Alfen Aktie

Hello, and welcome to the Alfen 2026 Third Quarter Results Conference Call, hosted by Michael Colijn, CEO; and Bart Meussen, Interim CFO. [Operator Instructions]

I would now like to hand the call over to Michael Colijn. Mr. Colijn, please go ahead.

Thank you, [ Elba ]. Good morning, everybody, and welcome to Alfen's 2026 q3 earnings call. Thank you all for taking the time to join us. I'm Michael Colijn, CEO of Alfen, and I will be leading this trading update with you today. Joining me is Bart Meussen, our Interim Chief Financial Officer.

Today's agenda is structured to give you a comprehensive view of developments during the third quarter of 2026. I'll begin with the highlights. We'll then dive into each of our 3 business lines. Bart will follow with our financials, and we will conclude with our outlook before opening the floor for your questions during Q&A.

Let's start with this quarter's highlights. Revenue came in at EUR 99.1 million, compared with EUR 104 million in Q3 2025. The year-on-year movement is largely a function of phasing within Energy Storage Systems, and it was fully anticipated. The number that better reflects the underlying momentum of the business is our year-to-date revenue, which grew 14.3% to EUR 360.6 million, up from EUR 315.6 million in the first 9 months of '25. That is a solid result and gives us confidence in our full year position.

Our group gross margin came in at EUR 30.5 million or 30.8% of revenue, compared with EUR 29.9 million and 28.7% of revenue in Q3 '25. The improvement in margin percentage was primarily driven by the release of project contingencies on the completion of large energy storage projects.

Adjusted EBITDA was EUR 4.0 million or 4% of revenue, compared with EUR 6.9 million and 6.7% of revenue in Q3 '25, reflecting revenue phasing throughout the year and transformation efforts with a planned temporary increase in personnel expenses.

I'm also happy to announce that we renewed our credit facility during the quarter with 3 years until October 2029 at the same terms with 2 1-year extension options. Bart will take you through the details of that later on.

Finally, and importantly, we are reiterating our full year 2026 guidance. With 3 quarters behind us, we expect revenue to come in within the upper half of our EUR 435 million to EUR 475 million guidance range. Adjusted EBITDA margin is expected to be in the lower half of the 4% to 7% range and CapEx will remain below 4% of revenue.

At the end of October, Alfen hosted a conference with the title Generation Electric, an event bringing together more than 300 partners, industry experts and stakeholders. The event was held for the second consecutive year. The program combined keynotes from industry experts on the developments shaping Europe's energy transition with showcasing Alfen current and future solutions across our business units. It is a clear step in strengthening Alfen's presence in the market and reflects the sharper customer focus.

Turning now to Smart Grid Solutions, which have delivered another strong quarter. Revenue came in at EUR 54 million, up 10%, compared to EUR 49 million in Q3 '25. That growth was driven by 2 clear forces, sustained high volume demand from Dutch grid operators compared to last year and the continued momentum of our Finnish subsidiary, Alfen Elkamo, which recorded its highest quarterly revenue to-date.

In terms of revenue mix, 70% was generated by grid operators sales and 30% by project sales. Operationally, we delivered 870 substations in the quarter, 621 in the Netherlands and 249 in Finland.

Adjusted gross margin came in at 23.7%, compared with 25.9% in Q3 '25. The modest decrease reflects the higher share of grid operator products in the mix, which carry margins at the lower end of our range. This is within our expected gross margin range of 20% to 30%.

Let me now turn to the market context for Smart Grid Solutions. The picture remains balanced and unchanged from what we have shared throughout 2026. Regulation is moving in the right direction, while the requirements to scale continue to set the pace in the short-term. On the one hand, the regulatory agenda moved forward again this quarter. At EU level, member states agreed their position on the Grids Package aimed at faster permitting and more grid investment. In the Netherlands, the cabinet set out its crisis legislation for grid congestion with the first measures taking effect from 2027. And in Finland, grid operators continue their large-scale renewal programs towards the 2036 security of supply targets.

