All right. It is 10:00 A.M., so I would like to say welcome to this Q2 report from MilDef Group. Today, we will have myself, Björn Karlsson, CEO of MilDef Group, and our CFO, Daniel Ljunggren, presenting the Q2 report. For everyone attending, feel free to type your questions in the chat, send them to Olof Engvall, or raise your hand in Teams, and we will take your questions. We will go through this presentation, and we have a Q&A session at the end. If you cannot wait, feel free to do so as we speak. We want to make this as interactive as you choose. Today, we will go through a few things that looks like this.
We'll talk about the MilDef universe and the things that we do for those of you who are new to the company or perhaps haven't heard of the latest and greatest from MilDef. We'll talk a little bit about the dynamics of a new world. There are macro effects that impact us as a company and as an industry. Go through some business highlights from both the first and second quarters before we go into the financial overview that Daniel will guide you through. Then we'll talk at the end about our strategies for future growth and a little bit of a future outlook before the Q&A session. We'd like to start with some things about MilDef and our universe. This company was founded in Sweden in 1997, so 25 years ago. We went live on Nasdaq Stockholm on June 4, 2021.
More than 200 employees across 5 countries right now, and our core markets are the Nordics, where we are super strong, in the EU and in selected NATO countries, including USA. Our customers are split between government customers and other defense, security, and defense companies. Most of them are global. The product portfolio is a complete set of tactical IT consisting of hardware, software, and services. We grow organically using our portfolio of products and services. We grow through partner networks, especially across Europe, and we grow through acquisitions. We'll talk more about that a little bit later. This is what we do. We digitalize the world where the stakes are the highest, requirements are the toughest, and when technology has game-changing potential. For us, this means that we are active in the security and defense space.
We do that, we deliver the cyber domain across everything on land, in the air, and on the sea, and under the water. Secure digitalization on land, air, and sea. That is what we do. Our markets and customers, I mentioned them before, but we have our own offices across the Nordics, in the U.K. and USA. We have a partner network across Europe. If you look at the revenue split for this company, it is basically 50/50 split between government customers and other companies. We have a lot of focus right now in the Nordics for apparent reasons. This is our stronghold, and there's so much going on in the Nordics right now that is important from a business perspective. We'll talk more about that as well.
Especially, we have a new focus on some NATO countries that were not maybe on our radar before but have become even more relevant now with Sweden applying for NATO membership. This is what it can look like when we digitalize the world. The tactical IT we deliver in the hardware portfolio is everything that you will need for an IT system. Everything from computers and servers to storage to displays and the accessories that goes with it. We also deliver services, everything from system design through installation, training, and the full life cycle of a digitalization project. Finally, we also deliver software that for something that we call zero-day deployment, which is automation of IT deployment in a NATO-compatible way, and that is important, and we'll talk much more about that in the future.
Maybe not so much in this short call today. If we zoom out a little bit and we look at the world that we live in in the first half of 2022, we see that first of all, which is something that, of course, has a global impact, not for just us as a company, but for everyone in the world, is the Russian invasion of Ukraine on February 24. This changed the dynamics of the world. This perhaps even more so for the Western world, which is where we are a part of. One of the reactions from this is on the second bullet point, which is when Sweden announced, the Swedish government announced that we are raising defense spending up to 2% of GDP. Former levels were around 1.3%.
This is a significant increase in defense spending over the years to come. It's a steep incline, there will be lots of investments, but it's also a long-term investment in growth for security and defense. The 2% limit is, of course, not a pure coincidence. If you look at the third bullet here, on May 18th, Sweden and Finland jointly applied for NATO membership, and that is where the 2% defense spending of GDP comes in. This is important for our nations, this is important for the Nordics, but it's also important for us as a company operating in the security and defense. This is very important for us because it offers us new opportunities.
