Good morning from Pfisterer side to all of you, our valued participants of today's earnings and web presentation of the Q1 results fiscal year 2026. Today here in the southwest of Germany, it's a nice, warm, sunny, friendly day, and I believe this is more or less also describing the nature of the content that we're going to share with you in the next 55 minutes of this earnings call.

In the first part of the presentation, we are going to share with you basic ideas of Pfisterer, of our business undertaking and the management team, and then in the second half of the presentation, we're going to turn to the financial performance and give you a brief outlook on what we think the next weeks and months are going to be influenced by. Starting with the management board, I would like to turn over to my colleague, Konstantin.

Yes, good morning from my side to everybody in the webcast. My name is Konstantin Kurfiss, I'm the gentleman on the right side.

Just a brief introduction: 30 years of industry experience, 16 years in Pfisterer, previous working for Pfisterer, then for NKT, now for Pfisterer again. I'm the Co-CEO with Johannes together and I'm responsible for sales and technology.

Johannes?

Thanks, Konstantin. I'm the person with the picture on the left.

Meanwhile, I'm in my fourth year here at Pfisterer. I've been managerial responsibility for profit and loss in a number of companies over the past 30 years.

By first education, I'm an engineer as Konstantin. I have a second education with a business degree.

From a functional point of view, I'm taking care of the functional areas of operations and finance here at Pfisterer, and together we are one CEO, individually we are two Co-CEOs. Pfisterer is in the galaxy of electrical infrastructure.

We are the glue, to speak, on the electrical infrastructure as we are connecting the individual contributors in the net, in the grid. We are doing this by way of connecting conductive situations or insulating those.

We have the mission in our company that we strive to be the preferred partner for innovative, reliable, and mission-critical electrical connection and insulation solutions. We are doing this by developing, producing, offering, and selling, delivering components, products, which could be, for instance, the ones that you see here on the picture.

This is quite a famous product of Pfisterer, the Connex solution that is consisting of a socket, this is what you see on the bottom right, and then there is the plug, you see on the top left. The plug obviously enters the socket.

You see on the top left, there is a cable entering the plug. The plug is then connecting the cable with the socket, which in itself again is connected to some type of an equipment, it could be a transformer, it could also be a gas-insulated switchgear or whatever it is.

With this solution, by example, we illustrate what Pfisterer is all about: we connect and insulate the electrical infrastructure, and we do this on a global scale. These connections and insulation solutions we are talking about can be found across the entire power value chain and across all voltage levels.

This is illustrated by the electrical landscape on the slide in front of you. Obviously, this is a simplified picture of the reality, but it's a good mean of explaining what we are doing.

Starting with the generation of electrical energy, you will find our products connecting the individual source of electrical energy with the grid. This is regardless of the way how electrical energy is being generated and produced: it could be an onshore wind farm at the 1:00 position illustrated here on the picture, or it could even be a nuclear power plant at the 12:00 position.

At 11:00, there is an offshore wind farm. Again, this is where Pfisterer would be connecting the source of electricity, or in the center of the picture there's a solar field, photovoltaic electrical energy generation field.

Again, this would be connected with products of Pfisterer. These situations, this is what the green three lightning arrows are illustrating, this is typically high voltage.

High voltage in our definition means above 53,000 volts. Now after the electrical energy generation and connection to the net, electrical energy typically needs to be transmitted to another geographical area which is closer to the consumer.

This is then done, for instance, using overhead lines or also underground cable systems. Overhead line, there is an example at the 7:00 position.

The underground cable example obviously is not so easy to see as it is underground, but it would be here illustration, for instance, in the center of the picture. After generation and the transmission, electrical energy finally needs to be distributed to the individual consumer.

Again, this is where Pfisterer products are installed and used in the power distribution, for instance, towards data centers, but also towards railway mobility applications or towards the city centers and urban areas where people individually use electrical energy. You will find products of Pfisterer through the electrical power value chain, as we call it, from the generation over the transmission up to the distribution, even up to your house, connecting your house to the distribution net.

