Lilium NV (LILM) 2022 Q3 法說會逐字稿

Good morning, everyone. Welcome to Lilium Q3 2022 Business Update Call. My name is Geoffrey Richardson, Chief Financial Officer of Lilium.

Before we start, let me go through a couple of housekeeping items. (Operator Instructions). Today, we'll give you an update on our progress since our last call in September. (Operator Instructions). Please note that this conference call is being recorded.

Recording will be placed at Lilium Investor Relations page, soon after the event. As a reminder, after yesterday's market closing, we posted our shareholder letter on our website. We have also posted the press release on the contract signature with eVolare. We invite you to take a look at it. Before handing over to our Chief Executive Officer, Klaus Roewe, let me please give a reminder that our presentation will include forward-looking statements within the meaning of the United States federal securities laws that are subject to risks, uncertainties and other factors that could cause Lilium's actual results to differ materially from such statements. Please refer to the cautionary statements and our shareholder letter and the risk factors discussed in our filings with the U.S. Securities and Exchange Commission for more information on these risks.

With us on our call today are our Chief Executive Officer, Klaus Roewe, our Senior Vice President, Commercial, Sebastien Borel. Let me hand it over to you, Klaus, for some initial words.

Thank you, Geoff, and great to join you all on this call. Ladies and gentlemen, I'm really excited to share with you our latest achievements.

Firstly, we signed our first commercial contract with predelivery deposits. The U.K. operator, eVolare, has secured deliveries of 10 aircraft with the option to purchase another 10. eVolare will serve the Greater London area with it. As part of the agreement, eVolare will make a predelivery payment to Lilium to secure aircraft delivery slots. The deal coincides with the formal launch of the Lilium Pioneer Edition. Sebastien will give you the details about it in a moment.

Secondly, we signed our first major commercial agreement in the Middle East with SUAIDA. SAUDIA will have the option to purchase up to 100 Lilium jets and will establish an eVTOL network in Saudi Arabia. With this, we have a total order pipeline of 603 aircraft. We will continue to convert MOUs into binding aircraft purchase agreements in 2023.

Third, we successfully completed our fundraising on November 22. Thanks to further investment from existing shareholders, new investors and strategic partners, we completed a capital raise of $119 million. We also made significant progress towards certification. We have now submitted about 80% of our certification plans to EASA up from 38% in September. Next week, we will conduct our third design organization approval audit.

Lastly, our flight test campaign is advancing. Flight tests have continued, including round effects, downwash measurements and further high-speed testing up to 120 knots, which is about 222 kilometers per hour. Our second demonstrator aircraft is ready to join the campaign in early 2023.

Let me now hand it over to Sebastien Borel, Senior Vice President, Commercial, for a more detailed update on our commercial achievements. Over to you, sir.

Thank you, Klaus. Earlier this year, we have clearly outlined our commercial strategy with a 2-phase approach, a first phase addressing the premium segment, including general and business aviation, and the second phase to address the scheduled regional services for the mass market. To support the first phase, Lilium launched a limited series to address sales to private individuals, the Lilium Pioneer Edition. This limited edition come with a compelling service, tailored support, training packages as well as exclusive cabin customization. The Lilium Pioneer Edition is limited to a total of 50 aircraft, all of which we expect to sell by the end of 2023, all of them with predelivery payments of at least 50% of the purchase price prior to delivery.

As Klaus mentioned earlier and in conjunction with the launch of our Pioneer Edition Lilium has received its first binding contract with predelivery payments from eVolare, a subsidiary of Volare Aviation, one of the U.K.'s largest helicopter and private jet operator. With its base in Oxford, eVolare proven applications around U.K., including the Greater London area. This partnership includes a firm commitment for 10 Lilium Pioneer Edition jets, including predelivery payments with an option to purchase an additional 10. Best is to hear from Volare Aviation directly. (presentation). My name is [Dustin Dryden]. I am the Founder and Chairman of Volare Aviation. Volare chose to partner with Lilium after looking at several of the other manufacturers in this sector, we felt that having looked at the Lilium Jet, it offered the best combination of beautiful looks, incredibly clever design, a lovely cabin and above all, total redundancy and safety. Volare customers are going to love to use a Lilium Jet.