As a member of NATO, as being on the inside, we are able to take our NATO experience, our NATO-compatible products, and export them in a way that we could perhaps not do before. We look forward to seeking strategies and partnerships across NATO that can grow not just MilDef but Swedish security and defense globally over the years to come. These macro effects, some of them are horrible. No doubt about that. We have to do our part of that, and some of them bring opportunities, and we need to do the most and the best of those. That is where we stand. Now we zoom in a lot, we zoom in all the way into the Q2 highlights, and I'll just touch on these numbers.
Daniel will go into details, and then we'll look at some of the business highlights that may not all of them be visible in the numbers yet. If we start with the order intake, it grows by 41%. This is very healthy. We are keeping this high pace of growth in the order intake, and that is important for us. Today's order is tomorrow's revenue. The revenue also keeps growing. It grows by 46% in the second quarter. If we look at the first half of the year, we're almost twice the size of the company in terms of revenue compared to the same period last year. The order backlog is now at a record high of more than SEK 900 million, so that's another 44% growth, and we keep defending our gross margins.
There are price increases on components, and there are logistical challenges, but we protect our margins, which is important. I want to mention this, even maybe not to highlight, but if we look at there's a negative EBITDA, and it's also a little bit worse than the same period last year. The quarters are volatile, so they go up and down. If you just zoom out to the first half of 2022, you will see that it's a fantastic increase and improved performance on EBITDA. We are back-end heavy, if we look at the deliveries. When Daniel talks through the numbers, he will take you through the order backlog and look what we have in store for the second half of 2022.
Just taking the big screen instead too.
Someone has their microphone on, and maybe they want to share their lives, but I think we should maybe save that for the Q&A session. Just in summary, accelerated order intakes, very strong sales, record high order backlog. The gross margin is very close to 50%. We really want to step over that 50% line if we can. Yes, there is a negative EBITDA margin, but if we look at the first half of the year, this is a great improvement. This is not just because we're growing, but also because we're changing the revenue streams to become less volatile over the year.
If we dig down into business, one thing that you won't find in the order backlog just yet is the framework agreement that we signed in Sweden with FMV, worth more than SEK 870 million, and that is across seven years. This signals more than just the financial value. This signals that MilDef is one of a handful of strategic suppliers going into the future with this increased spending and this increased investments in capabilities for Swedish security and defense. If we move across the Atlantic to the U.S., we won a SEK 50 million deal, the biggest deal so far in the U.S. This is also important because it's part of a bigger army program.
We are gaining access with our technology into the U.S. Army, and the U.S. market, of course, is by far the biggest in the world. We really look forward to having the best year so far in the U.S. this year. If we go back across the Atlantic and we just cross the border into Norway, we closed a deal worth SEK 82 million for the Norwegian Armed Forces. This is important because Norway, as a NATO country, is also a country where MilDef is a key supplier in their digitalization efforts for the army. What we do there, we can also reuse on other markets. All of these are super important for us.
If we stay in Sweden and we look at the integration business that really started to boom for us last year with an acquisition of a company that is now called MilDef Integration Sweden, part of our business unit, Sweden, won a prestigious order to continue upgrading the combat boats in Sweden, something that we have done before. We know how to do it, and we look forward to doing more. The integration side, very strong on the naval side of things, and we look forward to doing more on the army side of things. Again, back to Norway, and I mentioned our software before. We have a rather unique piece of software that automates deployment of IT systems in a way that is NATO compatible. It creates interoperability, which means that nations can work together. This is increasingly important.
We automate, we make things more efficient, but we also make countries more compatible using our software. We look forward to internationalizing, our system called OneCIS, as we go forward. These are five things that I think are important. Some of them are visible in the report, in the financial numbers. Some will be visible because, again, our framework agreements, we do not put them on the order backlog before they are actual orders with price, quantity, and delivery time set. If we summarize these things, it's been a very busy business first half of 2022. Let's look at those, things also in hard numbers, Daniel.
Thank you for that, Björn, and hello to everyone joining this conference call. As Björn mentioned at the beginning of the presentation, my name is Daniel Ljunggren, and I'm the CFO at MilDef, and I'm very pleased to present the financial update of the first half of 2022. If we dig into how the first half of 2022 has started on the next slide, if we summarize the first half year 2022, we see that, compared to the same period last year, MilDef net sales increased by 97% to almost SEK 260 million. That's a growth of almost doubling. That's 96% growth, and the organic part of that growth is 34%.