You will find our products, from a technical point of view, you could classify in voltage levels: in low-voltage arenas, this is below 1,000 volts; medium voltage between 1 and 53,000 volts; and the high voltage above 53,000 volts up to 1.1 million volts. Now turning this a little bit more in the direction of business, we share with you on the left the split of our revenues in the reporting segments that we are making public, that is the segment of geography, four, or the segment of product segments, again four.

Before we turn to this, let's take a look at the world map in the center of the slide. This is illustrating where Pfisterer is globally active, in meanwhile 19 individual entities.

We are doing our business in conjunction with technical dealers and distributors, and through this we are present in more than 90 countries serving our valued customers. We have five factories: one in the United States and four in Europe, namely in Germany, and the largest factory of Pfisterer in the Czech Republic, which has recently grown overproportionately strong and is helping us to develop the business in a very favorable way.

Starting on the Western arena, we are present in the region of Americas, next to the factory and our partnerships in the United States, also in Brazil and Argentina. In the second region of Europe and Africa, we are present all across Europe.

In the Middle East, we have offices, companies, entities in Saudi Arabia and the United Emirates. Lastly, in the Asia-Pacific region, we are present in South Korea and also with the two entities in China.

This being said, let's turn to the revenue split. This is the pie chart on the top left where you see that Pfisterer did have revenues in the first quarter of this year in the largest region of Europe and Africa with 54%.

On second place, you will find the Middle East with 26% of the revenue shares in the first quarter, the Americas with 14%, and Asia-Pacific with 6%. If you would compare the breakdown of the revenues with Q1 '25, you would see the same sequence: number one also has been Europe, followed by Middle East, Americas, and Asia-Pacific.

The sequence is the same. Of course, quarter over quarter, there are slight changes in the percentages.

You would also identify that Middle East and India has grown stronger than other regions, business has been very favorable there, but we come to this later when we talk about the segment development in more detail. On the bottom left, you see the revenue split as per the product segments.

The largest segment that we are having and that has been also the same number one position a year ago is HVCA, High Voltage Cable Accessories, with 39%, followed by overhead lines with 28%. Overhead lines typically are also in the high-voltage arena, if you would be adding the two, you would be having a 67% of revenue share with high voltage, meaning applications which are above 53,000 volts.

Then comes the components business, this is in the low-voltage arena as per first denomination, 21%, and medium voltage with 12%, as also in the previous year quarter, the smallest segment as we talk, but nevertheless, very interesting also from a perspective looking into the future. On this slide, maybe as a last comment, on the bottom right, there is an illustration regarding our customers, and not only the customers, but also the segments where we believe we can share similar customers alike.

The largest segment Pfisterer are the utilities directly. We have approximately 40% of our revenues we are doing directly with the utilities, for instance, TenneT in Europe or Con Edison in the North American area, Edenor would be in the South America region, just to name a few.

Then we are dealing with cable companies which are selling systems, companies that are dependent on their suppliers, which help them to connect cables into a system that they're selling to the utilities again. We have the distributors network.

On the bottom, as an example, we share names from OEMs: Siemens Energy, Hitachi, ABB, GE, Danfoss, and so on, where we are dealing directly with. As the fifth customer segment, there's the contractors.

You will find those primarily in the overhead line business, which are serving by contributing full projects to the utilities. Again, it is very helpful for Pfisterer offering the broad product range that we have today in the four product segments because this gives us the opportunity of dealing directly with the utilities, it's the largest customer segment, as I mentioned earlier, but then again, it also helps us indirectly if we are dealing with other companies which are serving utilities because we are known to the utilities, and quite often we are spec'd into the list of specification by the utility, and this is then indirectly helping also our business development.

This being said, that was the introduction of Pfisterer. Now let's turn to the business and the financial performance in quarter 1 '26.

Starting with the order book, illustrated by the columns in the center of this slide, and order book is then turning into revenue, revenues are illustrated on the right graph here on this slide. I think the headline is giving a good summary of this page.

As you can see, the revenues on the right have been increasing quarter by quarter over the past five quarters. If we started with roughly €100 million in the quarter 1 '25, we've seen this going up to €113 million in quarter 2, quarter 3 of last year.

We brought it up to €123 million in quarter 4, and quarter 1 '26 is again another step going in the right direction, going up, with €127 million. Therefore, showing an increase on a year-over-year comparison, quarter 1 '25 to quarter 1 '26, of 26.7%.

