and we have settled all open points from the previous contract. So that is closed, done, end of story. Now we are focusing forward.
Outside of that, we, of course, in and of itself, we're pleased that we're able to recover on that and entering into a very good relationship here. Startical came back to us. Why did they do that? Ask yourself that question. They came back. We've gone all over the world to find another provider. They didn't. They came back to us. We decided, let's work out our differences. We did that. We're on track, and we're executing on that. So this is really, really good. It's closing a lot of open points. Further to that, we closed about SEK 37 million worth of contracts. In all fairness, some of it was in January. We know we were going to close, but they signed in January. We have announced them. And then the last one, joint venture with Ellipse Projects from France. This is also great news.
I'll talk about Indonesia in a second. This is a very important relationship for us. Ellipse Projects are specialized in being prime, especially in government business, and they're very strong in Africa and Southeast Asia. I know there have been questions. I'm following, of course, what you're talking about. What does that mean? Well, it means, yes, we are working right now to complete a deal in Indonesia together with Ellipse partners, but we see a much stronger partnership beyond that. I have to say, it's Valentine's Day, so I'll say, "I love you," to my wife. Then I also say to Arnaud and Olivier, if you're listening, we really, really like working with you. This is going to be a very good partnership.
I think there was an old movie where I said Casablanca saying, "This is the beginning of a good friendship." So that's how I see it. So we will see more business coming through those joint ventures. And this is a good start. And Africa is going to need satellites. Southeast Asia for sure is going to need satellites. Indonesia in a second, keeping the suspense. So let's talk about 2024 for the programs. We have a couple of things. As you can see, it's very digital. A big project comes in, jumps like that. Small project here, project complete. So it's not quite as linear, perhaps, as the product business can evolve. So our ambition for 2024, certainly to maintain the activity level we have. We have skilled people, engineers. We want to be able to maintain that.
We are, of course, expecting further orders from existing customers, and we are looking at new customers as well. But we are happy to maintain a good activity level, be active in the market, and we are very active on the sales front. And then occasionally, we will have the big whale, the big fish that comes in and changes things. So we are always working on that, looking at a pipeline, how do we get a bigger deal as well. So let's jump to Indonesia. I have communicated in December. I've communicated Monday on this. There will be an update by the end of the first quarter. We have signed a commercial agreement with the customer, with the Indonesian government, to deliver this. However, it is depending on financing. So the Indonesian government is looking for financing for this.
The way it usually works is that you have to sign a commercial agreement first. We have agreed on all the terms, payment terms. Everything is agreed with Indonesia. But we cannot execute until Indonesia has the necessary financing and capital to execute the project. It's a normal order of things. No financier is going to go in before there's a commercial agreement, and they understand that. So we are in that, let's say, middle zone right now where that financing needs to be worked out. And I cannot say more about that right now. We'll give an update at the end of first quarter where this is going. So I want to repeat, we have a commercial agreement. It is not a final done deal yet because of the financing. Okay, let's look at the last one, North America. We laughed. Michael laughed a bit about it before.
Yeah, North America, that's a big whale in and of itself. Let's go there, and everything will be great. Well, yeah, but it's hard work, of course. We continue to focus. We are recruiting more people to focus on the North American market. I think 2023 was good. We had SEK 15 million second order intake. And as I said, the last came in Q4, half of it. And in that half, I saw Nanoracks from the U.S., SEK 3.6 million. So a slightly bigger deal. And I think in general, in average, we're probably going to see slightly bigger deal sizes from North America, mainly for products here. We continue to work actively with SAIC, as we have announced earlier. SAIC is very much they're commercial, also government business. So I think we have a strong link in here to potentially tap into U.S. government business via SAIC.
What does North America look like in 2024? Very much focused on cash flow. We want to make sure that we're not burning too much cash. We want to have a reasonable balance. 2024 for North America will, in the planned session, consist of smaller to mid-size deals that we are closing. I'm hoping 10, 15, 20, a lot of them. That's going to sum up to a number higher, a good deal higher than what we have seen what we see here. And then there is always a big whale. So we have Indonesia. It's a big occasional whale that come in. America, everything is bigger, also the deals. So we are, of course, constantly looking for where are those deals. But strategy number one, bread and butter, start building a regular revenue stream there.
