Yes, thank you, and also welcome to this conference call. Before we start our presentation on behalf of the Executive Board, I would like to say a big thank you to all 2,600 employees around the globe for their very strong dedication and team spirit and achievements in 2025.

This gives us every reason to look back with joy and pride. A culture of appreciation and personal development is of central importance to us.

It creates the conditions for us to grow sustainably and also remain successful from a long-term perspective. I would like to start the presentation with slide number two, the highlights of 2025.

We are again able to report a double-digit increase in order intake, orders on hand, and revenues. The order intake rose by almost €100 million to €680 million.

The orders on hand are now close to €800 million, 795 to be exact. Revenues grew by 21%, in other words €100 million to €580 million.

EBIT climbed to €47 million, resulting in an EBIT margin of 8.1%. Please note that the EBIT margin includes a positive effect from an €8 million claim settlement.

Without this, the EBIT margin would have been 6.7%. At the end of December '25, we had a net cash position of €105 million, including €87 million from advance payments from customers.

On the order intake highlights, when we look back, we had really great highlights to report last year. Additional orders in the US contributed to the high revenue growth in the Americas region that we will show you later.

The rollout of the air-to-ground protocol converter system in the United States is on track. In addition, first orders for a modernized voice communication system were generated.

The countrywide drone traffic management system ordered by Sweden shows that we have the right applications and solutions to participate in this growing drone market, even if it is only a small order. The multidomain communication systems for the Australian Defence Force's next-generation Air 6500 Joint Air Battle Management System are the type of order that moves us forward, especially in terms of both our product portfolio and our knowledge base.

Following completion of an order from the US Defense Department, there is now a digital air traffic control system in place at the US Army Garrison in Germany. Another drone management system, this time for testing the integration of drones into military airspace for the German Army.

In public safety, we won sizable contracts from the German federal state of Thuringia. Here Frequentis is the general contractor.

Multimedia functionality, in other words, managing multiple types of inquiries via phone, radio, video, or digital channels, is an important element in the LifeX rollout for all fire emergency call centers in Norway. Slide four shows that the order intake grew again, this time by 17% to a new record of €680 million.

Both segments contributed to that success. Air Traffic Management posted a rise of 11.8%, and Public Safety & Transport a rise of 26.6%.

The order intake shows confirmed orders only, as not the budgeted value of the contract. Looking back the past four years, we averaged an increase of 20% per year.

Looking forward, we have a well-filled order pipeline and also very good opportunities for 2026 and beyond. The orders on hand increased by 9.8% to €795 million compared with December 2024.

The composition of order intake and orders on hand is quite similar, roughly two thirds for Air Traffic Management and one third for Public Safety & Transport. We now go more into details about financials, and I would like to hand over to Peter Skerlan, our CFO.

Thank you, Norbert. Hello, here is Peter.

Now to slide number five. The revenues rose 20.8% to a new record of €580 million in 2025.

The book-to-bill ratio was 1.17, underlining our growth. Both segments contributed to the growth.

ATM grew by 18.5%, while Public Safety & Transport grew by 26.4%. In the past four years, we have managed to increase revenues by 15% per year.

This increase built the need for additional employees, on average 8% during past four years, bringing our headcount to about 2,600. We are able to find enough qualified employees around the world to handle this growth as we are an attractive employer.

Some industries, notably the automotive industry, are having to downsize their workforce. The revenue split by segment was almost the same: 68.9% ATM and 31.1% PST.

I'm now on slide six. Revenues grew in all regions except for Asia.

We saw postponements of tenders for projects and therefore revenue in Asia. Some of these projects were then awarded to us in first quarter 2026.

Europe is still our biggest market. We're happy with the new growth in North and South America.

The second highest relative growth rate was in Europe with 15%. The growth rate in the Americas region gave this region a 27% share of total revenues compared with 18% in 2024, while Europe's share fell slightly to under 60%.

We are totally happy with the increase of €40 million. Slide number seven shows the figures for revenues, EBITDA, and EBIT for past four years.

