Friedrich Vrwrk Grp U/Adr

Good day, ladies and gentlemen, and I warmly welcome you to today's conference call of the Friedrich Baweck Group SE following the Q3 figures of 2025. And as always, I'm delighted to welcome CEO Tom Kleinfeld and CEO Tim Harmeister. So the gentleman will speak shortly and guide us through the presentation and the results. And afterwards, we will be happy to take your questions if you may have. And having said this, Mr. Kleinfeld, the stage is yours.

Thank you very much and also very warm welcome from my side. My name is Torben Kleinfeld, CEO of the Friedrich Vorwerk Group SE. I'm on board Friedrich Vorwerk already since 2001 from profession civil engineer and I'm responsible of the total overall strategy of the company group and also still focused on a lot of hydrogen projects which are in progress here in our company's group. A little bit about Friedrich Vorwerk in detail to all of us who have not seen us yet. Friedrich Vorwerk Group is active since 60 years in the industry of energy infrastructure. The company group is very well represented in the northern part of Germany. With 14 locations, about 2,200 employees by today, and we can look back on a very strong growth over the last five years with an annual growth of above 20% each year. Our main markets here in Friedrich-Vorwerk is, as I said, energy infrastructure, mainly covering natural gas, electricity, hydrogen, and we have a other piece of adjacent opportunities where we cover all our expertise and services in biomethane treatment and also in district heating. The business update today will shine another light on some upcoming projects, which would be within our adjacent opportunities here as well. Main customers, of course, the large TSOs operating here in Germany. So on the electricity side, we see Tenet, Amprion, 50 Hertz. On the gas side, it's more Open Grid Europe, Onkras, Gaskader. So these are our main customers, but for very special services also serving the chemical and petrochemical industry here in Northern Europe. Due to the energy transition going on here in Germany and in Europe, we can look back on a very strong order backlog today, still having more than 1 billion euros of orders in the book by today. So what is Friedrich Vorgang actually doing? Very short update on that, or not an update, but a very short introduction to our business. This slide basically represents what we are doing. On the top you can see our activities within the natural gas infrastructure. So usually we are able to set up LNG plants or cross-country pipelines and cross-country stations where Germany is taking over natural gas from various sources outside Germany. Then we are able to engineer and also construct large diameter pipelines to transfer the natural gas to, for example, storage facilities or compressor stations, which are needed roughly all 200 to 300 kilometers in a pipeline to boost the flow of gas and finally bring the natural gas to the consumers. and right at the edge of the consumers, which could be a big city or an industrial plant. It requires also gas pressure letdown and regulator stations to supply the natural gas at the right pressure and the right volume. And of course, that needs to be metered for later invoicing as well. So, Dietrich Vorweg is basically able to engineer and also set up, maintain and operate all these components of the natural gas grid. Pretty much the same activities we can supply on the future hydrogen grids, which you can see at the very bottom of this slide. Except that, of course, hydrogen cannot be found in nature, so it has to be made by splitting water into oxygen and hydrogen. This is basically done by large electrolyzer stations, where we are also able to supply engineering services. And we have a full range of small to medium electrolyzer arrays from one megawatt to five megawatt, which we can supply to the market. Business in electricity infrastructure, which is shown here in the middle of this slide, looks a bit different. Usually our services start when we take over underground cable lines from offshore units. So when new wind farms that are situated outside in the North and the Baltic Sea, cables have to be transferred to land. There's a so-called landfall, which is typically done by a horizontal directional drilling method to underbore the crucial environmental