This is supported and caused really by a significant jump in the order book. Again, if we compare the order book on the left, quarter 1 '25 and quarter 1 '26, we see an increase of 17.7% on the order book, and we also see that it went up again from quarter 4 to quarter 1.

We believe this order book is giving us a very comfortable situation in expecting further increases on the revenues for quarters to come. If we do compare the numbers now, and this is the comments on the left, with previous years, we had an average quarterly revenue in '24 of below €100 million, €95.8 million.

We had a average quarterly revenue in '25 of €112.5 million. We have started now with €126.9 million into this fiscal year 2026.

We have reason to assume that we will see continued increasing revenues over the course of the year. Where is the revenue growth really coming from a segment point of view?

Again, we will be looking more detailed into this on a few slides further down the presentation. Maybe to share first the information here, we've seen a very good development in HV and OHL, the high voltage.

As we like high voltage because typically high voltage means also high margin, we are not against a good development in these segments. From a regional point of view, we have seen in particular growth in the Europe and Middle Eastern region, apart from also a good development in the Americas, from a country point of view, driven by the United States.

If we move on and we look a little bit more to the results. As we know, revenue makes proud, but results makes happy.

We look at the gross margin and the adjusted EBITDA on this slide here. We see an even more positive developments on the results KPIs we are sharing with you.

Gross margin is the columns in the center of this slide and adjusted EBITDA on the right. It becomes evident that in the first quarter, our gross profit and our adjusted EBITDA increased substantially on a year-over-year comparison.

This is true on a percentage point of view, on a margin point of view, and it's also true on an absolute number. Let's start on the gross margin.

We see that the gross margin last year's average was 40.6%, I believe, with a slight drop in quarter 4. We see that the gross margin went up to 43%, namely 5.3% over the Q4 '25 to now 43.6%, but it also went up 1.6% on a year-over-year comparison.

If it was 42% in the Q1 '25, we managed to bring it up to 43.6% in quarter 1 2026. This, in conjunction with the volume increase we have seen on the revenues on the previous page, is then helping us significantly on the EBITDA.

Last year's quarter 1 with €21 million, I believe, was a very solid number. This year's quarter 1 now is €27.7 million, we managed to bring the adjusted EBITDA up by 32%, 32.1% even on a quarter-to-quarter comparison.

On a quarter 1 to quarter 4 last year comparison, it went even up by 45.4%. Maybe it's also interesting to note that the gross result did grow in all regions and in all segments on a year-over-year basis comparison.

We believe we have a very solid business situation here at Pfisterer based on our order book. We think this will also be continuing in the coming quarters.

Now if you break it down to the regions on this slide, and then on the next slide on the product segments, we can further walk you through additional data on the order book and the revenues of the regions. I would like to do this as per the regions.

Starting with the Americas, we do see that the revenues in the Americas went up by 12%, year-over-year comparison Q1 '25 to Q1 2026. We also see that the order book went up by 17%, and both number developments are caused mainly by HVCA.

We have seen a good order book development and revenue development in this product segment. Again, this will be further explained later.

On Europe and Africa, we see a continued revenue growth in the double digit as previously, the revenues going up by 16%. Europe is the largest contributor to our revenue with the highest revenue share, I believe it was 39%, and the revenues went up by 16% from €59 million to €68 million, and the order book even more, went up to impressive €188 million, by 23% on a year-over-year comparison, which is a good development, we believe, we can say.

If we come to the Middle East as a third region, we see that the revenues went up by impressive 89% and the order book by 30%, meanwhile standing at €102 million. We believe is a very good basis for continued business execution in the Middle Eastern regions.

Lastly, there is the Asia-Pacific region where we do see a slight drop in the revenues, -4%, but we also see a drop in the order book by 42%. In Asia-Pacific, we have to say that we see, on the one hand, certain revenues to materialize outside of the Asia-Pacific region, despite the fact that the orders and the revenues are originated in the Asia-Pacific region.

Then there's another element: due to the high order book and workload in our companies, we do see our lead times going up, and in the Asia-Pacific in particular, this is a certain headwind that we see here in the figures, but that's why we are continuously investing into our capacities, and we believe by doing so, we will also be bringing our lead times down again. On the next slide, we are breaking now the business into the product segments, and again, I would like to structure the discussion as per the segments, starting with HVCA.