The EBIT margin increased to 8.1%. Without the positive effect from the €8 million claim settlement Norbert mentioned before, the EBIT margin would have been 6.7%.

The settlement occurred in the Public Safety & Transport segment. Even without the settlement, the EBIT margin in PST is above 10%.

The slight decline in the EBIT margin at ATM was due to R&D costs and to set up costs for large projects. As a reminder, we don't capitalize research and development costs.

They are recognized in the profit and loss statement. Now let us return to the numbers for the group in 2025.

The impact on EBIT mainly came from the cost of materials and purchased services, which rose by 38%, outperforming revenue growth of 21%. This was largely attributable to a more material-intensive project in the Americas region.

By contrast, personnel expenses increased only by 12%, a relatively lower increase than the rise in revenues. For the comments on our strategy and outlook, I would like to hand you back to Norbert.

Thanks, Peter. Let's go on slide number eight.

It shows the strategy of becoming number one in control center solutions. On the right-hand side, you can see that our current product portfolio can address a market of around €3.8 billion.

According to our research, the global market for control center solutions, including equipment, is around €14 billion a year. Our strategy is based on three main aspects: R&D, new deployment models, and M&A, to make more and more out of the €14 billion addressable for Frequentis.

R&D results in new solutions and products that cater for the change in technology and user landscape our customers face. For example, critical communications such as mission-critical services known as MCX; drone management, that is the integration of and defense against drones; and the future communications and tower infrastructure that can run in virtual and cloud environments, systems also supported by artificial intelligence.

A word about R&D: so expenses for internally funded R&D amounted to €19.2 million in 2025. It should be noted that the proportion of funding provided by customers was higher in 2025 than in previous years.

Expenses for internally funded R&D are expected to amount to a normal level of around 6% of revenues in 2026. When we look to the next box on the left, new deployment models, like cloud solutions and software as a service, meet changing customer demands and are part of our strategy package.

Nevertheless, we have to say that our customers are government entities usually having funding available for capex expenditures. Nevertheless, we think that over the time, maybe a more opex-based model could be of interest for our customers.

Our decision to acquire companies and interests in businesses that enhance our product portfolio has proven right. Take the emergency services program in the UK, the contribution made by our colleagues at Nemergent, where we acquired a stake in 2020, has been vital in enabling us to partner with IBM.

The proactive search for interesting M&A opportunities remains part of our strategy. When making acquisitions, we focus on parameters such as expansion of the product portfolio, a profitable business model, culture fit, and the acquisition price, of course.

We will continue to look at which technologies and products we develop ourselves and which we buy in. In an increasingly unstable world, systems that function reliably even in challenging conditions are becoming ever more important.

Frequentis is a global leader in this field. We are not passengers, our place is in the cockpit.

Our course is very clear: open standards and true interoperability, so that emergency services can work together across systems and borders. There are currently three major focus areas with potential for growth in addition to our current business, which is mission-critical services or called MCX, drones, and remote digital tower.

I would like to go a little bit more detail into the area of MCX. Let us start with MCX, which represents a quantum leap for security-critical communications used by emergency services such as the police, fire brigades, ambulance services, but also railways and other customers.

Technologies you are probably familiar with, such as TETRA or GSM-R in the rail industry, do not longer meet current requirements and become obsolete. MCX operates on existing 5G-based networks, enabling the real-time transmission of voice, mass data, and video across national and organizational boundaries using a single standard.

Frequentis is already involved in large-scale implementations, such as the MCX rollout in the UK for around 300,000 emergency service personnel. On slide number 10, the growing volume of drone traffic is also changing airspace and are placing new demands on safety and on coordination.

It is estimated that the drone ecosystem in Europe only will be worth more than €10 billion by 2030. For civil and military aviation customers, emergency services, and railways, we develop and supply solutions for the safe monitoring and management of drones, combining traditional radar systems with intelligent sensor and detection technologies.

By integrating safety-critical data and linking drone traffic management, air traffic control, and operations management systems, Frequentis is strengthening its position in the management of lower airspace and the protection of critical infrastructure. I think you're aware also of our remote digital tower.

