Fastned B V

Hello and welcome to the Q1 and 2023 guidance conference call. My name is Priscilla and I'll be your coordinator for today's event. Please note this call is being recorded and your lines will be on listen only. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Mikhail Lengazel, the CEO, and Victor Vendayak, the CFO, to begin today's conference. Please go ahead, sir.

Thank you, operator. I would like to say welcome to everyone in this call as well as to our webcast viewers. The presentation used during this call is also available at our investor relations website, which is ir.fastnetcharging.com. And to give a quick word towards the picture on the title page, this is a rendering of the two locations that we will soon be building near Ghent on the motorway E17. The first tender in Europe for a fossil-free service area, a tender that was again won by Fasnet. Next to this great win, we've seen loads of news in this quarter on the EU Commission regulation about having fast charging stations along major European motorways every 60 kilometers. Later in this presentation, we'll do a deep dive in the opportunity this provides to Fasnet. Slide two, please. With reference to the information provided in these slides and discussed during this call, please take note of the disclaimer. Slide three, please. My name is Michiel Langezaal. I'm the CEO and one of the founders of Fastnet. Victor van Dijk, our CFO, is also present in this call. Together, we will present today's webcast. Today, I will elaborate on the highlights of the first quarter of 2023, and also we will touch upon relevant market developments, and of course, we'll give you an update on our progress. After that, Victor will take over and take you through

Hello and welcome to the Q1 and 2023 guidance conference call. My name is Priscilla and I'll be your coordinator for today's event. Please note this call is being recorded and your lines will be on listen only. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Mikhail Lengazel, the CEO, and Victor Vendayak, the CFO, to begin today's conference. Please go ahead, sir.

