Good morning. I am Han SangYun, the head of IR at Hanwha Aerospace.

I'd like to thank everyone for joining the call today. Now, I will brief you on Hanwha Aerospace's financial performance for Q1 2026.

Please turn to pages 6 and 7 of the presentation. The consolidated sales were ₩5 trillion 751 billion, up by 5% year on year, and the operating profit was ₩638.9 billion, up by 21% year on year.

Both the sales and operating profit increased year on year, driven by earnings growth at Hanwha Ocean and higher sales in our business divisions as well as Hanwha Systems. Further details will be provided in the performance by segment section.

Q1 pre-tax profit was ₩554.6 billion, and net profit was ₩525.9 billion. Please turn to page 8 for financials.

The total assets were ₩56 trillion 542.8 billion. The total liabilities were ₩39 trillion 203.1 billion, and the net-debt-to-equity ratio was 41%.

I will share performance by segment. Please turn to page 9 for the Land Systems.

The Q1 sales was ₩1 trillion 221.1 billion, a 5% growth year on year. While the domestic sales were ₩569.7 billion, up by 41% year on year, the export sales were ₩651.4 billion, down by 13% year on year.

The operating profit was ₩208.7 billion, down by 31% year on year. The domestic sales increased year on year.

However, export sales was impacted by delivery scheduling, with relatively limited volumes delivered in the first quarter. However, with deliveries scheduled in the second quarter and the second half, both domestic and export volumes are expected to increase, with a more meaningful contribution to earnings anticipated.

Please turn to page 10 for Land Systems order backlog. As of the end of Q1, the total order backlog for the Land Systems is approximately ₩39 trillion 700 billion, reflecting the approximately ₩1 trillion 300 billion contract to supply Chunmoo multiple rocket launchers to Norway signed in January.

Regarding new orders, on April 9, we signed an additional export contract for K9 self-propelled howitzers with Finland, valued at approximately ₩940 billion. With this agreement, Finland becomes the third NATO country, following Türkiye and Poland, to operate more than 200 K9 units, and the order is expected to be reflected in the second quarter backlog.

Please turn to page 11 for the performance of Aerospace division. The Q1 sales was ₩661.2 billion, a 25% growth year on year, and the operating profit grew significantly from the same period last year to ₩22.6 billion.

Both sales and operating profit increased year on year, driven by a significant rise in defense volumes and a higher proportion of revenue from relatively higher-margin business. The operating loss related to GTF RSP during Q1 2026 decreased by ₩9.2 billion year on year to ₩16.1 billion.

In Q1, the number of GTF engine units sold was 232, declining from 257 units sold in the same period last year. As for the number of aircraft delivered, Boeing and Airbus delivered a combined total of 257 units in Q1 2026, broadly in line with 266 deliveries in the same period last year.

Please turn to page 12 for the performance of Hanwha Systems. Q1 sales were ₩807.1 billion, a 17% increase year on year, and the operating profit was ₩34.3 billion, up by 2% year on year.

For more detailed performance, outlook, and progress of the business of Hanwha Systems, please refer to Hanwha Systems's earnings release dated April 27. Please turn to page 13 for the performance of Hanwha Ocean.

Q1 sales was ₩3 trillion 209.9 billion, up by 2% year on year and down by 3% quarter on quarter. The operating profit was ₩441.1 billion, up by 71% year on year and 78% quarter on quarter.

For more details on the performance, outlook, and business progress of Hanwha Ocean, please refer to the earnings release of Hanwha Ocean dated also April 27. Lastly, please turn to page 14 on the performance of Satrec Initiative, which is included in the others in the performance by segment.

The Q1 sales was ₩37.2 billion, down by 7% year on year, and recorded ₩2 billion in operating loss. This concludes the earnings briefing, and now we will have the Q&A.

The first question is from Shinhan Investment & Securities. Regarding Poland, how many K9 Chunmoo units were delivered in the first quarter, and how much remains, and how are you preparing for local production?

The answer is: in the first quarter, a portion of Chunmoo launchers for Poland was reflected in the results. As noted in our previous earnings release, we plan to deliver more than 90 K9 units and over 40 Chunmoo units this year.

We are unable to provide a quarterly breakdown as the Polish government and the local media are limiting the disclosure of information related to force enhancement schedules and the procurement volumes. Accordingly, we are also aligning with Poland's security guidelines and we'll share updates on an annual basis.

We'll provide the further details on delivered products at the time of our annual results announcement. Regarding the local production in Poland, discussions on K9 localizations are currently underway.

We will disclose further details once the discussions become more concrete. Next question is from IM Securities.

Recent media reports suggest that, in connection with the Canadian submarine program, the company proposed the local production of K9 self-propelled howitzers as an offset. Are there any updates from Canada regarding potential procurement of Land Systems, such as the timing or the scale?

The answer is: as reported in the media, in connection with the Canadian submarine program, we have been in discussions with the companies in the local value chain regarding a potential framework for the Land Systems. We will disclose further details once there is greater clarity.