We see that the order book has shown an increase of 23% and also the revenues. It's a good equilibrium situation here.

Order book, meanwhile, at €172 million, which is a very comfortable situation, I believe, also for the coming periods. MVA, we see the order book went slightly down by 5%, but the revenues up by 2%, basically there is no fundamental development to be recorded at this moment in the MV segment.

On the components business, we see a certain increase in the order book and an even nicer development on the revenues with plus 10%. Last not least, again, OHL, we see a good development on the order book and a strong revenue increase.

This is also linked to the Middle Eastern regional development we've seen earlier as the OHL revenues have primarily been booked in our region in the Middle East, but the order book has also seen a positive development in Europe, and this will be seen then in the revenues in the future. After diving into the segments, I would like to come back to the consolidated numbers and take a brief look at some key KPIs of our business development.

This is now as a condensate to be seen here in an aggregated view. We do see that the order book did went up by 17.7% compared to the last year.

Our order intake is below last year's quarter 1 by 9%, but nevertheless, it's up double-digit compared to quarter 4 of last year, we believe we are on a good path. Our revenue increased compared to last year by 26%, and we touched our gross results earlier.

Gross result improved to, meanwhile, €55 million, which is an increase of 31.6%, which then due to an underproportional increase in our functional costs, shows a further increase of our EBITDA to, meanwhile, €27.2 million on a non-adjusted level and on the adjusted level to €27.7 million. The adjustment is strictly limited to the IPO-related virtual stock option program, which obviously will be ending at some moment in time.

Apart from the virtual stock option, there are no further adjustments integrated here, and this will be growing out next year as the virtual stock option program will be finished by then. Our result for the period has reached €18.5 million.

This is a very strong increase by 57.7%, and I believe it's a good indication of the strength that Pfisterer sees in its business and that we want to continue to develop also for the quarters to come. Our operating cash flow relative to last year's quarter improved also significantly.

Nevertheless, it's a slightly negative operating cash flow as, due to the increase in our revenues over the course of the months, we see significant increase in our receivables. Not overdue receivables, just very normal payment terms that will be reflecting into cash inflow, but obviously with a certain time lag between revenue and then cash in.

A very normal development from our point of view. Also, the inventories went up by, I think, €5 million.

This is what you then find in the net working capital down below, from 22% at the end of last year to 26%. Our midterm guidance is in the area of 27% to 28%, we are feeling quite comfortable also with the 26%, and we believe this is a healthy relation in our growth ambition that we have on the one hand and our ambition also to be a partner in the market that is offering interesting lead times, which obviously then also needs certain inventories.

Over the course of the year, from quarter 1 to quarter 1, we see an increase of employees. We have hired 19% more people on staff nowadays than a year ago.

The number is not shown in the figures we are making public, but the labor cost ratio went down by 2.5% over the course of the year. The number of people we have hired is, on the one hand, underproportional relative to the revenues, which went up by 26.7%, but apart from that, there's also a shift: we have overproportionally higher people in our Czech factory, the largest factory that we have, and this is then also causing a relative reduction in labor costs apart from the increase in revenues, which is obviously also helping here.

All of this then is culminating in our net profit of 57.7%. With 19% more employees, 27% more revenues, and 58% more results for the period.

This then also translates into earnings per share. We have made a comparison here on a year-over-year comparison based on quarters.

This is the comparison between dark red and light red as an example, quarter 2 '24 to quarter 2 '25 as the first comparison. Then if you compare in the same color over the quarters, you see the development over the course of the year.

I want to concentrate here on the light red where Pfisterer had earnings per share in the second quarter of '25 of €0.64, 64 cents, and we managed to bring the 64 cents over the course of the quarters to 72 cents in quarter 3, 92 cents in quarter 4, and meanwhile 98 cents in quarter 1 of '26. This is, I believe, a remarkable development also in the light of an increasing number of shares.

Last year's quarter 2 there was a capital increase prior to the IPO, and this obviously then is increasing the denominator in the calculation that you see here. Despite the increase of shares from 14.6 million rounded to 18.1 million rounded, we see that the EPS is going up.