Very happy also to see that the gross margin continues to be improved in the first half in 2022. Shows a gross margin of 48% compared to the 43% in the same period last year. That's an improvement of five percentage points. This is a complicated situation with the component prices and freight prices, et cetera. You all are aware of the inflation that's going on right now. That means that we have been able to address the increased costs very well. We see the adjusted EBITDA has been improved with almost SEK 40 million, mainly due to the strong Q1 we had this year. As we saw in the Q2, it was not so good compared to the last year.
The EBIT improved with almost 90 million Swedish krona and profit after tax improved with almost SEK 10 million. All in all, this put us in a much better position going forward into the second half year than it looked like one year ago. For those of you who has followed MilDef, you know that we always have a strong second year of the half and mainly a very strong Q4. If we move to the next slide and zoom out a little bit and look at the financial performance over a longer period of time, I'm very pleased to announce that on the last 12 months, we had an all-time high sales of almost SEK 600 million . That's a growth of 34% compared to one year ago.
That's far better than our current long-term growth target and also better than our CAGR the last five years. The growth engine is accelerating, and as Björn said, the order intake looks good, and the order intake is our future revenues, so hopefully this can continue. You can see that the adjusted EBITDA margin ends up on 7.7% the last twelve months, which is below our current long-term target of at least 10%. Going forward, we hopefully in the second year here can move above our target of at least 10%. We go to the next slide, and we can see it zoom out even further in time and see the top line development since 2016.
We can see if we compare that with the last 12 months, we have a CAGR of +25%. That is what we have seen historically as well. We continue to show a good CAGR and a good growth year by year. We can move over to the next slide and look at the order intake. We can see an order intake of almost SEK 690 million the last 12 months. That's a decrease if we look how it was a year ago. It's a decrease with 13%. However, a little bit unfair picture, I would say. In the Q4 2020, we received a major order in the U.K. market.
If we eliminate that order, we see that the underlying growth of order intake is 34% compared to how it looked one year ago. We can jump to the next slide, we look at the order backlog. We can see that we have a record strong order backlog when we close the first half of 2022. It has improved with 44% in one year ago. That's a big difference for us if we look back a couple of years in time, that we have now a significant order backlog, and we can have a good visibility going forward, and we can see two to three years forward. That's good and healthy for MilDef.
We can also see if we jump into the next slide, and we dive in a little bit on how the order backlog duration looks like and how we plan to delivering on this record strong order backlog. You can see that the second half of this year, we still have SEK 473 million left to do in the order backlog. That is almost 50%, more than 50% of the current order backlog, which should be delivering in 2022. That would indicate that the full year growth 2022 of 56% if we compare that to the full year 2021. You all know that it's very tough and tricky situation on the component market.
We want to just make sure that you all are aware of that, of course, there are risks under these SEK 473 million on planned delivery dates. There may be delays in deliveries that will impact the outcome, and the actual outcome can be different from the picture we're showing right here. If we move over to next slide, we have a glimpse of the balance sheet. We can see that we are still in a very healthy position when it comes to net debt and current cash position. The net debt to EBITDA is still negative, which is positive, and this is also giving us some future confidence when it comes to M&A activities going forward.
Here in the beginning of July, we also signed a credit facility agreement with SEB, giving us a 325 million SEK credit facility to use for future acquisition and M&A efforts going forward. I think it's the last slide of the financial update, which is just a summary. If we summarize the first half 2022, we see a sales growth of 96%. Order intake is +38%. We see an improvement of the gross margin from 43% up to 48%. We have operating cash flow that's for the first half, it's almost SEK 50 million better than it was one year ago. If we look at the last twelve-month figures, we can see an all-time high sales of SEK 597 million.