Again, I love to use it because it's environmentally sensitive, it has 0 emissions, it has a very low noise signature and has a beautiful cabin and above all, it has so much redundancy that safety is better than anything that we currently produce or operate. From a sales perspective, the Lilium Jet presents incredible opportunities. It is something that will be attractive to people that own helicopters because it can do everything a helicopter can do, but in a quieter environment it's going to be attractive to people that like super cars because the design is beautiful and it's going to be attractive to people that have never used private aviation because it's green, it's environmentally friendly, and it's noise sensitive. This product is going to open a completely new marketplace. It is a great industry disruptor, something that I've enjoyed doing throughout my career. The teams working together in Germany and the U.K. have come up with an absolutely fabulous product that our customers are going to love. It really is a solution to the future.

Going back to October, Lithium announced MOU with SAUDIA with intent to purchase up to 100 Lilium Jets and to deploy a high-speed eVTOL network in the Kingdom. We believe that this partnership is the first of its kind the Middle East and totally aligns with Lilium premium launch positioning. As part of the partnership, SAUDIA will support Lilium with local regulatory approvals. These 2 agreements, eVolare and SAUDIA bring the total auto pipeline to 603 aircraft. Lilium will continue to convert further of its existing commercial MoU’s into binding aircraft agreement -- sales agreement in 2023. Union also views predelivery payments as an integral component of our future capital structure.

And with this, more from Geoff on our finances now. Over to you, Geoff.

Thank you, Sam. This November, we announced the successful closing of a $119 million capital raise from existing shareholders, new investors and strategic partners. Participants included Aciturri and Honeywell as well as LGT and its affiliated impact investor LightRock, Tencent and B. Riley Securities. Lilium CEO, Klaus Roewe as well as 3 Board members, Barry Engle, David Wallerstein and Niklas Zennstrom also participated in the capital raise. We are pleased to have such a high-quality group of supporters in a challenging macro environment. These proceeds will strengthen our balance sheet and allow us to proceed with the assembly and testing of our type conforming aircraft as well as reaching final agreement with EASA on our means of compliance.

As we progress on our development, we are in active discussions to secure additional nondilutive funding sources to finance our operations until type certification of the Lilium Jet. These include grants and subsidies from governmental authorities as well as predelivery payments as discussed earlier on this call. Additionally, we terminated the equity-line-of-credit facility in November. Overall, Lilium received proceeds of approximately $12.6 million from the ELOC.

Let's take a look now at the Q3 financial results. Our total cash spend was EUR 69 million in Q3. The increase in cash spend compared to the previous quarter of Q2, EUR 63 million was driven by a ramp-up in onetime supplier payments. which included the e-motor development and battery industrialization of approximately EUR 7 million. This is in line with our target budget of EUR 250 million in 2022.

Our liquidity as of the end of Q3 and prior to the recently completed investment round stood at EUR 160 million at the end of Q2 was EUR 229 million.

Looking ahead, given the macro environment, inflationary effects and market uncertainties, we've initiated significant cost conservation measures at Lilium. We are currently finalizing our budget for 2023 and expect it to be consistent with our 2022 budget.

I'll hand it over to Klaus for the latest program updates.

Yes. Thanks, Geoff. As I mentioned before, our certification program is making significant progress, since our last update, we have submitted to EASA several more of our proposed certification plans, bringing the percentage of requirements covered to about 80% at the end of November, up to 38% in September. Lilium remaining certification plans are largely draft and ready for submission. 72% of the means of compliance are already agreed with EASA. And for the remainder, Lilium submitted its proposals to EASA earlier this year. We had discussions with the EASA over the past months have led to significant progress on the remaining means of compliance. Based on those discussions, we anticipate that EASA will accept our means of compliance in the first half of next year.

In parallel with the type certification program, Lilium is working towards design organization approval with EASA. The DOA is a necessary prerequisite for any aerospace company to obtain a type certification of its aircraft. Lilium third DOA audit is scheduled to take place next week and the fourth and final order is targeted for the first half of 2023.

On to our industrialization with our first Type-conforming aircraft due to go into assembly next year, our detailed design and collaboration with suppliers is accelerating. Strong partnerships with Tier 1 aerospace suppliers are fundamental to our path towards certification and industrialization of the key subsystems of the aircraft, need to meet rigorous aerospace quality standards. Lilium has agreements in place for aerostructures, avionics, battery cells, energy management system, e-motors, propulsion system, aircraft interior and landing gear, amongst others. In total, we have now selected or contracted 75% of the total expected aircraft bill of material cost. Right now, we are in the process of onboarding additional suppliers for the engine fans and the inceptors the sidesticks used for maneuvering the Lilium Jet.