Next question is from Samsung Investment & Securities. What was the separate net debt at the end of the first quarter?

Given the significant advance payments received at the year-end, has it decreased meaningfully, and what is the expected direction going forward? The answer is: the separate net debt stood at approximately ₩2 trillion 380 billion at the end of the first quarter.

We expect the separate net debt to increase by year-end. While overall operating cash flow remains solid, an increase in working capital is anticipated.

In addition, investments and ongoing localization efforts are expected to contribute to a rise in borrowings. Next question is from IM Investment & Securities.

Regarding the potential acquisition of Poongsan, assuming the progress were to be resumed and the company were to acquire Poongsan's ammunition business, what synergies could be expected, and what advantages could this provide relative to competitors? The answer is: as reported in the media, discussions regarding the acquisition of Poongsan's munition business have been discontinued.

As such, it's difficult to comment on hypothetical synergies. That said, given that the business operate within the same value chain, some level of synergy could be expected.

Next question is from Daishin Securities. Can you provide an update on the Saudi MNG project and the US next-generation self-propelled howitzer program?

Also, how do you plan to utilize the next-generation wheeled self-propelled howitzer that has been developed? The answer is: discussions on the Saudi MNG project are ongoing.

As you are aware, the current situation in the Middle East has created a short-term challenges in advancing administrative procedures. Once conditions stabilize, we expect discussions to gain momentum and will provide an update when there is a great visibility.

Regarding the next-generation artillery program, we are participating with a wheeled self-propelled howitzer. The preferred bidder is expected to be selected in July, and we are making our best efforts.

The wheeled self-propelled howitzer has been added to our product lineup, enabling us to respond not only to demand in the US, but also to opportunities in other regions. The next question is from DAOL Investment & Securities.

The first quarter export declined year on year, which may be due to the timing effects. You indicated that top-line growth is expected this year and that the export volumes will increase.

Should we expect the ramp-up starting in the second quarter, or will it be more back-end loaded in the second half? Also, could you share the quarterly guidance for the Land Systems export?

The answer is: in the first quarter, only a portion of Chunmoo launchers for Poland were reflected. Compared to the domestic mass production, there was a higher proportion of development and the maintenance activities.

Earnings are determined by the mix of domestic and export deliveries in each quarter, and it's difficult to derive a meaningful mid-to-long-term trend based on any single quarter. The key factor is the quarterly mix between domestic and export volumes.

As for the outlook, as previously mentioned, export volumes are expected to increase starting in the second quarter, with the contributions from Poland, Egypt, and Australia alongside domestic mass production. As you are aware, the defense business exhibit seasonality.

Similar to last year, we expect a stronger performance in the second half, with the results improving further compared to the second quarter. The next question is from Merrill Lynch.

On export versus domestic margins, while it may be possible to back-calculate based on the assumed domestic margins within the scope of what you can disclose, could you comment on the trend in export margins for regions other than Poland compared to the second half of last year? In the first quarter, domestic revenue included a higher proportion of development and maintenance activities rather than mass production.

As you are aware, margins for development and maintenance are lower than for mass production. The guidance we can give is that the domestic operating margins are in the low single digit.

Based on this, the remaining portion can be inferred as export margins. For exports, when combining volumes from Egypt, Poland, Australia, and others, we expect to maintain profitability broadly at a similar level.

Next question is from Kiwoom Investment & Securities. On the order pipeline, you previously mentioned the Saudi and the US artillery programs.

Could you provide more color on the pipeline expected this year, including programs not yet discussed, such as the Spanish artillery projects? The answer is: in Europe, with Finland's additional K9 procurement, Finland has become a country operating more than 200 K9 units.

There continues to be steady interest in repeat orders from existing customers as well as from new customers. As reported in the media, we are also pursuing a localization program for self-propelled howitzer in Spain with a local partner, which has the potential to lead to orders.

The Chunmoo programs have also significant order potentials in Europe, and we expect more concrete developments by the end of this year. For the Saudi MNG project, once conditions in the Middle East stabilize, we expect more tangible progress in the second half.

Regarding the US artillery modernization, we are awaiting the selection of the preferred bidder in July. In addition, heightened instability in the Middle East has increased interest in air defense systems beyond Cheongung II.

There is also growing interest in L-SAM, which we view as a factor that could further expand the order pipeline. The next question is from Meritz Securities.

In this quarter, it appears that lower deliveries to Poland were offset by increased export volumes to Australia and Egypt. Can you provide us an update on how the Australia and the Egypt programs progressed this quarter and share the expected trajectory for the remaining quarters?

The answer is: while we have previously provided quarterly delivery guidance for Poland, we have indicated that such disclosures will be more limited going forward. The same applies to Australia and Egypt.

In particular for Egypt, it is difficult to provide guidance in terms of unit volumes as deliveries are structured on a package basis, making it challenging to establish clear benchmark. To provide some directional context, we expect Egypt's revenue contributions to increase significantly this year, with the overall order of contribution likely to be Poland, Egypt, and Australia.

