Lilium N.V.
Q4 2021 Earnings Call Transcript

Published:

  • Bjorn Scheib:
    Good afternoon and good morning to everyone. Welcome to Lilium's Full Year 2021 Business Update. This is our second conference call being publicly listed. My name is Bjorn Scheib, and I'm the Head of Investor Relations at Lilium. Before we start, let me just go through a couple of housekeeping items. This is a virtual conference call. And for the moment, all participants are in listen-only mode. Management will first provide an update on our business progress since our last call in November. A brief question-and-answer session will follow the formal presentation. We scheduled the call for approximately 45 minutes, including Q&A time. Please note that this conference call is being recorded. A recording will be posted on Lilium's Investor Relations page soon after the event. As a reminder, after yesterday market closing, we posted on our website our shareholder letter. I warmly invite to you to read it. Before handing over to our CFO, Geoff Richardson, let me just give a reminder of the Safe Harbor language and other cautionary statements that will govern today's presentation and are described in more detail on the first two slides of today's presentation. Specifically, I want to remind you all that our presentation will include forward-looking statements and any forward-looking statements or comments we make about Lilium's future expectations, beliefs, plans, objectives, financial condition, assumptions, performance, projections, forecasts or other characterization of future events or circumstances that are subject to risks, uncertainties and other factors that could cause Lilium's actual results to differ materially from such statements. For more information on these risks, uncertainties and other factors, please refer to the cautionary statement in our shareholder letter and the risk factors discussed in our filings with the U.S. Securities and Exchange Commission. All forward-looking statements that we are making during this call are qualified by this cautionary statement. You should not place undue reliance on forward-looking statements, which speak only as of today, and which we assume no responsibility to update. With this, now let me turn over to Geoff, our CFO. Geoff?
  • Geoff Richardson:
    Thank you, Bjorn. And good morning, everyone. We appreciate you joining us this morning. With me on the call today our co-Founder and CEO Daniel Wiegand and our Vice President Business, Sebastien Borel. We're especially delighted to have Sebastian with us today. He joined Lilium last year and brings over 20 years of aerospace experience. He'll be walking us through the exciting new developments between Lilium and NetJets. In 2021, we had the opportunity to share our vision of creating a radically new emission free, high speed, quiet and affordable form of regional transportation. With your support, we're moving towards that goal. Today, we want to give you an update on several key developments. These are the highlights. First, a new market opportunity to sell our aircraft through private sales and fractional ownership. Second, a memorandum of understanding with NetJets for the prospective sale of up to 150 Lilium Jets, plus related aftermarket services. Third, introduction of a premium four-passenger club-cabin configuration for the private and fractional market as part of our expanded product offering. Fourth, implementation of modifications to our aircraft based upon the preliminary design review process that will simplify the design and reduce technical and certification risk. To start with our financials. On cash spend, we met our budget in 2021. Total cash spend for the fiscal year through December 2021 was at $217 million in-line with our planned budget of $221 million and reflected our budgetary discipline and focus on key engineering projects. The total cash spent for Q4, 2021 amounted to $72.7 million higher than Q3’s $56.5 million. The anticipated increase in the latter months of 2021 was mainly driven by the acceleration of the development program, including the planned ramp up in engineering activities and important investments in technology and supply chain. Technology investments mainly related to battery development, energy and wind tunnel testing facilities. Total cash spent excludes transaction expenses and a onetime equity investment in technology. Going forward, we expect the quarterly total cash ban to decrease and Q1 2022 due to lower investments compared to the previous quarter, partly offset by preparations for extended flight testing in Spain, and the build of our next demonstrator aircraft Phoenix 3. Daniel will tell you more about those activities in the moment. Our liquidity at year-end 2021 was approximately $400 million. Our audited full year financial statements will be filed with the Securities and Exchange Commission at the end of this month. We're closely monitoring the effects of COVID, the conflict in Europe and general economic factors on our business and planning. These factors put pressure on their employee, material, and non-recurring supply chain costs, specifically tooling and engineering services, as well as pressure affecting other stakeholders and regulatory agencies. We will provide the full year financial outlook together with an update on the program at our next business update in May. With that it's over to Sebastian, who will tell you about one of our key highlights.
