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Operator: Ladies and gentlemen, welcome to the ANDRITZ Q3 2025 Results Conference and Live Webcast. I'm Sergen, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, it's our pleasure to hand over to Mr. Pfeifenberger. One second, Mr. Pfeifenberger. Please go ahead, sir.
Matthias Pfeifenberger: Good morning, and warm welcome from ANDRITZ from Vienna. I'm Matthias Pfeifenberger from Investor Relations. It's my pleasure to host with you the Q3 earnings call this morning. And also have with me our CEO, Dr. Joachim Schönbeck; and our CFO, Vanessa Hellwing. We'll start the call as usual with the CEO highlights and the headline figures, followed by a financials overview and then go back to the developments in the business areas and the outlook, followed by the Q&A session. Make sure you register for the Q&A with full name. Thanks a lot, and it's my pleasure to hand over to Dr. Schönbeck.
Joachim Schönbeck: Thank you, Matthias. Good morning, ladies and gentlemen. Thank you very much for spending your Thursday morning with us. We are happy that we can report rather good results. We had a strong order intake in the fourth consecutive quarter. We could now benefit from the increasing project activity. The order intake in Q3, I would say, like in the entire years was driven by continued strong demand for power generation, and that materialized in the business areas, Pulp & Paper, Hydropower and Environment & Energy. Although we had a slight decrease in the revenues compared with the previous year and the previous quarter, but we could protect the bottom line and stable comparable EBITA margins as we have, I would say, early enough initiated the cost reduction measures to adjust our capacities to the slowing market demands. We had a negative foreign exchange revenue translation, which basically is in line with what it was in the second quarter, very strong euro against the main currencies we are trading in. There's still no direct tariff impact on our business. Very good. The project execution improved, and we have seen a continuing margin progress in Hydropower, both definitely helped us to save our profitability. We made significant forward movement on sustainability. We achieved two major milestones. EcoVadis lifted our rating from Bronze to Gold. Now we are in the top 5 percentile in that arena, which is very good. And in summer, we got SBTi approval for our greenhouse gas emission targets, now fully in line with the targets of the Paris Agreement. So, I think that is very good. If we look to the numbers itself. Major KPIs. Let's go first Q1 to Q3. Our '25 order intake now is at EUR 6.9 billion. That's up 20% from previous year. The revenue at EUR 5.5 billion, down 8% to the previous year. Order backlog nearly on a record high, EUR 10.8 billion, nicely building up, also a good cushion for the next months to come. That's up 15% from the previous year. If you look at the comparable EBITA margin, we kept that constant 8.5%, and that's EUR 471 million. And the reported margin dropped to 8.1%. That's EUR 449 million. The difference is basically the restructuring cost to severance, mainly the severance payments that were included there. Net income is stable at 5.5%, EUR 303 million. If we look at Q3 alone. The order intake went nicely up 15% from last year Q3 to EUR 2.2 billion. Revenue dropped by 8% to EUR 1.9 billion. Order backlog went up 15% from last year Q3 to EUR 10.8 billion backlog we just reported. And the comparable EBITA margin is at 8.9%, nice solid figure, same level as the previous year, EUR 168 million. And the reported EBITA margin dropped to EUR 160 million, that's 8.5%. That's on the same level as last year. Net income, also here stable, 5.9%, EUR 111 million. We see project activity is increasing. We have here, you see this on a rolling 12 months level, you can see a strong growth for the fifth consecutive quarter. And order intake is significantly above EUR 2 billion for the last 4 quarters with contribution from all business areas and also book-to-bill above 1 for the fourth consecutive quarter. So, we feel that is in the, I would say, a difficult environment we are facing at the moment, that is a good sign. It gives us a good view towards what is coming in the next months. Going to the details of the order intake. You can see, if we start with Q3, that all business areas contributed to the growth in order intake except Metals, which had a significant drop by more than 50% compared to last year, but this quarter and the last year contained a significant large orders. So, we are at a run rate without any large orders in Q3 with EUR 300 million. We are, I would say, online with the volume we can expect from without any significant orders. In Pulp & Paper, we jumped by 94% to above EUR 900 million in the Q3. Excellent result. Hydropower was growing on already very high level to EUR 525 million. And we were also very happy that now Environment & Energy started to grow again, 25% up from the Q3 last year to EUR 424 million. That is very good. If we look to Q1-Q3, you see a mixed picture. Pulp & Paper, strongly up 36%. Hydropower, very strongly up by 50% to almost EUR 2 billion in three quarters. That's very good. Metals is down by 10% to almost EUR 1.2 billion, and also at EUR 1.2 billion is Environment & Energy, down by 4%. We are very happy that the Pulp & Paper market response is very good. Even without large Pulp net orders in South America, we can make that business grow. In the Metals, definitely, we see a particular uncertainty. You know that steel and aluminum is one of the main targets of the tariffs. That definitely creates uncertainty about investment plans. And the automotive industry is really in, I would say, a critical situation on where to go, where to invest and where the markets will be for the next years. Hydropower, definitely supported by strong demand on energy, strong