Thank you, operator. I would like to say welcome to everyone in this call as well as to our webcast viewers. The presentation used during this call is also available at our investor relations website, which is ir.fastnetcharging.com. And to give a quick word towards the picture on the title page, this is a rendering of the two locations that we will soon be building near Ghent on the motorway E17. The first tender in Europe for a fossil-free service area, a tender that was again won by Fasnet. Next to this great win, we've seen loads of news in this quarter on the EU Commission regulation about having fast charging stations along major European motorways every 60 kilometers. Later in this presentation, we'll do a deep dive in the opportunity this provides to Fastnet. Slide two, please. With reference to the information provided in these slides and discussed during this call, please take note of the disclaimer. Slide three, please. My name is Michiel Langezaal. I'm the CEO and one of the founders of Fastnet. Victor van Dijk, our CFO, is also present in this call. Together we will present today's webcast. Today I will elaborate on the highlights of the first quarter of 2023 and also we will touch upon relevant market developments and of course we'll give you an update on our progress. After that, Victor will take over and take you through the top-line financial results in the first quarter of 2023 and discuss the full year 2022. He will also update you on our station metrics again. At the end of this presentation, we'll share our outlook on station openings and upgrades for this year. We intend to take one hour for this call, including Q&A, and end at 12 noon. Slide four, please. We've had an amazing quarter with lots of positive developments inside and outside of Fastnet. Let me talk you through it. We continue to see great momentum in the electric vehicle market. In all markets, we see an acceleration of electric vehicle uptake, especially with prices of EVs going down significantly, while at the same time, cars have better range and faster charging. In the last quarter, we sold more than double the amount of electricity as in the same quarter of 2021, and we grew deliveries by 15% compared to Q4 of last year. As always, more cars means more continued growth at our stations, something Victor will elaborate on today when discussing the station metrics. After serious price hikes on the electricity markets in December of last year, we've seen markets coming down rapidly this quarter. The gas supplies in the storage facilities in our operating countries are high, and gas prices have come down to levels close to that of before the start of the Ukraine conflict. We therefore expect the summer period to be relatively calm. How things develop towards the winter of 2023 is still to be seen. As a consequence of these developments, Fafnet was able to lower its prices in Q1 while still having a healthy margin, increasing the attractiveness of EVs over fossil cars, a great development in light of our mission, accelerating the transition to e-mobility. This price decrease in combination with the continued volume growth leads to revenues only slightly growing compared to the previous quarter. A very positive development dimension as well is the operational EBITDA growing with 244% from 2.4 million last year to 8.1 million euro in 2022. This is a consequence of both a healthy margin as well as continuation of an exponentially growing charging demand on a business with operational costs that grow in line with the number of stations and their size. After the race towards year end, things had to calm down a little in Q1 in order to give our team some rest. This also provided time to rethink learnings from our high build base in Q4 and start planning for more structural build base of 100 stations per year in some time from now. is 14 new stations in our network last quarter, with amongst them very big stations like Erre de la Max on the route from Metz to Luxembourg with 16 drive-through charging positions. We added 144 chargers in the last quarter and now have 1,381 chargers online. This gives Fastnet a place in the rankings of Europe's largest charging networks. To build more stations, we need more new locations. From the very foundation of Fastnet, we have been talking about the scarcity of good high traffic locations to build charging stations at. Securing these locations is key to building that valuable network that will be our stronghold for years and years to come. In previous years, we've heavily advocated for the importance of market access and public tenders for these locations. You'll understand that we're very happy with the EU Commission mandating member countries to realize charging infrastructure on European motorways every 60 kilometers. A big win and something which will create loads and loads of opportunities for Fastnet. More about this later. That said, we also see that the regulatory processes take time, and location tenders are taking longer than initially communicated. This slows down our build pace in the near term, but for the longer term, the AFIER legislation enforcing the build-out of the European charging infrastructure strongly solidifies our long-term outlook. More about this later on in our presentation. Next to tenders, we have been putting a tremendous amount of effort on accelerating our location pipeline with private developments. Our network development team has roughly doubled over the past year, and we're starting to see the first results. In Q1 of this year, we closed almost the same amount of private deals as in the whole of 2022. Scaling up private location development and seeing the opportunities from large public tenders paves the way for an acceleration of our location pipeline in the coming years. The last highlight I would like to mention is the solidification of the 2035 target by the European Commission, mandating all new cars to be emission-free from 2035. This paves the way for €500 billion for a 500 billion euro fossil fuel market to go electric. And that is our growth path for the coming decades. Which brings me to the next topic. Slide five, please. With the shift towards EVs accelerating, one or two chargers adjacent to some parking spots is no longer going to be sufficient. And more and more policymakers have seen this. Tenders like the two Gentbrugge locations are instrumental in developing the needed charging capacity for the exponentially growing number of EVs on the road. Stations that provide a charging experience that is better than going for gas and have the same or better amenities. We are very proud to have won the very first of such tenders from other contenders, such as large oil majors that start to put their eyes on transitioning away from fossil fuels, or the typical utilities that want to build on their electricity generation backbones. In the Netherlands, we now see that the government is starting to plan for the phase out of petrol stations with its new service area policy proposal. That proposal advocates for a roadmap for when service areas become zero emission. On the slide, you can see what this would look like, a service area where one cannot buy fossil fuels. Logically, we're very pleased with this proposal. Interestingly, this development of zero emission service areas coincides with other news for this quarter. Slide six, please. Which brings me to the alternative fuel infrastructure regulation. Some time ago, this was still a directive from the European Commission. But recently, this became regulation in order to strengthen the mandate towards member states and drive the transition towards the mobility. We at Poznet have been saying it for a long time. Without charging infrastructure, people will not give up their fossil fuel cars and change to electric. Solving this issue became our mission. The European Commission is now of the same belief and therefore now mandates member states to ensure that European motorways have that basic and robust charging network with stations every day. 60 kilometers this is a big thing the 10t road network encompasses roughly 95 000 kilometers of highway of which the commission has labeled roughly a third to be core and two-thirds of it being the comprehensive network this leads to roughly 500 charging hubs needed to cover the core network alone and as most often motorway service areas on the very high traffic roads are only accessible from one direction, we expect that this number should be multiplied by two for most of the core network, leading to a thousand charging stations just for the core network alone. The logical route to realize this infrastructure is to put out public tenders in line with the European Services Directive. This will bring an opportunity of a thousand or more very interesting locations for Fastnet in the coming years.

Slide seven, please.

For years, we've been conveying the message of location, location, location. And therefore, I'm just going to do this again. Locations along highways, especially those with loads of traffic, are scarce, very scarce. Aiming for those cars locations was a strategy 10 years ago. Today, the proof is there that these locations are very, very interesting from a commercial perspective. We talked about this a lot last year. For example, when we explained that Fastnet holds only a fifth of the charging locations in the Netherlands, but sells more than 60% of the fast charging volume. Amongst other things, this is the result of that strategy of acquiring A-plus locations or motorway locations. So one would expect competition for these locations to be serious now that the market is accelerating. So this leads to the question, how does FastNet win these tenders?

Slide eight, please. We talked about this before as well.

