Alfen N.V.

Thank you, Saskia. Good morning, and welcome to this webcast regarding the 2025 first quarter trading update of Alfen.

We appreciate the fact that you have taken effort to participate. This webcast and the questions that may come forward are handled by the Management Board of Alfen, being Onno Krap, CFO; and myself, Marco Roeleveld, CEO.

In this webcast, we will start with the highlights of the first quarter of this year, followed by a short review by business line. Next, we will go in more detail regarding our financials and outlook.

Continues with Slide 4 with the highlights of the first quarter of 2025. In this first quarter, we realized EUR 103.8 million in revenues.

This represents a decline of 8.3% compared to the same period last year. The decline was driven by EV charging and for a smaller part to Energy Storage solutions.

The 27% lower EV charging revenue was mainly related to a weak home market and the temporary low number of charging stations delivered for public applications. Energy Storage System revenue was 8% lower due to last year price declines impacting this year revenue.

The overall gross margin was 29.8% compared to 32% in the same quarter last year. The main driver of this effect was the lower share of EV charging in the revenue mix.

As a percentage of revenue, the adjusted EBITDA declined from 8.2% in the first quarter of last year to 5.3% in the same quarter this year. With regard to cost control measures taken in the second half of 2024, we have been able to reduce personnel and other operational costs with 18.2% compared to Q4 of last year.

The energy transition delays and continue to impact our business lines. Our Smart Grid private customers are impacted by grid congestions, while our grid operator clients are working on resolution of grid congestion, so they face labor shortages and regulatory constraints.

Furthermore, the softening of European CO2 targets for automotive OEMs delays EV adoption acceleration and as such, EV charging infrastructure demand. Regarding Energy Storage solutions, we are a bit more positive.

For example, in the Netherlands, some regulatory constraints have been resolved and it's noticeable to mention that we have won our largest Energy Storage deal to date with return energy this April. The system size is 100 megawatts, 200 megawatt hour and will be connected to the Dutch transmission grid and will be contributing to next year revenue.

For the rest of 2025, we expect revenue to be at the lower end of the full year revenue guidance of EUR 445 million to EUR 505 million. Therefore, we adjust the expected revenue range to EUR 430 million to EUR 480 million.

And as a consequence, we will take additional cost reduction measures to keep our operational costs in line with the revenue development, and we have to adjust our EBITDA margin guidance from high single digits to a range of 5% to 8%. Our CapEx share of revenue will remain below 4% of revenue.

Now we will continue on Sheet 6 with Smart Grid Solutions business line review. In this first quarter, the revenue was EUR 54.3 million, which is close to the revenue in the same quarter last year.

We see weakness in the market for private clients due to grid congestions and hesitations to invest in less solar park developments. The outlook for revenue with the Dutch grid operators for the remaining of 2025 will stay behind the anticipated volumes.

Two of the major Dutch grid operators have decided to decrease their previously communicated volume numbers for 2025, and we have to scale down our production. Grid operators are struggling to increase their installation capacity as labor shortages persist and they have continued to use nitrogen-related permitting issues.

However, of course, we support our grid operators in their appeal to the Dutch government to resolve these bottlenecks. The gross margin was 23.9% compared to 27.8% in the first quarter of this year, and this was in line with our expectations.

We had anticipated a lower gross margin due to a mix shift towards more substations for grid operators that are more standardized and are being acquired more through tender processes. On Sheet 7, we go in a little bit more detail regarding the current situation with the Dutch grid operators.

For scaling the grid reinforcement, many factors need to be in place. On the one hand, it is clear that the long-term objective for the Dutch operators to relieve grid congestions is to install 48,000 new substations up to 2050.

This has been announced by the Netherland, the branch organization of the Dutch grid operators that aims for optimal cooperation between the grid operators and takes care of the interaction with the governments and other stakeholders. On the other hand, there are short-term challenges that hamper the ramp-up of the installation rate.

These challenges are obtaining the necessary permits, which is currently delayed by nitrogen restrictions. There's also a problem with available transmission grid capacity, which needs to scale in parallel.

There's limited availability of land for substations, especially in densely populated urban areas. One major element is also the constrained delivery of certain components and of course, the limited increase of installation capacity due to continued labor shortages.