We have an EBITA margin of 7.7% the last 12 months. That is something we hopefully can improve going into the second half of the year that we can at least improve it, so it will be above our financial target that is at least 10%. We have a very strong order backlog, and we have a strong commitment to our customers going forward to deliver and convert that order backlog into revenues is +SEK 900 million. We also move into the second half of this year with a solid and a strong balance sheet and financial position. With that said, I think I will close this financial update for this time and hand the word over to you again, Björn.
Thank you for that, Daniel. Just a future outlook, and I want to talk about some of the things that we do to realize the potential for accelerated growth and the investments that we do in the future. Let's start organically, and we might have mentioned this before, but the second quarter had a 4% organic growth, and our quarters are of course very volatile, so we don't look at that too much. But we think we should be able to do better in all quarters using the fantastic potential that we have in our technology portfolio and with the additional software and services that we now have. We look to expand organically on the markets where we operate with our own offices, our own staff, and our own portfolio as a potential to grow more.
We see that there is a fantastic untapped potential to do that. If we look from the left-hand side with the U.S., of course, we're now having a very small footprint on the biggest defense market in the world. If we look at the right-hand side, I think that there's so much more that is happening now with the investments, the expansions, the new capabilities where we can be an important supplier. Our organic growth on the markets where we already operate has good potential, and we have the right teams in place to realize that potential. We also look into expanding the portfolio even more. We have, in the Nordics, created a model where we are a one-stop shop for our customers.
You can get all the hardware, software, and services that you need from MilDef, from our own portfolio, from third-party portfolios, and from our partners. That will continue to be important as we keep growing and climbing in the value chain. Finally, there is non-organic growth, the acquired growth. We have created a model for acquisitions and for integrations, which are of course, even more important than the actual acquisition because it's what happens after an acquisition. I'm happy to say we've done four acquisitions in the last few years, and they have all been successful. Of course, because we have found fantastic companies and fantastic people. To some extent also because we have a fair and good model that makes it easy to come into the middle of the family, build a career here, and do some fantastic things.
If we look into what this looks like, our M&A agenda, we have a model where we can create profitable growth. If we look at the compass on the right-hand side, in plain words, this says what we're looking for. We're looking for more services, we're looking for more software, and we're looking for more tactical hardware. That is about increasing and expanding the portfolio we already have. We are looking into space technology because that is the next domain. We're already doing a few things that I claim to be space-related, but we need to do a lot more before we call ourselves a space company, but we will move there. That is part of our long-term plan. We're looking into new markets. We're looking at partners and competitors as acquisition potentials as well.
We're looking at security of supply, which means we also look downstream into our supply chains for securing the deliveries of our technology over time, which is also increasingly important. We look for more capacity as well, just in general, being able to do more of what we already do. We have a map that is highlighting the acquisition targets, opportunities that we see. We have a backlog where we nurture and where we mature these M&A opportunities. There is a MilDef blueprint for how we evaluate, how we negotiate, how we do due diligence, and how we move from opportunity to transaction. We have an organization that works only with M&A topics. There are a couple of people.
An organization sounds like 200, but there are a couple of people who do nothing else than work with this, and they are good at what they do. Finally, we have a greenhouse model for successful integration, which means that when you join the MilDef family as a company, we create a home here, that works for both companies. We take the best of the cultures, the best of the portfolios, and we create something bigger and better than before. If you're listening to this and you have ideas of good companies that could be a fit for us, reach out because we are working very actively in this domain. We aim to make one significant transaction per year at least.
We have not done one so far this year, but it doesn't mean that we are not working on it. I can assure you that. Okay, three things to look out for, going forward. One of them is the NATO effects for Swedish defense industry. This is. There's a little bit of risk, from an industrial perspective because there will be new players trying to target the Swedish and Nordic markets that may not have been successful or active before. There is a huge potential reward in our ability as a Swedish company, and Swedish defense companies are competitive on a global market.