On the other hand, the known constraints are still there. Permits, transmission grid capacity, land to place substations, component deliveries and installation capacity still determine how fast our customers can build today. The NGO Netbeheer Nederland latest progress report captures this well. Grid operators are building more than ever, but demand for grid capacity is still growing faster than the grid can expand.

I'll share one concrete example to illustrate that we see a similar pattern. Our transport distribution stations continue to grow year-on-year, and build times across the sector are coming down. Yet finding locations and permits for these stations remains the bottleneck as reflected by one of the Dutch grid operators in the media recently.

For Alfen, this underlines our view. The long-term need for grid infrastructure is clear and growing. In the near term, however, the pace is set by execution in the field, and that is how we are planning for it.

Moving to EV Charging, where the story this quarter is one of transition with real signs of progress emerging alongside near term challenges that we are managing with clear intent. Revenue came in at EUR 26.8 million, a decrease of 6.7% compared with EUR 28.7 million in Q3 '25. That decline reflects 2 dynamics running in parallel, the phaseout of our previous generation products and continued competitive pressure in the residential segment. Neither is unexpected and both are accounted for in the strategic choices we have made to reposition the portfolio for the long-term.

What is encouraging is that we have a new platform and it is beginning to deliver. The phased introduction of new features throughout '26 is starting to pay off in a tangible way, most visibly in the year-on-year growth in the business segment, where our Eve Double Plus product is gaining clear traction. Seeing growth there in the face of broader revenue pressure is a meaningful signal.

On volume, we delivered 25,850 charge points in the quarter, a decrease of 10.6%, compared with the 28,900 delivered in Q3 '25. Geographically, 61% of our EV Charging revenue was generated outside the Netherlands, which speaks to the breadth of our pan-European footprint and underscores that we are not dependent upon a single country.

Gross margin was 40.9%, compared with 43.1% in Q3 '25, with the modest compression reflecting ongoing sales campaigns. Importantly, the margin remained above the midpoint of our 35% to 45% guidance range, which we view as a solid outcome given the current environment. We are clear-eyed about the work still ahead in this segment, but the strategic direction is set. The new platform is gaining traction, and we remain confident in the path back to growth.

Moving on to the market context of EV Charging. Electric vehicle adoption in Europe accelerated in the third quarter. Battery electric registrations grew by 55% year-on-year on average and every market on this chart grew. France more than doubled and Germany was up 77%. EV registrations in our core markets are back on track. After a slower first half year, the Netherlands grew by 51% and Belgium by 34%. This acceleration is happening while European policy is uncertain. The European Commission has proposed to soften the 2035 targets for new cars, and that discussion is still ongoing. Yet the market keeps moving forward.

First, buyers now have a much wider choice of more affordable electric models. Second, batteries keep getting better and cheaper, which means more range, faster charging and lower prices. And third, higher fuel prices make driving on electricity even more attractive. Finally, the fourth point, EV Charging infrastructure is more accessible and reliable.

In sum, EVs have a better total cost of ownership and are more convenient. And that is why uptake is becoming structural rather than driven by regulation alone. For Alfen, this makes the trend irreversible and supports underlying demand for charging infrastructure across our markets, independent of the direction of the European debate.

Turning now to Energy Storage Systems, where the headline revenue number requires some context to be read correctly and where the underlying story is considerably more positive than it might first appear. Revenue in Q3 was EUR 18.3 million, a decrease of 30.4%, compared to EUR 26.3 million in Q3 '25. That decline is a direct consequence of phasing, not demand. The large projects that reached completion this quarter had the revenue recognized progressively throughout the first half of the year as components were placed on site and construction advanced.

By the time we reach Q3, the bulk of that revenue had already been booked. This front-loading was anticipated and it is fully consistent with how we have guided the market to think about the shape of our energy storage revenue across '26.

Running alongside that, mobile storage systems continued to deliver significant year-on-year growth, a part of the business that is scaling with real momentum in the last 12 months, driven by power rental companies that take our batteries all over Europe, replacing diesel generators at construction sites, events, charging hubs and temporary projects, providing reliable and clean power. Going forward, this segment should supply the energy storage business with a more stable baseload revenue.