All parties involved agree on the fact that in the installation rate of substation should ramp up, but also include that this will not happen in 2025. Onno will now continue on Sheet 8 with EV charging business line.

Thank you, Marco. If we take a look at our EV charging business line, revenue of Q1 2025 was EUR 28.8 million.

This is a decline of 27% compared to Q1 last year. This revenue decline was caused by 2 factors.

First of all, we see increasing competition in the home segment. And secondly, in our public charging segment due to timing of certain tender deliveries, we shipped a limited number of charge points.

More than 2/3, 68.4% of our revenue was generated outside the Netherlands. However, the Netherlands remains our biggest market, and we sold most charge points here, followed by Belgium and Germany.

The number of charge points we produced in this quarter was a little over 28,000, which is a decline of 24.8% compared to Q1 in 2024. In the first version of this press release, we mentioned a percentage of 35.3%.

This has been corrected in the meantime. Gross margin was 39%, which is a slight decline compared to Q1 2024, in which margins were 41.8%.

The margins remain within our expected margin bandwidth of 35% to 45%. The margin decline was mainly caused by an inventory charge we booked during Q1.

Overall pricing remained stable. Next slide.

We've seen a strong start of the year in terms of battery EV registrations in Europe. However, the outcomes of the EU strategic review are mixed.

On one hand, the fact that the European Commission has sticked to the 2035 zero emission target provides predictability for the industry and its investors. And this reconfirmation is vital to our positive long-term outlook.

On the other hand, the onetime flexibility measures that allows car OEMs to meet the CO2 targets over a 3-year average rather than annually will delay the short-term EV adoption in our segments. This impacts this year's revenue expectations for Alfen.

I will share more about that in the 2025 outlook section. Lastly, the European Commission has announced a legislative proposal to accelerate the electrification of corporate fleets.

This will drive demand in the business and home corporate segment, which is a segment Alfen is strongly positioned for. To ensure our product portfolio remains ready for the future, we are proud to announce that by the end of this year, we will be launching our new double plus and single plus chargers.

These new chargers are ready for the future because they are ready for vehicle-to-grid, which means they enable cars to charge but also discharge in case needed. We are first to provide this technology in the public segment as our twins have been vehicle-to-grid ready since 2023.

These 2 new chargers ensure we're also able to offer this technology to our charge point operators, business as well as home charging customers. The vehicle-to-grid feature is key for our customers.

For charge port operated, it enables smart charging as well as ancillary services, supporting them to increase their value. For buildings and homeowners, the vehicle-to-grid feature enables optimization of self-consumption of locally generated solar energy.

For example, a homeowner can choose to charge the car in solar peak hour, midday, and use that energy for running the household during peak demand hours. The system we have developed is compatible with a broad range of vehicle brands and energy management systems.

Furthermore, these charges are lower in installation costs when installed in a group. They are compatible with the latest protocols for smart charging and are user-friendly with a secure ad hoc payment through the dynamic QR code.

We will open our commercial book in Q4 this year. Then if we take a look at our third business line, Energy Storage Systems, our revenue was EUR 20.7 million.

This is a decline of 8% compared to the first quarter in 2024. This decline was anticipated and is partly caused by a 40% battery price decline we have experienced during last year.

This decline is now impacting our revenues because orders closed last year against last year's prices are this year's revenue. Gross margins were 32.5% in this quarter, which is higher than the first quarter last year.

It's also above our expected margin bandwidth of 15% to 25%. This higher margin can be attributed to one-off effects as certain project contingencies were released as these projects approach completion.

Looking forward to the rest of the year Alfen will be doing more large-scale projects, which will lead to the gross margin returning more towards the expected margin range. At the end of Q1, the Energy Storage Systems backlog for 2025 revenue was EUR 86 million, which means that all orders required to achieve the 2025 Energy Storage System revenue outlook are secured.

As such, we have adjusted our expected revenue bandwidth slightly upwards. I will share more about that in the outlook section.

The backlog for 2026 revenue was EUR 23 million at the end of Q1 2025. Please note that at the end of Q1, the order with Return Energy was not yet signed.

Also, as you know, the precise timing of the backlog turning into 2025 revenue is dependent upon various factors that influence project execution. Furthermore, as announced recently, we won the largest Energy Storage deal to date with Return Energy in April 2025.