demand on green energy. But also grid stability, energy storage and turbo generator business for the data centers is definitely lifting up our business. Environment & Energy, the strongest growth here comes from flue gas treatment businesses, and that again is originating in demand for power generation. If we have a quick look to the regions. You can see that -- it might be a bit of a surprise, the strong growth in Europe, growing to 37%; North America is stable at 23%; and China and Asia both are up. Significant drop in South America, and I think that reflects what is happening in the world today. On the revenue side, as I already mentioned, we see a drop in revenue by 8% on the quarter and on Q1 and Q3. Several reasons for that. We have a foreign exchange translation impact coming from the strong euro. That's the currency we are reporting on to you. But a lot of the businesses, as you know, we are doing local for local in the other currencies, which weakened. So, that's basically not taking any business or any market share from us. In Pulp & Paper, the increase in order intake started in Q4 last year. And now we are in, I would say, very -- in the project cycles, we are at a very early stage. So, the revenue growth is not there. But backlog is building up nicely, projects are on track. So, that's not a major concern. It's not a major concern at the moment. In Metals, we saw some decline and we saw also some delays in the projects, because of tariffs going on and off. So, deliveries has been switched back and forth. Hydropower is apparently not affected. It's a continuous growing business and the energy sector is basically not affected at all by any of these economical uncertainties. Environment & Energy is slightly growing also in the revenue. So, it's a mixed picture. The foreign exchange translation impact is almost EUR 60 million in Q3 and amounting to almost EUR 140 million in Q1 to Q3. And we do not see that this trend will change in Q4. So backlog, as I said, is building up nicely. Now for the fourth consecutive quarter, building up majority, as you know, from our business in Pulp & Paper and Hydropower. We expect that 2/3 of that backlog can be converted to revenue within the next 12 months and 1/3 after that. EBITA development. As I told you, on a profitability, comparable EBITA margin remained stable at 8.5%. And the reported EBITA margin dropped down to 8.1%. The gap are the restructuring costs, which we had mainly in the Metals sector and in Pulp & Paper. What did support the margin and protected our bottom line was definitely the improved project execution. We could see that a certain amount of the low-margin legacy projects in Hydropower are phasing out and that restructuring efforts are now bearing first fruits, which definitely had helped us a lot. So, as I told you, we have been uplifted on our ESG rating from Bronze to Gold. We basically had achieved our ESG targets for 2025. So, we announced -- in the summer, we announced new ESG targets. And you have an overview here. In some areas, they are quite different. In some areas, they are basically continuing what we have already been targeting for. The E-impact revenue, higher than 50%. That's basically the revenue with our green products. On the greenhouse gas emissions, we are now -- I have said, the SBTi targets are now our new targets for 2030. That's reduction in our own operations of 42% and on the value chain of minus 25%. We will keep our former KPI, this greenhouse gas emission related to our sales, because we believe that is a very good indicator and probably much more feasible to handle for you than the absolute values. And then we turned our water usage. We concentrate on water use and water stressed areas that was recommended, and we have plans to reduce that by 25%. Same is for the residual waste. Our accident frequency rate, the LTIFR, we want to keep below 1 over that time. We want to increase our women in leadership positions, lifted above 15%. Voluntary turnover below 4% and the employee engagement index above 75%. On the governance side, we concentrate on supplier prequalification, supplier social audits and sustainability-rated suppliers. And then, we also have a certified Sustainability Management Index. That's basically an index that reflects how well our operations are covered by certifications like the ISO 9000, ISO 14000 and so on. So that's, I would say, a new set. We are very confident that we can reach these targets. I already said we could get improved ratings from, I would say, biggest in EcoVadis. But also the other rating auditors had improved their view on ANDRITZ, I believe we are in a good way there. So, we are continuing our successful M&A strategy. We made some four very, very good acquisitions this year, excellent fit to our businesses that we are doing: two acquisitions in the USA, LDX and Diamond Power, strengthening our local footprint there with local for local and also local manufacturing and service teams available; and then, we have made two acquisitions in Italy, one to support our Paper business and one to support our Metals business. We trust that there might be more M&A on the way. Service business has a good development. It's at 41% of the total revenue in '24. In the last 4 months, it even jumped up to 44%. And in Q1-Q3, we moved that up to 44%. So, we see -- I would say, we see a bit of a mixed development on the Service side. While the revenue is rather -- is growing more slowly. We could see a good jump in order intake in Service in Q3, but also in Q1 to Q3, and that gives us a good indication that we are on the right track to keep our target to continuously increase our Service revenue, and to keep, let's say, the fluctuations in our P&L small. So, that's a short overview from myself. I'm happy to hand over to Vanessa, who will explain to you and lead you through our financial performance in the first 3 quarters. Vanessa, please.