Turning now to our flight test activities. Our flight testing continues with the current focus on high-speed maneuvered ground effects and downwash measurements. Downwash measurement relate to the downward flow of the air from the aircraft are important to validate multiple operations.

Let's have a quick look at some highlights since our last call in a little video. About demonstrating that the air plane can take the operating (inaudible), but the site wins during landing, ground effects, (inaudible) cases. We also trained multiple pilots recently to fly the aircraft, so we can speed up our testing as we bring our second demonstrator into the test campaign. We are now validating also our models and control software in these safety critical areas. We then use the validated models for certification of the production aircraft. And for the moment, you will see us proceeding with high-speed flights up to (inaudible).

An accomplishment of these latest milestone the aircraft continue to perform precisely as predicted by our computer-aided flight models. The Phoenix 2 demonstrator enables us to verify in a real-world environment of flight physics underpinning our series aircraft, the Lilium Jets and support our certification program.

An additional demonstrator aircraft called Phoenix 3 is in the final stages of integration testing and due to enter flight testing in Q1 next year, having 2 demonstrator aircraft at our disposal will give us additional support for testing and learnings before the first flight of our type conforming production aircraft.

So let me please conclude with the following summary and outlook. We've made significant progress advancing our commercialization efforts in the third quarter with the signing of our first binding aircraft order, including predelivery deposits and a breakthrough in the Middle East with a SAUDIA MOU. Having successfully completed the latest fund raise, our teams are fully focused on achieving the development and certification of the Lilium Jet and building out our manufacturing and supply chain capabilities. We are confident we have the right technology and the right team to bring this transformational product to the market.

In 2023, we will be working full steam towards signed binding agreements with deposits, securing government loans and subsidies, starting assembly of our type performing aircraft, building and testing our first battery packs, further flight testing with both technology demonstrators, receiving the design organization approval, agreeing the full certification plan and means of compliance with EASA and last preparing semen flight in 2024 of our type-conforming aircraft.

And now let me hand you over again to Geoff, who will open the floor for Q&A. Thank you, Geoff.

Thank you, Klaus. So now we have some time to take your questions. (Operator Instructions). We will now begin the Q&A session.

The first question comes from Colin Rusch from Oppenheimer.

Moving from having LOIs into actual deposits with customers is a pretty important step. And I'm curious about the conversation with those customers. What's been the key levers? Are you looking at the subsystem testing? Is it around the redundancy that like I mentioned in the video, how are you seeing any folks evaluate the product and decide to go over the hump and start spending some actual cash here?

Sam, do you want to take that, please?

Yes, absolutely. We've announced very early on this year, our partnership with NetJets and we have engaged with a number of customers, some of which we announced during Fanberg, and it became very apparent that some of the unique features of our aircraft became a unique setting point. And we are the only one having a full wing and third engine. So yes, the redundancy in the safety aspect is absolutely a major component compared to conventional helicopters.

And so as we progress also through our own program in engineering and the confidence by which we can really provide everything we need to put into an agreement, which is performance related and warranties. And as we're also progressing with our supply chain, we are absolutely able to transform all of the work we've done this year with the first phase segment, which is really right now the general and business ovation segment into a contract with deposits, having binding terms on Botham. Hopefully answers your question.

I'll take it offline and dig into it a little bit further. And then Geoff, as you look at funding this business, obviously, augmented the balance sheet was an important step here. Could you talk a little bit about the key spend areas that you see over the next 2 years to really get ready for full commercialization and demonstration of the platform as you look through some of these nondilutive opportunities, obviously, project finance is one element in the customer deposits. But just trying to get a sense of the overall magnitude of the capital that you're looking for and where that would go from a business development perspective?

Yes. Great question, Colin. I think the headcount is stable so that we don't really need to add additional head count. The main spend that we'll be looking to add is really related to ramping up the supplier base and moving towards assembling the type conforming aircraft for the flight campaign and then the working capital ultimately will need to assemble the aircraft. And so if you look at CapEx, you look at manufacturing, you look at green jobs and you look at producing a product that customers want. That's why we're really focused on the subsidies and nondilutive pieces from the predelivery payments that Sam and his team have been working on to government loans and subsidies and capital allows you to potentially add leverage as well. So the contracts are also quite important column as we look to that.

And so next year, where we're really trying to hold the budget consistent with what we did this year with taking money out in the corporate, but also focusing a bit on ramping up the supplier base with nonrecurring cost to get the supplier base going column.