This system is a 200-megawatt-hour system and is the second largest in the Netherlands. The system will be connected to the transmission grid and provides essential reserve capacity.

This reserve capacity alleviates grid congestion and ensures a more predictable and reliable electricity supply as the share of renewable energy continues to increase. The battery system is expected to be operational by the end of 2026, contributing mostly to Alfen's 2026 revenue.

We are proud to be able to realize such a large-scale projects and are pleased with our strong 4-year partnership with Return Energy. This is the third major system we developed together, and we are looking forward to continue our collaboration in the future.

Furthermore, we are pleased with the announcement done by the Dutch transmission grid operator TenneT. They will use a new type of time-bound contracting that will free up 9 gigawatts of capacity on the transmission grid.

This creates opportunity for Alfen for more transmission grid battery storage projects in the future. We continue with the financials.

Revenue amounted to EUR 103.8 million for the first quarter of 2025. That is an 11% decline versus prior year, which is mainly driven by EV charging and Energy Storage solutions.

Gross margin for Q1 is 29.8%. This is a decline versus the gross margin of 32% in Q1 2024.

This is mainly due to a shift in the revenue mix as we experienced a lower share of relatively high-margin EV charging revenue. The margin per product line was broadly in line with expectations and guidance with the exception of the gross margin for Energy Storage Systems.

These margins in Q1 were artificially high as we released some contingency as certain projects came to an end. Adjusted EBITDA was 5.3%, which is lower than our guidance of high single digits, mainly due to lower revenue volume in the first quarter of 2025.

In particular, the lower revenue share for EV charging did affect the gross margin in absolute numbers and therefore, EBITDA. We did see the effect of the 2024 restructuring and OpEx, as I will discuss on the next page.

Cash flow in the first quarter of Q1 was slightly positive by EUR 0.2 million, mainly driven by working capital improvements of EUR 3.5 million despite the cash out for the restructuring expenses we paid in Q1. In Q4 2024, we went through a significant cost saving program, and we do see the result of this in the first quarter of 2025.

Overall, our cost base declined by 18.2% versus the same quarter last year. This was driven by savings in personnel as well as other operating expenses.

If we look towards the rest of 2025, we adjust our expected revenue range of EUR 454 million to EUR 505 million to a revenue benefit from EUR 430 million to EUR 480 million. This is mainly driven by the downward adjusted outlooks for Smart Grid Solutions and EV charging.

In Smart Grid Solutions, we do not see the anticipated growth materialize as 2 out of the 3 main grid operator clients decided to downscale their order quantities for 2025 compared to earlier communicated volume numbers. The grid operators are struggling to ramp up their in station capacity and are held back by the ongoing nitrogen crisis that delays issuing of project permits.

We, therefore, adjust our expectations to 0 to minus 10% slight decline in revenue compared to 2024. In EV charging, we have limited forward-looking visibility.

The Q1 revenues were below our expectations because of the increased competition in the home segment as well as a temporary dip in charge point deliveries in the public segments. Also, the softening of CO2 targets for automotive by the European Commission will not lead to an accelerated adoption of electric vehicles this year.

It's therefore that we reduced our revenue expectations for this year to a decline of minus 10% up to minus 15%. In our Energy Storage Systems business line, we are well on track to meet our revenue guidance for this year as our guidance is fully backed by backlog.

We therefore increased our revenue expectations by lifting our bandwidth to a maximum revenue decline of 0 to minus 10% compared to last year's revenue. As our revenue outlook is reduced, our adjusted EBITDA margin range is adjusted downwards as well from high single digits to a range of 5% to 8% of revenue.

To reduce the impact of lower revenues on our bottom line, we will look for further cost measures throughout the company to align our spending as much as possible with our revenue performance. Our CapEx guidance remains the same, expecting to have less than 4% capital expenditure share of revenue.

I now would like to hand over to the operator for any questions you might have. Thank you.

I would have three, and I would go through them one by one. So my first question is on your cost measures, you just commented on.

Can you give more details on these? And how long will it take to materialize them in financials?

Thanks, Niki. Cost measures will be across the board.