  • Sebastien Borel:
    Thank you, Geoff. And good morning everyone. I'm Sebastien Borel, Vice President, Business at Lilium. And I'm glad to be joining you all today to cover some of the business highlights starting with the fractional and private edition segment. We have received a really strong interest from private and business edition customers. And they do believe the Lilium Jet is especially well suited for the premium demands of the segment. We will therefore extend our commercial offering to private individuals and business professionals through either direct sales or through a fractional ownership model that we expect to implement through our future collaboration with NetJets. We believe the segment to be highly attractive to Lilium with a greater pricing flexibility, and we also strongly believe they will drive early adoption of the eVTOL aircraft. Moving on to NetJets, As Geoff said earlier, we are very excited to be working together with the world's largest private jet company NetJets. The MOU we signed really covers three areas of cooperation. Firstly, NetJets will have the right to order up to 150 Lilium jet along with the corresponding support services from the Lilium for its fractional aircraft ownership program in the U.S. and Europe. Secondly, major plans to support Lilium in establishing a separate private self-campaign for individuals to purchase Lilium jets. Aircraft will be sold by Lilium directly to private individuals, and those aircraft may then be managed on behalf of the owner by NetJets or its affiliates. Thirdly, we also work together to have NetJets run flight operations for our Florida network. As announced before, a lending infrastructure in Florida is to be handled by Ferrovial a major airport operator and the Lilium investor together with the Tavistock Development Company. So really all network plans in Florida continue to make good progress. The proposed arrangement with NetJets is obviously subject to the body's finalizing commercial terms. And definitely recommendation but for now, I'm glad to briefly show you a video of our partnership. Great. So another important and exciting update today is our aircraft and its cabin configuration. Most of you probably have seen the aircraft and know the aircraft from the way it looks on the outside is proprietary ducted-electric vectored thrust technology, you can actually see clearly in this picture. However, our cabin is really impressive as well. It is designed in a modular and very flexible way. It's long, wide, tall has lots of lights, it is smartly designed to accommodate various configurations. This will ultimately allow us to pursue the various segments that we discussed earlier. So starting with our six-passenger shuttle-cabin configuration, which we have announced before. Its high capacity, has lots of leg room space. This is really meant for commercial aviation, shuttle services in higher frequency routes. Now introducing the new four-passenger club-cabin configuration, which is really well suited again to the private and business aviation segment offers the highest standards for space and comfort with premium seating and whereby the customer experience will be very special. Lastly, we remain excited for the potential of this large cabin to be turning to a cargo space, especially in the high-speed logistics business, and in this case would not have any windows will intend to support either bulk loading or containers as you can see in this picture. I now hand over to our Founder and CEO Daniel Wiegand to talk about the Lilium Jet program development. Thank you, all.