Vanessa Hellwing: Yes. Thank you, Joachim. And hi, everybody. Also a very warm welcome from my side here from Vienna. Before going into the financial details of the third quarter results, let me shortly highlight again the key cornerstones of our strategy of long-term profitable growth. I really love this long-term chart that you can see in a minute, yes, as you can see, as it reflects that ANDRITZ is growing well across the cycles with only a few down years with rather moderate revenue declines, like you see currently, but also the performance trajectory of 400 basis points margin expansion over the last 2 decades. And quite a low margin variance from peak to trough in these respective mini cycles. As outlined last time, this resilience is basically achieved by our well-balanced portfolio, our asset-light and flexible cost base, our strong service growth as well as our successful M&A strategy. I would not like to present the same slide to you without at least one additional aspect. So, if you focus on the last 5 years only, our compound annual growth rate of 5.6% on revenue compares to 12% on comparable EBITA. So, that proves profitable growth is really a cornerstone of our strategy. Let me now walk you through the key components of our EBITDA to net income bridge for the first 9 months of '25. Our EBITDA margin remained stable at 10.4% despite higher non-operational items, while the absolute EBITDA decreased by 9%, in line with the temporary decrease in revenue that we are undergoing in the first 9 months of this year. Depreciation was marginally higher, resulting in a reported EBITA of EUR 449 million with reported EBITA margins declining slightly year-over-year to 8.1%. This is on the back of the higher NOI, while on a quarterly comparison, the margin remains at the same level with 8.5%. Purchase price allocations from the recent acquisitions have lifted IFRS 3 amortization to EUR 51 million. This will normalize again somewhat in the fourth quarter due to the final phaseout of PPA amortization for Xerium that was acquired in 2018. Xerium is contributing to IFRS 3 terms with EUR 18 million in '25 so far, but will be 0 from October onwards. While -- And that comes in addition now, our recent acquisitions show a higher PPA amortization usually in the first year and leveling down thereby by next year, especially LDX which is part of ANDRITZ since Q1, impacts that number with about EUR 11 million as of September. In the financial results, we see a big swing to positive EUR 9 million from this year from minus EUR 10 million last year. Obviously, the reduced interest gains, again, status that picture with an impact of about EUR 20 million due to lower interest rates on the one hand and, on the other hand, reduced liquidity generating interest. Furthermore, we see the effect from the deconsolidation of OTORIO last year with a negative impact of EUR 20 million, the recent fair value adjustment of Armis shares accounting for plus EUR 21 million this year. As a reminder, ANDRITZ has sold its stake in OTORIO to Armis, a leading supplier of cyber exposure management and security. And ANDRITZ received a consideration in Armis equity that generated the fair value gain that I just mentioned. And to complete the picture of net income here, the tax rate decreased by 0.2 percentage points to 25.4%. Summing up the net income for the first 9 months of 2025 at EUR 303 million is reflecting the revenue and the consequential EBITDA decline as well as higher non-operating items, while our net profit margins actually remain solid at 0.5%. On the next slide, let me walk you through our free cash flow calculation and start again with EBITDA at EUR 578 million year-to-date 9. Outflows from net working capital have continued at EUR 86 million in the first 9 months of '25, and you will see more details later on our working capital slides. Cash outflows from income taxes were a bit higher than last year. This rate is in the first place attributable to foreign tax related to project execution. As mentioned already, with the swing in the financial results, also here we have a cash related negative net effect from interest gains and expenses. Provision releases deducted from the operative results were higher than last year and mainly reflect personnel-related payouts of almost EUR 30 million for pensions, severance payments and termination, while the remaining impact is project related. The personnel accruals released were mainly built last year in Q3 for restructuring reasons in Metals and Pulp & Paper, so that also explains the year-over-year big swing that we see. Adding up all items mentioned here brings us to a cash flow from operating activities of EUR 340 million for the first 9 months. Deducting a somewhat higher CapEx of EUR 164 million for the first 9 months '25, we arrive at a free cash flow of almost EUR 150 million, down from EUR 248 million last year. As Joachim already mentioned, our M&A delivery exceeded last year's level with 4 larger deals signed so far in '25, increasing our M&A spend significantly to more than EUR 300 million