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Operator: Good day, ladies and gentlemen, and I warmly welcome you to today's conference call of the Friedrich Vorwerk Group SE following the Q3 figures of 2025. And as always, I'm delighted to welcome CEO, Torben Kleinfeldt; and CEO, Tim Hameister. So the gentlemen will speak shortly and guide us through the presentation and the results. And afterwards, we will be happy to take your questions if you may have. And having said this, Mr. Kleinfeldt, the stage is yours.
Torben Kleinfeldt: Thank you very much, and also a very warm welcome from my side. My name is Torben Kleinfeldt, CEO of the Friedrich Vorwerk Group SE. I'm on board Friedrich Vorwerk already since 2001 from profession civil engineer. And I'm responsible of the total overall strategy of the company group and also still focused on a lot of hydrogen projects, which are in progress here in our company's group. Yes, a little bit about Friedrich Vorwerk in detail to all of us who have not seen us yet, Friedrich Vorwerk Group is active since 60 years in the industry of energy infrastructure. The company group is very well represented in the northern part of Germany with 40 locations, about 2,200 employees by today. And we can look back on a very strong growth over the last 5 years with an annual growth of above 20% each year. Our main markets here in Friedrich Vorwerk is, as I said, energy infrastructure, mainly covering natural gas, electricity, hydrogen and we have a -- other piece of adjacent opportunities where we cover all our expertise and services in biomethane treatment and also in district heating. And the business update will today will shine another light on some upcoming projects, which would be within our adjacent opportunities here as well. Main customers, of course, the large TSOs operating here in Germany. So on the electricity side, we see TenneT, Amprion, 50Hertz. On the gas side, it's more Open Grid Europe, Ontras, Gascaribe, these are our main customers, but for very special services also serving the chemical and petrochemical industry here in Northern Europe. Due to the energy transition going on here in Germany and in Europe, we can look back on a very strong order backlog today, still having more than EUR 1 billion of orders in the book by today. So what is Friedrich Vorwerk actually doing? Very short update on that or not an update, but a very short introduction to our business. This slide basically represents what we are doing. On the top, you can see our activities within the natural gas infrastructure. So usually, we are able to set up LNG plants or cross-country pipelines and cross-country stations where Germany is taking over natural gas from various sources outside Germany. Then we are able to engineer and also construct large diameter pipelines to transfer the natural gas to, for example, storage facilities or compressor stations, which are needed roughly all 200 to 300 kilometers in the pipeline to boost the flow of gas and finally bring the natural gas to the consumers. And right at the edge of the consumers, which could be a big city or an industrial plant, it requires also gas pressure, let down and regulator stations to supply the natural gas in the right pressure and the right volume. And of course, there, it needs to be metered for later invoicing as well. So Friedrich Vorwerk is basically able to engineer and also set up, maintain and operate all these components of the natural gas split. Pretty much the same activities. We can supply on the future hydrogen grids, which you can see at the very bottom of this slide, except that, of course, hydrogen cannot be found in nature. So it has to be made by splitting water into oxygen and hydrogen. This is basically done by large electrolyzer stations, where we are also able to supply engineering services, and we have a full range of small to medium electrolyzer arrays from 1 megawatt to 5 megawatt, which we can supply to the market. Business in electricity infrastructure, which is shown here in the middle of this slide, looks a bit different. Usually, our services start when we take over underground cable lines from offshore units. So when new wind farms that are situated outside in the North and the Baltic Sea, cables have to be transferred to land. There's a so-called landfall, which is typically done by a horizontal directional drilling method to under board the crucial environmental areas on the shores of the North and the Baltic seas. And then we are able to engineer and also run underground cables to the next transformer of converter stations with laying cables, we can handle up to 525 kilovolt in transmission voltage. And we are also able to engineer and set up transformer inverter stations, inverter stations unnecessary to switch the current from AC to DC. And of course, in today's grids, we can also connect the electricity grid to the heat grid. So we are also able to engineer and set up large-scale power to heat stations. Okay. Short business update, this time, not on our core markets, electricity, natural gas and hydrogen, but on some adjacent opportunities, which came up lately. First of all, I want to focus on what we call the NATO grid. The NATO grid here in Northern Europe has been set up in the cold war area. So in the -- starting in the '70s and '80s, on the right hand, you can see a sketch of the existing NATO pipeline grid, which is basically transferring jet fuel to crucial air fields of the [indiscernible] and the allies as you can see, basically, the NATO pipeline grid ends pretty much in the -- at the former inner-German border. And now since activities are going more to the east, this nature pipeline grid will be expanded by another 300 kilometers towards the Polish German border and then also into Poland and possibly also to the Baltic states. Since this is the pipeline system, pumping fuel, this is, of course, within our scope and it's a very nice addition to our