On gross margin, the picture is genuinely strong. Margin came in at 37.1%, compared with 18.2% in Q3 '25, well above our expected range of 15% to 25%. This was driven by the release of one-off project contingencies upon the completion of several large projects, combined with meaningful cost efficiency improvements in executed projects. We are transparent that this level of margin is not the run rate expectation for that segment, but it does reflect the quality of execution our teams have delivered on these projects.

Turning to backlog, which grew to EUR 109 million at 30 September '26, up from EUR 93 million at the end of the first half. That growth was driven in large part by orders secured early in the quarter, and the backlog is now split EUR 23 million for the remainder of '26 and EUR 86 million carrying into '27. Orders signed in Q4 will add further to the 2027 revenue base. The underlying pipeline gives us confidence in our ambition to close the year with a backlog above the EUR 127 million level, which we held at the end of 2025. For the remainder of the year, we are actively focused on converting those opportunities before year-end. The fundamentals of this market remain compelling.

Let me now turn to project delivery, where we have reached significant milestones that strengthened our execution track record. With Return Antares and NOP Agrowind now in operation, Alfen has delivered the 3 largest operational battery energy storage systems in the Netherlands to-date measured by capacity. Together, these represent 180 megawatts and 522 megawatt hours of capacity. Return Antares in Waddinxveen, is the largest of the 3 at 100 megawatts and 200 megawatt hours. It has been operational since the end of September and is connected to the transmission grid. NOP Agrowind in Espel followed 1 week later, 49 megawatts and 196 megawatt hours co-located with wind power and delivered turnkey. FlevoBESS in Dronten has been running since November last year. At 126 megawatt hours, it is -- it was the largest system in the country when it went live. Three sites with 3 different connections and setups all brought into operation within a year. That is the execution capability customers look for as projects grow in scale and time to operation becomes an increasingly important criterion.

In total, Alfen has now delivered 2.8 gigawatt hours of battery storage to-date, and our role does not end at energization. All 3 systems are covered by long-term service agreements in line with our ambition to be a reliable life cycle partner for utility scale storage in Europe and support the buildup of a recurring revenue stream further.

With that, I'd like to hand over the call to Bart, who will talk you through the financials. Bart?

Yes. Thank you, Michael, and also good morning from my side. I will now walk you through our financial performance indeed for the third quarter. Starting with our top line. In the third quarter, we delivered a revenue level of EUR 99.1 million, compared with the EUR 104.1 million in the prior year. A strong performance in Smart Grid Solutions was offset by a decrease in EV Charging and Energy Storage Systems. As we have previously communicated, the energy storage revenue has been front-loaded in 2026, and this quarter's performance reflects that pattern.

Our adjusted gross margin increased slightly and reached EUR 30.5 million, equal to 30.8% of revenue, compared with EUR 29.9 million or 28.7% in Q3 2025. The group gross margin was strong this quarter, in part due to an outperformance of the Energy Storage Systems compared to its expected range. EV Charging and SGS reported within their expected ranges.

Operating expenses increased by 12.7% to EUR 26.7 million, compared with EUR 23.7 million in Q3 2025, predominantly driven by a 10% increase in personnel expenses resulting from our ongoing transformation. These amounted to EUR 19.6 million, compared with EUR 17.8 million in Q3 '25. This effect was planned for. The other operating expenses were at EUR 6.8 million and remained broadly stable throughout 2026.

Our EBITDA came in at EUR 3.9 million, down from EUR 6.2 million last year. As only a minor adjustment of EUR 0.1 million was recorded, the adjusted EBITDA resulted in EUR 4 million, equal to 4% of revenue, compared with EUR 6.9 million or 6.7% of revenue in the comparable prior year period. We saw a deleverage effect during the quarter, but again, all within expectations.

From a cash flow perspective, we generated EUR 1.2 million in cash flow from operating activities. Overall, we remained in a net cash position at the end of the quarter.

And lastly, I'm pleased to share that we signed a renewed credit facility agreement with the bank for 3 years until October 2029 with 2 1-year extension options. The revolving credit facility of EUR 50 million, the guaranteed facility of EUR 80 million and its financial covenants remain unchanged. The size fits the company's expected working capital needs. Securing this agreement well ahead of majority strengthens Alfen's financial foundation and gives the flexibility to execute our strategy. It also reflects the continued confidence our banking partner in the business.