With the addition of the NATO effect of being part of the inside, I think that Swedish defense, security, and defense industry is very hard to beat on the global market, and we look forward to having a little bit of that extra capacity, extra wind in our backs as we keep going forward. There is a MilDef NATO strategy, and we aim to do the most of that. The market consolidation is expected to continue, so there will be M&As, there will be new companies, there will be growing companies. This is an interesting space to look into right now with security and defense. So much happening, so much more funds being available. That will create market movements that are very interesting to follow. Finally, we of course have big ambitions in this company.
The people working here, I think, are special people in their professionalism, in their capacity, and what they are able to do going forward. We're not done yet. We aim to become the Nordic voice of digitalization within security and defense. Look forward, if you like us, you can look forward to hearing more of us, across different domains and different media. We have something to say, and, we're not afraid to say it. To summarize, second quarter delivers growth far above target. The first half shows increased profitability. The order intake has built an all-time high order backlog. We are stronger in the Nordics than we have ever been before, and the potential for our NATO compliant software is growing. That's something a little bit extra, a bit of icing on the MilDef cake, if you will.
With that, we open up for the Q&A session. Let's see. We have a couple of hands in the air.
You have a question in the chat as well, Björn, about M&A.
Okay.
I think perhaps you covered it, but have a look at it.
I will. Maybe you can, Olof, help me with finding out who is first there with their hands raised.
Absolutely. I can read it out loud. It's from Marcus Wilkins. "Please tell us more about how you work with M&A, who drives and owns it, and the internal human resources you have for it." I think you did cover most of that, but.
Well, I think so, but I mean, I talked about that. We have a model that we follow very closely, and that is we're using our own resources to map the territories, which means we know our markets, we know our domains, we know competitors, partners, customers, and other players in the markets. We use that, and we put them on a map. We evaluate these companies from a number of dimension. We find out what types of people and culture there is, the type of technology. I mention people first, because we are a technology company, but we are more than that. We are a people company.
We look for cultures that are a good fit, companies that are a good fit, and then we put the people who work with M&A start having discussions, moving this, finding out if there's an interest, and over time, moving this from potential acquisitions all the way to an M&A transaction and after that an integration. I think we talked quite a bit about that. If there are specific questions on that, feel free to reach out now or after this presentation.
Now you have Erik Golrang on the line. Go ahead, Erik.
Thank you. I have a couple of questions. First, two questions, detailed questions on the second quarter order intake. How much, if anything, of the framework agreement was called off? Or the Swedish, the big one, SEK 870 million was called off in the second quarter, and the Norwegian SEK 82 million order, that wasn't included in the second quarter order intake, right? Or was it?
I'll start with the second question. You're correct. It came after the first half. That is part of what we now have in the order backlog with deliveries in 2022 and in 2023. The main part of that goes for 2023, and you will see that reflected in Daniel Ljunggren's pie chart in the next report. That's correct. On the first one, it's small numbers. There are a few call-offs on that framework agreements, but they are pretty small so far. They are more of a strategic character when it comes to some of the services that we deliver.
Okay. Thank you. Next question on the pie chart showing the duration of the order book there. That's very helpful. SEK 473 million for the second half. I guess that excludes orders that you could book in the second half that would be delivered in that period as well, so that there could be additional business on top of that, or should we think of it as you being sold out for the rest of the year?
I mean, that is correct. Of course, we have to also understand that there are lead times on our products. Yes, new orders that can be delivered can add to that. As Daniel also mentioned, if there are things of a negative character, long lead times, delays, something that happens, this could also have a spillover. For those of you who have followed us before, we mentioned in the fourth quarter of last year that we have some spillover into the next year. This is not to be seen as a guidance or a forecasting tool, but it's a fair view of the current state of the order backlog.
As you said, Erik, if you combine those two things, is there new business that could be delivered this year, combined with what are the risks contained in this order backlog? If you have those two numbers, then you can do some interesting math on the company
Yeah, I just want to add there, Erik, as well that you know that our Norwegian subsidiary, Sysint, doesn't show up in the order book. They are excluded from that one. We will see a second half year from Sysint as well you can add on top of that.
Thank you for reminding us. Second question. Good gross margin again in the second quarter here. Is there any reason the gross margin shouldn't improve second half versus first half, mix-related or otherwise?