usual portfolio estimated costs to set up this pipeline grid is roughly EUR 5 billion and also the first steps and the signing of contracts with Poland has been done in October. So we really see that this project is being kicked off, and we'll probably see tenders from the NATO grid in 2027. Next and also very interesting for us is decisions made by the German government concerning ramp-up of hydrogen activities here in Germany. First of all, of course, German government has emphasized that they're still looking for further investments in the pipeline infrastructure and also the plant infrastructure mainly focusing on setting up new electrolyzers to fill the hydrogen core grid, which is planned to be set up here in Germany until 2035, which, of course, requires not only the import of hydrogen, but also the production of hydrogen. They also made decisions to accelerate the tenders by digitalization and which is, I think, the most important decision which has been taken that they also accept not only green hydrogen, but also other colors of hydrogen to be transferred in the corporate and make it available for the consumer. So that's very important decisions for our hydrogen activities. And at the moment, we really see that both on the pipeline side and on plant construction sites, new projects pop up, and we received quite a bit of inquiries for setting up electrolyzers and also pieces of pipeline grid, which is summarized under the core grid here in Germany. And the third outlook I want to show is activities in CO2 transport because also here, very important decisions by the German government have been made in early November. So for example, they've agreed in general that we are able to split up the CO2 for certain industries, which cannot eliminate the emission of CO2. So for example, the cement industry is one of the core industries where you cannot get rid of the CO2 except to capture it and then transfer it to a storage facility. And of course, one of our largest customers, Open Grid Europe is already looking into the future CO2 grid, which will connect the emitters of CO2 to the neighboring country, Belgium and Netherlands because these countries are able to take CO2 and pump it in former gas and oil wells to store there for a long, long time. And also one of the CO2 clusters, which is planned is the so-called Elbicluster, which is pretty much in front of our doorstep to transfer CO2 from the cement industry to the ports on the North Sea and then, there it will be liquefied and brought by shipped to Norway, and Norway is able to take over the CO2 and also store it in old natural gas wells. That's it from my side for the moment. And with the update of our future -- possible future activities, and I would then hand over to my colleague, Tim, who will present the financial performance of the company's group for the third quarter.
Tim Hameister: Yes. Thanks a lot, Torben . Good afternoon, ladies and gentlemen, and a very warm welcome to our earnings call and the Q3 figures. My name is Tim Hameister, CFO of Vorwerk. And I'm very pleased to walk you through our extremely strong Q3 figures and the updated outlook today. After reporting record revenue in the second quarter, we once again managed to beat that figure in the third quarter, achieving quarterly revenue of more than EUR 200 million for the first time in Vorwerk's history. Despite ambitious year-on-year figures, this represents growth of a fantastic 39%. Although the start of the third quarter in July was mixed due to challenging weather conditions, this was more than offset in August and September. The continued success in recruiting contributed significantly to this, enabling us to hire more than 100 new employees in the third quarter alone, also including a small M&A transaction consisting of roughly 35 employees. From a project perspective, the largest revenue drivers in Q3 were, of course, still the large-scale Anord project, followed by a number of pipeline projects, such as the EWA pipeline as well as several large volume gas pressure regulating and metering stations, which ensured high capacity utilization for our plant construction division. Consolidated revenue for the first 9 months of the year amounted to EUR 505 million, representing growth of 49% compared with the previous year. In both percentage and absolute terms, our electricity segment was once again the growth driver. However, it's also noteworthy that absolute revenue in the natural gas segment increased slightly again compared to the previous year, particularly due to the high number of plant construction projects. Revenue in the clean hydrogen and adjacent opportunity segments is roughly on the same level as the previous year. However, the development of profitability in the third quarter is particularly remarkable. Once again, the already very solid EBITDA margin of 21% in the second quarter was improved by another 4 percentage points to 25.4%, compared to the previous year, this represents an increase of 8 percentage points and a doubling of absolute EBITDA to over EUR 50 million. The EBIT margin even rose by 5 percentage points to a new record high of 19.1%, corresponding to EBIT of EUR 45 million alone in Q3. All segments contributed to this improvement in earnings are the largest increases that were achieved in the pipeline construction projects. In addition, the share of profits from joint ventures, [indiscernible] doubled compared with the previous year due to the higher number of projects awarded in this specific contract structure. Accordingly, the 9-month period closed with EBITDA of EUR 105.8 million, corresponding to a margin of 20.9% and adjusted EBIT of EUR 87.3 million or an EBIT margin of 17.3%. These fantastic results include minor catch-up effects in the mid-single-digit million euro range from variation and change order negotiations, but as already in Q2, the vast majority was achieved with our ongoing projects fueled by our