within this year compared to EUR 61 million last year, sorry. So, talking about capital allocation. Here, you can see a clear focus this year is on acquisitions, further feeding our remarkable ROIC on a long-term perspective. At this cash bridge, you can also easily deduct the sum EUR 250 million dividend payments from April this year and will almost get to the liquidity development that you will see at one of the following slides. I would now like to turn your attention to more details on the development of our operating cash flows. Operating cash flow amounted to EUR 145 million in the third quarter '25 and EUR 314 million for the first 9 months. We are gradually improving our operating cash flow quarter-by-quarter, not reaching the high last year's levels. In general, we are still seeing the usual volatility in operating cash flows on a quarterly basis, which is typical in the project business and also driven by the actual processing of large and midsized orders. However, please keep in mind that we are still running high levels of order intake close to the all-time high order backlog without mega projects and respective also without mega down payments that we have -- that have often boosted our cash flows in the past years. Important also to emphasize here again is the overall high level of operating cash flows we are maintaining compared to the historic level, driven by higher top line levels, better margins and improved cash conversion. That becomes evident when we look at the right side of the chart showing the 3 years' rolling average. And as you know, 2 to 3 years actually reflect the average execution cycle of our capital business. So, let me now turn from cash generation to liquidity and walk you through the changes in our net liquidity profile. Over the last 3 years, we have steadily increased -- no, we have steadily decreased our liquid funds by termination of bonds and promissory notes. We still continue a strong financial position, especially when including our EUR 500 million revolving credit facility, which is not added here to the gross liquidity. In 2025, our net liquidity declined further from EUR 905 million at the end of 2024 to EUR 413 million by September '25. As outlined during the Q2 call, this further reduction was expected and is driven by ongoing purchase price payments related to our recent acquisitions. The dividend payment of EUR 254 million deducted in the second quarter was also a major part of the EUR 492 million reduction in net liquidity during the first 9 months of this year. Again, our reduced operating cash flow at EUR 314 million. We had outflows for slightly higher normal CapEx of EUR 170 million as well as significantly increased M&A spending of EUR 305 million paid out for the acquisitions until Q3 and maybe some more to come in Q4. Despite that, ANDRITZ continues to hold a strong financial position with sufficient liquidity as part of our DNA. Let's now -- let's turn to the net working capital development on the next slide here. And here we focus on the quarterly development of the operating net working capital. As you can see, we are still pretty lean overall with current run rates of some 12% to 13% of revenue. Just to recall once more, for a project engineering company like ANDRITZ, the operating net working capital consists of the typical trade working capital, means inventory receivables and payables as well as contract assets and liabilities, including prepayments related to POC orders. What you can take from that picture is that operating net working capital has increased slightly following the period in 2022 when we received several large projects and therefore large prepayments. A general increase in operating net working capital also results from the structural exposure of ANDRITZ. We have increased our service business and, therefore, also our inventories to provide an optimum of service and spare parts availability to our customers. Following the increase throughout last year, the operating net working capital has been slightly reduced in Q2 '25 after the all-time high in Q1 in absolute terms, but also as a percentage of sales. And to discuss the renewed increase in Q3 that you can see, let me turn to the next slide for more details. As you already saw, we have split the operating net working capital into its two components, trade working capital, you can see on the upper blue part of the chart; and contract assets and liabilities and advanced payments, and those are displayed at the bottom of the chart, reflecting here our project cash flows. This is a typical management element for us as the project engineering company, as you might know. The trade working capital remains relatively stable at about 16% of revenue on a long-term average. And our net contract liabilities and prepayments usually fluctuates between 3% to 10% of revenues, depending on where we stand actually with the execution of several thousands of our projects. This fluctuation is especially driven by large projects where we typically receive significant down payments. To discuss the easy part