It's a difficult question. I mean, we don't report on the mix in the order backlog, but one of the things that makes this difficult to predict is that still we have. When it comes to component, there are two components, semiconductor components, two things tend to change. One of them is lead time, and one of them is price. Sometimes, there is a price increase that we have to take in order to deliver true to our promises. It makes it a little bit hard to predict. What we look at this very a lot for the first half, and we see that we've been able to protect our margins, so we hope to continue to doing so.
Again, there is a bit of an unpredictability based on these, moving targets on component prices and on lead times, that makes it hard to say with accuracy if that will be the case. We of course work intensively with protecting it. This is key for us going forward.
Okay. Final question. Could you indicate what percentage of sales that your own products with your own IP represented in the first half year?
I look towards Daniel to see if he can answer it. I know that he can, but if he wants to, I'm not so sure. I'll leave the word to him.
Of course he wants to.
Of course he wants to. I would say it's roughly around 40%-45%, if that, in that ballpark that's coming from our own IP, and then you add our services, software, and also the third-party products from Taiwan, but 40%-45%.
Thank you.
If you look at the total, there is of our own products are dominant if you look at the hardware side of things.
Thank you.
Thank you, Erik. Good questions. Do we have someone who dares to ask questions after Erik? The list, but I don't see anything. Let's see if we have something in the chat. Maybe I should just add to the question from Marcus Wilkins regarding M&A that we have part of the management team, we have Ola Alfredsson, who's our Chief Business Development Officer. So if there are general M&A questions, you can ask that and pose those to him. You can contact me as well. If it's country-specific, I would say, and maybe you have a good, great idea, then you should connect to some of the country managers that we have.
Now we have a question from Anders Björkstén. Please go ahead.
Yes. Hi, good morning, Björn and Daniel and Olof.
Morning.
So-
Morning
I have one question. Obviously, we had defense budgets now being raised to 2% of GDP, and what's the kind of timeline here? I mean, there are political decisions. These need to trickle through down to the actual organizations that place the purchase orders, and they're gonna kind of structure their budgets, where they're gonna put the money into which verticals and so on. Can you maybe talk about the market? What kind of timeline are we looking at here? Is it? You mentioned kind of six months, and so we might start seeing something. Yeah, if you can give a broad spectrum, maybe it is different in the Nordics versus continental Europe and maybe in the U.S., it doesn't seem like defense budgets are going up that much over there. Yeah.
The market is huge, so that's a totally different question. Yeah, maybe we can start with Nordics and trickle down to continental Europe as well.
Yeah. Well, if we look at, first of all, how the defense spending development is going, because this is such a massive increase. The Swedish government has tasked the Swedish Armed Forces to grow into the new cost structure at the latest 2028. The opposition is saying it should be no later than 2025, and there's now work ongoing to figure out how to fill those capability gaps and how to be able to effectively spend the money to make them investments that create effect. That is kind of the timeline we're looking at. You have to look into what are the types of products and services being ordered.
In our case, there are a couple of ways that these projects reach us, and one of them is downstream, which means that someone else will order something, let's say a new combat boat, and the IT equipment may be coming downstream. That takes some time. I mean, that can take a year. Some of the things are more here and now, and that is part of increasing the capacity that already exists, and that is what we expect to start seeing in the second half of 2022. Because of what you just said, first you have a political decision, then you have money to spend, then you have like an overarching strategy for how to spend it and where you should focus, and then this trickles down into the projects.
They do their inventories, they do their plannings, and then it ends up with someone in purchasing. This is a long, long process, which is why we think it's taking a little time. On the other hand, we also see that if we look just in Sweden, in the Nordics, where I think we have the best insights, FMV and the Swedish Armed Forces did not wait to start to ramp up their business until February twenty-fourth of this year or until the 2% announcement from the government. They started before. We were already on an increase and a ramp up in Sweden. They have some preparations, which is why I think we start seeing some things in general for the defense industry in the second half.