This is just another expression of the business strength that we have seen in the profit development recently. With this, I would like to finish the financial results chapter in this call, and I would like to touch two slides regarding the outlook that we believe we will be seeing also in the business development ahead of us.

Touching briefly the Middle East situation. We spoke about that already four weeks ago when we had the full-year earnings call, and I would like to come back to the point once more as this is, I assume, also a little bit of interest to some or all of you.

Our business situation in the Middle East, it's easy to be summarized: it's business as usual in a, of course, extraordinary situation. The on-site situation has, from a business point of view, totally calmed down.

Staff is back at office. This is the case for us, but also for the customers.

Nevertheless, we pay very close attention to what's going on on a local basis as it is clear that the safety of our local teams does have a top priority for us. At this moment in time, no business interruption or anything negative from a business execution point of view is to be reported.

The planned projects are being executed and they are being fulfilled. From a shipment point of view, we have the inbound shipment situation here at Pfisterer.

There is very, very low sourcing activity from Pfisterer in the region, and whatever is being sourced from the Asian region and used to be brought through the Red Sea has already been rerouted since 2024 around the Cape of Good Hope. Inbound, there is no exposure of Pfisterer, basically no exposure of Pfisterer relative to any transportation interruption risks.

On the outbound, if we are exporting into the region, obviously then there is a certain exposure. Due to our outbound logistics going primarily through Jeddah, again the Red Sea, this is not being harmed at this moment in time by any negative influence other than that there are risk surcharges and fuel surcharges which the logistics companies are charging.

Those we are discussing with our customers and they are increasingly being levied with them as it is clear this is extraordinary cost that was not inside the calculation, and this needs to be treated on the level of partnership between our customers and between us. If we look at the more objective data, we found there is a Geopolitical Risk Index being published by BBVA Research.

This has been steadily going down for the past weeks. This is not intended to be cynical, but at the end of the day, whatever has been destroyed in geopolitical stress situations needs to be rebuilt after peace comes back.

In the mid- and long run, we believe there is tremendous investments in the Middle Eastern region and also other war regions ahead of us. This being a comment on the situation in the Middle East brings us to the second last slide of the presentation, namely the North American region.

We believe that in North America, the best really is yet to come when we talk about electrical infrastructure. Apart from the fact that the grid in the US is quite outdated and apart from the fact that, for a number of reasons, electrical consumption in the US is growing, there is a trend that causes unbelievable investments in data centers, that is the AI boom, which from a capacity point of view and then also capacities linked somehow to electrical consumption, is expected to go beyond even what we see today due to the fact that large language models are causing certain electrical demand, but agentic AI will be causing a significantly higher electrical demand than large language models do.

We believe that this trend will be continuing and could possibly, from an electrical consumption point of view, could possibly even be only at a starting point as we talk today. The US utilities, they have reflected this in their latest investment forecasts.

Their investments are forecasted to go up more than 20% compared to the forecast from a year ago. If in '25 the forecast until the end of the decade were 1.1, of course, on a cleaned area, '26 to 2030, it was intended to be $1.1 trillion a year ago, nowadays the utilities are forecasting $1.4 trillion.

We believe this is a curve that continues to go up, and the grid, as mentioned, is already operating at capacity, and we think this will be propelling further investments also due to the quite over-aged nature of the grid as it is today. With this, I would like to close the presentation and leave some room for also questions from the audience.

The financial calendar very briefly: if any question or any matter is not totally satisfying today, we will be available also in further on-site meetings: the Berenberg European Conference in New York tomorrow or be it during the Annual General Meeting, which we will be hosting in about four weeks from today. Q2 figures will be due on August 19.

After that, we're going to be present on the NWB German Select Conference at the end of August or Commerzbank and ODDO in Frankfurt on September 1st. Q3 figures we're going to be sharing with you at the end of November where we will be also presenting on the Deutsches Eigenkapitalforum in Frankfurt on November 23rd and 24th.

Thank you for your attention at this moment in time, and we will be happy, either me or Konstantin will be happy to answer your questions in the remaining minutes. Thank you.

Hello, good morning, and many thanks for taking my questions. I have two if I may.