of the slide first, the bottom gray, on the prepayments received side. We have seen a constant improvement over the last few quarters, which created additional contract liabilities. With the increase in our trade working capital in Q3, but also after the first 9 months in 2025, the drivers here are multi-folded. In general, we have a typical seasonal trade working capital buildup in the first 3 quarters of the year, which is typically followed by a slowdown in Q4. Then we have higher levels of inventories, like I just mentioned, for supporting the expansion of our service activities. And certain payables decreased in large projects from the past years that are getting closed out now. Lastly, but most importantly, the net increase in our trade working capital was impacted by our acquisitions this year. Especially also in relative terms, the target revenue are only accounted for on a pro rata basis, resulting from the individual date of the first time consolidation, while on the other side, the assets of the acquisitions are accounted for in full. And this is why, we also see a relative jump in the related percentage numbers from 18% to 21%. So, we can say broadly, we have the full working capital of the M&A targets included but only a part of their revenues, which clearly has an impact here in this overview. Following the details on our capital allocation, let me provide a quick update on our ROIC performance. To recall ROIC is our main metric, quantifying value generation over the long run, and it has been increasing since 2020 and stands at a substantial margin to our cost of capital. And above 20% is actually an industry-leading level. So, you can see, ROIC has declined in the first half of '25 and now also further in Q3 to just under 19%. On the one hand, this is obviously driven by the organic EBITA decline. But more important, this is because of our recent acquisitions again with purchase price allocation leading to higher goodwill and intangibles, but EBITA from the acquisitions is still only included on a pro rata basis. As mentioned before, also relevant for the working capital ratios. So, this is a very typical effect that comes along with the first-time consolidation of acquisition targets in the case that closing happens intra-year and not as a year -- to a year start. So, at the end of my presentation, let me quickly summarize the development of our headline financials. Our main indicator is still pointing upwards. Order intake significantly increased by plus 15% in Q3 and plus 20% year-to-date. Again, worth highlighting once more, we now delivered growth in order intake and book-to-bill ratio above 1 for the last four consecutive quarters, as already mentioned by Joachim before. Order backlog missed the all-time high of ANDRITZ's history by only EUR 23 million. It was only higher in 2022 when the large Pulp & Paper orders, OKI and Bracell were booked. The significant increase in order backlog over the last few quarters to this record level already secures a material part of the next year's revenue recognition. And in margin development and order intake this is very positive and strict risk management is improving project execution. As a consequence of high revenue recognition from completion of larger orders last year, our revenue trajectory is still pointing downwards on a comparison base, but we are gaining ground and especially when adjusting for negative FX translation effects. So, please keep in mind, even we are an Austrian company, we have major local business -- local currencies. And when reporting globally in euro, this obviously has some reporting effects when FX rates are changing, And that's what we can see here and also referring to what Joachim said before. So, along with lower revenues and restructuring impact from capacity adjustments in Pulp & Paper and Metals, our absolute operating and net profit decreased, but we were able to maintain our comparable EBITA and net profit margins on a stable level, as you can see here. Operating net working capital and ROIC remain in high focus going forward, with the development in Q3 obviously impacted by the recent acquisitions we have made. Our enhanced capital allocation and higher M&A delivery, and support value creation and has reduced our net liquidity position consequentially. And last but not least, the number of employees is quite steady at group level but with variances, of course, across the business areas. While restructuring measures significantly reduced headcount numbers, specifically in Pulp & Paper and Metals, this effect was offset by hires, on the one hand, in growing business areas, but especially with 780 employees who joined ANDRITZ this year through our acquisitions. And as mentioned, FX has been headwind in the first 9 months, but tariffs have still not impacted our key end markets. And we will provide further details on that later in the presentation. And with this, for now, I would like to thank you for your kind attention and hand back over to Joachim, who will now present the key developments across our business areas.