  • Daniel Wiegand:
    Thank you so much, Sebastian. Good morning or good afternoon, everyone. I'm excited about the progress we've made not only on the commercial side, but also most certainly with the aircraft and with professionalizing, our aerospace organization. We opened our preliminary design review in the fourth quarter last year. And this is an important milestone in traditional aerospace product development, but it is similarly important to us. We are conducting the review as well as disclosure with highly experienced independent advisors, with led some of the industry's most successful programs. Following our closure of the PDR, we expect to release the design data to our supply chain starting in the second quarter of 2022. As described in our November blog, the PDR consists of a series of technical reviews to assess whether the aircraft architecture will meet airworthiness requirements, deliver the performance requirements and be produced at the appropriate quality levels. Completion of the PDR gives them the green light for engineering to finalize detailed designs and for procurement to ramp up supplier contracting. The PDR process also helps us refine and optimize the aircraft’s design, as well as identify and mitigate program and certification risks. We continue to assess and as a result of the PDR process today, we are implementing certain changes that simplify the design and reduce technical and certification risk. For example, through a slightly larger and more powerful engine design, we will reduce the number of engines from 36 to 30. And this will firstly reduce part count weight and system complexity. It will secondly improve aerodynamic balance between the main wings and the front wings. It will thirdly create potential for lower material and maintenance cost. And lastly improve the design flexibility of the aircraft in the future. We are also introducing as Sebastian just mentioned, a flexible cabin architecture which enables us to offer a range of different configurations overtime, including a four-passenger club configuration, and the six-passenger shuttle cabin as well as a future cargo cabin. The cabin configurations we launched that enter into service will be determined by final customer demand regulatory requirements and the performance characteristics of the certified aircraft. We continue to evaluate our overall program and launch timeline, according to the PDR and will provide an update at our next business update called in May. Now let me tell you where we are with the flight testing of our demonstrator aircraft. Following the highly successful flight test campaign in Southern Germany last year, our fifth-generation technology demonstrator, Phoenix 2 is now at the e ATLAS Flight Test Center in Villacarrillo, in Spain for high-speed flight testing. The ATLAS Flight Test Center provides optimal infrastructure, enabling the aircraft to fly over a large and unpopulated area and this also offers excellent weather conditions in Spain. We expect our final permits to fly from the Spanish authorities to be issued shortly, and following the wind tunnel tests we've done recently, to validate our aerodynamic models, we are expecting an exciting flight test campaign in Spain, which we will expand the flight envelope through full transition into wind borne flight and do high speed flight testing. Work remains on track for an additional demonstrator aircraft Phoenix 3, which is scheduled to go to Spain for first flight this summer. Having 2 test aircrafts flying will further accelerate our flight testing campaign this year. I take a lot of pride in the way our aerospace aircraft is progressing, but also in our progress as an aerospace company. We want to build the leading electric aviation company of the 21st century. And therefore in our recruitment, we are focusing on high quality talent and leadership. And we have recently made some important appointments in key roles. Karim Jalbout, joined us from Egon Zehnder as Chief People Officer. His experience in blending new technology with industry mindsets will be invaluable to Lilium. Sebastien Borel, whom you've had a chance to listen to just now joined us as Vice President Business. John Wyzykowsk, with 18 years executive experience from Pratt & Whitney joined us Head of Propulsion. Guilherme Oliveira, a former Principal Engineer at Gulfstream, joined Lilium as Chief Engineer Flight Mechanics. And Andy Strachan j joined us as Chief Test Pilot currently running the campaign in Spain and he served in the Royal Air Force and was Chief Test Pilot ever Leonardo Helicopters. In the weeks and months ahead, we look forward to updating you further on the aircraft development on the sourcing, on the flight testing the commercial activities, as well as the finances. Finally, I wish to extend our sincere thanks to all our stakeholders. We are aware that the financial markets have been turbulent, and technology stocks specifically have been challenged. Nevertheless, we are confident that we have a winning family of products and that we have the team to deliver a certified aircraft. We believe the rewards will be compelling for society for the planet and our shareholders. Now let me hand you over again to Geoff and he will open questions for you.
  • A - Geoff Richardson:
    Thank you, Daniel. So now we have some time to take your questions. Please introduce yourself with your name and company. .
  • Operator:
    The first question from Alex Potter from Piper Sandler. Please go ahead.
  • Alex Potter:
    Great, perfect. Thanks. Yes, this is Alex Potter Piper Sandler. Okay, so obviously that NetJets announcement, very interesting. I just wanted to clarify, it sounds like this is primarily focused on the United States. So that was my initial impression is that it's mostly U.S., but in the video and mentioned Europe a couple times as well. I know NetJets has a presence in Europe. So to what extent is the NetJets partnership, global in nature? Is it U.S. and Europe? Any comments on the regional focus of that relationship would be helpful.
  • Geoff Richardson:
    Morning, Alex. Great questions. Seb, do you want to take that one please?