Our remote digital tower enables airports to remotely monitor takeoffs, landings, and aircraft movements using cameras and sensors, for both civil and military users. Airport operators benefit from the centralized management of multiple airports and from the relief this provides in the event of staff shortages among air traffic controllers in remote areas.

This technology has already been in use for several years in Germany, England, and in Brazil, and we see good growth prospects for Frequentis because there are only a few other companies that offer remote digital towers. Our target regions for remote digital towers are Europe, the United States of America, Asia, and Australia.

Our local subsidiaries in these regions are staffed to manage tenders and the rollout of remote towers. Regarding the United States, our remote digital tower system is the only one currently being tested for US-wide certification at the tech center of the US Federal Aviation Administration.

We still expect to obtain this certification in Q2 2026. Nothing has changed there.

Given our annual volume of over 1,000 projects, questions about our capacity to handle multiple requests at the same time are common. In practice, however, demand is well distributed.

Customers initiate tenders when their current solutions reach the end of their service life, and these timelines vary across customers. As a result, there is no simultaneous surge in demand for individual products, such as remote digital towers.

Let me conclude with the outlook for 2026 on slide number 12. Based on orders on hand of €795 million, we are working at a good level of capacity utilization.

We aim to increase order intake further, and the sales pipeline for '26 and beyond remains well filled. Revenues are set to increase by about 10%.

A word on profitability: inflation and now, above all, shortages, long delivery times, and limited commitments from the suppliers on the IT hardware market will weigh on EBIT in 2026. Temporary shifts in milestones, revenues, and potential start-up costs at the beginning of projects are common challenges for project-driven companies like us.

Overall, we expect an EBIT margin of about 7% in '26, which is above the 6.7% margin we achieved in '25 if we exclude the claim settlement of about €8 million. Capital expenditure, mainly for notebooks, office equipment, and production machinery, will be around €15 million.

Company-funded, that is self-financed, R&D expenses will amount, as mentioned already, to around 6% of revenues in 2026. To sum up, we are proud of what we have achieved as a team in '25, and we are really energized for another year of growth, 2026.

We are now ready for your questions.

Yes, hello. Hope you can hear me well.

I have two questions. I'd like to take them one at a time.

Firstly, starting with the '26 revenue outlook, you've specified your target for around 10% of growth. Could you perhaps just give us some additional color on the underlying assumptions here and why we shouldn't expect a similar growth rate as we saw in 2025?

Perhaps if you could also just shed some light on why 2025 was so strong in terms of revenues, that would be great.

Yes, maybe I will answer your question about the '26 outlook, and Peter will then give you a feedback around the 2025 revenue explosion. So '26, we have a very conservative view on '26 as we see a lot of tensions currently coming up in the Middle East or already ongoing in the Middle East, and also on the delivery time of hardware, especially standard IT hardware equipment.

We currently do not get any commitments on prices, neither on delivery time from HP and Dell. That's why we fear that maybe our execution path in transferring orders into revenues will probably be challenged by the delivery time of IT standard equipment.

Karl can maybe give you a little bit more insight about the problems we have there due to the AI boom, artificial intelligence boom. In orders, we see very good IDIQ contracts in the US.

Nevertheless, I think the US is currently not the most stable country in the world when it comes to decisions. Therefore, we are more on the conservative side.

We have a good run on our IDIQ program execution, and we get orders in from the US continuously. Nevertheless, we have mid-term elections in very soon.

The question is what's the outcome there, and is that influencing the continuation of our programs which have been set up during the new administrative time of the US administration? That's why we are a little bit conservative about 2026 when it comes to revenue.

Jump in '25, Peter, do you want to add something

there? Thank you for the question.

As I tried to show it on my slide number six, you can see that large portion of the revenue increase comes from the Americas as well as a substantial increase from Europe, which could more than compensate the decrease in Asia. I think revenue comes from our projects from larger and mid-sized programs where we had the possibility to do a little bit more in the Americas.

Karl, maybe you can say something about our current challenges on the standard IT hardware equipment side.