Joachim Schönbeck: Very good. Thank you, Vanessa. And if you allow me having a quick look on the business areas, starting with Pulp & Paper. We are happy with the business development in Pulp & Paper, looking at the order intake, looking on the well acceptance of the market, of our offerings in a, I would say, definitely difficult time for our customers, in particular for our customers in Europe, but partially also in North America. Demand clearly driven by power generation. So, the hunger of the world for electricity is definitely driving it on the one side. And there is also a trend in the Chinese Paper industry to backward integrate in order to better prepare themselves for the fierce competition in the market. And so we could book in total -- now in the last 12 months, we could book -- we received order for four complete pulp mills, all technological islands supplied by ANDRITZ in the Chinese market. So that's a really strong sign of the customer confidence in our technology. On the revenue side, we are down compared with the previous year. As I said, especially here in Pulp & Paper, we are in a very early stage of the project execution. You could see on the other side the order backlog increased by EUR 500 million. Projects are stable. And so, this volume will definitely and securely turn into revenue and deliver also to the bottom line. We have initiated a restructuring program. Vanessa explained that little bit. That is on its way, and we are now in the budgeting phase for the next year, having a very close look to what we can expect to the markets to see whether we really are on the right size or whether we need to take some further actions. On the Metals side, as I mentioned, the situation is definitely more challenging as both major industries, automotive and steel industry, are facing severe economic uncertainties. The order intake, I would say, with the EUR 300 million is on the low side. But from a steady business alone, nothing to be too concerned about. But customers do not invest. They do not spend money. They need to keep their spendings low as both markets are a bit down and the high energy costs in Europe definitely pose also, I would say, strategic questions for our customers in the Metals industry in Europe. The restructuring is going on. You can nicely see already, I would say, positive effects of that. If you look to the comparable EBITDA margin, we are now in Q3, we are at 6.4%, so within our target range, which shows that the restructuring has already shows effect. And particularly here, we know that the market will not recover and we will continue our rightsizing and further look that we adjust the capacities to the level to keep -- to maintain competitive. Hydropower provides, I would say, a good view, a happy news across all KPIs. Strong growth in order intake, 50% in the first 3 quarters. Very, I would say, solid growth in revenue and over-proportional growth in the bottom line. You see that we are at a comparable EBITA margin. We are at 7% now. It's in the -- that's within our targets. In Q3, EBITDA increased by 48%, while the revenue in the third quarter increased only by 8%. So, strong working, better margins, better prices hit the bottom line, good project execution and particularly phasing out of the old legacy projects. And I would say the trend for renewable energy, strong demand for grid stability, energy storage and also turbo generators. We have quite a positive outlook for the next years to come. What's also very good is that this growth is not only attributed to the capital project, but the service is growing in line. So, we see a nice development in the service both on the revenue side, but even more on the order intake. Comparable EBITA and profitability, I already commented on that, very positive. Development on Environment & Energy. We see several effects. We are happy that we could turn around the order intake now in Q3 by a solid growth of 25%. In total, full year, we are still down 4%. Growth is driven mainly by several midsized orders in flue gas treatment. So, that originates also in power generation. Why we are positive that this is a trend continue for some time to come. Slight growth in revenue to an all-time high. We also could grow service revenue, and that's on a good way. And the EBITDA is very stable on a, I would say, good, high level. If we come to the outlook. On the trade barriers, no news on the left side of the chart. It's basically what we explained to you last year. The negative foreign exchange translation impact now on the Q3 is EUR 58 million. And on the right-hand side on the pie chart, you see how the total negative impact to EUR 173 million is split by the various currencies we are doing business in, largest portion from the Brazilian real, followed by the U.S. dollar, the Chinese renminbi, Mexican peso and then 1/3 is to the others. So, the strong euro here really plays the major role. We confirm the guidance that we presented to you beginning of the year. And we repeat that on the revenue side, we will be at the low end. So, we expect total revenue at EUR 8 billion for 2025. And on the margin side, we are positive that we will be in the range. Midterm targets, also confirmed. On the margin side, with the restructurings we are currently having underway and with the increase in the Service business, we definitely can protect that. On the revenue side, we are definitely depending on also the markets. So we are careful, but we think we can confirm the EUR 9 billion to EUR 10 billion. I think, you know that, that also includes some acquisitions. On the comparable EBITDA margin targets for 2027, we at least can report that we are in the target ranges for the Q3 results now for Hydropower and for Metals, which have been below our targets for a very long time. So, please take that as a positive sign, and we trust it's a trend and it's not a one-off. Environment & Energy is also with a 10.3% comparable within the targets. And Pulp & Paper in Q3 was 10.8%, is just very short of the target for 2027. So I would say, if we look in total where the global economies are, we are not unhappy with where we stand and we see also good opportunities to improve from where we are. So, that's from my side. Thank you very much for your attention. And I hand over to Matthias to moderate the Q&A. Thank you very much.
