Bill Peterson: Yes, thanks for that. And I appreciate the cost savings measures you took with the cash control and the guidance you posted for the first half of the year. But I guess, maybe for Oliver, can you share some more information on what will be in OpEx, what will be in CapEx in terms of new construction or buildings you may need or equipment and how to think about the trajectory in the second half of the year and into next year, especially considering it sounds like you’re going to potentially unlock more PDPs after flight testing. So should we assume that the use of cash actually goes down in ‘25? Any sort of color on the cash trajectory, use of cash, sources of cash would be very helpful?
Rama Bondada: Thanks, Bill. Just real quick, on the 2025, we’re not guiding quite that forward yet, but I’ll hand over the rest of the question over to Oliver.
Oliver Vogelgesang : Thank you, Bill. I expected this question. Bill, yes, as we said in the call, our budget for the first half and that is the guidance we give is around EUR 170 million to EUR 180 million. You could expect the second half to be in a similar ballpark. So I don’t want to be over precise on that one. But having said this we closed the year with nearly EUR 200 million and it will bring us quite far throughout this year. However, of course, we are preparing to cash in additional money. And here in first instance, I would like to mention, I cannot be too detailed, sorry for that. But as discussed before, we expect to sign some binding orders. So we will see the PDP ramping up. And we are in dialogue with existing shareholders and we get an amazing support with our largest and oldest investors here is incredible.
I cannot disclose too much. We are in discussion with new investors and we have the government discussion in Germany but also in different countries. So overall I think we are well underway for the first half of this year. We are covered and then we of course are working on getting additional money into the company and my target is not to close this year with liquidity which is significantly less than what we had last year. But again I cannot go into more details. I hope this gives you a little bit of framing in order to update your model.
Bill Peterson: Yes, no. Thanks for the second half color and yes, a lot going on here so really appreciate the update this morning. Thank you.
Operator: And the question comes to the line of Alex Potter from Piper Sandler.
Alex Potter: Perfect thanks. Maybe Oliver just very quickly just kind of a housekeeping question or a definitional question. When you talk about the cash spend guidance in the first half, is that net of PDP expectations or is that just your own operational cash spend plan?
Oliver Vogelgesang : Seb, sorry. I take it directly, Rama, sorry.
Rama Bondada: It’s fine. That’s our spend. That is what we use, intend to use for the first half. It is not a net cash, flow it is our cash spend. It is basically our SG&A our head count related costs. It covers the CapEx and it covers the supplier NRCs and you can imagine the more we move towards building our first aircraft and we also need to think on our serious production because you’ve heard that in ‘26 we will start to deliver our aircraft to our customers, so I think that the growth of cash spent compared to what we had last year is mainly related to the production ramp-up and to supplier energy.
Alex Potter: Okay. Very good. So maybe another question, just obviously you’re getting, having some success moving MoUs into firm orders with PDPs. I’m interested in knowing how you think that will inform your mix of deliveries. Once we’re actually in service, we’re starting to build the unit maybe in 2026, 2027, 2028, in those first couple of years, how do you think the mix of deliveries will look maybe just in broad terms what percentage is going to be going to private aviation, what percentage is going to be larger airline orders. Obviously, the pricing implications could be different but the volume implications will also be different. Has that mixed consideration changed at all over the last several months or quarters?
Rama Bondada: Thanks also for the question. I think this is a good one for Sebastien.
Sebastien Borel: Yes, hello, everyone good question indeed. As you know, the premium market is a healthy market which will stay steady over the years who will always continue to sell to the premium market and so since we’re starting with this and since we will introduce then the shuttle edition which serves six passengers, scheduled operation, you will see the growth and therefore more and more shuttle coming in and the premium staying steady you’re looking at your 50 to 100 premium a year, 150 if it continues to grow and have the discussion — the current discussion going very well. So steady premium and high net worth individuals purchases and the shuttle edition growing tremendously in the next few years.