Yeah. The challenge here is that the big memory manufacturers are currently focusing very much on providing high-bandwidth memory chips where they can make higher margins and sell them to the big AI data center providers.

This leads to a sharp increase in prices for the traditional random access memory chips that are used in our COTS IT hardware servers. We see sharp increase in prices of our standard manufacturers.

We decided to buy on stock those servers so that we are able to fulfill our contract obligations. This will remain a challenge throughout the entire year and probably also into 2027.

I understand it's not only a price increase, it's also a delivery time increase.

Right.

Daniel, did we answer your questions? Okay.

That's very helpful. A second question would be on the margin outlook.

I guess what you mentioned in terms of memory pricing sort of feeds into that. I was just sort of wandering around the sort of moving parts within the 7% guidance for next year.

If we look at the clean EBIT margin for this year of around 6.7%, I was just wondering where this progression comes from. Is it sort of more the ATM segment with the software transition, or higher defense share?

I was just sort of wondering how you think about that.

May I ask you, you mean the increase from the 6.7% to around 7%? That's your question, where does it come from?

Is it right?

Yes, exactly. Just I guess tied into that the underlying margin dynamics by segment: ATM versus PST.

Just sort of how we should think about that trajectory as well in terms of not just '26 margins, but in terms of your mid-term targets of 10%.

Shall become from the ATM section.

ATM and PST from the margin dynamics. I guess most of the uplift...

Public should come from ATM. I think we are quite satisfied with the PST margin.

That entire uplift also towards the 7% will come from ATM under software rollout, or what are the dynamics there? Because you also mentioned higher R&D costs for '25.

Just wondering if you can shed some light on that. Should we then expect a kind of linear improvement each year as the software rollout gains traction in '27 and beyond?

Yes. When you look upon the history, then you see that in the past we had also the possibility to make a little bit more margin in ATM.

Due to starting costs from programs, that's the reason why the margin declined. We want to come back to better margins and improve them, as well as when the transition to the new products is then fulfilled, which shall be done within the next two, three years, the transition shall be done then to more software-based business.

Great. That's very clear.

Just on the PST margin as well in terms of '25, even if we strip out the one-off gain, it looks like it's quite a step-up as well compared to the '24 margin. Just wondering if there's anything to mention there, or is it just a project-specific, and that's the main driver?

Yeah. No, of course it's fluctuating from one year to the next year, but I think we have reached here a quite acceptable level.

Okay. Understood.

Thank you.

Thanks, Daniel.

Hi. Thanks for letting me on as well.

I would like to follow up a little bit on a margin discussion. Can you confirm that you see basically everything on track towards your mid-term margin target level of around 10% at the end of the decade?

Is this still valid?

Here's Peter again. There are a lot of dependencies here, but still we try to follow this plan.

What do you see as the major risk in meeting this mid-term projection?

I think on the last slide Norbert mentioned some major threats for our profitability. A phase without a crisis, yeah, a worldwide crisis would be quite nice for the margin.

I think if you make a business worldwide, you have probably all the problems worldwide. Next thing is to succeed in finishing our new products, especially in the ATM business.

The next thing is that larger projects, when we fulfill the larger projects, that there are no postponements, that also the customer is able to finish his tasks so that we can deliver in time. These are the main things.

I think other risks, I think we have declared them in our financial statements over several pages: political risks and inflation. Inflation in Europe is a tough thing for us.

As we had inflation rates of 7%, 8%, 9% here in Austria as well as in the other subsidiary countries: Slovakia and Romania. That's tough for us in comparison to the international competition.

These are the things that could hurt us in the future.

Understood. Then one more on the claim settlement.

You mentioned the €8.5 million one-off. Could you provide some more insight on this settlement just to get a feeling of to what extent we should really treat this as one-off?

It would be nice to have this each year, to be honest. That would be really nice.

It's a situation that I don't want to have each year. It's a large program where the customer decided to stop it because the prime contractor did not perform and the customer decided to stop the program.

Frequentis performed, but we had a contract that more or less if the prime does not perform, we have a problem. We had to fight that, and it took several years, yeah, to fight it through.