FASnet started a decade ago with building the first stations, developing a software backbone in which we run our charging infrastructure, acquiring the permits for the first charging stations, and much, and much more. Together, all these elements make up one of the best charging concepts in the market. Google location reviews shows that FASnet ranks best. And last year, we won prizes for the best charging network in several countries. under which the UK, of which you can see the ranking here on the right side of the slide. When it comes to charging infrastructure tenders, governments recognize the importance of quality, expertise and experience more and more. They found out the hard way that getting rid of range anxiety and supporting people in switching to an electric car only happens when charging infrastructure works. Demanding petrol stations to add some chargers or letting the commercial offering be the decisive factor doesn't result in good infrastructure. If competition for quality is not important, one will not get quality. Or in the worst case, you will get chargers with red tape around it. Having one of the best charging concepts in the market and more experience than most others allows us to hand in very competitive bids. Flight nine, please. Having discussed the many moving panels and policy landscape, we thought it would be good to see what is actually happening in each of the countries. On this slide, you can see the various stages in the development process of charging infrastructure, starting at the top with initiating talks with policymakers. The flags for each of the countries, we've indicated where things roughly are in the process. Let's talk you through. In Denmark, separate tenders for fast charging stations are on the roadmap. And logically, we're following up with authorities. These tenders could provide a very interesting opportunity to invest in serious stations along Danish motorways. We've touched upon Italy before. New regulation has been developed, and this is pushing for tenders to be held for all service areas on the motorway network. As you can imagine, with several hundreds of such service areas and millions of car owners to be supported in their switch to owning an EV, we are very interested. To this end, we are working with several stakeholders in the market to get from regulation to tenders and finally to building the infrastructure. In Germany, we have been supporting the development of the market with building large stations at Autoheufe. which are privately owned terrains at motorway exits. In the meantime, we've continued to advocate for an open market and market access. One of the results of this is the Deutschlandnetz program. This program consists of two tenders, one for the realization and operation of 200 new motorway locations, which have been issued in six separate models. And the second tender offers financing for an additional 900 locations off Moseley. Exact locations are still to be determined for this last tender. Both these tenders were communicated to lead to outcomes before the end of 2022. For various reasons, these timelines were not met. Logically, we're following these developments closely. 2021 was the year of tenders along private motorways in France. Fasnet had among the highest win rates in the industry. 2022 was the year of building this infrastructure, something to which we have contributed with great pride. The coming year will be about the plans for the national motorways. So this is the road network that is not operated by the concessionaires, but by the government itself. In Flanders, we've won a lot of tenders, and much of the work is now focused on realization. In Wallonia, it is the opposite, and loads of work goes towards discussions with policymakers in order to explain the need for building serious charging stations along motorways, and also about how to allot such works by means of tenders. We're proud to open our first station in Wallonia next month. In Switzerland, we continue to build on the 20 motorway concessions we acquired several years ago. These sites are in separate development stages, from permits to construction or are already in operation. Last year, we were able to designate three locations on public land for the development of a charging station and acquire the rights to execute on that development. We expect similar developments in the coming years, with Swiss authorities continuing to offer public land to support the build-out of charging infrastructure. Logically, we're closely following such developments. Last but not least, I want to mention the Netherlands. This country has held its first tender to allot the rights to develop and operate charging stations along motorways early 2012. As mentioned before, we see very important and brave steps by the government towards a policy that should govern the next phase of tenders. This is when the oldest concessions will start to expire, the first concessions ending in 2028. The key ingredients of the new policy are separate tenders for petrol and charging, as well as a roadmap towards phasing out petrol stations with zero emission service areas. a very long list of developments with opportunities that are expected to materialize in the coming years and deliver very valuable locations to our pipeline. But note that we have only been talking about public developments here. I said earlier in the last quarter we've been able to massively increase our developments with private landowners as well. In Q1, we signed close to the same number of locations as in the whole of last year. On that note, I would like to hand you over to Victor van Dijk, our CFO, for a look at station metrics and financials.

Thank you, Michiel. I'll take you through our financials. I thought it was a good moment to show you a more longer-term perspective on what the drivers of our station economics are. On the left, we show the station economics of our average station in the last pre-corona quarter, the fourth quarter of 2019. With corona now fully behind us, this provides for a nice reference. This was actually the first time we presented the station economics like this. This was shortly after I joined Fastnet in that same quarter. We wanted to show the unit metrics to give more insight into the business case. Back then, we aimed to explain that station revenues could go to more than 1 million euros by 2030, which was a bit of a challenge when they were still at 61,000 euros annualized at that time. Basically, a 16-fold increase was needed. Today, we obviously have a longer track record. So in a little over three years' time, station sales more than three-folded. which is driven by a three-folding of electric vehicle fleet penetration. We continued to build high traffic stations, so the general traffic counts of an average station in a portfolio stays relatively the same. But the number of electric vehicles passing by increased from roughly 300 to roughly 900 vehicles per day, which directly drives station sales. We know electric vehicle fleet penetration is predicted to go around to around 20% on average across our markets by 2030. So the number of electric vehicles passing by will sevenfold towards 2030. Therefore, we expect station sales and revenues to see a similar growth. And we still expect station revenues to be above 1 million euros by 2030. We also expect station revenues to be above 400,000 euros by 2025, also driven by increased electric vehicle fleet share.

So what do we need to do to get there?