areas on the shores of the North and the Baltic Seas. And then we are able to engineer and also run underground cables to the next transformer or converter stations. With laying cables, we can handle up to 525 kilovolts in transmission voltage. And we are also able to engineer and set up transformer inverter stations. Inverter stations are necessary to switch the current from AC to DC. And, of course, in today's grids, we can also connect the electricity grid to the heat grid. So we are also able to engineer and set up large-scale power to heat stations. Okay, short business update, this time not on our power markets, electricity, natural gas and hydrogen, but on some adjacent opportunities which came up lately. First of all, I want to focus on what we call the NATO grid. The NATO grid here in Northern Europe has been set up in the Cold War area, so starting in the 70s and 80s. On the right hand, you can see a sketch of the existing NATO pipeline grid, which is basically transferring jet fuel to crucial airfields of the Luftwaffe and the Allies. As you can see, basically the NATO grid ends pretty much at the former inner German border. And now, since activities are going more to the east, this NATO pipeline grid will be expanded by another 300 kilometers towards the Polish-German border and then also into Poland and possibly also to the Baltic states. Since this is the pipeline system, pumping fuel. This is of course within our scope and it's a very nice addition to our usual portfolio. Estimated costs to set up this pipeline grid is roughly 5 billion euros and also the first steps and the signing of contracts with Poland has been done in October. So we really see that this project is being kicked off and we will probably see tenders from the NATO grid in 2027. Next and also very interesting for us is decisions made by the German government concerning ramp up of hydrogen activities here in Germany. First of all, of course, the German government has emphasized that they are still looking for further investments in the pipeline infrastructure and also the plant infrastructure. mainly focusing on setting up new electrolyzers to fill the hydrogen core grid, which is planned to be set up here in Germany until 2035. which, of course, requires not only the import of hydrogen, but also the production of hydrogen. They also made decisions to accelerate the tenders by digitalization and which is, I think, the most important decision which has been taken that they also accept not only green hydrogen, but also other colors of hydrogen to be transferred in the corporate and make it available for the consumer. So, that's very important decisions for our hydrogen activities. And at the moment, we really see that both on pipeline side and on plant construction sides, new projects pop up and we receive quite a bit of inquiries for setting up electrolyzers and also pieces of pipeline grid, which is summarized under the core grid here in Germany. And the third outlook I want to show is activities in CO2 transport. Because also here, very important decisions by the German government have been made in early November. So, for example, they have agreed in general that we are able to split up the CO2 for certain industries. which cannot eliminate the emission of CO2. So, for example, the cement industry is one of the core industries where you cannot get rid of the CO2 except to capture it and then transfer it to a storage facility. And of course, one of our largest customers, Open Grid Europe, is already looking into a future CO2 grid, which will connect the of CO2 to the neighboring country, Belgium and Netherlands, because these countries are able to take CO2 and pump it in former gas and oil wells to store it there for a long, long time. And also, one of the CO2 clusters which is planned is the so-called Elbe cluster, which is pretty much in front of our doorstep to transfer CO2 from the cement industry to the ports on the North Sea and then that will be liquefied and brought by ship to Norway and Norway is able to take over the CO2 and also store it in old natural gas wells. That's it from my side for the moment and with the update of our future, possible future activities. And I would then hand over to my colleague Tim, who will present the financial performance of the company's move for the third quarter.