Operator: [Operator Instructions] And we have the first question coming from Sven Weier from UBS.
Sven Weier: They are largely around the Pulp & Paper business. The first question being if you could give us an update on the large greenfield contracts given latest development in Pulp pricing and demand, whether you still see bigger tickets going ahead maybe in the next 12 months? And let's maybe start there.
Joachim Schönbeck: Thank you, Sven, for the question. I mean, we don't know on the decision makers of our customers. We are working -- several projects are under preparation. For our business, we are not planning with the decision in the next 12 months. But we are working on engineering to prepare the projects.
Sven Weier: And I mean, of course, Pulp is not the only business with big tickets. I mean, how do you see it maybe on the Hydro side? Do you see scope that in this business, you have some really bigger projects in the pipeline that could go ahead?
Joachim Schönbeck: Yes. Hydro, I would say, is definitely a strong driver. We have several large projects underway, under negotiation. And we can expect larger orders also for next year. Yes, that's very clear.
Sven Weier: And then maybe coming to the Service business that you thankfully outlined in the presentation. I was more wondering about Pulp & Paper specifically here again, because your peer yesterday reported about further softening of Pulp & Paper service revenues in the quarters ahead. I mean, are you observing similar trends? Or are you better off because you're maybe not so exposed to the Board market?
Joachim Schönbeck: I believe you hit the point right away, yes. Paper & Board is definitely hard hit by the low utilization of the assets. We also see that. But our exposure is not that big. So, we do not see a decrease in service. On the contrary, we see -- overall, we see a strong growth in order intake and service in the first 3 quarters of this year.
Sven Weier: And for the Pulp & Paper business specifically?
Joachim Schönbeck: What I said now was for the group. But even in Pulp & Paper, we see a growth in order intake, yes.
Sven Weier: Okay. Good to hear. And the final question from my side is just on pricing, because here, again, Valmet said yesterday that they will reinvest some of the cost savings out of their program into gaining share. I mean, is that something you observed in the capital equipment decision, that there's more pricing pressure from your peers?
Joachim Schönbeck: Yes. I can confirm that observation.
Sven Weier: And I mean, what's your position on that? Do you rather walk away from the business? Do you think your technology is better anyhow, so you don't have to compromise on price? What's your strategy there?
Joachim Schönbeck: No. We fight for orders. We believe a low investment is a huge benefit for our customers. So, I think that's good. That is what competition is made for, yes. And we take it on. And this is why also we need to look to our cost base constantly. So, we do not walk away from any opportunity.
Operator: The next question comes from Daniel Lion from Erste Group.
Daniel Lion: Can you maybe outline a little bit your expectations now in the Environment & Energy markets? Do you think we've seen a sustainable turnaround on demand in the third quarter, maybe now especially supported by another rate cuts, potentially good talks between the U.S. and China on solving trade issues? How do you see the development going on there?
Joachim Schönbeck: On Environment & Energy, I would say our largest hope for growth is clearly related to the green products and to the products that Europe has planned to use for the energy transition, green hydrogen, also carbon capture, recycling and all of that. Some of that we could see with some of these flue gas orders. They go in that direction. I believe that this RED3 directive from the EU is significantly hurting the green hydrogen market in Europe. All the investments are basically stuck there. It's basically regulation. Carbon capture, we give a positive future. Specifically in the Nordic countries, there is a huge interest and they are moving a bit faster than Central Europe in the regulations. I would say on the midterm, I have no concerns there. I cannot give you satisfying guidance on the timing. But that has not so much anything to do with interest rates, but with regulations that is in the hand of the politicians, I would say, here specifically in Europe.
Daniel Lion: Okay. And maybe digging a little bit deeper. Austria wants to actually invest quite heavily in green hydrogen in the coming years. There are several projects ongoing. How are you reflecting on these investments? What would you expect in terms of volume that could fuel your business part? And yes, leave it like this.