  • Sebastien Borel:
    Sure. Definitely. And thank you for the question. And the opportunity to clarify, it is a global partnership. We intend to look at their fractional market and in a global way. And obviously, as Pat mentioned in the video, the U.S. market will be a good test for us to see how far we can go. But it's meant to be global, and we’re confident it will drive us to be global.
  • Alex Potter:
    Okay, perfect. And then, I guess another follow up on that. My understanding at least obviously, if you look at their current fleet, most of the jets that they have are 8-10-12 passenger configurations, most of them are clearly going to be longer than the 100 or so mile routes, that the Lilium Jet will be flying. So to what extent does this incorporating the Lilium Jet into their business model, require them to change their service offering, change their pricing. It obviously is going to be a different product from what they've historically offered. So I'm, I'm interested in how they're approaching that.
  • Sebastien Borel:
    Great note. Thank you. Again, I cannot speak from that just as we see today. What I can tell you though, is that a very high number of flights of small jets actually are flying below 300 kilometres. So, something like 200 miles. And therefore, there is a need and demand for the first mile and last mile, because some of those aircraft cannot land in all of the places in the world. So we've validated the demand. And we feel confident it will be a great add to NetJets’ offering and the way they're going to do it. It's for them to talk about.
  • Alex Potter:
    Okay, perfect.
  • Sebastien Borel:
    Hopefully I answered the question.
  • Alex Potter:
    Yeah, yeah, that's good. And then maybe a couple questions on the on the technical side. You mentioned that a fair amount of the engineering spend has been focused on batteries. Presumably that's in partnership with CUSTOMCELLS. I'd be interested in hearing about any progress there, I guess on battery chemistry changes or any other key battery performance metrics? Not sure if battery related developments were involved in the decision to move down to 30 engines from 36. Or I guess any other details you'd be willing to share on either batteries or powertrain would be interesting.
  • Geoff Richardson:
    Thanks, Alex. I’ll let Daniel take this. I would say that as part of our May 1. The team is going to give a larger battery update as part of our next call. But I'll let Daniel answer the specific question.
  • Daniel Wiegand:
    Thanks, Alex. That's a great question. So the changes from 36 to 30 engines were not related to the battery. On the battery side, as you know, we have started selecting and testing the silicon-anode better results in 2020. Since then, we have made a big progress in testing those cells over two years. We understand their performance very well, we understand the power very well and their lifetime. And we are now focus with our partner CUSTOMCELLS on the industrialization of these cells, as well as the safety certification of the cells. On the industrialization, we have made great progress with CUSTOMCELLS. In fact, very soon, we can start production of the first cells on the serial manufacturing line. This is the same line that we would use for the serial manufacturing of the cells. It's the same tools, and a fully process controlled and quality managed line, a huge step for the industrialization of our batteries and the prerequisite for certifying the cells. So we are fully on schedule with respect to the batteries, and there's no changes on chemistry or anything else.
  • Alex Potter:
    Very cool. Okay. So maybe last question, then I'll turn it over. You mentioned in the letter, obviously, a lot of interesting new employees added, which is exciting. If you could maybe comment on headcount? I think in a previous call, you mentioned you were working toward 1,000 employees, or thereabouts? Is that roughly where you're at now? And are there any key job functions that you still need to address? Thanks,
  • Geoff Richardson:
    Company around 800 FTE s. We also have a bit over 100 contractors. So we look at the mix between contractors, and FTE. So I think it's somewhere -- if you add those two together, it's probably 900 and 1,000. On an absolute basis, I think that it's not a numbers game for us, as evidenced by I think the quality of the people we showed on the page, and then previous quarters. All of these developments come down to the quality of the team. So we're always looking at adding bench strength, I would say, last data can confirm this. I think the top of engineering is largely set. But we're always looking to add great talent, particularly filling out the management ranks. But Daniel, what you give your thoughts on engineering?
  • Daniel Wiegand:
    Yeah, I mean, as a CEO, talent is always at the top of my mind. And for this year, talent is not about significant growth, we may see a 10% growth also in the organization. But as Geoff said, we're continuously adding top talent, especially in the middle ranks of engineering. And this is what we're focused on this year.
