GomSpace Group (GOMX) Status Update summary

Market environment and strategic response

• Heightened geopolitical tensions and increased European defense budgets have accelerated demand for rapid delivery and readiness in the space and defense sectors.

• Focus areas include reducing time to market, improving supply chain resilience, increasing inventory readiness, and investing in cybersecurity, signal intelligence, electronic warfare, and ISR.

• Business development, sales capacity, and solution management are being expanded to capture new defense opportunities across Europe.

• A stronger balance sheet is necessary to meet government contract requirements and provide necessary guarantees.

• Investments planned in digitalization and AI implementation to improve efficiency and reliability.

Capital injection and share issue details

• A directed share issue of 28 million new shares at SEK 7 each will raise SEK 196 million, increasing the main investor's stake from just under 30% to approximately 41%.

• The capital raise is executed quickly and cost-effectively, with minimal administrative expenses compared to a public rights issue.

• Surpassing 30% ownership triggers a mandatory offer to all shareholders, priced at the market average near deal closure, not at the SEK 7 issue price; shareholders are not obliged to accept.

• The main investor, Peter Hargreaves, is described as a long-term, supportive shareholder with no intention of a hostile takeover or rapid share sale; he is also the main investor in Goonhilly.

• The capital will be used to increase inventory, invest in solutions and sales, and maintain a healthy balance sheet for government business.

Guidance and financial outlook

• Revenue guidance for 2025 is SEK 320–380 million, representing 25–48% growth over 2024, with EBITDA targeted between -2% and +10%, and positive free cash flow projected.

• About 70% of forecasted revenue is already in backlog, with expectations for double-digit growth in North America and product business units.

• Product sales are expected to drive margins, while large contracts will drive top-line growth.

• Strong order intake in 2H24 with larger prepayments may negatively impact 1H25 cash flow, with correction anticipated in 2H25.

• No changes to guidance are planned at this stage, despite evolving market dynamics.