The next question comes from Alex Potter from Piper Sandler

So Geoff, just to put a finer point on that you mentioned you want to keep the budget consistent. In 2022, it was a cash spend budget of EUR 250 million and you're targeting the same number in 2023. Did I understand that correctly?

That's -- we're in the process of finalizing Colin, sorry, Alex. But I guess, I would say as we're looking at cost savings on the company, and we're looking at the supplier side. So that consistent -- that's a good assumption for now. The exact number, we'll give you guidance on our next call, but we're kind of looking at cost savings versus the supplier side right now.

So then I wanted to get an update on in-house battery testing. I believe that you're in the process of establishing maybe some of your own facilities to conduct those battery tests in-house. But my understanding is that it takes a while to get things like that permitted in Germany. So just wondering how long it will take until those facilities are completed. And then once they are -- how is your battery testing going to change versus what you're currently doing with third-party labs?

Yes. May I take it. Hi, Alex, good to talk to you again, Klaus speaking. So it's not that we have limitations here in Germany to do those test things more than more. We have our own test lab that we are using, by the way, since a couple of years, and we are using it to test out new battery recipes, but also cycling batteries and this is ongoing. And it takes long because you can run the battery about 8x per day. So if you would want to get into meaning for numbers of battery cycles it always takes a few months. So we are doing it internally, but we are also using external labs like energy assurance, which is I think we lab in the U.S. And you can see the results on our battery block, which confirms that we have the energy density but also the power density that we need for our missions.

And secondly, we have also started external testing of our batteries with another laboratory, the Idaho National, which is a very laboratory also in the U.S., doing basically the same so we wouldn't want to have 2 independent sources of test wise for sure. We are conducting our internal tests and also iron blocks, which you formally know as Zen Labs, for sure in their labs also conducting tests.

So another question that I had, you mentioned that you've got your second test aircraft coming Phoenix 3. How is Phoenix 3 going to differ from Phoenix 2 in terms of its capabilities? I'm just trying to understand if you're going to be able to different kinds of tests with Phoenix 3? Or is it more or less a carbon copy of Phoenix 2 and you're just going to be able to do, I guess, test that twice as quickly now? Or is it a different kind of capabilities that are coming with Phoenix 3?

Yes, that's exactly the right view. So Phoenix 2 and Phoenix 3 are really identical. And there was no need to change Phoenix 3 compared to Phenix 2 because Phoenix 2 is already capable of basically performing all maneuvers that we would want to perform with such an aircraft, be it high-speed testing, transition flights, downwash ground effects, what you saw on the video. And Phoenix 3 is basically giving us additional capacity. So we also have additional flight crews so that we can intensify the testing in 2023.

Then maybe one last one, then I'll turn it on. So you -- I'll pass it on. You mentioned that you've got your third EASA audit coming up here next week. I'm interested in knowing the extent to which that upcoming audit is going to differ from the previous 2 or the final one. Is there one out of these 4 audits that's more stringent or more difficult than any of the others? Are they all more or less the same in terms of hurdles that you're trying to clear. Just anything you can say about that upcoming audit would be helpful?

Yes. Thank you. That's a great question. No, they are building upon each other. And so it's kind of a continuous journey. Basically, the third audit will attest that we really have the capabilities to design an aircraft and the first audit. But to get the DOA only with the fourth and conclusive audit is basically related more to things that you need to be able to do when you're in service period.

So content-wise, we are done to a large extent for the development part with the set out the fourth audit, the first audit will be more for cost activities, continuing oversees and so on. And for sure, we'll be a conclusive one which enables us to be granted to former DOA from the EASA.

We will take our next question. The next question comes from Will Peterson from JPMorgan.

I'd like to follow up on batteries. Just to clarify, about the masses. So is the battery chemistry fixed? Or I guess, are you still doing more process optimization? And if so, what is the timing sufficing the process? And I guess, secondarily, the types of tests you're doing or whether internally or externally, what is the status of, I guess, performance, repeatability, thermal characteristics, charging speed, general runway, cycle life, especially cycle life? What kind of levels are you able to achieve now.

Yes. (inaudible) a great question. Thank you for that. So yes, I would say we are in the process of fine-tuning our battery recipe. We have contract internally, but also externally, we have the energy density, which is essential for getting the range of the aircraft, there's the power density that we need to lift up and lend the aircraft. We also have got confirmation that we get enough battery cycle life to enable our, I would say, extraordinary good cost position that we will have when flying the aircraft.