We had done all our work, but we were not paid by the prime contractor. That's the reason of this marvelous effect in 2025, because all the costs were in past periods, but we had no possibility to capitalize it or do something with it, because we had this fight, yeah.

The question was, will we win or will it last for years? Because, as some court decisions take a lot of years.

Understand. Yep.

Then maybe a last one. Working capital sales, it's flattish for the first time since years on a year-on-year basis.

Do you see this level now as sustainable going forward, especially now reflecting on the shortages that we see on the memory side, but there might be other shortages coming up as well? Or should we prepare for this ratio maybe to even increase higher?

Thanks for the question. It's a very good question.

There we have to make decisions each day. Shall we put something on stock so that we are able to deliver, or shall we risk that we cannot deliver?

Shall we take the contract because the payment milestones are ugly, but it's a tender and we have no possibility to improve the payment milestones, we receive the payment at the end of the contract? It's a decisions that we have to do each day.

Our overall target, especially my target, is to keep it stable and even to improve it, yeah, because we had lower rates in the past. Due to the growth of the company, we have to keep the working capital under control, otherwise it will cost a lot of funds to pre-finance the working capital.

Clear. Perfect.

Thanks a lot for the time being.

Thank you for the questions.

Yes, I will take that question. We are now a stock-listed company since May 2019, so that's around seven years.

Within these seven years, we have acquired 10 companies. I think have learned what it means to acquire a company and then to focus on a post-merger integration phase.

We are in some larger acquisition areas still working on that post-merger integration, which is, of course, a good learning for us. Yes, we are hungry and keen to do further acquisitions.

Are there targets out we are interested in? Yes, there are.

We have around 30 to 35 theses a year where we, not in all of them we go into details, but in some of them we are interested to learn more about their business model, about their profitability level, about their pricing level, about their culture, and so on. Yes, M&A stays a major cornerstone of our strategy.

Will we acquire something in '26? I cannot tell you now.

M&A is one of our prime activities when it comes to growth of the Frequentis Group.

yes, hello. Can you hear me?

Yes, Miro, we can hear you.

Hello, everybody. Thanks.

I have a couple of them, and if it's okay for you, I take them one by one.

Okay.

The first one is for Peter: the €8 million settlement one-off payment, in which P&L line was it booked?

Revenues.

Into revenues. Okay.

Yes. Yes, we had the possibility to bill that as one sum, and part of it was then already paid 2025 and the other half then in 2026, but it's in revenues.

If you can deduct it, if you want to know it without this one-time effect, you can deduct the amount from revenues and then it's also deducted from the EBIT.

Very clear. Thank you.

It's in PST, as you said, huh? Okay.

Yes.

The next question: I've seen that you released quite a large amount of provisions in H2. You built provisions: €17 million in bonuses.

Congratulations, gentlemen. The question is: are these €17 million of bonus provision already included in the personnel cost in H2, the €148 million?

It's also a question for Peter, probably.

Yeah. Yes.

They're already in there.

Yeah. Then

I have a question, because if I deduct €17 million from 100 and €48 million, which is the H2 personnel cost, then I get €131 million of pre-bonus personnel cost, which is in line with the number you had in 2024 already, roughly €130 million per semester. Now the question is: why was H1 already basically at €144 million, which is quite high?

Despite the €17 million personnel cost bonus provision booked in 148, we have 144 for H2.

I I'm not sure if I understood your question, but what what we have to do is we for the half year, for the first half year, to also a provision for bonus if we think that by the end of the year we the the people will meet the targets. If you have a good idea how to convince our auditors that I don't have to book these provisions when the half-year result shows a very low result, then then I would appreciate that.

The opinion is here since years: if we think by the half year that we will achieve the target, I have to make a provision of of half of the bonus. The question is: if the result is then better, the provision at the end of the year has to be then a little bit more, yeah.

I I'm I'm willing to pay more bonus if if the results are better.

Very clear. You already booked some of the provisions in H1.

Unfortunately, I have to, yeah.

No, it's fine.

Yes.