We'll build a team as we build cash flow, and then eventually, we will hit a bigger jackpot. I cannot say when, but it's certainly in our strategy. Okay, so in summary, we did well on cash flow in Q4. I'm very happy with that. Free cash flow is good. Money in bank is improved well during the quarter. Product order intake is trending in the right direction. That's what we wanted. We'll have a record high revenue from 2023, even though we didn't focus on it. I didn't even realize it until we got late in the year. Cash is king. That's what we're focused on. But the funny thing is, if you do that better, you also get a better revenue. So we'll keep doing that. We restarted the Startical partnership. Excellent, excellent, excellent.
We're putting a lid on the history of focusing forward and obviously building that first satellite together with them. It's potentially creating more opportunities after that. We established three objectives for 2024 growth. I just went through with you, saying product sales, program sales, profitable with some upside, some bigger deals, and North America. We have an organization in place now where we can measure and we can follow up. Last but not least, I will give you an update on Indonesia by the end of the first quarter. Don't forget, I get a chance to talk to you again in 12 days' time. You have the full Q4 report on February 27, and we'll have a similar video conference at 1:00 P.M. that day. Back to Michael.
Yeah, but shall we jump to the questions, Carsten?
Yes, let's do it.
Regarding your work together with the French company Ellipse Projects in Indonesia, what is the perspective by this collaboration? Is there more to come in the future of something like that? I think you touched upon Indonesia and this work together. But there's a couple of questions here regarding, could we expect something more like similar deals in the future?
Yeah, let's focus on the partnership we've set up with Ellipse Projects here in Denmark first. So we have a joint venture now together with them. And from that, we are bidding into Indonesia. So it's our joint venture that has won the commercial agreement in Indonesia. If you go in and look at Ellipse Projects, go in and Google them, you'll see where they are. They have a lot of activity in Africa and also in Southeast Asia. And they're really specialized working with governments, working on financing, helping finance different projects. That's their specialty. And it's perfect for us to work together with them in opening doors. So I think on the back of this deal in Indonesia, which is rumored across Asia, even though it's not a done deal yet, I have to keep saying that because of the financing. But there are other opportunities opening up.
GomSpace is, oh, hey, you guys can do that in Indonesia. What about some of the other Southeast Asian countries? Couldn't you do the same? Yes, of course we can. We'll do that together with Ellipse Projects. Then Africa is also a nation or a part of the world that will benefit a lot from more satellite communication. We're also hoping to build opportunities there. Will we do other joint ventures partnerships going into the future? Yeah, probably. In principle, we have a partnership with SAIC. I think whatever it takes to get more momentum into the market, we'll do that.
Yeah, that was the second question. So you answered two questions in one, Carsten. With this effectiveness, we will soon be finished now, Joe. There's a question here. Do we have the skills that are competent to deliver and run constellation to the Danish military, as an example? And there's also, I think everybody is realizing that the military budgets are going up. Surveillance must be a big part of it. So do we have the competencies, and can you run it for the Danish military? And maybe a little bit to talk about the defense industry, which is clearly a growth place. Is that also potentially a growth place for you?
Yes. It'd be my similar answer. Yes. And for a number of reasons. Do we have the skill set? Yes, we do. I don't think we're going to operate a whole network. That's not the point. But we absolutely have the skill set to deliver a critical part of the surveillance, for example, for Arctic, where if you talk about Denmark. Beyond that, you can call it defense or call it government. There's a lot about this sovereign nation. There's a lot about, okay, we have different alliances with the U.S. and NATO, Europe, etc. But maybe we should be able to do a little bit more ourselves. Maybe we want to control the way that we monitor fishery, the fishing industry, and the boats around, the naval industry around our country, for example, Indonesia. There's more and more of that coming.
I'd say Denmark needs to hurry up a little bit. We are behind. We actually have all the skill sets in Denmark to do this fast. But it's a slow process. But I'm happy to see now that there is much more funding coming out. So yes, we have the skill set. Yes, we can deliver it today. And yes, we'll deliver it to government and also defense around the world because I do see there's a strong trend there. And we have the technology to do it.