So we are doing these tests in a repeated way. The test results are very consistent between our internal ones between the runs of energy assurance. And with the Idaho National Lab, we are about 25% through the test program, which is going to be completed in early next year from what we see from the first 25% of the test program, they are absolutely coherent with what we have seen internally and also with the energy assurance lab.

I wanted to get the latest thinking from Lilium on, I guess, its own network, the Lilium network. It seems like, obviously, you've gotten a lot of preorders, 600 MoU’s. Is this still, I guess, critical to the business? And if so, like what should we think in terms of timing? Will this be 2, 3 years after additional sales? Or how is the team thinking about this?

Yes, it's certainly not off the table. So we intend to pursue this, but our first intention and all our energy has been put together today in getting our aircraft certified. And then for the first 1 to 2 years, for sure, we are largely serving the premium segment. We want to then honor our MoU’s and agreements we have with a more kind of general aviation type of customers like SAUDIA and afterwards difficult to give a time line, but I would say not in the first 3 years, we also think about opening our own network. That's still the plan, but it has been really pushed behind the other 2.

And if I may add on this one. I think what's important to understand is that the premium actually segment is helping us tremendously as we are talking to authorities as we're looking at the lending sites, for all of those premium customers, it's actually helping us as well, paving the way for the network. So it's definitely something we want to do, but it's actually good to start with another segment, which helps us developing it.

If I could sneak one more in. One thing we haven't heard of recently is related to what Lilium is doing in terms of infrastructure development. I think in the past, you talked about Ferrovial. What are you doing with your commercial partners in terms of infrastructure? And I guess you have a lot of agreements to private individuals. Will these use existing airports or heliports like any specific infrastructure requirements for these applications?

Excellent question. Thank you. We are still actively working with our partners on the infrastructure. We're actually looking at a few others in different regions of the world to accelerate. But this is exactly what we just discussed. And if you look at Florida and other places where we like to have a scheduled service with a higher network, it takes some time to get some of the permitting to get some of the land agreement in place. So we are actively working with them.

However, as you just mentioned as well for the private individuals, much easier. You're looking at private estates, you're looking at luxury resorts, golf clubs. We have actually been talks with many, many, I would say, tourism industry and luxury industry players that have existing helipad where we can upgrade them into a vertiport really with a charging station on top and looking at some of the ground side. But it's much easier to go from a private general segment than it is to go from a commercialization segment. So yes, it's absolutely right. We will work with them and they have with us sharing their locations with us and we're working on it.

Next question comes from Adam Forsyth from Longspur Capital.

Just on the Pioneer Limited edition, great to see that launched, obviously. In terms of sales going forward, are we likely to see these as single aircraft sales? Or are we going to see something more similar to the Volare deal numbers of aircraft being filled through a kind of dealership-type structure?

Good question. We're looking at both, to be honest with you. We do have direct sales discussion, and we have also a reseller type of people that can look into aircraft and have it in a specific location. And what's important for us is we have the right ecosystem around our end customer to make sure they have the maintenance that they have people to fly the aircraft, et cetera, et cetera. So you always have -- most of the time, you ways have someone helping us out with the end customer, but we do have interest going directly to us.

And just a slightly technical one, just you mentioned ground effect issues in terms of the testing that's been going on with Vectra and have been an issue around ground effect. And I wondered if it has any particular advantages in that area within your design?

Well, on the aircraft side, first of all, we have what is called a value, which is a diameter of the aircraft, (inaudible) 14 meters. So we can actually use most of what's called it (inaudible). So most of the helipad in Europe have at least 14 meters of a diameter. And so we can use them. Now then we have to look at the ground effect and the downwash. And there are ways for us to actually look from a trajectory perspective to look on how we can accommodate this with its specific terrain.

So we're doing a lot of analysis right now on some of the vertiports or helipad upgrade to fit our aircraft. It's something which we can manage, like I said, from a trajectory perspective, and that we're not that too concerned about.

(Operator Instructions). The next question comes from the line of David Zazula of Barclays Bank.

First one is around the means of compliance and the band of first half, seems a little bit on the wide side, not to make light of it a significant challenge and uncertainty that's going on there. Just wondering what are the key drivers or levers that could cause it to go one side or the other as you're working EASA on that?