We need to continue to acquire high traffic locations, so the general traffic count stays at the same level as now. And we need to build large stations to satisfy increasing demands. We need to continue to offer the best charging experience. We know that, on a relative basis, we realize higher sales than other parties in the market. And the electric vehicle fleet share needs to grow. To us, this is all but a given. Given the phase out of non-zero emission vehicles by 2035 in Europe, and by electric vehicles becoming better, cheaper, and more available. Over the last three years, the operational EBITDA fourfolded per station due to operational leverage in our station metrics. Higher sales at the same cost level. And note that, as expected, also over the last three years, the operational EBITDA margin and return on investments also increased. This is due to a higher utilization and high charge speeds, allowing us to sell more kilowatt hours over the same investment.

Slide 11, please.

We have said before that the representative top five station provides a glimpse into the future, which you can clearly see here. The top five station is top station because it has around three times more general traffic than the average station. and slightly more electric vehicle fleet penetration in its region. This leads to three to four times more electric vehicles passing by, and three to four times more sales than the average station. This is both today and in 2019, as you can see comparing the two slides. Therefore, the top five stations shows the potential at three to four times more electric vehicle fleet penetration for the average station. as it did in the past. The Q1 2023 average station economics on the previous slides are very close to the top five station economics end of 2019. So the average station economics a number of years down the line will look a lot like the top five station economics now. All this gives you the underlying logic to our guidance for 2025 and 2030. in terms of station revenue and station profitability.

Next slide, please.

We thought it was good to show a state of the industry, showing European slow and fast-charging company ALEGO and a US-based pure-play fast-charging company EVGO. Both are listed companies. What you can see is that these players are all investing hundreds of millions in fast-charging infrastructure. which facilitates double or, in our case, triple-digit sales growth. This has led to significant losses to date, as can be expected with utilization still catching up with investments. As we already indicated at Charting Day last year June, we expect Fastnet's underlying company EBITDA to be positive for the first time in 2023, as one of the first charging companies worldwide. We believe that is because we have been a frontrunner in the fast-charging market, being a thought leader on how the infrastructure to accelerate the transition to electric vehicles should be organized and built. And it's also because of our extreme focus on high-traffic locations and a best-in-class and efficient charging concept. This contract, this concept attracts additional demands leading to above average sales growth. And the efficiency leads to an acceleration in profitability.

Next slide, please.

Then turning to company financials. Over the last years, we have expanded operational EBITDA from 0.9 million euros in 2020 to 8 million euros last year. This was on the back of strong sales growth, a relatively stable growth margin per kilowatt hour over the last two years, and with relatively stable network operation costs per charger. This year, we expect revenue, growth margin, and operational EBITDA to grow strongly again, based on continued electric vehicle growth and high traffic, best-in-class stations being added. This is already shown in the first quarter of this year, where we realized the gross profit of €9.4 million. That is already almost half of the full-year gross profit in 2022, which was €20.5 million. With that, we expect operational EBITDA growth to significantly outgrow network expansion cost growth. and therefore underlying company EBITDA to turn positive this year, for the first time in our history.

Next slide, please. Then on funding.

As we indicated last year, with the 75 million euro equity private placements with Schroeder's infrastructure fund, we have funding to build 400 stations, where we have close to 260 stations operational right now. As we indicated this morning in our press release, because of location tenders taking longer than initially communicated and due to delays in grid connections, we now expect to build station number 400 in 2025 instead of before year-end 2024. Funding to date was realized through a combination of more than 240 million euros in equity through various instruments, and more than 110 million euros in retail bonds. Funding beyond the 400 stations will likely come from, but is not limited to, either further retail bonds and accelerated book bills, another price placement, or a combination thereof. Next slide, please.

Yeah, when discussing the highlights of the quarter and the European Commission regulation that the EU motorways should have charging stations every 60 kilometers, I already mentioned that we see our long-term outlook solidifying with more and more proof points out there. But at the same time, we also are communicated about tenders and policy developments taking longer than originally planned for. something which slows down the market in the short run. Additionally, we have been seeing quite some news about the electricity grids being under strain and the delivery of new connections to the grid becoming an issue. Fastnet also is experiencing this. The impact of these developments bring us to an updated guidance whereby our 400 station target will most likely move into 2025. Based on our pipeline and potential wins in the coming months, we're confident to hit somewhere between 350 and 400 stations year-end 2024. These numbers translate into a construction plan for this year of more than 60 new stations, whereby if tenders materialize quickly, there could be some room for more. but given development timelines and lead times in supply chain we expect the majority of future wins to move into 2024 and 2025. all in all we are talking about delays in the order of half a year as you can imagine we're doing all we can to push these developments towards results on the other hand We also want tenders that have outcomes that allow us to make serious investments in serious stations. Feedback on terms and conditions of the concession logically is part of our discussions with tendering authorities in the early phases of tenders. And we're very happy to see that such feedback is often taken seriously. And to that end, we think that these delays are worth it. All in all, accepting a number of months of delay in order to get a 15-year or more concession, right, is in our view the right decision from their perspective. Which brings me to the financial part of guidance, something I'm very excited about. Because after many years of investing, it looks like 2023 will be the year in which Fastnet will become underlying company EBITDA positive for the full year. This is a special moment, as we will be one of the very first charging companies in the world to achieve this milestone. We continue to expect that the operational EBITDA margin will be more than 40% by 2025. We have already achieved that this quarter based on a healthy gross margin, so we are well on track to achieve that. We also continue to expect average station revenues to surpass €400,000 in 2025 and €1 million in 2030, driven by electric vehicle growth and by adding very high traffic locations to our network. This all in line with what we explained on the station economic slides. Next slide, please. This finalizes our presentation and I would like to thank you all for listening. Given the increased amount of analysts, we kindly request you to limit the number of questions to two per analyst. If there is time left after that, we can obviously take more questions.