So we will take a look again into our OpEx expenses, temporary contracts, vacancies that we have outstanding for which we plan to cost, but we will also take a look at other areas in the company, and I'm not excluding then we will also take a look at certain job positions. When will that take effect?

Some of them will be more or less immediate, especially when you're basically not fulfilling vacancies and some temporary contracts, we are able to react a little bit more swiftly. Other areas will take a little bit longer, but we'll try to execute on this as fast as possible.

Okay. And then related to this, how should we think about your midterm guidance for 2027 to reach a low double-digit margin by then?

If we look to the, say, medium-term area, it's good to put in perspective that what we see maybe also medium-term effect of the energy transition. If you look to the 3 elements of the energy transition related to how the products we are operating in is EV charging, battery-equipped solutions, and substations.

I think we try to explain the substation market, let's say, yes, this year, we see no growth, but the ambition by the grid operates, but also the need to be able to strengthen the grid to accommodate the energy transition, is still clear. So the expectation that at some moment, this will pick up is also clear.

So therefore, we should be able to grow the revenue in the coming years. But EV charging the softening of the CO2 targets for the OEMs, we expect that this will be having a major impact or might have a major on this year, but that will be compensated by the growth in the years after.

And for battery storage, we see that within different countries, but especially also in the Netherlands, say that the regulatory elements have been changed positively to allow for large-scale utility-scale elements projects into the grid. So therefore, we have concluded, let's say, the medium-term elements are positive, and therefore, we don't step down or step away from our medium-term guidance.

I've got two questions on EV charging, please. First of all, what caused the temporary dip in the installation of public charge points?

I understand it's a bit more lumpy. And what gives you confidence that it will recover in coming quarters, especially considering the easing CO2 targets, maybe that's not related to the public installations?

And then the second question is related to the increased competition in the home segment. Where do you see that effect mainly?

Is that mainly driving the weaker-than-expected volumes, as your ASP decline was only 3%. And I think that's also what you had baked into your medium-term outlook for ASPs and EV charging.

So, where do you see that impact of the increased competition in the home segment?

In relation to the charging stations for public applications, those are supply of charging stations to, say, parties that have won the public tenders for, say, the different, whether it is provinces or bigger cities. So those are, say, multiyear contracts on which we supply more or less based on that contract in each individual month or quarter, based on the fact that we have signed those contracts.

Due to, say, practical circumstances coming together, we have a relatively high revenue in the last year and say, a limited revenue in this first quarter. And we are due to several reasons, but are practical reasons why they have less installation capacity due to practical constraints, but also they wanted to take down a little bit of their stock to be able to have less pressure on their working capital.

But we also know that the installation rollout will continue in the coming year, and also that the contracts we have will continue also in the coming year. Therefore, we are speaking of, say, a temporary lower revenue on public charges in that area.

And if you look at the market for home chargers. We see that especially in the entry level, where we have also seen, let's say, where a lot of hybrid cars sold also to the lands where the requirement of the charging stations was more limited.

We see that in the area where we are aiming for, that's in the managed home, semi-public, those type of areas where we can lean on, say, the differences in the product and also the way to integrate in the back offices of our partners. That's the area where we are able to maintain our position and also price.

And we have seen that in the entry level of the market, there is more price pressure in that area.

Understood. Can I ask a quick follow-up, please?

Can you remind us roughly what the split is between the public and the home segment? I think in your CMD, you indicated that the overall market was 75% home, 25% public.

How does it look for Alfen now, 2 years later?

I think fundamentally, there's a directional element that is still correct. Only in the first quarter, we had, say, a limited amount of, say, public charges, which is what we consider to be a temporary element where, say, more than 95% of the charges were, say, nonpublic.

I just had a first question on Smart Grids. You talked about 2 of the 3 main Dutch grid operators sort of downscaling their order qualities.

And I think the reasons you mentioned were mostly sort of execution bottlenecks, right, so labor shortage and the grid permissions. I mean, it doesn't look like it would be very much in isolation for these 2 grid operators alone.

How do you assess the risk, maybe of a similar slowdown for the third grid operator? And from the guidance, it looks like you've now lowered it by EUR 20 million for '25.

Would you expect those to a large degree, shift into '26? Or what's your visibility on '26 volumes from the Dutch grid operators?