It's basically the workload. So as I said, we have submitted our proposals. They are at the EASA, and we are discussing them. It's basically working through the pile of documents. So I'm not foreseeing any technical, I would say, surprise or uncertainty. It's just getting the work done. And as you can see, we have also progressed significantly on the certification plans. So it's the 2, which we are working through for the moment. And we have decided, together with the EASA to keep this pace. We are in permanent exchange with them and visuals with the FAA. So it's just getting the work done and balancing out the completion of the MLCs and of the certification plans.

And then looking at the flight demonstration, it seems like it's not designed as a range flight, but with the advent of Phoenix 3, could just discuss what you've gone as far as range on the flight so far and what the plan is to convert to maybe a little bit more range testing in 2023?

Yes. We haven't done a lot of range testing, and Phoenix -- the both Phoenixes are demonstrate the aircraft. They don't have the batteries that we are using now on our test facilities, and we are going to use in (inaudible), so we would not be able to take a 1-hour flight with them. But it's also technically, it's kind of meaningless to do is because we don't learn anything by flying straight away. We are rather spending our time on making maneuvers like the route effect, which as people in from the vertical take on landing business, no, it's a very delicate business. We could be flying some 15 to 20 minutes with this aircraft, given the batteries with are (inaudible). We may do it at one point in time, but we feel from a technical learning perspective, it gives us nothing whilst what we are doing now, tuning our flight control laws and the likes. What we have seen on the video for us is much more fruitful. So we have preferred to do this. We may do longer and we may also do much faster flights in next year when we have the second aircraft available so that we have more capacity and bandwidth.

And then for Geoff, you did disclose in your most recent filing that there's significant capital and I appreciate the discussion on how you plan to fill it. I guess I'm wondering why you would choose to terminate the e-lock though, given that, that was an option, what the thinking was behind that?

Yes. I think given the size of this offering, we wanted to let the market settle and send the message that we were planning on utilizing that. So that's one. You also found that an ELOC is something that you put in place before your seasoned issuer. So some of the mechanics were a bit suboptimal. So we then get out of it as much as we could from a mechanical perspective, but we really want to let the market settle given the most recent deal is the main reason.

The question comes from the line of

Savanthi Prelis from Raymond James.

Can you please talk a little bit about the PDPs, like how payouts just the 50% is timing of those? Like when you expect those to start flowing in or how the agreements will be done?

Yes. I mean they are very much in line with industry standard, whereby we have the first deposit in a schedule until delivery of the aircraft. And you can imagine the kind of milestones we're going to have in between the time of delivery and the first deposits. So it's a spread PDP schedule. Based on some of the milestones and like I said earlier, we're going to be getting more than 50% of the aircraft purchase price prior to delivery.

Does that mean to be seeing some kind of PDPs coming in 2023? Or is that more of a for 2024 then?

There are definitely deposits coming into2023, correct.

And then I thought the service support and training package being included was interesting with the Pioneer Jet. And I was wondering if you could provide a little bit more color on how that's set up in terms of -- are you doing that a lot of that in-house are going to have partners of it and just how you might have gone around kind of setting pricing around that, given all the uncertainties around training and things like that still?

Yes, absolutely. So first of all, the pioneer, the Lilium Pioneer Edition has a comprehensive service package to make sure that we can take care of everything A to Z type of solution, right? So it's talking about maintenance, we're talking about flight training and so on. We do have like, I would say, 2 different packages depending on the type of partner we're going to have if they are certified for maintenance and flight operations, obviously, they can do things on (inaudible).

Going back to flight training. We do have an agreement with Lufthansa vision training, and we have an MoU with Flight Safety International. I'm not able to comment more on this, but we do have partner working on the flight training side so we can provide trainings to the crew, but also to the mechanics and so on. So it's really -- the pioneer edition comes with training package, tailored services and maintenance services along with, of course, cabin, quite a bit exclusive cabin and customization options.

And if I might just ask a quick follow-up question. Just can you talk about the cost savings that you're kind of looking to do to describe a little bit more about kind of where that's coming from?

Cost savings for the company. I think we reviewed all external spend, reviewed all necessary activities. So I think a lot of it is really as the program has progressed really defining what really needs to be happening and eliminating anything that is a nice to have. So it's spending a lot of time really sharpening the goals and reducing any kind of extraneous spend as the best way I could describe it.

At the moment, there are no more questions on the line. Therefore, I give back to Geoff.

Okay. With that, I think we've come to the end of our Q3 2022 business update. Thank you once again for joining us. We look forward to speaking with you again next year. Everyone, have a great break and a great start to the New Year. Cheers.