I now hand the word back to the operator for questions.

Thank you, sir. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star 1 on your telephone keypad. We'll pause just for a moment to allow everyone an opportunity to signal for questions. We'll take our first question from Jeroen van Eken from D-Groove Petercamp. Please go ahead. Your line is open.

Yeah, good morning. Could you just give us an update on the win rate for, let's say, the newly acquired locations? I believe it was around 20% to 25% before. Do you see more competition in the market which might impact that win rate? Any information on that one is helpful. Thank you.

Jure, I think the answer would be it's 100% because we won those two tenders. But I think the answer is most likely in sort of we are seeing some delays in the tender results. So we're basically also awaiting tenders that will have more lots and a more diversified outcome in that sense. So I would say the answer is to be awaited.

Any further questions? Yeah, I understand the 100%, but there's not like that you participated in other tenders that you did not acquire, let's say.

No, there were no other tenders that were relevant to us at the moment. Okay, good to know.

Thank you.

Thank you. We now want our next participant, Paul D. Froman from Brian, Garnier & Co. Please go ahead, sir. Your line is open.

Yes, I have two questions for me. The first is gross margin was 57% in 2022, 70% in Q1 thanks to your adaptive pricing strategy. What can we expect in 2023? And the second question, is regarding your charging point supply with clp training charging points everywhere there are few providers and i was wondering you observe any pressure to obtain or any pressure or delayed to obtain the number of charging points you need thank you let me start on the gross margin

So we realized a 46 cents per kilowatt hour gross margin last quarter, obviously helped by the energy prices going down, our input prices in the market. And we think our price level of 69 cents in most of our markets towards customers is a fair level. uh given the fact that the energy prices still are uh the energy market is still more volatile than it used to be and also the prices are more elevated than they used to be so the cost price level to customers is is is a fair one um uh given the current circumstances and that with that that leads to um Yeah, right now, the gross margin of 46 cents that we realized in Q1. And we're a bit dependent on energy markets to see where it goes from here. But I think it's important to highlight that we'll keep monitoring the markets. If at some stage there's reason to increase the prices, we will do it, like we have done over the last winter.

Maybe then on supply, I think you mentioned sort of the supply of charges and any pressure in the supply chains there. yeah we have seen that last year I think we might see that again this year but I think if we sort of prioritize let's say things that are bottlenecks towards the expansion of that network we probably would say tenders are more of an issue today and the lead times of that and policy developments To some extent, great connections, but the supply of chargers is not the main issue at the moment. Okay, thank you very much. Does that give you a bit of color on that topic?

Yeah, thank you very much. Very clear. Thank you.

Thank you. We'll move on to our next participant. Mark has a link from ING. Please go ahead, sir. Your line is open.

Yes, thank you first the what is your visibility on the on the number of times I can I can understand that it's it's a bigger number coming up over the coming quarters, but is there a number that you can that you can attach to that. locations.

I think that's a bit what we tried to do when we talked about sort of the countries and where they are in the process. I think if you look at sort of Germany, we're talking about 200 locations in six slots. Then there is financing, financing tender for 900. But those locations are still to be determined. So the tender basically doesn't come with locations, although it might support it. um and yeah then i think if you look at italy for example we're talking about a couple of hundred of service areas probably order of 300 up to 600 sites but the question of course is like what will be the pace of getting that out for tender and what the percentage will be that will be tendered out in in the end um If you look at Denmark, we're probably looking at the order of magnitude, let's say 50 sites. So that's sort of order of magnitude, the numbers that we see in those countries. I think if you look at it, if you look towards the countries that are further down in that development process with currently being policymaking, it's very difficult to say. So it's really at a very high level. Does that give you a bit of visibility on what is to be expected, let's say, in the short run versus the longer run?

Yeah, maybe because it's actually linked, the second question, is actually to the 1,000 networks in the core network and the 1,500 comprehensive sites. I assume there's quite a big overlap to where you already have locations, overlap with those, the ones that you just mentioned. Can you give a bit of a feel? Because I want to try to square everything with your 1,000 stations target for 2030. What does that mean?