Yeah, thanks a lot, Tom. Good afternoon, ladies and gentlemen, and a very warm welcome to our next call in the Q3 figures. My name is Tim Harmeister, CFO of Forwerk, and I'm very pleased to walk you through our extremely storm Q3 figures and the updated outlook today. After a reporting record revenue in the second quarter, we once again managed to beat that figure in the third quarter, achieving quarterly revenue of more than 200 million Euro for the first time in FORVEX history. Despite ambitious year-on-year figures, this represents growth of a fantastic 39%. Although the start of the third quarter in July was mixed due to challenging weather conditions, this was more than offset in August and September. The continued success in recruiting contributed significantly to this, enabling us to hire more than 100 new employees in the third quarter alone, also including a small M&A transaction consisting of roughly 35 employees. From a project perspective, the largest revenue drivers in Q3 were, of course, still the large-scale ANOV project, followed by a number of pipeline projects such as the EWA pipeline, as well as several large-volume gas pressure regulating and metering stations, which ensured high-capacity utilization for our plant construction division. Consolidated revenue for the first nine months of the year amounted to €505 million, representing growth of 49% compared with the previous year. In both percentage and absolute terms, our electricity segment was once again the growth driver. However, it's also noteworthy that absolute revenue in the natural gas segment increased slightly again compared to the previous year, particularly due to the high number of plant construction projects. Revenue in the clean hydrogen and adjacent opportunity segments is roughly on the same level as the previous year. However, the development of profitability in the third quarter is particularly remarkable. Once again, the already very solid EBITDA margin of 21% in the second quarter was improved by another 4 percentage points to 25.4%. Compared to the previous year, this represents an increase of 8 percentage points and a doubling of absolute EBITDA to over 50 million euro. The EBIT margin even rose by 5 percentage points to a new record high of 19.1%, corresponding to EBIT of 45 million euro alone in Q3. All segments contributed to this improvement in earnings, but the largest increases were achieved in the pipeline construction projects. In addition, the share of profits from joint ventures, Arbeitsgemeinschaften, doubled compared with the previous year due to the higher number of projects awarded in this specific contract structure. Accordingly, the nine-month period closed with EBITDA of 105.8 million Euro, corresponding to a margin of 20.9% and adjusted EBIT of 87.3 million euro, or an EBIT margin of 17.3%. These fantastic results include minor catch-up effects in the mid-single-digit million euro range from variation and change order negotiations, but as already included, the vast majority was achieved with our ongoing projects, fueled by our high-quality order backlog. Now let's take a look at the development of order intake. In addition to the conventional order intake figure, we've introduced a new KPI with the half-year figures, the total product volume acquired. And I would like to use the opportunity to once again explain the differences between the two key figures to all shareholders who were not present at our last earnings call. So there are basically two different types of project structures. And in option A, Owek acts as a general contractor and handles the entire project through its own P&L statement, which means that 100% of the order value goes into order intake and later into revenue. In the second option, the client awards the entire project to a joint venture. And in this constellation, we do not show the proportional share of the total order volume in conventional order intake. Instead, we are only allowed to show the supply of personnel and equipment to the joint venture, which can in some cases be significantly lower than the proportional share of the total project. The order intake figure, therefore, does not reflect the actual project volume handled by the FORVEC group, which is why we also report this new K figure. This KPI also includes the proportionate project volume from the joint ventures in which FORVEC is involved. And therefore, in our opinion, provides a more transparent view of the actual order situation, regardless of the type of contract structure. So the total project volume acquired rose by 45% to €886 million in the first nine months of 2025, while conventional order intake at €419 million is around 20% below the same period last year. The main reasons for this are, on the one hand, the shift in the order structure towards joint ventures, especially in H1 2025, and on the other hand, our already well-filled order book. Nevertheless, we've also acquired many new and attractive projects in 2025. Some of them Tom will present later in this call. The order backlog, which corresponds to order intake, declined slightly to 1.1 billion euro for the reasons stated before and currently consists of around 70% order volume attributable to the electricity segment. In addition to the strong development in both revenues and profitability, the development of net cash is impressive as well. Compared to Q3 2024, we've increased net cash by €80 million to €112 million, and thereby creating an excellent basis for further organic and acquisition-driven growth. The main reasons for the significant increase are firstly, significantly higher profitability. Secondly, an improved negotiation position with regards to the payment terms in the contracts. And thirdly, improved working capital management with regards to our internal processes and project control. Yeah, and based on the strong performance in the current year, and especially in Q3, and an unchanged positive outlook, we raised our guidance already for the second time this year, a few weeks ago. We now expect revenues in the range of 650 to 680 million euro, with an EBITDA margin of 20 to 20, 22%, which corresponds to a margin improvement of five percentage points at the midpoint year on year. Let me now hand it back to Torben for some updates on the ongoing and upcoming projects before we open the floor to your questions.