I think we've seen some announcement as well for other customers. I believe that Saab, for example, have a couple of orders that they have press released earlier that may be an effect of these new increases.
Do you think that Sweden and Finland, because they haven't been members of NATO, that they have been more kind of front-loading these kind of, or what is a kind of speed up their process in taking these decisions versus the other countries who are part of NATO, and they've been ramping below 2% for ages, many of them. Is that a fair assumption of the situation?
Maybe Sweden moves a little bit, and Finland moves a little bit quicker right now because we have such dramatic changes in our political direction and in the processes that we live by, which creates a momentum for change. I think that some other countries, even though they come from similar investment levels and now want to increase, are more driven by recent events. They are driven by the fact that maybe the U.S. drew back a little bit from Europe a couple of years back during the Trump era. They have another trajectory, I think, than perhaps. I think the sense of urgency is huge now in Sweden and in Finland. I think that maybe we will lead by example a little bit on how we best do these capability upgrades.
For us, I think that's great because we are built into these systems, and we can learn, and we can hopefully replicate this, as we help the rest of the world to digitalize, just as we do here in the Nordics.
It's quite interesting this. I mean, countries need to spend 2% of GDP if they are part of NATO. Like, that's kind of implied.
Mm-hmm.
Very few countries have actually done it. Why haven't countries been compliant, and why would they be there in the future if they haven't been there in the past?
I think that two answers to that, and now I'm speculating a little bit because it becomes political. More from me as a person than from the company, but one of them is accountability. Who keeps checks and tabs on who? I think that has been a little bit unclear in NATO. I think again one of the things that Donald Trump did, however you rate that, was to draw back U.S. forces from Europe because people were not paying their part. That was an incentive, I would say, to start paying.
The other thing, I think, is the urgency, the relevancy, the political and the security situation in Europe now and then also across the world that has absolutely put security and defense on the first line in our minds, in our political will, in media, and also in the public opinion. I think that is the key driver for this. Everyone wants to make sure that we live in a safe and secure world, and part of that insurance fee is paying your 2% GDP for your NATO membership and investing in defense. I think that's pretty simple, and people can understand it. I think that it will just happen because there is enough political will and also public opinion. Again, more of my personal opinion than the company's stance on this point.
Okay. Okay. Thank you.
Let's create a little bit awkward silence to see if we can lure a final tricky question for me or for Daniel.
Okay. I'll do another one then if no one else wants to.
Go for it.
We spoke in the past, and you mentioned that, in, let's call it a bull market for defense, you've seen kind of larger competitors neglecting your space a little bit because they have kind of the price is not big enough, so they focus on the big stuff that they can make much more money on. If you have shortages of semiconductors, whatever, it's like car OEMs do the same thing. They focus on the high value things, so they can make more money. Have you started to see this in the market yet, or is this something you expect to see in the future?
I think we see it more in the discussions and dialogues that take place. We work a lot with our technology partners, and technology partner is sometimes a nice word for competitor. This is where we see that there is a focus on your core business. There is an increased will to have discussions with MilDef as a strategic supplier, where sometimes otherwise the silence would speak and indicate something else. I think that we see these things as trends, but it's more of a whisper in the wind right now than you actually see this in technology partnerships and in the way people are structuring their business.
Maybe we've seen a few of those indications in the past where everyone is organizing to focus on their core business, and we do not see that our particular niche is one of those, again, because it's hard to generalize. If you specialize in something else, it's very hard to generalize your portfolio the way that we're trying to do. It might enter some new competitors, but if we look at the landscape today, we believe that there will be a little bit of an empty space and a vacuum here in our niche that we hope to fill.
Okay. Very good. Thank you.
Thank you, Anders. I think that we are also running out of time. On that positive note, I would like to say thank you to everyone for joining this session, for continuing your interest in our company. We are happy to talk more and answer your specific questions. We hope that you found this useful and that you will also be with us for our Q3 reports and the other things that we do. Again, thank you very much. We'll do our best to keep growing this company going forward. Thank you. Have a great day.