I think the interesting thing is that, yes, there is overlap, definitely. But that overlap is not going to be very massive. And maybe an illustration towards the Netherlands helps there. I think the Netherlands has a core network of, I think, roughly, let's say, 2,000 kilometers or something, if I'm right. So you're talking about, let's say, 20, 30 sites according to sort of that European legislation. While it has many more motorways, but they're simply not being, let's say, labeled as European motorways. And if you look at that mandate from the European Commission that basically puts in place Yeah, the basics for what is required across Europe and pushes countries like Spain, Poland, Denmark, like everything where basically these standards haven't taken place yet to get towards standards and build the rudimentary network whereby in countries where traffic levels will be very, very high and the logic when you have such a tender to build a bigger station or to build more stations than every 60 kilometers is very logical for a government and for operators. So I think the result that we will see in the end is going to be more stations and bigger stations than what we see with a basic mandate from the European Commission. Does that explain it, Mark?

No, that's clear, and it's actually also promising. Maybe if I can sort of sum that up. If you look at your 1,000-station target, how much percent of that is that of the total locations you see that are attractive to you, given the size that you're targeting and everything?

We haven't done that in full yet, but I wouldn't say that the overlap is big, probably in the order of maybe 10% to 20% or so.

So you have a 10% to 20% market share?

Yes, I think your question is what the overlap is of our current network compared to that network of the TEN-T regulation, right?

No, no, no, sorry, sorry. I tried to... like if i'm trying to get to a feeling if if the thousand is uh very aggressive or not like how many how many stations are there like do you take one thousand out of four thousand available or do you take one thousand out of ten thousand uh available yeah i think i think maybe to provide some answer on that i think what we have been saying is that

very high traffic sites are scarce in europe uh there's a there's a finite amount in the uh order of magnitude of that is ten thousands uh and that's that's a combination of multiple service area sites that we indicated that charging they receive about four thousand of them in europe and commercial sites have um roughly the same and you get to order of magnitude ten thousand so that's what How you should see our target of 1,000 stations, you should see it in the light of that.

Okay. That's very clear. Thanks.

Thank you. We'll move on to our next participant, Tisberg Kolder from ABN Amro Odo PHF. Please go ahead, sir. Your line is open.

Good morning, gentlemen. First question is on your outlook. You're giving an outlook on a number of stations by end of 23, 24, and let's say mid-25. Can you maybe also quantify your outlook in terms of charger rollout? Your press release clearly hints that you're shifting to bigger stations, more chargers per station. So what kind of charges per station should we expect by end 23, 24, 25?

Yeah, we indicated on charging it to be around 6 by end of 2025. And right now, you see that we're already at the end of this quarter. We're around 5 and 1 half. And we are adding stations. that have six to eight charges. So that's the average number. And we're also adding charges to our existing stations. So that six by 2025 is probably on the low end right now.

Yeah, that's what I mean. It is more logical to expect something like seven to eight already at that time instead of the six.

I would say more towards seven. So we're adding stations that have on average seven chargers. And we need, of course, to add chargers to our existing stations.

Yeah, because are you then, let's, you briefly told that you're managing extra chargers when you see occupancy rates, let's say, up above, let's say, 25% rates or so?

Yeah, I think what we tried to manage there is that adding infrastructure, if you look at the number of electric vehicles that will hit the roads this decade, that is really growing exponentially, and then the infrastructure uh will grow it's also growing at a strong at a high base but will the growth will be slower so at some page at some stage that and those two lines will intersect um and we are basically what we're doing is trying to delay that intersection because then by then our stations will be uh completely full and occupied so um yeah we keep on adding capacity um because we know at some stage we will need all the utilization we can get. So it's not as mathematical that we say we have a current utilization right now, and then we start to add charges, because we know the challenge is to add sufficient charges. So that's an ongoing project. But if you look at utilization that grew from 10 to 18 percent at this over the last year if we would if we would not have added charges to our existing stations but that gives you a bit of a picture that utilization will increase very strongly okay then over the past 12 months you primarily uh heavily

expanded in france and now of the past two quarters you especially at the locations in the uk should we also already see a delivery of a large part of these locations let's say towards end of this year or is that more back end loaded towards what is it 24 25

Yeah, so your question is a bit like the delivery of those sites that we added in the UK, when they will be built, if I'm right? Yeah. Yeah. Yeah, in the UK, the process is that it might go a bit quicker because the contractual process is a bit different. Yeah, I think whatever happens, I think it's probably more back-end loaded to this year at least or going into next year. In the end, let's say from contract to realization, we're most often in sort of a period of somewhere between nine to 18 months. But sooner than that, it very rarely happens because ordering times of quick connections, parts, all these kind of things. So it will be back-end loaded, definitely.

And what is the reason why you now specifically are winning much more locations in the UK and not so much in, let's say, your other region?