Yeah, because I've read something about it. I speculated also myself. The Ukrainian situation showed that it's very easy to put down a country's infrastructure, but not if it's small satellites in space. I know it's the Starlink, and I know you're not connected to it. But are you feeling that you are hearing others that we might need a backup of our communication and not a full country's communication? And this that can be shut down or cut over by cables in the ocean is actually something countries might need to consider to have as a reserve, I might say.
Yes, absolutely. Absolutely, it's needed. And I think what you'll see is that sooner rather than later, of course, we have an interest, and you have an interest as shareholders that it goes faster. But there is an element of you can't just wait and say, "Oh, shit, something" excuse my French, "something happened. Let's get a satellite up and flying. Let's get 20 satellites." Yeah, it takes a little while. You have to think ahead a little bit more. Wouldn't it have been great if we in Denmark already had a satellite network we could lend to Ukraine? That would be great. We don't because we haven't made those decisions. We're a little bit slow there. So that needs to come up and running.
To give you an idea of the financials, to build a whole network surveillance for Arctic, let's say with 20 satellites, something like that, it's probably going to cost around the wing of an F-16 fighter jet. That's about the price. It is absolutely nothing in the big context of what you can do with the technology. So my answer is very clear. Yes, you will see more government and defense business because they will start investing more. And to the governments, I'm around the world, I think you better giddy up because it needs to go a little bit faster than it's going today.
Then there's a direct question. I don't know whether you want to answer it. Is Kongsberg a competitor on the project in Indonesia? It's because he speculates that there has been some ministry visiting them in.
Yeah, I saw that. What's interesting about Indonesia is there are many projects. If you go in and Google, you'll see they're signed with some other providers of services and satellites in other parts of the government. So I can't really say why they are there. I have been visiting. I did see it. Kongsberg is actually not directly a competitor, but Kongsberg owns a company called NanoAvionics that is a competitor from Lithuania. So I don't know if they're competing with us there. What I can say is we've signed a commercial agreement. So as far as I'm concerned, we have the agreement. We just need to get the financing in place. But what else they are talking about, I can't say.
There's a question on why you couldn't make your Q4 today. But I think you answered that very well. You wanted to be more sure on some numbers and, I guess, with the completion phase and so on. That's always a difficult one.
Yeah, but I can repeat that. I use the word nefarious. And you can look it up if you don't understand it. There's nothing obscure about it. I just decided I didn't want to release some of the numbers because I could see they might change. And then I have to go out and explain to you why they changed. I don't see any reason to spend energy on that. But at the same time, I decided I did want to talk to you today. We do have a good Q4 from a cash perspective. So good news. And I wanted to tell you about 2024. So I took the opportunity to talk anyway. And we'll meet again in 12 days' time to look more at the details of the report.
Then there's a question around the SAIC. On paper, it looks like a good partner on the U.S. market. Maybe you haven't released so many things. I think you touched a little bit upon it in your presentation. The question is, are you still seeing this as a potential way into the a strong potential way into the American market? And is there some pipeline? So it's a little bit more specific. Do we have a pipeline lined together with this partner?
Yeah, absolutely. To be careful, I don't venture into the things I can't say here. But I would answer in general. So do we see that as one of the strong stepping stones into North America with SAIC? Yes, we do, absolutely. Are we working on other fronts as well? Yes, we are. So it's not just that. But I do see SAIC as a strong partner for us. We're working on developing a joint offering into the market, as I've communicated before. And I hope we'll see something I can communicate more concretely during 2024. To me, the relationship with SAIC is also a long-term relationship where we are building up, looking at really capturing a much bigger part of the North American market. And it doesn't happen in a quarter. It's something that takes time. You have to dedicate yourself to it.
But there are other channels into North America as well that we are looking at. And one thing I want to highlight why it's important to have these partnerships is that if we want to do some of the larger deals in North America, there could be governments. We need somebody who can hold a U.S. government contract because it's harder for us, is one. Also, when the deal size goes up, it's difficult for us to manage this out of Denmark directly. We need to have partners locally that can also help managing the deals. So this is why we are building it up. So when the opportunity is there for something bigger, we are actually able to execute on it.