The first, on the order intake, can you explain in more detail the dynamics in Q1? OHL was down 27%, but also the other segments were flattish.

Is this related to a specific region or lower dynamics in all regions and product lines? In this context, maybe also if you can explain a little bit your comment about the increasing lead times in medium voltage which resulted also to slower order behavior pattern in APAC, if I got it correctly.

Then the second one on medium voltage in particular, sales was flattish in the first quarter, order backlog was also down. Could you explain the reasons behind and what you expect for the remainder of the year?

Many thanks.

Hallo Frau Steilen, good morning. Thank you for the questions.

First question was regarding order in. As you said, yes, there is a reduction relative to the Q1 data on the order intake of last year.

Nevertheless, there is a relevant increase on order in relative to quarter 4 of last year. This being said as a starting comment.

Now where is the difference coming from relative year-over-year Q1 to Q1? The delta of roughly €10 million is coming out of the OHL segment as you said.

If you look from a regional point of view, this is out of the Middle East, again if you would be looking. This is not related to the conflict at all, this is just simple, very normal project activity: one month is slightly higher, another month is slightly lower.

We see in quarter 1 that on a year-over-year comparison, OHL has been lower by €10 million, from an order intake point of view, relative to the quarter 1 of last year. Nevertheless, order intake and revenue ends up in order book, if you compare the order book from Q1 last year to Q1 this year, I think we are up by more than €30 million.

I need to switch over to that slide. €20 million, I'm sorry.

We believe in a slow business such as OHL, order book will always be showing certain fluctuations. We believe there is still a good revenue growth ahead of us based on the order book, and we are very convinced that the order intake in OHL will also continue to develop in our favor.

We have no worries in this respect. I also would like to say, with an extraordinary high order intake last year quarter 1, I wouldn't call this year's quarter 1 to be called lower dynamic.

I think this is still a very good dynamic. At the same token, with an revenue growth of 27%, we do see increases in lead times as we did not grow capacities proportionally.

We need to keep investing into our factories. We need to work hard in improving our processes as obviously our internal way of executing customer wishes and orders also have a certain influence on lead times.

We are making progress in this, we see that capacities are going up, we see that the efficiency of our doings is improving, and by doing so, we will also continue to bring our lead times down again, and then we will also see continued growth in the order intake again. MVA, you asked about the lead times in MVA.

My comment on the lead times in Asia-Pacific was not primarily linked to MVA, maybe this was not clear in my earlier comment. In general, HV in Asia-Pacific is a little weaker than it was before.

This is due to lead times in the sense that lead times in Asia-Pacific are specifically competitive. Any increase in lead times in the Asia-Pacific region is causing immediate impact on business.

This, again, in the overall light of our business development, is not what we would like to see, but at the end of the day, is not causing any harm as we have seen a very good development in the other regions and product segments in the other regions. It's a snapshot at this moment.

We don't think that this is any fundamental trend. Again, as I also said earlier, due to the way we recognize revenues, Asia-Pacific is looking a little bit weaker than it really is as some of our revenues we would have expected to be recognized in Asia-Pacific were, for instance, recognized in the region of the Middle East.

This is due to the way how we recognize revenues in the Empfängerland, the receiving country, I believe would be a proper translation. If we would have expected to ship product to Siemens in China and Siemens rerouted the shipment to Middle East, on our hand, not on their hand, then we recognized the revenue in the Middle East, but we budgeted it, for instance, in Asia-Pacific.

This was a lengthy answer. I hope I did get the point, Frau Steilen.

Yeah. Just a quick follow-up.

Basically a kind of capacity scarcity is currently the limiting factor for the order intake, and you expect also order intake to increase then in line with your capacity expansion, and this is according to plan?

Yes, absolutely. Absolutely.

Over the course of the year, we have also in our in our earlier statements, over the course of the year, we have said that we are expecting, in the full-year point of view, we are expecting order intake to be in line with last year. On the order intake, we do not expect significant increases in full year of this year, but we would like to repeat the almost €550 million of last year as this is more than sufficient for matching our revenue expectation regarding growth.

As we are building up capacities, we will also see continued increase in order intake.

Perfect. Thanks very much.

Yes, hi, gents. Good morning.