I would say it's mostly oriented towards hiring of people. So we've been hiring the first, let's say, scale-up of the network development team mostly, I think, in the UK. And country by country, we're adding people to that team. And what you see is basically before a person is up and running, you need half a year or at least a period of time to get your network, you get the conversations. And then, of course, before the deal finalizes, you're definitely a period down the road. And the result of this, I think, is mostly a consequence out of the accelerated book build that we did already quite some time ago. Based on that, we've been hiring people. Those people have been learning and getting into the process, and that leads to contracts now. That also shows a bit like what is the lead time of getting commercial people out there and getting them to deliver results.

Yeah. okay then maybe for now final question uh dynamic pricing uh is there development can we expect that to happen at fastnet uh let's say within the coming 12 months or probably not and you talk about pricing per kilowatt hour then or um Yeah, let's say higher pricing during dense traffic hours and maybe discount at night or so.

I think at the moment what we've said is I think we're happy with a healthy margin and with the price point that we're at. We're in the market. Yeah, I would say there's reasons to expect that the energy markets will become a bit more volatile towards the end of the year. I think it's also there's reasons to expect that the summer will be relatively calm. And in that sense, I think we will react in a very similar fashion as last year and work with price increases if needed. I think the development of more, let's say, different price plans, that's something that we haven't decided on yet.

Okay. Thank you. Any other questions?

Thank you. We'll now take our next question from Hans Swagers from Kepler Showroom. Please go ahead. Your line is open.

Yes, morning, gentlemen. Indeed, two questions from my side. First of all, on the grid connections, you already have elaborated on that. But see you really, let's say, that there is a further, let's say, more delays kicking in. And how do you see it, especially going forward? At one moment in time, I assume that those connections or that delay should disappear to really get to your target. And do you see any, let's say, any key risks that there will be a problem at utility companies with respect to grid connections. And secondly, on your operating EBITDA, in Q1 it was already at 40%. That in principle implies that your network operating costs have not really, or only limited increase compared to Q4 of last year. So how do you see those costs developing and were there some, let's say, one-off issues or items in Q4 or in Q1 which a little bit distorts the picture?

Thanks a lot for these questions. Maybe from my side about grid, I think what we see there is we see that the strain on that grid is increasing as a consequence of the energy transition. I think it's first happening in the Netherlands. uh because we've built the most infrastructure there i think to many reasons uh that if yeah sort of that energy transition is is um yeah definitely front-runner markets you might say um i think what we also see is that there's very good developments happening to mitigate the issue so Grid operators are being provided with opportunities by the consumer authorities, the HCM, to start prioritizing grid connections. So we are working on that. But of course, there is at some point physical limitation. So we will need to work with what we and they have. I think in the end, yeah. yeah it is a delay in that sense but it's a delay which also highlights our let's say scarce position if you might say so it's a bit working on both ends in other markets i think we slowly see similar things happening in the uk they have maybe a bit of a weaker grid than in other countries that is also a consequence on why the rollout of those stations is maybe going less quickly there than in some other countries In France and Germany, we see basically we don't see this development that much yet. And the majority of our growth path will be across Europe. So I think towards our growth in longer term, the effect should not be that significant. I think if you talk about the risk in that sense, it's very much related to the Netherlands, and it is starting to be mitigated by what the policymakers want to see happening as well. And then maybe to Victor on EBDA.

Yeah. Yeah. Good morning, Hans. Thanks for your question. On operational EBDA and the network operation costs, I think Maybe starting more high-level, so network operation cost per charger were 11.8 in 2020, 11 in 2021, 12.7 in 2022. And I think, yeah, that is relatively stable when you compare it to the triple-digit growth rates we had in each of those years. And I think, yeah, I think to give you some insight, so we're Basically, growing the teams, growing the operating teams, the maintenance engineers in different markets, at market entries, we're growing the network operation teams here in Amsterdam. And that sort of goes in a bit in leaps and bounds. But if you look at the overall picture over the last couple of years, yeah, I think it's uh i'm i'm very happy with the relative stability that we have there um so yes in q4 last year we had some costs that applied basically through the whole year so second half network operation cost per charge are representative uh for ad for going forward uh so the 12.7 is In 2022, it's the more representative number. And if we look at this year's costs, our growth plans this year, in terms of mainly a number of staff in those network operations teams, and also the growth in number of chargers, as we also indicated in the presentation, we see that network operation costs per charger to be around 12,000 again. I hope that answers your question.

That certainly helps. Coming back on the grid connections delay, I hear what you say with respect to the Netherlands and the UK and France and Switzerland, but I can imagine that also in Belgium and also especially also in Germany, of course, also the whole energy transition, there could be also some pressure going forward. So how do you, let's say, incorporate in your guidance any further delays or further deterioration in, let's say, grid connections? Or do you assume the current status is what we have included?