  • Alex Potter:
    Great, perfect. Thanks very much, guys.
  • Geoff Richardson:
    Thanks, Alex.
  • Operator:
    Thank you. The next question from Colin Rusch from Oppenheimer. Please go ahead. Your line is open.
  • Colin Rusch:
    Thanks. Thanks so much, guys. I'd love to get a little bit more detail on what's changing with the engines. Specifically, if you are looking at higher voltages on how that operates, RPM for those engines, and then the implications for the next generation design by having a little bit larger engine? Does that simplify the process and the design of that larger aircraft?
  • Daniel Wiegand:
    I can take that one. So the switch from 36 to 30 engines is really an incremental change. There is no change in the engine design, no change in the technology, no change in the engine voltage. Also, what we're doing is basically slightly scaling up the geometry of the engine. But with the same design and parts, the same propelled speeds, the same acoustic technologies. So the motivation here is really as I have laid out to reduce the complexity, make a simpler aircraft by reducing parts counts. And this is also obviously lowering the maintenance cost and the operating costs of the airplane. It doesn't really change something on the certification side. It's the same means of compliance and the same requirements that we are fulfilling. So we have been thinking about the 30 engine configuration over the last two years. But we really now just felt confident in that process to say, we now have all the data we need. We've had three wind tunnel test campaigns in the last 12 months to confidently make that step and make use of the benefits.
  • Colin Rusch:
    Okay, that's helpful. And then I'm curious about what's going on in the business development side? Obviously, you've been able to make a couple of meaningful announcements in the last couple of quarters. But if you across the field of potential partners and interest level and maturity of those conversations, can you give us an update on where you're at with incremental partners, particularly around some of the freight applications that you guys have talked about and supplementing some of the passenger down the line?
  • Sebastien Borel:
    Should, Geoff you want me to take this.
  • Geoff Richardson:
    Yeah, Seb, why don’t you take that please?
  • Sebastien Borel:
    Yeah. It's interesting journey, of course. And a lot of progress has been made. I have to say, I've joined recently, but I've been in industry for long. I think people are starting to realize that this is real. They will change dramatically the way of flying. We're talking to some cities and countries, whereby the implementation of our eVTOL will have just a positive impact, in terms of mobility, tremendous impact. So we're seeing -- we're going through the journey of building the aircraft and people are following what we're doing. But overall, I would say that the maturity of discussions are increasing. And our partners and potential customers are looking to are very serious about it. And, committing to resources understanding what it takes to operate such an aircraft. And our role, I think -- we're getting closer and closer to being able to look at that at a much more global footprint.
  • Geoff Richardson:
    So do you want to comment on delivery, Colin’s main pain points?
  • Sebastien Borel:
    Say it again?
  • Geoff Richardson:
    Do you want to comment on delivery? I think Colin have asked, what are we seeing on the delivery side?
  • Sebastien Borel:
    Delivery side of the aircraft that you're talking about? Sorry.
  • Geoff Richardson:
    Cargo. I think you said, what are your thoughts around?
  • Sebastien Borel:
    Cargo. Sorry. Yeah. So this one is bit -- more complex. Every single cargo company has certainly different requirements in regards to why they want to do it. But overall, it's still very positive. A lot of discussions with those companies. And we'll see where it leads, but obviously, overall, a big engagement and trying to figure out some of the details of their operation. So quite engaged. And we'll see in the near future.
  • Colin Rusch:
    Great. Thanks so much, guys.
  • Geoff Richardson:
    Thanks, Colin.
  • Operator:
    Thank you for your question. The next question from from Longbow Research. Please go ahead.
