Short, sharp 25 min call by EOS this morning to talk through the Korean deal. Since about 6 months ago, EOS management has held these calls the day after a significant announcement, allowing for, and answering, a lot of investor questions, all of which has provided significant insights and transparency - a really good thing.

There were quite a few new takeaways from the call:

BOTTOMLINE

• EOS was surprised at (1) this deal and (2) the speed in which it was executed - this came from an unexpected enquiry several months ago
• Korea is a significant market - the entry and the manner that it occurred, sets EOS up very nicely in Korea
• Provides strong credentials of the EOS go-to-market strategy and an operating model template for future country-specific JV’s
• The breadth of countries which EOS is currently negotiating with for HELW is very encouraging from an “arms race” perspective
• Andreas (CEO) and Clive (CFO/COO) project a very strong, highly knowledgeable, highly switched on management team that is effectively responding to tap on bullish market conditions in a very dour, matter-of-fact manner - inspires significant confidence in management
• This is really only the start of a long runway ahead, initially in HELW, then evolving into Space capabilities ...

DETAILS OF DEAL

• Deal is with a Korean Industrial Partner 
• International options were evaluated, the award is a positive showcase for EOS
• Cash flow neutral/positive from the outset, no specific working capital drag
• Customer impressed by 30kW system, EOS showed how it can be scaled up to 100kW with no technology risk
• Includes Transfer of Technology, Transfer of IP, Training, Spare Parts, hence the higher contract cost
• Non-refundable US18m deposit expected before 31 Jan 2026 - remaining 70% will be linearly distributed over timeline, will be booked as revenue in FY26/27, with a small FY28 tail

SIGNIFICANCE OF KOREA

• Korea is significant as it has a strong domestic industrial base for defence
• Puts EOS in the pole position for subsequent large Korean procurement program for HELW - looking to be in batch sizes of 10-30 
• Korean Govt has strong links to the Polish market

NATURE OF JV

• A key non-negotiable requirement of the JV is that EOS retains control - key personnel and technology
• Likely to be 51% owned - will account for 100% of the JV less 51% EBITDA to partner
• JV will produce units for the Korean market, case-by-case on opportunities outside of Korea, especially those relating to to Korean Govt-to-Govt deals

OVERALL HELW MARKET

• “Extremely bullish”
• Majority of sales is expected to be to Europe - (1) more orders from the Dutch (2) in discussions with France and Germany (3) 3-4 Middle East Govts (4) India has reached out
• Different opportunities between 30kW to 300kW
• Working also with 1 Govt to finance the development of the 300kW HELW family, targetting 2026
• HELW Cost:
• Low Quantities, below 20 units - between USD45-50m each
• High Quantities, above 20 units - between USD25-30m each
• The HELW technology is also rapidly transitioning into a Space capability - this demand is happening earlier than planned

PRODUCTION CAPACITY

• EOS SIN can produce 5-10 systems per year today, and can double capacity to 15-20 per year easily - this new facility will be formally opened in Feb 2026
• Most clients will insist on local production, so the EOS SIN capacity is not a constraint to production expansion
• EOS will do all manufacturing across the vertical production chain, in-house - the only company with the full vertical manufacturing capability, which makes EOS extremely independent in the manufacturing supply chain
• Will commence accelerated procurement once HELW market is more established

up 28% today !