If you look at, say, the 3 grid operators, we have, of course, not only talked to the 2 of them that lowered the numbers, but also had intensive discussions with the third one. It's for us not 100% clear where, say, the ambition of the other 2 was too high in relation to the practical situation, but we see the third quarter the numbers we have been planning that they will be realized for this part of the year.

And if you look to the more or less ambition ramp-up of the 2 other grid operators, they have to be compensated somewhere in the coming years because as also explained by myself, but also by Onno, say they enabled still the numbers they published about, say, the need for the Dutch grid operators to ramp up their overall installation capacity, that need is still there. The only fact relation is that, say, it is not something where a simple measure will automatically result in a solution.

Therefore, we think for 2025, although the ambition is still there for the ramp-up, that will not happen and that maybe the first signs will be there in '26 of ramp-up, but it's too early to ready a bank on that.

Okay. And maybe for Energy Storage, I think the backlog suggests that you have already fully booked for '25, but then you've also got a bit of a backlog for '26.

And I think you've announced that Return Energy project, right? Is it fair to say that that's the large project included in that backlog for '26?

So, yes, just curious about the revenue contribution basically of that large project that you recently secured?

That will be on top of the reported backlog that we -- and sold out, I think that we are sold out to the extent that any orders that we would get in at this moment in time to be for execution in 2025 will be difficult to realize that it's a triple time ordering a battery and getting them over here, and we have done so. So from that perspective, it's not so much sold out as well as that there are physical limitations of what we still can install in 2025.

As you know, we still have a number of mobile items on stock that if we get orders for those, that we would still be able to deliver those.

Okay. And then just a final question.

I think under the current cost structure, right, so excluding what you might be implementing going forward, what's your revenue breakeven point under the current cost structure?

What exactly do you mean by revenue breakeven point?

Yes. Like, what is the full-year sales that would leave you breakeven on EBITDA line?

Maybe I can explain a little bit different, and I'm not sure that's going to answer your question. From an EBITDA perspective, we need about EUR 30 million to, let's say, EUR 33 million of EBITDA to be cash flow positive, so be operational cash flow positive, free cash flow positive.

Any other, and we do expect working capital improvements during 2025 that will be in addition to that. But that's more or less the number that we target to be cash flow positive.

Is that answering your question or?

Yes, that's very helpful.

I have two questions related to EV charging. So the first one is that you mentioned a difficult environment related to carmaker targets impacting EV adoption, but EV sales are up 30% year-to-date.

And if you look at Q4 numbers in your main markets, for example, Netherlands, it's up 45%; U.K., 47%. So I was wondering if the decline related to your EV numbers is really related to these targets?

And if you could comment on that, it would be helpful. And my second question is that you mentioned increased competition in home segments.

Could you give more details? Is it related to pricing?

How do you explain the loss of competitive advantage compared to this new competition?

If you look to say, mark on car sales, we indeed saw, say, in the first quarter, say, relatively strong growth in the number of EV cars sold. But if you look already in the Dutch numbers for April, we see an almost flat situation where we most anticipate, say, maybe in the fourth quarter and the first quarter, the sales was, growth was there, but we see that already the first signs are there that this growth will not continue in the remaining part of the year.

That's also why we more or less lean on that element. The element of competitive pricing, we see it especially in the entry part of the market or with charging stations for, say, hybrid cars that we see that in the entry level of the market, the positive elements we can offer to our clients related to all kind of functionalities to include, say, all kind of options into the way of working of the charger and to support the CPOs in the overall management of the EV charging stations.

That's the area where we see, especially on that entry level that's say, different manufacturers from different, say, geographical areas, we use that entry point in the market to leverage on, say, price to get a position into the market area.

Okay. And just a quick follow-up question, but don't you think you will have to choose between market share and gross margin rate EV charging at some point?

We, of course, are debating that element to what level we can use also, say, the different price elements with regard to that position in the market, but we have not finalized that approach.

First question, can you maybe help us with your reported EBITDA compared to your adjusted EBITDA? And how we should think of your governance?

Second question is, can you maybe also provide an update on your inventory level? I assume that in the substations segment, inventory level has gone up.