  • Unidentified Analyst:
    Morning. I’m Suraj from Longbow Research. A couple of questions, if I may. Just going back to the just the answer you gave just on motor engine technology. I just wonder, I think I'm right in saying it's a permanent magnet synchronous motor that you're using. Have you ruled out other motor technologies? Obviously now I think this use that same technology? Have you ruled out things like actual flow motors in the longer term? And then on the PDR. Generally, I wonder, have you made any changes on the back of what we've seen in terms of supply chain disruption sort of across the world generally? Do you think maybe are in a more robust place for potential disruption going forward? And then just a couple quick questions on the MOU. Is there any time up thoughts on the MOU? Or is it a sort of evergreen one? And again, just like clarification on an answer to an earlier question. The actual fractional ownership model, which NetJets has, will that pretty much be the same model that they'll offer? I mean will the sort of model they're offering on a Falcon, be the same one that you offer on the NetJets aircraft? Thanks.
  • Daniel Wiegand:
    Okay, that's great question. Geoff, I can take the first one, and maybe you can take a second. On the motor yet, I can confirm it's a standard permanent magnet electric machine, which of course, we have looked into different designs like axial flux machines and other types of machines. There's two reasons why we in the end, took a relatively standard geometry for the motor. One is cost and the supply chain again, this we have the highest competition in the market for this type of motors. And the second reason is that it fits very well into the cooling concept and geometry of our engine. It's an extremely powerful power dense motor still, because it runs at relatively high RPM, and where you seeing very sophisticated geometries and designs. But in a nutshell, it's a standard permanent magnet motor.
  • Geoff Richardson:
    Yeah. Seb you want to address?
  • Sebastien Borel:
    Yeah. For NetJets, obviously, I can't communicate the term of our agreement. However, what's more important is we are currently working hard together to really make it happen. And we have, as we said earlier, several streams. Number one is, how do we -- how does our aircraft fit into their functional model? And it seemed like, it's a great fit. And we're really excited to work together with a better understanding. Someone mentioned earlier, the number of passenger. I can't comment on, these are confidential data. But our aircraft ability and capacity actually fits very well with most of their travels. So anyway, back to fractional limit to its private cells. This is really important as well, right. We're going to be serving private individuals, and their aircraft will have to be managed by a bottom 35 operator, or 145 for maintenance. But this is a second big pillar. How we're going to be selling to private individuals? And lastly, we see that as a great opportunity as well to make offer and work even more real with an operator looking at the fight up side of our business there along with, like you said earlier, the partnership on the infrastructure side. So really complimentary I would say work streams. And we're working hard together with the both teams right now, to make it a success.
  • Geoff Richardson:
    And add on for me, what's really important about this deal is the concept that if you look at their customer base, they're early adopters. And they have an ability to pay. So those -- if you combine those two things, there's a lot a lot of ways to work together and deploy those. But if you take it up a level, and look at how industries typically roll out their customer base, who are the early adopters is quite important. And we've aligned that. We agree that their customer base are likely early adopters for this type of product.
  • Unidentified Analyst:
    That's really helpful. Just other question just on the PDR and impact on an influence of a supply chain issues, and particularly supply chain potential disruption.
  • Geoff Richardson:
    Yeah, I think that we're very aware of the disruptions. I don't -- I wouldn't necessarily say that the outcome of PDR is to change designs based on current supply chains. But the team has been very focused since last year and aware of it. So as we go through the PDR process, any limitations or kind of difficulties in the supply chain are getting factored into the process. I don't think design changes are happening to address the short term market imbalance. But as we go forward, whether it's through volumes, through contracting through NRCs, there's a huge amount of supply chain activity. This is one of the topics, we'll be in a position to give you a deeper dive we'd like to do that on the May call, because I think we're seeing more visibility. But I think that the team has been working very hard on this. And I think in the last call, we have updated that we've added a new Head of Supply Chain who was very senior from Airbus, and BMW. So we've also spent a lot of time adding talent to this team, particularly because of the current situation in the market.
  • Unidentified Analyst:
    That's great. That's really helpful. Thank you very much.
  • Geoff Richardson:
    Thanks, Adam.
  • Operator:
    Thank you for your question. The last question from David Zazula from Barclays.