Then I think there's some questions regarding whether you can look at the critical infrastructure. I think you said that very clearly. What about Arctic? I also said I don't know whether you have more comment than you can build that extremely.
No, we can. I mean, we have the satellites that go up in space for the Arctic for surveillance. All of that we can do. We know exactly how to do it. We have the technology today. So that's fine. Then you need to have the data to come down to the ground. You need analysis of the data to say what's going on. And to give an example, why is it important for Arctic? Well, we only have so and so many destroyers that can sail around up there in the Arctic and figure out what's going on and try to spot something on the horizon. You have about what, 40-50 km potentially at best you can see. We can see everything from the sky. You only have so many jet fighters that can fly around. We can see everything from the sky.
Through that, you can direct where your destroyer is going, whereas the jet fighter is going to take a closer look. All of that is possible. We have the skill set to build that. Denmark, as such, have the technology to build a ground segment as well with the military. It's all very clear. Oh, and by the way, environmental stuff, probably in 10 years' time, what do you think? Maybe there's a free sailing between Russia and Greenland and Canada. The game is changing once the ice is melting, which is probably happening. Even more reason to get going on this part.
We just need to convince the military guys that the only thing they know is the drones. Maybe they should look a little bit.
No, I know they are. I know they are. So let's not be too hard.
Yeah, I know.
I know they are.
I know. I know. I know. I know. It's always tough. Then there's the restart of the Indra collaboration. Is that except some projects that GomSpace won back in spring 2021? And if so, what is the potential if Gom is choosing to the primary projects?
So what was the first part, the project with?
Yeah, except some projects that GomSpace the person is asking whether the restart of the Indra collaboration, is that except some project that is there something left out that GomSpace won back in 2021? Is something left out? And is there potential for more in this one?
Okay. So yeah, we need to separate it out a little bit. So the Indra, I would say, Startical deal because Startical is a customer that has to provide this air traffic management to the airports and the airline companies. So that is one trend. This is one direction. This is one track for developing a technical solution together with Startical and Indra that will work. It's a prototype. And then based on that, they will build out a whole network. So that's one thing. GOMX-5 is something different or it's GOMX-1. Sorry, probably didn't slip. GOMX-1 is something that we launched with ESA funded there. We have GOMX-1, 2, 3, 4. And then we are expecting it to continue. ESA continues to help us with funding here, also the Danish Space Agency. So it's two different things. And the GOMXs are actually for testing and verifying technology.
So if we have new technology, we get Flight Heritage, meaning we send it up. We can test how it's working. So when we sell to customers, we know that it's working.
Perfect. And then I think the last question, which is a perfect way to end this, where do you see GomSpace in 10 years' time? Has something changed? Now you've been for the company for almost a year. You moved it in some direction. Are you more seeing it as a product company? Or do you still have the ambitions to build it as a constellation company or both? So a little bit about the talks about how you look at it in 10 years' time.
Yeah. Yeah. I will answer it a little bit different. The counter question is, 10 years ago, before GomSpace was listed, what do you think GomSpace would be 10 years from now? I don't think anybody would have guessed that. But for me, it's very much about leadership. It's very much about understanding the market and leveraging the technology you have. So right now, we see a very clear trend. We are focused on how do we get cash flow positive? How do we stabilize the company? I see a lot of trends going out in the market. I think the whole surveillance and observation is something that we will prevail in and will continue with. But I firmly believe in agile leadership, meaning you have to adapt all the time.
It's difficult to say where we'll be in 10 years other than I can say, I think we have all the foundation to continue to be a great company. We've always been a great company with a lot of knowledge and technology. We'll continue to be that, but with more profitability. I think you will see that we will be growing in more parts of the world, not just in Europe, which is our biggest market. I think you'll see we have more business in Asia and in North America as well, for sure. So I see a company growing. But I also see a company adapting with the time.
Perfect. I think that was the last question, Carsten. Thank you for taking us through your market update and the results.
Thank you.
Of course, as you mentioned, we will see again very, very soon. If we didn't catch a question there, I will see if I missed one. There was a lot. I will bring it to you on the 27th. See you there, Carsten.
See you.
Thank you for listening.
Happy Valentine's Day to everybody.
Yeah, you too.