Third question is on your vehicle-to-grid-ready chargers, which you expect to launch in Q4. What kind of pricing should we expect there?

And what does it really mean vehicle-to-grid ready? What does it take to make it vehicle-to-grid?

Maybe to start with your last question, vehicle-to-grid has 2 elements in itself. That is the ability of the charging station to accommodate, say, different type of, say, steering of the charging stations, but also to be able to allow the energy to flow back from the car towards the grid but say, the charging stations in itself is not the only component that needs to be able to be accommodated.

Also, the back offices, the control mechanisms used by the charge station operators, the electrical cars, all of those elements have to be changed in order to be able to make this possible. And that means depending a little bit on the way the charging operators will want to make use of this capability to charging stations.

It might be that in the future, some settings have to be changed in order to accommodate those elements in the charging station to accommodate those type of way of working that we decide that we are ready. But dependent on the way the charging operator wants to make use of this aspect, it might be that some say, some future software settings as necessary to be adopted in order to accommodate those type of business changes.

But the first step is that we need to implement, say, in these charges, the different communication protocols and allow for a different use of the charging stations. And then in the whole value chain, all elements have to come into play to make that possible.

I'll take the adjusted versus reported EBITDA. We have a difference of EUR 1.3 million in special items.

And that basically is the difference in that has to do with some one-time organizational changes and some additional costs that we're making for redesigning our R&D organization. Net debt ratio at this moment in time for the end of Q1 was 1.7.

As you know, we have an agreement with the bank that can go up to EUR 3 million -- sorry, 3x. And of course, this is something that we closely monitoring not just from an actual perspective, but also looking forward, our expectations, and are we staying within the covenants.

And at this moment, our forecast is indicating that we are staying very much clear of the EUR 3 million borderline that we agreed with the bank. On an inventory perspective, inventory, including the down payments that we have made December, it was EUR 114 million.

In March, it is EUR 117 million. The increase is very much driven by the fact that we ordered some additional batteries with our main supplier, CTL.

So, the increase in inventory was due to Energy Storage Systems. Smart Grid Solutions went down slightly with about EUR 1 million and EV charging equipment went also down with around EUR 3 million to EUR 4 million.

Are you saying inventory EUR 117 million end of March?

Yes. Including down payments.

So, if you take a look into our annual report, you would see down payments to be reported somewhere else, but we take a look at down payments because we consider them to be inventory, including down payments is EUR 117 million.

Clear. Then a follow-up question on Energy Storage.

Can you maybe indicate what the order intake in Q1 roughly has been, and roughly what you added after Q1? That's still not really clear to me.

I will get back to you in a second on that one.

Taking a look at the historical gross profit margin and especially looking at the Smart Grid Solutions, the margin right now was 24%, not that high. Now, if I look at the historical gross profit margin in 2019 and 2020, it was above 35%.

At that point in time, Energy Storage System was still relatively small as well as EV charging. So, I'm trying to understand how you get from plus 35% gross profit margin in 2019 and 2020 towards the current gross profit margin for Smart Grid Solutions of 24%.

I know that the product mix played a role, but I am wondering, especially given the fact that the ASPs increased significantly for Smart Grid Solutions from 2019, 2020 to now. So, I'm just trying to get a better understanding in the long-term dynamics of the gross profit margins in the Smart Grid Solutions business, especially given almost a doubling in the ASPs.

If you look to ASP, it's for also a large part related to the fact that say, the average, I call it power rating of the substation has increased, where we historically supplied 250 kVA and 100 kVA also as part of our portfolio. We see now a shift to 630 kVA and even 1,000 kVA where also the associated components in transformers and high-voltage switchgear is contributing a lot to the increase of the average sales price.

And if you look to the gross margin situation is, let's say, due to the critical situation of last year, we still have, say, for part of this year, a little bit of a higher cost price in relationship to the fact that we needed to include higher reinforcements to be able to give comfort to the grid operators about the quality of our product. We are thinking that will be somewhere in the second half of 2025, we will be able to resolve that.

And that we also see, let's say, in the latest round of, say, tenders with the grid operators, given the higher numbers, we more or less decreased our gross margin a little bit compared to the situation a little bit before that time period.