Thanks for taking me. Actually I've got quite a few, but I'll ask three in the first tranche, if you want so.

On the strong gross profit margin that you had in OHL, that was an outstanding result. I remember well when we were on roadshow that you said everything above 50, 40% is actually something very good.

Now this was significantly above that level. I was just wondering if there were some specific effects in there, or should we expect a strong gross profit margin like this to continue in the next couple of quarters?

The next question is a little bit also what Yasmin already asked: obviously, as Middle East is gaining in importance, now we talked about a bit of the cooling off, and the book-to-bill in the region is the lowest in Q1 from all the regions. I was just wondering on the phasing of the projects that you see there and how the funnel is looking like.

Should we expect some kind of digestion phase on what has been going on in the region for 2027 taking into account that, I don't know, a lead time is probably 9 months or so? Or is this something you would not see and actually order intake accelerating to some point?

Then a third question, which is probably a bit of a high-level question. Just as a scenario, if at some point Middle East would slow a little bit, just to understand your flexibility, obviously you have these different product groups and categories and regions, but would it be relatively easy for you to switch revenue-wise or let's say marketing effort-wise to other regions to compensate where you have been probably not focusing on so much, like Asia-Pacific or do more in the US?

How flexible are you? I'll leave it with those three and then maybe I'll jump in later.

All right. Hallo, Herr Pehl, good morning.

I would be answering the first two questions, and the third one maybe I would ask Konstantin to jump in. The first one on the gross margin.

We've seen this quarter a gross margin of 43.6%. This is super strong, yeah?

If you look to the past five quarters, this would have been the highest number we have seen here in quarter 1 '26. The average for the full year in '25 was 40.6%, I said earlier.

I hope that number is right. It's a 3% higher than the average of last year.

Now should you expect this number to be exactly the same in the coming quarters? I would not confirm this.

I believe quarter 1 really is a very good quarter. Three of the four product segments were above 40%.

This is also not the norm in our case. Also the 43.6% is not the norm.

We are striving to stay above the 40% as we did last year. We have communicated earlier that our profit development, bottom-line development, we expect maybe some from a continued gross margin development, but primarily we said that we would like to see or we expect to see our profit development from underproportional functional cost increases on the sales cost as well as on admin.

If you compare sales cost and admin in the first quarter relative to last year, this is also exactly what you see, yeah? We are seeing a good margin profit development in quarter 1 because of the gross margin, yes, but we also see that the functional costs are, from a relative point of view, did decrease.

This is true for sales as well as for admin. It is not true for R&D, also as we communicated earlier, as we continuously invest significant amounts into R&D and we kept the ratio in the area of 5.5%.

Maybe to summarize a little bit, I hope that I'm touching the point, Herr Peel, yeah, 43.6% gross margin is not what I would like to promise for every quarter to come. This is a very strong quarter, but we have seen in the past quarter results typically above 40%, and this is also what we think is viable and what is in line with our earlier communications.

Can I just quickly follow up on that very point because I was also wondering specifically on overhead lines. Obviously last year you had this kind of wide range of the gross profit of 36% to 46% in Q2.

Now you had 46.8%, which is kind of outstanding, I would say, very strong. What is driving that specifically in OHL?

I understand it's probably the magnitude of your own value creation versus purchased parts, but this seems to be very high, and I was just wondering if that is how sustainable that is.

Let me see, I need to check. I'm sorry, I thought I was muted so then I can talk to myself.

Last year, OHL has seen this transition phase due to the fire incident. I'm getting tired of always repeating it, but you are asking, Herr Pehl, I need to come back to it.

The gross margin last year, and this is true for the full year last year, even to an even higher extent in the last quarter, the gross margin has been burdened last year by inefficiencies in OHL production in the factory in Kadaň. The relocation from Wunsiedel to Kadaň did cause extra efforts, and the costs of the extra efforts, they are seen in the margin, in the COGS, yeah, cost of goods sold.

They have been partially compensated by the insurance payments, but this is then below gross margin, yeah? You will find it then, of course, again in EBITDA, but you see this uneven viewpoints in the relation between gross margin and EBITDA.

This is now over, yeah? We communicated to you earlier, relocation is finished, production is up, yeah, everything can be improved, we also continuously improve production in Kadaň, but we are now running.