Alex Potter: Okay, very good. That’s super helpful. Then maybe one last one, if I can sneak it in. Is there any additional regulatory clarity on certification in the United States? I know that you’re obviously making great progress with regard to EASA, the two organizations have slightly different certification protocols. Just any additional clarity you can provide on certification in the United States or progress towards certification in the United States would be helpful. Thanks.
Klaus Roewe : Yes. Hi, Alex, Klaus speaking. So as you know, we have since quite a while our SC-VTOL in place requirements and we also have since I think June last year our G-1 paper which basically sets the scene for us in terms of what we have to do regarding an EASA certification but also FAA certification. On top, the part IAM has been also released. So we also know the operational rules. In the US, we are a little bit behind, but that’s not only for us. That’s true for everybody because the so -called SFAR rules for the operations have not been finally finished. And to my knowledge, also our friends, competitors from the US, the G-1 papers, the updates have not been published on the [inaudible] register. So I would dare to say, formally, we are even the most advanced company, not only having it from both jurisdictions, from the outside FAA, but I think we are also at least as advanced as everybody else, if not more advanced in the United States.
Operator: And the next question comes from Austin Moeller from Canaccord Genuity.
Austin Moeller: Hello. Good morning. So just my first question with the announcement about the aftermarket business. I know we’re not there yet, but how are you thinking about the aftermarket business as a percentage of total revenues within your mix once we get to production? And what the margin profile would look like for the aftermarket versus the OEM sales?
Rama Bondada: Seb, you want to take this question?
Sebastien Borel: Yes. I mean, obviously, the recurring revenue we grow as we introduce the aircraft starting in 2026, and we have given estimates of what the revenue could look like by 2035 provided that we’ve looked into the number of flight hours that we expect out of our customers and the number of aircraft flying that way. I think Oliver you may have a better picture in terms of how much that represents from a revenue perspective compared to the OEM sale.
Oliver Vogelgesang : I have to unmute. Thanks, Seb. And hi, Austin. Great question. I just want to give you a little bit of the talk tick theory on this business. So you can imagine it is service business so it starts to kick in after the first deliveries. We see it ramping up then and this is interesting. It is ramping up over proportionally. You can imagine the main driver for this business is the exchange of the batteries and the more aircraft you have in the universe. Of course, the more often you need to exchange the batteries. So this is the portion I would say with the strongest growth potential. It starts a bit later. To give you an exact percentage, I cannot do it right now to disclose all the business plan details.
But having said what I wanted to mention before, it starts, I would say, to be visible in ‘27 with the first battery exchanges. But then in the year 2030, we gave you an idea it’s beyond the $5 billion revenue line and it will grow over proportionately after that. I don’t know if it helps you for your modeling, but on the margin, I would like to say it is a high margin business. So we expect to get even higher margins compared to the OEM business. It’s a low risk business. So therefore it is one of our key priorities to really get a grip on this business. And yes, that’s what I can say for the time being, Austin.
Sebastien Borel: And Austin, just to clarify, that’s over $5 billion in revenue in 2035. And on the margin front, I think for a good example, you could kind of think of, if you look at the other aerospace aftermarket companies that do proprietary sole source products, that’s kind of what we’re looking at for margin profile.
Austin Moeller: Okay, that’s helpful. And then just to follow up, I know you’ve already started collecting PDPs. You’re aiming to collect additional PDPs once you get some manned test ride under the belt with the aircraft. But are you confident that with 730 aircraft in the backlog that potentially those PDPs, if you collect them, 30% to 50% of the price of an aircraft, that might be able to replace like a supplemental equity raise, for example?
Rama Bondada: Oliver, do you want to take that one?