high-quality order backlog. Now let's take a look at the development of order intake. In addition to the conventional order intake figure, we've introduced a new KPI with the half year figures, the total project volume acquired. And I would like to use the opportunity to once again explain the differences between the two key figures to all shareholders who were not present at our last earnings call. So there are basically two different types of project structures. In Option A, Vorwerk acts as a general contractor and handles the entire project through its own P&L statement, which means that 100% of the order value goes into order intake and later into revenue. And the second option, the client awards the entire project to a joint venture. And in this constellation, we do not show the proportional share of the total order volume and conventional order intake. Instead, we are only allowed to show the supply of personnel and equipment to the joint venture, which can, in some cases, be significantly lower than the proportional share of the total project. The order intake figure, therefore, does not reflect the actual project volume handled by the Vorwerk Group, which is why we also report this new K figure. And this KPI also includes the proportionate project volume from the joint ventures in which Vorwerk involved. And therefore, in our opinion, provides a more transparent view of the actual order situation, regardless of the type to contract structure. So the total project volume acquired rose by 45% to EUR 886 million in the first 9 months of 2025, while conventional order intake at EUR 419 million is around 20% below the same period last year. The main reasons for this are, on the one hand, the shift in the order structure toward joint ventures, especially in H1 2025. And on the other hand, our already well-filled order book. Nevertheless, we've also acquired many new and attractive projects in 2025. Some of them, Torben will present later in this call. The order backlog, which corresponds to order intake declined slightly to EUR 1.1 billion for the reasons stated before and currently consists of around 70% order volume attributable to the electricity segment. In addition to the strong development in both revenues and profitability, the development of net cash is impressive as well. Compared to Q3 2024, we've increased net cash by EUR 80 million to EUR 112 million. And thereby creating an excellent basis for further organic and acquisition-driven growth. The main reasons for the significant increase are, firstly, significantly higher profitability. Secondly, an improved negotiation position with regards to the payment terms in the contracts and thirdly, improved working capital management with regards to our internal processes and project controlling. Yes. And based on the strong performance in the current year and especially in Q3 and an unchanged positive outlook, we raised our guidance already for the second time this year, a few weeks ago. We now expect revenues in the range of EUR 650 million to EUR 680 million with an EBITDA margin of 20% to 20%, 22%, which corresponds to a margin improvement of 5 percentage points at the midpoint year-on-year. Now let me now hand it back to Torben for some updates on the ongoing and upcoming projects before we open the floor to your questions.
Torben Kleinfeldt: Tim, thank you very much. Yes, very proud to present another major pipeline project, which will be executed in 2026. It is a project driven by German Gasunie division. The project is strongly in conjunction with the ETL 182, which is a 56-inch pipeline running from Stuttgard at the river banks of the Elbit towards the city of Bremen. In the end, this pipeline will be constructed also by a joint venture driven by Friedrich Vorwerk to bring regasified natural gas from Stuttgard to a hub in close to Bremen and the ETL 179.200, which has been awarded in the last month also to the same joint venture will basically connect the Dow Chemical facility, which is located in the northwest of the city of Stuttgard to this new pipeline grid. It is a 900 so 36-inch pipeline, roughly length is 18 kilometers, very difficult terrain for constructing pipelines. But since it is tight conjunction with the ETL 182. This is a very nice top-up to the existing project and we are actually managing this project also with the same resources as the other project. So second project I would like to represent is the TenneT project, which has already been ongoing this summer. It is one of the landfall projects, which is driven by TenneT, basically a framework contract where we are entitled to cross different islands north of the mainland of Germany in the North Sea by means of horizontal directional drilling. We have to execute in total 39 boreholes for the later use of -- with the cable -- with the high-voltage cables. We have already executed five drillings under the island of Baltrum this year and basically stopped operations now over the winter and we'll continue with the operations on the island of Baltrum next year in May when the window for working in the [indiscernible] is being opened. And once all the cables under the island of Baltrum have been laid, we'll shift to the next islands and then also to Buzon, which is shown here on the top right side of the picture. Friedrich Vorwerk and [indiscernible] share here in this joint venture is roughly 40%. So we'll also be entitled to do most of the drillings, which are necessary to complete all landfalls. Third project I want to focus on today is also from natural gas or hydrogen market. It's a plant construction project, a rather large gas metering stations and pressure letdown station, which is located at the compressor station in Boa, which is in former Eastern Germany. This project is set up by Ontras Gas Transport, and it is necessary to transfer hydrogen, which is taken over from the YAGAL pipeline and will be supplied into the grid of Ontras Gas