Next question: what are your hiring needs in the next two years, without acquisitions? If you just want to grow the 10% around, which is, in fact, more because you had the €8 million one-off, right, it's maybe 11% or 12%, do you also need to scale employees?

By what extent?

I had a slight noise, did you ask how many people do we plan to hire in the future? Was that the question?

Yes. Okay.

Okay. There is a special effect when you look upon the ratio, personnel cost in relation to turnover, you will see that personnel cost is declining, yeah, from where we are almost up to 54% of revenues was personnel cost and now it declined to 50 point something percent, yeah.

The decrease was because we have a little bit more material and more procured services. I think if we need more people, and how many of new employees we need, depends on the structure of the tenders that we win.

I don't want to sell IT hardware. I'm not interested in selling IT hardware.

If the customer tenders these things, we have to offer it to procure it. Then a portion of the turnover is created by delivering this IT hardware, you will see more material costs.

What will I expect in the future? I would expect in the future that probably we really transform then in a software company by not being forced by the customer to deliver hardware, so that means that we provide more labor to the customer, more software.

That means the relation personnel cost to turnover will increase in the future.

You can't give a number, like 200, it was always 200 the last couple of years?

If you want to have a percentage, yeah, because when you think that will be the turnover, yeah, then from the 50%, we probably will go back to 52%, 53% of revenues.

Okay.

I think that's probably better than people, because people, the question is where do we hire the people, and how much personal payroll to you then calculate. If you take this ratio, it's probably easier for you.

Okay. Next question is basically related to what you just said.

You've seen very low personnel cost in percentage of sales, also have seen quite a low gross profit or high cost of material related to sales, which led to a lower gross profit margin, especially in H2, but also for the full year. We also see a lower EBIT margin in ATM.

Can you explain better how much of this low-margin hardware straight-through selling was included in your top line? That must certainly be such an element in your P&L, from the numbers I see.

That's hard to say because a project has hardware in it or not, yeah. I think in this case, I can't give you a figure that could be useful for you, yeah.

As I mentioned, concerning the material costs, we hope that in the future that's declining, yeah, because especially in IT hardware, the margin is lower.

Okay. A different question regarding margin in ATM: I think the ambition in the beginning was to have clearly a increasing margin there, right?

Now it was a decline in ATM. I guess this is related to a specific project from the US, that's my guess.

You don't have to comment on that. Will these profits, have they disappeared or have they just been moved into 2026?

A very good question, yeah. Unfortunately, a large portion of it was used up in 2025.

To regain it in the future depends then on change requests if we can sell additional things with probably higher margin, yeah. As I mentioned before, the increase for 2026 that we have shown already when we went ad hoc in February, will mainly come from ATM.

I'm not sure, but did you, when you answered, did you talk about cash flow, the usage of the prepayments, or were you...

No, margin. EBIT margin.

Margin.

I'm talking about EBIT margin because what we elaborated, I don't know, 10 minutes before, was the increase from the 6.7% margin when we take off this one-time effect to the around 7% EBIT.

Can you better explain, because I was expecting positive operating leverage in the ATM division also given the fact that Xten, with the not capitalized R&D cost should increase the margin in the ATM division. I expected that the ATM division would actually increase the margin year-over-year.

Now it was lower. Can you better explain what was happening there?

How this is going to develop into 2026? Do we have to expect that with continued growth in the ATM division that the margin is going to go down again, or how does that work?

Maybe can explain better what's happening there in this division. Was there a specific problem happening, something which you didn't expect also, or?

As I mentioned before, the transition takes further two to probably three years, the transition to these new products. That's the point.

During this transition, the margin will decline or just increase, or?

No, as I mentioned, overall in ATM, we think the improvement for 2026 from 6.7% to 7%, to around 7%, will come from ATM. In other words, a slightly recovery shall be seen in 2026.

Okay. Then two last questions.

One is the minorities went up significantly to €5.3 million from 1.5, which was 1.6 the year before. It was clearly much higher, probably Team communication or so, Elara.

Don't know, maybe can explain what that is and in which segment these profits were booked.