Oliver Vogelgesang : I’m good. Austin, on the PDPs, it’s important to understand what are the triggering points. In a classical aerospace business, you have two years in advance of delivery, typically one year in advance of delivery. What we try here, but not every contract is the same, yes, but what we try and that the trend we see is that the important program milestones, especially on the premium sales, are the elements which trigger the PDP payment. Can we achieve 30% or more? So far what we saw on the 45 firm orders, yes, we can. Will it be the same with the big airlines? We will explore and we will come back to you later, but I think what is important to collect the PDPs is to achieve the first flight as a key milestone, the type certificate as a key milestone, and this will trigger a significant PDP payment.
And therefore it is one more argument why we have the entry into market strategy as we select it and focus in the first two or three years, basically in the premium segment, because it is a higher aircraft price. We get higher PDPs and we can link them primarily to those milestones.
Sebastien Borel: Maybe I just can add, this is Sebastien again. In the commercial discussion we have given the maturity we have, especially on the aftermarket actually, we provide a lot of data on how we’re going to be supporting them and a lot of, I would say, level of comfort understanding how we can provide in those details solution. The percentage of PDP being provided prior to delivery is not a hot question in the discussion we have commercially. It’s much more about the demand and the network and working together. And you mentioned 700 aircraft under MoU. We also have cooperation agreement where we haven’t stated number of aircraft. And so you can imagine that there’s a lot of silent activities going on which is not only converting what we have. We also have a lot of discussions. So obviously the world is pretty big and we’re talking to a lot of people right now.
Operator: And the next question comes from the line of Savanthi Syth from Raymond James.
Savanthi Syth: Hey, good afternoon, everyone. Just as a follow-up to kind of Bill’s line of questioning here, what’s your approach to kind of building these aircraft? Are they going to be fully compliant, one through six, or kind of certain aspects of it? And just I know cruise flight or manned flight is kind of the target for your end, but do you expect to start flying these? And how many flight hours do you think you might get this year on these kind of certification conforming aircraft?
Klaus Roewe : Yes, maybe I take it. Hi, Savi. That’s nice to have a question. So we are going to start with a manned flight. So we are not even provisioning an aircraft to be remote-controlled. As I said before, we foresee a total fleet of six aircraft, three to be completed by this year. It will be the first flight, will be in the last part of the year, so we won’t count hundreds of flight hours this year. The overall flight test program as we speak is foreseen to be something between 800 to 1, 000 flight hours. And this is what you need to learn to understand your aircraft and also run through all the certification tests. And the aircraft will not be identical for a simple reason. You allocate certain tests to certain aircraft because you have to instrument them accordingly.
So I think there will be no two aircraft will be the same. The aircraft itself, yes. But as we are targeting certain tests on certain aircraft, the instrumentation will be different. There will be some overlap because we need to have redundancy and fall back in case an aircraft is under maintenance so that we can continue the flight test. But this is well laid out and it’s, I would say, very similar to what I did when we certified the A320neo. We had a similar size of aircraft, flight test aircraft, and also the same philosophy, some being very heavily instrumented and then specialization on certain instrumentation depending on the flight test purposes. Does it answer your question?
Savanthi Syth: Yes, that super helpful. Yes, it did. Just on the follow up, if I might, you have a lot of Tier 1 suppliers contributing here. What’s their role in the certification process? I know you talked about doing a lot of components testing this year. Are these already certified components so that you can move faster or just, what’s the kind of benefit of using these kinds of Tier 1 suppliers?
Klaus Roewe : Yes, so suppliers, it’s either we certify or supplier is doing a lot of the certification work. And then the aircraft comes with a so-called DDP, which is the Declaration of Design and Performance, which offsets a lot of work that we have to do. So basically what we are doing, we do vast tests on our deliverables, which is a propulsion system, the battery system and also the total aircraft. But for sure, we are also making vast use of tests which are performed by our suppliers. And as we have the who is who of experienced suppliers assembled around us, we can really make lots of use of what they are doing, because they for sure have the components first and they have done similar qualifications and certifications before means, they have all the tests means, they have the people who know how to run those tests.