In the current quarter, both Egypt and Australia were reflected in the results. Considering that the domestic development revenue carried low single-digit margins, it can be reasonably inferred that export margins are broadly consistent without significant variation.

The next question is from JPMorgan. On Cheongung II and L-SAM, are there ongoing efforts to expand capacity?

It appears that the timeline for domestic deployment of L-SAM may be accelerated. Could you comment?

Also, is there a potential for Chunmoo guided munitions in the Middle East? The answer is: with respect to Cheongung II, we are unable to disclose specific details regarding current or future delivery capacity.

However, given the increased demand, we and also other companies involved in the Cheongung II program are expected to respond accordingly. For L-SAM, it is true that the interest from the Middle East has increased compared to the past.

As we engage with this demand, we expect it could lead to earlier export opportunities. Regarding Chunmoo guided munitions, as they are closely tied to each country's force enhancement plans, it is difficult to comment on specific export prospects.

That said, we view the establishment of the Chunmoo guided munition joint venture in Poland as a key competitive advantage. Following the delivery of Chunmoo systems, demand for guided munition is expected to continue.

Given the current instability in the Middle East, we believe such demand will persist. The next question is from Daiwa.

The margins in the Aerospace segment appears to have improved, likely supported by increased defense volumes and a reduction in losses from the RSP business. Has the trajectory for the full-year margin improvement changed, and is this trend sustainable into the second half?

Also regarding the order pipeline, following the recent presidential visits to India, there has been some discussion about the Biho hybrid system. Could you provide an update on the India pipeline?

The answer is: India remains a key market for us. We have completed the second K9 package sales, and there is a continued interest in additional K9 units.

There is also interest in the Biho hybrid system, and we will provide updates as discussions progress and become more concrete. In the Aerospace segment, the first quarter profitability improved overall, supported by defense MRO volumes and some contribution from mass production.

In the RSP business, aftermarket, or AM, revenue increased relative to new engine sales, resulting in a slightly lower operating loss than in a typical year. For the remainder of the year, in defense, we expect revenue to improve with contributions from mass productions and some MRO volumes.

In the RSP business, new-engine-related revenue is expected to increase from this year into next. We will continue to monitor the trend and provide updates on a quarterly basis.

The next question is from Macquarie. Regarding the defense order backlog, the export backlog increased from around ₩26.6 trillion at the year-end to over ₩29 trillion by the end of the first quarter.

Even excluding the Norway Chunmoo contract, this appears to reflect a meaningful increase. Is this driven by a simple adjustment or by orders that have not yet been disclosed?

It seems there may be ongoing, undisclosed orders. Could you provide guidance on the overall direction within what can be shared?

The answer is: as previously mentioned and as shown on page 10, the ₩1.3 trillion Norway Chunmoo contract was added, along with additional export orders. These consist of multiple contracts, and discussing any single item in isolation would not be particularly meaningful for analysis.

In terms of direction, for Land Systems, we expect to consistently maintain a backlog equivalent to approximately 3.5 to 4 years of revenue. If incremental demand arise at a certain point for specific weapon systems and countries, there could be further upside beyond this 3.5 to 4-year level.

The trajectory will ultimately be driven by the addition of specific contracts, and a program such as the Saudi MNG project would represent a step-change event that could take the backlog beyond the current 3.5 to 4-year range. Next question is from Shinhan Investment & Securities.

On export margin dynamics for the Land Systems, for example, Finland's K9 order is a follow-on purchase, whereas the Poland was structured as a new package deal. Would margin be relatively lower for follow-on orders?

More broadly, do margins vary depending on regions, whether it is an initial or repeated order, or as specification evolves over time? The answer is: the differences in margin by country, customer, or whether an order is initial or the follow-on, are driven less by production cost and more by market conditions.

Where demand is strong and competitive pressure is favorable, higher profitability can be achieved. Conversely, margins can be lower in less favorable market environments.

In the case of Finland, compared to when the initial units were first contracted and delivered, the K9's global market position had strengthened significantly. As a product with a leading global market share, its pricing power is increasingly reflected in both pricing and profitability.

Next question is from Yuanta Investment & Securities. You mentioned the Poland JV as a key factor in Chunmoo's competitiveness in Europe.

It appears that the deliveries of HIMARS to around 10 NATO countries have been delayed and the negotiations are facing challenges. Is there any volume shifting towards the company and as a result, and are you seeing any benefits?

The answer is: the situation you mentioned is not limited to this year. It has been developing over the past two years and has recently been accelerating.

We agree with your observation. Based on the competitiveness of our products in terms of performance, cost, and delivery timelines, there is growing interest in Chunmoo across Europe.

One of the key reasons for establishing the Chunmoo guided munitions joint venture in Poland is that the demand for munitions continues following the initial systems acquisition. Localization, therefore, represents a significant competitive advantage.

Reflecting these factors, we have positive expectations for additional Chunmoo orders.