The thing is if you don't own 100% of a company, there is another owner, and if the other owner has half of the company, half of the profit is then, yeah, the profit of the other owner. Especially here we had the nice possibility to gain profits in these companies where we had not 100%, yeah.

That's the point.

No, I know what minorities are. Was it

Team

communication technology or was it Elara or what?

Elara, yeah. Elara.

Is this in ATM or in Public Safety?

Public Safety & Transport.

That's in there. This is a 50%...

51%.

51. Okay.

Mainly from this company, but I have to say that with Team we are doing quite good business, yeah. Overall we are happy if all these companies doing good business, because even when the other half belongs to another person, half of it belongs to Frequentis.

Okay.

The entire increase in Public Safety & Transport, if you adjust for the €8 million, went from 14 to 19, the entire increase was basically coming from Elara, I can infer from the increase of the minorities. There was no underlying increase from other than Elara companies, quite the opposite.

You're right.

Okay.

And...

Elara, is there a one-off element, or Elara is also...

Yes, you're on a good track, yeah. Congratulations.

You're on a very good track, and you combine it quite well. Yes, you are right.

The one-time effect, yeah, happened there.

The €8 million was in Elara.

Yes, because...

Okay. Very clear.

No, that's much better. Thanks a lot.

That was it,

yeah. It is as it is, yeah.

You... No,

no, it's fine. Thank you for the transparency.

Congratulations to your combination. Mr.

Sherlock, marvelous done, yeah. Then

the last one, sorry, would be on the €80 million prepayment from the FAA. I wonder why your networking capital change was still negative in 2025.

Is it already used up entirely, the €80 million of the prepayment of the FAA?

I think now I have missed the point. May I ask you to repeat it once more?

I think I've missed the point.

I think there was a large prepayment of around €80 million coming from the FAA in the beginning of the year. Despite this large prepayment, the change in networking capital was negative in sum.

80?

I don't know where the €80 million comes from.

From my notes. I'm not sure where they're coming from actually, but I have it in the notes.

I hope they're not wrong.

I don't know the €80 millions. I had appreciated this sum.

It was I think probably we expected something like that one year ago. That's possible, because sometimes customer promise a lot and then the question is how much do they keep.

I think there were enormous sums in discussions, but then when it comes to the contract and to the real payment, sometimes numbers are smaller. The prepayment was then used to procure materials, yeah.

What you see is in the working capital, you will see a little bit still concerning that you still increase of materials, because the materials were procured, were on stock, you see a large increase in the inventories. You see also an increase of our trade receivables and also the trade advances.

In total, FAA has an effect of the working capital of €20 millions, yeah.

Okay. Cool.

Thanks a lot.

It affected every position in the working capital, yeah, but overall €20 millions.

Okay. Thanks a lot.

I'm stepping back into the line. Congrats.

Thanks, Miro.

Thank you.

Yes, thank you. Couple of follow-up questions from my side.

Firstly, on your defense business, I was wondering if you could comment on the defense revenue share for 2025 and also what the current backlog share of the defense business is, and perhaps also your expectations for 2026 and beyond, when do you expect orders to pick up more meaningfully? Also in terms of profitability, where do margins currently sit and what do you sort of see going forward?

Okay. For defense revenue share in 2025, we have been around 18%.

The reason for that is that we had a very strong growing Public Safety & Transport business. In absolute numbers, defense was growing.

The order backlog is pretty good for defense, we expect a higher order intake value '26 compared to '25, when hopefully soon the NATO spending starts in Europe out of this special funding mechanisms in Germany and other NATO countries. We expect that '26, '27, '28, we will see much more tenders following the procurement of fighter aircrafts, tanks, and other hardware equipment.

Margin profile, I think we have reported that last year as well. It's the same this year.

Margin profile in defense is much better than the margin profile in civil. To be honest, in some projects it's not easy to distinguish between civil and defense as it is a joint infrastructure, like in Brazil, where the network is managed by military organization, but is also used by civil airspace users.

Great. Margin still sits somewhere around 10% or slightly double-digit profile?

Yes.