  • David Zazula:
    Thanks for taking my question. Maybe for Daniel or Sebastian, you gave some criteria that you would be using to address the type of configuration you'd go on to the launch market. I know you'll do more color on this in May. But can you maybe give a little more detail on the criteria you'll be using and how you're evaluating that? And specifically, whether you're thinking right now maybe launching one configuration before the other in the 2020 for launch time
  • Sebastien Borel:
    Do you want me to take it, or you’re going to take it?
  • Daniel Wiegand:
    I can take it. I can start and maybe you can add to it. So from the technical perspective, this is really a flexible cabin. So we're deliberately designing the aircraft. And this is part of the PDR process outcomes here. We're really designing the aircraft to be able to accommodate all different types of cabin configurations. So in the end, it really boils down to the demand of the customers in the different segments. We think that as early adopters on the fractional ownership side, especially, this is a great market and business model to start with. But I would maybe hand over to you, Sebastian to say a couple of words on the demand side.
  • Sebastien Borel:
    Yeah. Well, actually, on the demand. We've seen, obviously both people that cares more about higher capacity and high frequency routes. And we've seen others more into replacing helicopters more premium. So if you're asking me what order, we're going to be starting delivering the aircraft? I can't give you the answer yet. But it will probably be a combination of both configuration. And as Daniel said, we have smart design in the cabin. And we're not afraid of being able to delivering the aircraft in either order.
  • Geoff Richardson:
    David, does that answered your question?
  • David Zazula:
    That does. Specific to the configuration, is it envisioned that the configurations would be roughly similar payload size for the segment.
  • Sebastien Borel:
    For the pilot side?
  • David Zazula:
    Like how much weight you would?
  • Sebastien Borel:
    Weight, sorry. Daniel?
  • Daniel Wiegand:
    So the configurations can have different payload capabilities. So they would not all have the same payload necessarily depending on what you're adding in the cabin. And what -- yeah, what configuration you choose in the cabin.
  • David Zazula:
    Okay, great. And then if I get one follow up, you had a competitor announced a launch and a certification process in the Brazil market. You already have an agreement in that market. Can you discuss how your certification process is expected developed there? And how your assessment of the market and whether it can support multiple entrants?
  • Sebastien Borel:
    Yeah. The only . I'll start. Yeah, as you know, we're going to be in the EASA territory. And we will have the FAA certification, as well. And therefore, we're going to be able to go outside quickly to any countries in the world that people accepting, EASA type of certification. So we obviously engaged with our partner Azul and with the authorities over there. And we'll see how in developed. But I think Brazil has a huge market and probably there is enough room for too. So all I can tell you is it's going well, we’re engage, authorities engage, and we see that market being quite interesting for us.
  • David Zazula:
    Thanks, Sebastian. Thanks, Daniel.
  • Geoff Richardson:
    I think we have two minutes. We received a number of questions from our retail engagement platform. We saw a lot of engagement, and they voted up. I think we have time for probably two quick questions. Daniel, why don't we give you -- what can we expect an update on the progress of key flight tests such as max speed and max range validation test?
  • Daniel Wiegand:
    So on the flight testing side, as I mentioned, before, we are -- we have just freshly brought the demonstrator to Spain. And in the Spanish flight test area, we have the big advantage that it's an uninhabited environment where we can do longer flights, we can do faster flights, we can, in the future, if necessary, fly beyond visual line of sight. So we're starting this flight test campaign now. And we have as a target for this campaign in the next steps to do the full transition flight and then continue into high-speed flying. And then in summer, we will add another aircraft to this test campaign. So we're going to have a higher pace in the testing of our technologies and of our airplanes. And we will obviously keep you updated on any progress in the flight test campaign. I think it will be very exciting. It's for me, always the most exciting thing to see the aircraft flying.
  • Geoff Richardson:
    Okay. Thanks, Daniel. And I think with that, we're at time. We will try to leave more time in the future to address the highest voted retail questions. But I think with that, we come to the end of our fiscal year 2021 business update. I want to thank everyone for joining us and we look forward to speaking again soon. Cheers.

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