I think it's difficult from our side because in that sense, yeah we have the data from what we see happening in the Netherlands but we don't see it yet in in France or in Belgium and to some extent you could say the development of infrastructure in these countries is lagging with what we have been doing in the Netherlands maybe by a couple of years so yeah you might see constraints in these countries maybe popping up in 2025 or so but do we have the data to to to build that outlook where we don't, because we just don't have the information on these grids, so we have to do it with basically the results of what we see.

Okay, thanks.

Thank you. We'll take our next question from Mark Hesseling from INJ. Again, please go ahead, sir. Your line is open.

Yes, thanks for the follow-up. One question actually on what you said on the concessions, the first one running off in 27. What is your idea that how will it be structured? Will it be similar like how it was with the petrol stations in the past that's open for all and then you have to target for your own stations again and then maybe decommission it if you don't win it? How do you think it will work?

I think the answer is that, to a large extent, it's still to be seen. So I think the policy proposal that's now out is more about, let's say, governing sort of the high-level rules, so saying, okay, there will be separate tenders for petrol stations and charging stations. That's something we're very happy with, the fact that there will be a roadmap to phase out petrol stations. So I think there's, in that sense, there's already a lot of sort of the basic ruling starting to get into place. But how these tenders that in the end will sort of issue these rights, that is really something that they need to work on still. So there's no news on that. Logically, we're advocating for things like quality in these tenders because we do see still a lot of infrastructure being out there with red tape around it. And that doesn't help the EV driver. It also doesn't lead to faster realization of infrastructure. So that is under discussion, but there's no result out there yet. Does that give you a bit of framing on where it's headed?

Am I right to assume that given that you already run the station and you already have your assets there actually, that you're

sort of in an advantage if if a new tender comes up and logically there's some advantages that we have right we we already have a cable running there we have contracted power um yeah we we now have learned that that contractor power is a very strategic asset so the question of course is like how uh Those things are things that other parties don't have. And, yeah, we will see how that develops in these standards, what the advantages that that will bring. But there's definitely things that we bring along that, yeah, the newcomers in the market don't have.

Okay. And do you know when there will be more detail on this?

The expectation is that by 2024, at least, this new policy is out there, so the ingredients are there now. Whether or not that will include sort of a full layout on how potential tenders will look like, we will still have to see. Looking at the developments with policies, I think it's probably going to take a little bit longer even.

Okay, clear. Thank you.

Thank you. Yes, are we okay to take more questions?

Yeah, maybe let's take one more question, and then we wind up our call, and then we would say thank you, everyone, for listening.

All right, okay. We'll take our next question from from ABN Amarok Odo BHF. Please go ahead. Your line is open.

Yeah, it's Thijs again, two additional questions. Can you maybe give us a flavor update on what you witness in the uptake in France following your delivery of these stations? How rapidly, let's say, are these filling up with traffic, yes or no? And is that above or below your expectations? And the second question is more on, let's say, peers of yours having received big financing plugins, peers such as Power.Electra and InstaVault. Are you seeing them now appearing in your, let's say, target scope?

Maybe Sarah will start on France.

I think it's, to a large extent, it's early days. We opened a lot of stations only recently. I think what you see in general in France is that also holiday periods are very important. We've just had Easter where we saw record utilizations at our French stations over the last week. And I think, yeah, it's basically in line with our expectations so far.

Yeah. I'm thinking about what to answer on, let's say, funding of competitors. I think it's not something we're following in that sense. We're not analysts of these companies, if you might say. We don't see them that often in, let's say, the larger service area tenders. And I think probably that's a consequence of them being, yeah, let's say, a relatively young startup that just doesn't have the experience to deliver to such a questionnaire. We, yeah, we do see them here and there. I think when you look at Electra, I think they're mostly sort of focused on building sites at hotels in France. So you might say that that's also a bit of a different business model to some extent. The question, of course, is to what extent they will be seen in service area tenders in other countries in the near future. Until now, we've seen mostly they're the more, yeah, the more logical contenders that we expect from sort of the existing market, basically parties like Ionity or EBW or Engie. So, yeah, I think it's more, basically it's more the experience base that, yeah, that is required for these tenders. Is that a bit of color on that topic? Yeah. I think it's not very clear to say, right? But sometimes we just simply don't have the data. It's more like something we hear here and there. Yeah.

No, I was just curious whether after these hundreds of millions being pushed in, you now suddenly see these parties popping up in your territories.

Yeah. I think... Maybe to add a bit on it, I think we mostly, on these service area tenants, we mostly see parties that can lean on either the experience that we've built with service areas in the Netherlands or parties that have built serious other infrastructure. So more from a utility background or from a fossil background in that sense. Yeah. Oh, okay.

Clear. Thanks.

All right. Thanks a lot.

Thank you, everyone, for your time, I would say. And see each other in three months' time.