Great. In terms of the drone business, I know you mentioned that in your presentation anyway, but could you just shed some light on expectations there in terms of revenue, growth, contribution going forward, and also current revenue share, margins, anything you could share here would be very helpful as well.

We don't have these figures as we have incorporated drones, MCX, recording, and our C2 development agency into one organizational unit called Acceleration Hub. There we share resources, and the purpose of that company is to have a much bigger and faster scale than in our standard business model.

That's why we have combined them. Overall, we do around €25 to €30 million order intake already in coming out of that Acceleration Hub.

What I can report concerning the drones is that we see currently a more activity in the defense space as we have published the research program for one military airport in Germany where we test the friend-foe distinguish based on our technology and based on sensors being available there and effectors being available there. We are the data collector and data processor in the back, collecting sensor data, processing the data together with the ANSP, and then come to decision if it's a friend or a foe.

If it's a foe, we give data to the effectors. That's our positioning.

In the civil area, yes, we have won Sweden, but to be honest, it's a very, very slow developing market in Europe as the regulation is still missing who is responsible for the lower airspace. I think the regulators and the European Commission would love to have competition to the ANSPs.

Therefore, they hoped that somebody will stand up and say, "I will be an ANSP for the lower airspace, managing drone traffic." Unfortunately, that didn't happen because nobody was willing to invest millions of dollars into infrastructure to manage a maybe upcoming drone traffic.

Therefore, we hope that within the next hopefully 24 months, European Commission will come to a conclusion that the only way out here is to give the ANSP the responsibility for also managing the lower airspace and therefore the drone traffic.

That's helpful. Final question on R&D.

You're guiding for around 6% of revenues for 2026. Is that a sort of reasonable run rate to assume for the outer years beyond '26 as well?

Karl, it's yours.

Yeah. Now that the goal clearly is to reduce that rate, yeah.

As Peter has mentioned before, for the next two years, we expect to stay on this 6% rate, and then slowly moving towards the 5% rate. Frequentis will always be a very R&D-heavy company, and for a good reason, but the clear ambition is here to move towards the 5%.

It will take some years.

Thanks, very helpful. That's all for me.

All right. Thank you.

Yes, I should be unmuted now.

Yes.

Hello. Okay.

Once again on one of your three strategic growth areas: drone management. If I look at the military part of the business that's hopefully upcoming here, do we may need some more, let's say, solutions for combating drones before you will really see a spike in orders here, because detection and combating should be one integrated solution for the military part?

Is it maybe a little bit too early to really hope for big orders from the military side?

Our reflection goes more into another direction. Our positioning is very clear: we want to stay agnostic when it comes to sensor equipment and effector equipment, because what we see is that sovereign states try to support their local industry.

You find hundreds of companies developing sensors, and you find hundreds of companies developing effectors. Our positioning is we are an expert in managing a controlled airspace.

That's where we have a lot of domain knowledge and solutions available. Parts of them are in our UTM solution where we can process sensor data, process and align with ANSP and regulation, and give it back to effectors if necessary to shoot or bring a drone down.

That's our positioning. We see that military organizations are interested in that because you shouldn't forget we have peacetime in Europe.

Hopefully, we have peacetime for a very long time. In peacetime, you cannot just start shooting around if you see a drone.

You have to follow a process and the procedure, and this has to be aligned with the air navigation service provider. Therefore, we think our positioning to be the channel to the ANSP and be the data processor of sensor data and effector data is the right positioning for us.

Do we see a major development in the area of tenders? Currently not.

It's more a research program. Partially we see a tender like Sweden coming up, and partially then another tender is now coming up in the Middle East.

We think the next couple of years, it will be more a military tender traffic than a civil one, as long as the regulation is not clear for Europe.

Thanks a lot.

Yes, hello from my side as well. I'm looking forward to meet you at the upcoming conferences next week with Oddo BHF in Zurich or on the 6th of May with Berenberg in London.

Our half-year results for 2026 will be published on the 11th of August. If you have any further questions, please just drop me an email at [email protected].

Until then, all the best and take care.