Transport, where it is then transported to numerous industrial consumers in Sachsen and Sachsen-Anhalt. Friedrich Vorwerk not only has the contract to set up this plant, but also to do the full detailed engineering scope. And we have already started executing the engineering part of the project and will then be executing the actual project in 2027 and 2028. So here also a very nice project for our Plant Construction division, not only here in Halle Saale, but also in [ Vismore ] for the prefabrication activities, which are necessary to perform this project. Final project I want to focus on is another district heating project. You know that we have just finished the so-called [indiscernible] in the city of Hamburg, which is a large diameter district heating system, bringing heat from industrial producers in the port area of Hamburg to the north. And the follow-up project is, so to say, the -- it's called the [indiscernible], which in the end then transports the heat from these industrial consumers more in the middle of the city of Hamburg. This is a project in tendered in 3 lots. We have actually been awarded with lot number three. Pipeline here is also flow in the return line, diameter DN600 and 700 millimeters right in the middle of Hamburg. So very difficult inner city terrain to execute. But since we have a very well trained and very well executing district heating team here, we are really happy to have won this project so they continue -- they can continue their good work from the previous projects. And also looking in the future, there will be numerous district heating projects, especially in the city of Hamburg. For example, we are at the moment working on the tender for constructing also a large diameter pipeline grid towards the airport of Hamburg, which will later on supply the actual airport and also the Lufthansa facilities, which are located right at the Hamburg Airport. Yes. Now final slide from my side, at least on the technical part, is a short update on our newly developed welding system, the so-called PX2. PX2 has been developed and is also operated by our subsidiary, 5 CTECT welding system, fully automatic, being able to trace the actual well, so it can adjust automatically. It doesn't need an operator anymore to be run around the pipeline. system has first been tested on the EWA pipeline this year and has now continued on the pipeline. First experience, very high productivity, very little weld defects. We had a defect quota of below 1%. So repair rate below 1%, which is very unusual in the past with other welding systems, we had almost double-digit repair rates. So we are very, very happy to have developed the system, and we were already able to receive contracts outside Germany, for example, in Croatia and Turkey. And at the moment, we are actually supplying welding services in Turkey to a 40-inch pipeline and quite happy with the production. We are doing almost 100 wells a day, which is a very, very good performance and still with a very low repair rate. So the investment in the development of the new PX2 system is, in general, very good for us and opens up a complete new market also on international projects. And of course, finally, switching back to our HR department, I think Tim already focused on it. We have grown by more than 13% in the third quarter of 2025. So taking on a lot of new employees. And in the end, that has really helped for numerous projects, and we are -- we hope we can keep up the pace with our employees and hope with all these people on board for a very successful 2026. This is the end of our presentation, and we are, of course, very happy to take your questions.
Operator: [Operator Instructions] We received the first question, or hand from Mr. Stueben.
Lasse Stueben: I'll have three questions, please. First of all, the margin profile in the natural gas segment, it was really high again in Q3. I know that's probably in part due to those negotiation payments. But I'm just wondering, can you just give some more explanation to that? And what we should be looking for in terms of the margin profile going forward? The second one is you spoke in the past about a potential delay on the Anord project. I just wanted to ask how that is looking or if there's an update there and what the possible impact is for you? And the third one is the duration of your backlog now. That EUR 1.1 billion that you have in terms of the phasing, does that already cover you for potential double-digit growth in 2026? Or is there still, I guess, some gaps to fill with some short-term projects for 2026 to potentially achieve double-digit growth?
Tim Hameister: Yes. Thanks for joining today, Lasse. I would like to start with the first question regarding the segment profitability. In Q3, there were actually two drivers for the strong margin for the natural gas margin. On the one hand side, I already mentioned, there were some negotiation one-off effects from change in variation orders from past projects. And the second effect here was the high share of joint venture profits because this structure is mainly used at the moment in pipeline construction projects. Regarding your second question, Anord, I still foresee that there will be delays in construction due to a lack of building clearance, especially in terms of missing permits, and we are still in constructive discussions with the client to adjust also the relevant targets for the bonus-malus clause since it's not our risk here in the end. So the customer is responsible for obtaining the permits. And we expect to have a result here on this before Christmas this year. Regarding the third question, the backlog. There are just a few projects such as the [indiscernible] project, Torben , as presented, the [indiscernible] duration until 2028. But apart from that, the majority of the backlog will be transferred into revenue in 2026 and 2027. And therefore, we have a very strong basis for further growth in both of the 2 years.