There is no extra cost anymore, and there isn't even any insurance compensation yet, this will happen in quarter 2 and quarter 3. Again, this is not the answer to the gross margin, and this is one element of the answer, Herr Peel.

Another element is we have had a very good sales success in the Middle Eastern region in OHL. We have a very attractive product offering.

We have a very loyal customer base, great sales team, good product, and this has caused to the increase in the margin in OHL. Digestion phase, you ask is there a digestion phase in the Middle East ahead of us?

I wouldn't say so. We should not expect the jumps from last year in order intake to continue forever, yeah?

Order book went up at a significant point in the Middle East, and this will be turning into revenues. The order intake in the Middle East is not expected, as I said, to continue to grow forever.

We have also said this in our year-end report, yeah, where we are giving outlooks on the order intake expectation in the different regions and in the different product segments. We believe there is a phase in the Middle East in OHL where things are going to consolidate on a very high level.

Based on this, yeah, we believe that the OHL and Middle East will be a very strong contributor in the course of this year, and there is no expectation that this will be changing anytime soon in the negative direction. Maybe as a last point, Konstantin wants to join as well?

Maybe just to add, Middle East. When we are talking about the Middle East region, we are talking about Middle East and India, this is one thing.

You are asking a little bit for some kind of compensation. We are also heavily working on the Indian market with cable manufacturers.

This is one argument, which also was always the discussion with the I would say regions which are breathing in a certain way. We see good developments in India on one side.

Maybe also on the digestion phase, what Johannes said, from the technology point of view, what we see, especially in Saudi Arabia, but also in the Middle East, there's a technical change from ceramic to polymer overhead line business that also will give a push in I would say in the region for the future. Also what we see, the connecting of the whole system of the Middle East, that also gives a drive on one side on the transmission line overall for the overhead lines, but we also see investments which we also have in the order book for high-voltage and utilities for underground cable systems in the Middle East for the connection in between, if you look into the Emirates, if you look into Oman, and also if you look into Saudi Arabia.

I believe this region will develop on a high level, and I would say the argument also is the Indian part.

All right, thank you. Jump back into the queue.

Hello. Thank you for taking my questions.

Just a very short question. It's regarding the success in Middle East and India.

How much of this increase in sales is attributed to the sales success in this region, and how much of the ramp-up of production in Kadaň and being able now to serve the customer demand?

Maybe I take the point. Johannes Linden speaking.

It's primarily driven by the sales success as we have two different product types that we are providing into the Middle East: one is we call it the fittings, and the second is the insulators. If you would be going into the details here, you would see that the fittings have had a stronger increase than the insulators in the first quarter.

This is not necessarily the same ratio in the coming periods, but this is what it is right now.

Okay. Thank you very much.

We have gained a relevant market share in the Middle East due to a very strong engineering team, yeah, that needs to design the project and customer-specific fitting solutions. Apart from that, we also see that the insulators, which used to have a higher share in ceramic technology than in silicon, that now there is a technological change taking place in the Middle East, in particular also in Saudi Arabia.

In other Middle Eastern countries, this change has already taken place before. Now Saudi Arabia is at the turn, and they are changing more and more from ceramic to silicon insulators.

Silicon is the technology that we are providing, this is a change which is very much in our favor. There is a number of reasons for this change.

One of them is that the silicon insulators are simply lighter. As the insulators as such are getting bigger and bigger as the voltages are increasing, the share of high voltage in overhead lines is increasing.

This is very much in our favor, providing the lighter product which helps the installation works. Silicon technology is meanwhile considered or respected as a proven technology.

If there was hesitation in the past, this is not the case any longer, this is having us.

That means that for the upcoming quarters, the success in this region could be replicated?

Yes, yes. We do not want to share any negative viewpoint here.

We are confident also for quarters to come.

Thank you very much.

Thank you once more from Pfisterer. It was our pleasure to host you and share information, details, hopefully also positive messages with you on what we think is a super strong quarter 1 of this year.

We believe there is a lot in our favor which will be helping us also to continue a positive business development Pfisterer for the future. Thank you very much.

Have a nice day. Bye-bye.

Thank you.