So, part of it is temporary, and part of it because we do go towards higher switchgear components. If that trend continues in the future, that would further put pressure on the gross profit margin in the mid- to long term.

That's correct.

I have a question about the Energy Storage business. What is exactly the nature of the project contingencies released in the first quarter?

Two things. Basically, what we do is when we calculate a project, you always take into consideration that something might not go as you anticipate.

And then over the course of the project, it turns out that things are going better than originally anticipated, you can release some of the contingencies. So that's more or less kind of what's happened there.

On top of that, what you do see is that there is a certain timing effect, and it's small, but I mean, because of the fact that prices went down quite rapidly last year is between order intake in the moment that we order batteries with our main supplier, there could be 1 or 2 weeks in between. And in this case, there were a couple of those cases that basically were in our advantage.

We try to keep that as close as possible, the timing effect as close as possible because something that basically is now in your favor could otherwise also be not in your favor. So, it's not one of the things that we are trying to accomplish, but it's actually trying to reduce it as much as possible.

That is clear because I'm a bit concerned about specifically that business because it's indeed a project-based business. And also you're mentioning that the projects are getting larger.

So there is indeed a lot of risk that you have arbitrage cases that there are variation orders with clients and you have to -- I mean, on revenue recognition, accounting-wise, it's finance. It's just proceeding the execution of the project, but it is kind of arbitrage on profit taking.

So you're following a conservative approach here because that yes, that is quite important for me.

Yes. I think yes, we are conservative in the sense that we are following IFRS, which doesn't know the term conservative.

But we try to make sure that, yes, we follow the regulations.

Yes. So any, let's say, potential hiccup or change with increased cost is being booked and reported immediately and not, let's say, at the end or that you take a view that you might recuperate some of that at the end of the project?

Correct.

Okay. That's helpful.

And then I also have a question about, are there at the moment, let's say, internal discussions being held about, let's say, the potential pitfalls in the communication of the complete energy transition value chain. So in the light of maybe some industry participants have been snake charmed by the initial years of strong growth, which leads to constant downward adjustments on everybody's ambitions, plans, investments and orders, and that's been feeding to Alfen, which you're basing your outlook on.

How are these discussions being held at the moment?

If you look at, say, the broader picture, let's say, the energy transition and the constraints within the grid, especially in the Netherlands, they are quite known. That's also why in the past years, the cooperation of the grid operators through Netherland, they have made a very big initialization of what is needed to try to translate into an investment plan and also because the governments, whether it's local governments or central governments are more or less responsible for the ownership of the grid operators, but also they need to be able to participate in the, say, political element to free up money to be able to support the investment they have to do.

So in the past years, there's have been many discussions between grid operators and the government, whether it is local government or central government, but also with the suppliers in the whole value chain, what is needed in the coming years so that everybody could anticipate on, say, the requirement step-ups. What we see now is that, say, the step-up is still necessary.

On the other hand, also, we see a combination of practical constraints, whether that's now the nitrogen situation or the ramp-up in installation capacity. That's also why we included more or less on Sheet 7 of our webcast, more or less the numbers of technical personnel needed to be able to support those electrical -- the addition of substations in the grid.

that those elements, although everybody is anticipate -- trying to anticipate on the growth and also is convinced of that the growth is necessary that the practical constraints are at this moment making that the ramp-up is not as anticipated. And therefore, we also took the approach that for this year, we said we don't expect that growth to be there.

And for next year, although we see already elements come into play that might support this, but we are careful in not already putting that in our numbers because it could well be that the time needed to be able to realize that ramp-up could be even a little bit longer than only this year.

Okay. So indeed, you're already making downward adjustments on the [indiscernible] of your customers because indeed, Alfen is listed and those guys are not.

So I would indeed be as conservative as possible if I were you guys.

A couple of questions, just digging a bit deeper into the competition in the EV charging home segment. Can you talk more about the people or the competitors who are initiating this competition?

Are they Chinese or non-Chinese competitors? Do you know if they are profitable?

And also can you split out the minus 27% decline you had in EV charger sales? Can you split out how much of that was due to higher competition and how much of it was due to the temporary impacts you mentioned in the public segment?

If we look at, say, the temporary impact, if we look to the average of the elements of revenue in 2024, then the average in all the quarters was around EUR 5 million. So in 2024, not all quarters were the same, but that is the average number you could consider also for, say, this quarter that was more or less lagging behind.