Operator: All right. Thank you so much. Yes, no, we did not receive any further questions. So having said that, we received -- yes, just go ahead with you. The follow-up.
Lasse Stueben: Yes. Just a follow-up, please. And then just on guidance, revenue guidance for this year. I mean, we've seen in last year, I know it was probably a bit special with Q4 being stronger than Q3. Guidance this year implies that Q4 is quite a bit weaker. So I'm just wondering, sort of -- what the thoughts are behind that and what that kind of means in terms of also potentially a contribution from Anord. I saw it was roughly EUR 180 million in 9 months. I think originally, you were guiding for I think, EUR 250 million or above for this year. So I'm just wondering if that's still current or if we should be modeling a bit less than EUR 250 million from Anord.
Tim Hameister: So based on the current forecast and the Q3 figures, this would imply revenues between EUR 145 million and EUR 175 million for the last quarter this year. When you think about the usual seasonality of our business, Q4 is easily weaker than Q2 and Q3, although we had an extraordinary strong Q4 last year. But in general terms, it's are more likely to expect a weaker Q4, at least in terms of revenue due to the weather conditions and less working days since we usually close the construction sites mid-December. And of course, we also try to reflect risks and uncertainties from our project business within the guidance. Regarding Anord due to the missing permits on some of the sections on the track. There will be shifts of revenue to 2027 as well, at least to the first half of 2027. And therefore, we expect that the revenue contribution this year will be a bit lower compared to previous expectations.
Operator: And in the meantime, we received questions in our chat box. And the first one is, to put it simply, which is the better leading indicator of future revenue recognition, the order intake or the new KPI total project volume in your opinion?
Tim Hameister: So in our opinion, it's of course, the total project volume acquired. That's the reason we have introduced this figure because can transparently show how much project volume is in the end, handled by the Vorwerk group. Although it's important to say that the total project volume is not the figure that will translate into revenue in the next years. Only the order intake will translate into revenue. However, you will see higher profit shares from these joint venture constructions so that in the end, the total EBITDA will be the same regardless of the contract structure.
Operator: Next question, how likely is it that you will be able to generate revenues with the CO2 transport network already next year, assuming the Federal Council's approval is greater this year?
Torben Kleinfeldt: We do expect not to have any revenues in CO2, at least not in the pipeline business because the first project is being set up here between cement industry farm in [indiscernible] in the Port of [indiscernible] We do expect that public permits for this projects will be applied for next year. We expect to have a duration of about 12 months to get the permits approved. So construction will probably be '27, '28, '29, but we already have some revenues in the CO2 business, we are delivering CO2 purification and liquification plans, especially as an add-on to our biomethane treatment plants. So this liquefied CO2 goes in the food and also in the beverage industry. And we have already supplied a couple of CO2 electrification plans to the market until today.
Operator: And the next question, what are your plans for share buybacks?
Tim Hameister: Well, we have plans for at least capital allocation, not necessarily for share buybacks our priority number one, to use our cash is, of course, still organic growth, which means that we continue to invest primarily in technical equipment and machinery. In addition, we have to take into account the working capital swings across the year and maintain a very solid balance sheet at all times as this is part also of the pre-liquification processes for our projects. Yes. In addition, we are keeping certain amounts of cash available for potential M&A transactions. And we also expect to pay a higher dividend in the next year since this is linked to the net profit of the company.
Operator: And another last question. Do you expect a higher margin in the electricity segment from H2 2027 onwards. Once Anord is completed and follow-up projects will not be executed via IPA?
Torben Kleinfeldt: Yes, of course, once the dilutive effect from the Anord project has run out in the next years, and there are no follow-up projects with this specific contract structure. We will, of course, expect higher margins in electricity as well.
Operator: So with you now chat and in the queue, there no further question pops up and that seems, we will come to the end of today's conference call. So thank you, everyone, for your showing interest in the Friedrich Vorwerk Group SE and also a big thank you to you, Mr. Kleinfeldt and Mr. Hameister for the time you took today. It was a pleasure to be a host, wish you all a lovely remaining day or evening and hand back for some final remarks, which concludes our call.
Torben Kleinfeldt: Yes. Thank you very much for hosting us. Also thanks for listening today. And I can only say let's keep fingers crossed that the weather stay with us to make it a very, very successful year here in 2025 for Friedrich Vorwerk and hope to come back with good news in the beginning of next year. All the best and bye-bye.