Joachim Schönbeck: Yes. So I'm happy to hear that and I'm embarrassed that I'm not aware of that. So, thank you for that information because I should know rather than you about these investments. We have one project under execution in Austria. I believe there is more. There is -- and we feel good positions with the technologies we have. Next year, we will have industrial plants in operation, which gives our customers, I would say, a good feeling and security that they will invest in a rather mature technology with us. So, I think if these investments will come, I believe that we will have a fair share of that.
Daniel Lion: Okay. Perfect. And maybe a last one. You just published a few days ago, I guess, a bigger order on synchronous condensers. Could you maybe put some kind of a volume tag on that? Northern Ireland.
Joachim Schönbeck: Northern Ireland, I would say that's in the lower to mid double-digit million range. If we take that with several orders from in Ireland and Northern Ireland, if you refer to that, yes. So it's good volume. It's -- but these are not these mega projects, at least not in Europe, yes.
Operator: The next question comes from Christoph Blieffert from BNP Paribas Exane.
Christoph Blieffert: I have two, please. The first one is on Hydropower. Given that your order backlog has grown nicely, can you give us some insight into workload and capacity utilization in the division as well as on pricing to get a better idea about the revenue growth potential for 2026?
Joachim Schönbeck: So, I think we can say that all capacities are loaded. And pricing is that we are trying to push prices up, which is in the bidding structure of the highly regulated areas, not as easy as it's usually done in, I would say, private markets. But you can see, and I think that is what we are reporting for the last quarters, you can see a constant improvement on the margins. So, the better prices also reached the bottom line, but also over absorption contributes to that.
Christoph Blieffert: Okay. The second question is on Pulp & Paper service revenues, and I have to come back to Sven's question. According to my math, service revenues are down mid-single digit in the first 9 months. Can you maybe walk us through the reasons behind that? And can you explain how you want to grow service revenues in Pulp & Paper in '26 and also maybe elaborate a little bit on potential self-help measures?
Joachim Schönbeck: Yes. So, we have been -- the service revenue is correctly calculated by you. It's down in the first three quarters. The main driver is the low Paper & Board consumption. I would say the overall utilization in that area, our customers is not higher than 60%. So, then service and parts are not needed. So that is driving us down. What gives us a good feeling is that the order intake on the service is up compared with the previous year. That will give us some workload for the next year. We're expanding our service offerings on the pulp side. We just made this acquisition with Diamond that will contribute -- that's basically 80% to 90% service business that will contribute to the Pulp & Paper service. And we have ongoing restructuring in paper service, because the low market demand does not require these capacities that we have. So, capacity reduction in the market areas where there is no demand and expanding our service offerings on the pulp side, that is basically our recipe for going forward.
Christoph Blieffert: And one follow-up question. Can you give us a brief idea or rough idea about the revenue split in services between Pulp & Board/Paper?
Joachim Schönbeck: I cannot. Sorry for that. Not that I'm not willing to, but I don't have these numbers.
Operator: [Operator Instructions] There are no more questions at this time. I would now like to turn the conference back over to Matthias Pfeifenberger.
Matthias Pfeifenberger: Akash from JPMorgan, who was not able to join the call. The question is, can you tell us about activity you're seeing in synchronous condensers for the first 9 months? What is the book-to-bill in the business? At the last Capital Markets Day, you said this is about EUR 100 million business. How fast do you see this growing? And can you talk about investments in this business?
Joachim Schönbeck: So, synchronous condenser book-to-bill is significantly above 1. I would say a very solid pipeline of projects to come that is across all regions. The more renewable, especially the more solar and wind is installed, the higher the demand on synchronous condenser. I would say the market outlook we gave at the Capital Markets Day of EUR 100 million share of ANDRITZ, I would say, is probably rather on the low side.
Matthias Pfeifenberger: Perfect. I think, if there are no more questions, this concludes our today's Q3 earnings call, and I'd like to hand back once more to Dr. Schönbeck for concluding remarks. Thanks a lot for joining.
Joachim Schönbeck: Yes. So, thank you very much for attending the call. I appreciate your detailed view to our business. The questions you asked point out that you probably know ANDRITZ even better than I do it. Yes. So thank you for that attention, and looking forward to deliver to you also a solid and good Q4. And see you then next year. Thank you very much.
Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.