And if you look to the situation of the whole market, we see different type of players. We see some areas where we see Chinese players but also we see some semi-European players, whether that's Zaptec or [indiscernible] from Norway or say, our Spanish competitor, but they are mainly operating for, say, standardized charging stations that could be -- the primary function is just to charge the car but are less equipped to be able to be steered by the charge point operator to accommodate also future type of business and also can be modified according to the wishes of the charge point operator.

And we see the entry level of the market where -- which is more price-oriented that companies that are aiming for, say, the price approach are at this moment gaining some share. And maybe on the question...

Go ahead. I was just going to say, therefore, is it fair to assume that some of these competitors are profitable then?

You can assume, but I say we didn't make a in that about, say, how all those parties are more or less targeting this market because not all of them are public. So I think it is too easy to say some of them are loss-making.

On the other hand, we know some of them are loss-making, but it doesn't mean that everybody is operating in the same way in this segment.

Great. And then one final question.

Obviously, you had the discussion with Paul just before about the EV sales data, which was obviously very strong for the first quarter, but obviously, it dropped off in the month of April for the Netherlands. But if you look at some of the other countries which you're exposed to like Germany and maybe to a lesser extent, Denmark, the EV sales data remains very strong in those markets.

So I was just wondering if you had any other evidence or any other color which you could help give us to better understand your guidance as to why you think the second half of the year will be softer as a result of the changing CO2 regulations?

If you look to the countries, the overall picture is quite complicated. If you look to April, we see the Netherlands and France being a little bit more or less flat or a small positive.

Germany has a big increase also in April. But say there is, for us, sometimes complicated to have, say, the direct donation of the sales of electric cars and the increase of numbers of charging stations.

What we typically see there is a delay in the ramp-up of cars coming to the market or registration of cars because that's also not maybe the right word because registration doesn't mean directly that the car is already driving that there is a delay in number of charging stations follow up. On the other hand, we don't want to bank on those type of numbers and then anticipate and then we are now taking an approach that we more or less lean in the fact that we see happening with our distributors and market parties operating in the market and use that information to predict more of the numbers for the coming quarters.

You have revised downward your revenue as well your EBITDA margin, but still that decline is much less than the drop you expect in the gross margin. I estimated about EUR 5 million.

That means that your savings of -- you indicated of EUR 13 million should go up to EUR 18 million. That's up 35%.

So could you provide more color how you will achieve that kind of saving?

Your number is slightly higher than the number that we are calculating. But I mean, we have to -- I think as I indicated that we are looking in every part of the company to realize savings and that is in the products that we are buying, but that's in the organization that is in operating expenses, et cetera.

So it's somewhat of an effort that we will go through. But at the same time, I think we also believe it's doable.

One question on the CO2 targets. I mean the EU Commission confirmed for now the 2035 target to reach zero emissions.

The industry, however, is already discussing some kind of softening of this target. What is your expectation on the BEV market if the EU Commission drops the so-called ICE ban?

And should we expect that the charging business will not pick up in the long term if this will happen?

This is a complicated debating question. If you look at the long run and all elements that are now into play within the European space.

I think moment the general -- in our opinion, the general direction is still that at the end that electrical driving is the way forward. We see that supported not only by, say, regulation elements, but also that we see also that, say, the cost price development of a battery vehicle is coming down.

And we also see already -- you can best compare it in lease car situations that the I call it RIN price of an electric car is now also going down as a consequence of price, but also, therefore, the overall acceptance in the market of the electric car will be not only related to is the government forcing us into that direction, but also the economical element will come into play. And all in all, we are convinced that even there might be an element of softening of the CO2 targeting in whatever way, we are convinced that the electrical driving will still continue.

I still owe a question to Tijs, so I'd like to answer that one. Battery intake for Q1 was EUR 35.4 million and battery intake in the second quarter, I want to be a little bit less precise, but it's north of EUR 40 million.

Okay. With that question being answered, we would like to thank everybody for participating in this webcast and the questions that have been proposed.

And we're happy to engage you again if there are any further questions on a later moment. So thanks, everybody, for participating and speak to you next time.