They have the people to know how to compile the necessary reports. So that is really of great help for us. So like we are discharging a last part of the development work, we can also discharge a large part of the certification work to our suppliers. Ultimately for sure it all flows into the type certificate of the Lilium Jet. So we have to sum it up, but the physical doing is to a large extent also offset by our suppliers.
Operator: And it comes from a line of Griffin Boss from B. Riley Security.
Griffin Boss: Hi, thank you for taking my questions. So first, can you just give some more color on what level of performance you are expecting to achieve with your prototype propulsion systems? And then what gains you are expecting with the next iteration? And when that next iteration might occur?
Klaus Roewe : Yes, hi Griffin. So on the propulsion system. We expect right from the beginning the performance that we need because otherwise we wouldn’t be able to lift off the aircraft and to go to transition flights and to go to high speed flights. And the same is true for the battery system. And for sure, as we’ve said several times in the past, we foresee over the years a lot of improvement coming in with the battery system. And as we speak, we are already discussing with some suppliers about next generation batteries, which we are going to bring in a couple of years after entry into service. Whilst I would say, as we speak, we don’t see necessarily a need to upgrade the propulsion system as such. And you may know also when you look into conventional aircraft, you are largely not changing.
So what conventional aircraft are doing, they optimize the gas generator. They try to squeeze some 1% or 2% points out of the efficiency of the compressor of the turbine as we have an electrical motor that runs as an efficiency well above 90%. Honestly, there is not so much of the gain to be expected on the propulsion system side. On the battery side, that’s by definition a completely different story because we believe by the end of the decade or perhaps even before our operating range, which at the starting point is 175 kilometers would be well above 200 kilometers with the next battery generation that we already have line of sight of.
Griffin Boss: Got it. Okay. Thanks for that, Klaus. And then just on the battery front, just clarification here, do you expect any differences in performance from primary and secondary battery suppliers?
Klaus Roewe : No. The batteries we are working on and the first one we get and we get more than a 1, 000 a month as we speak is from CustomCells here in Germany. But we have engaged into a partnership. with Inobat and Gotion in Slovakia, and they will also start delivering batteries by mid of the year. We always look into refining the battery recipe a little bit, but we are basically looking into, if I cut it a bit short, into the same type of battery. However, we are also looking with Gotion and others on what next generation batteries are. And we see still a good trajectory with high silicon content batteries, but we are also looking into lithium metal batteries already. So the whole battery industry is going to move forward.
And I think we are really clearly at the forefront with our high -silicon and content-pre-lithiated batteries. And we will be so for quite a while, but it doesn’t mean we are satisfied. So we are going on. But initially our intention is dual sourcing also to derisk our supply chain. And then when working with new suppliers like with Inobat and Gotion for sure also see what they have in their laps and what they can provide. And then to say, okay, the next generation for sure we are going to make use of what our suppliers are going to deliver us.
Operator: [Operator Instructions]
Rama Bondada: Nadia, as we wait for additional questions, I think this is a good opportunity for us to take some questions from a Lilium shareholder on the Say Technologies platform. This question comes from Trevon P. Is there any concern that competitors making it to market faster will harm your progress or future profitability? I think the Lilium Jet is a better design, but I wonder if timing and flight heritage will be important. Klaus?
Klaus Roewe : Yes, thanks for the question and anyway, great to have our valued retail shareholders with us and asking questions. Honestly, I’m not really concerned about it because the Lilium Jet features a couple of USPs. We are the only aircraft flying regional. We are the only Jet aircraft. We are one of the very few aircraft that are being certified to the highest safety levels. So we will be eligible to basically deliver in every country of the world. We have some areas like EASA country where others not certifying to the SC-VTOL standards will not be eligible to deliver. And I would also say, especially in the premium segment, I wouldn’t dare to say we are without competition, but maybe we are without competition because our value proposition, I would say the uniqueness, the attractiveness, the performance, and lastly, the safety of the product really stands out so that we don’t perceive necessarily a lot of competition.