With that, I'll now hand over the call back to Michael, who will walk you through our outlook.

Thank you, Bart. Let me now bring together our outlook for the remainder of 2026 and share our thinking on what lies ahead. We are reiterating our full 2026 guidance, and with 3 quarters now behind us, we have good visibility on where we expect to land. Revenue is expected to come in within the upper half of our EUR 435 million to EUR 475 million guidance range, a position supported by a strong year-to-date performance and the backlog we have in place across our business lines.

Our business line guidance for full year 2026 remains unchanged. Smart Grid Solutions is expected to deliver revenue growth across both grid operator products and project sales for the full year. In EV Charging, we are working hard to return the business to growth, but we are being realistic. Given the ongoing portfolio transition, we expect a revenue decline for the full year. In Energy Storage Systems, we expect full year revenue to grow year-on-year, underpinned by the backlog already in place.

On profitability, adjusted EBITDA margin is expected to be in the lower half of our 4% to 7% guidance range. This reflects the full year revenue mix shift towards Smart Grid Solutions and Energy Storage Systems, both of which carry lower margins than EV Charging as well as the continued investment in our transformation. We remain disciplined on capital allocation and CapEx will stay below 4% of revenue.

Stepping back, 2026 is a year of deliberate and fundamental transformation. The decisions we are making this year in our portfolio, our platform, our organization and our operational capabilities are designed to build a stronger, more resilient Alfen for the years ahead. They come with near term costs, and we are not shying away from that, but we are making them with conviction.

Looking into 2027, we are confident that the combination of this transformation and our outlined growth strategies will reignite consistent profitable growth. We expect to deliver year-on-year improvements in both revenue and adjusted EBITDA margin and the building blocks for that are increasingly visible across all 3 of our business lines.

With that, I'd like to open the floor for your questions. Thank you.

[Operator Instructions] The first question comes from Nikita Papaccio from Deutsche Bank.

I would have 3. The first one is on your elevated personnel costs in Q3. Should we expect the same level in Q4 as well? The second one is on your full year '26 margin guidance. Taking the lower end of the guidance would lead to a negative Q4 margin. Do you have any comments here? Or would you rule it out and say low but positive number? And the third one is on your 2027 outlook. I mean you stick to your expectations that 2027 will show positive developments versus 2026. Can you walk us through the main improvements you expect for this?

Yes. Thanks for the questions, Nikita. I might take the first 2 and then on the outlook, I give the floor to Michael, obviously. Yes, on the personnel cost. So during the H1 publication, we mentioned an increase of the personnel costs year-on-year and H2 versus H1 in 2026. Personnel costs, including direct labor, so really relating to activity mix, but also indirect staff. And talk about the latter that is -- that has been for us a continuous balance, so the indirect staff, continuous balance between progressing on the transformation at the one hand and strict cost control. Yes. And I guess in Q3, we found that balance. So cost levels were in control compared to H1. And we strive to keep them in control, obviously, also for Q4. So if we would do well in that respect, H2 would be give and take the same as H1 as we see it now. That's on the personnel cost.

Then on the margin development, yes, basically explained by Michael, we reiterate the outlook and gave some specific guidance on that margin item, namely in the lower part of the bandwidth. The final result at the end of this year is basically dependent upon revenue level, but especially mix at the one end, the ability to cover our organizational cost to a well extent and the personnel cost in general compared to last year, like I said, higher than last year due to the transformation. Please recognize that in Q3, you might have seen that we had some one-off -- positive one-off effects in our energy storage business. They won't come back in the fourth quarter.

So all-in-all, I really don't want to give an exact number here, but the dynamics underlying these I just mentioned, lower part of the [ band ].

Thanks, Bart. On the third question, the outlook for 2027, we really spent quite some time in 2026, making sure that the business internally is set up for success. As we described earlier, we spent quite some time on culture and structure. The structure is now in place in terms of the business unit setup. And on the culture, we defined our principles, our guiding behaviors and also our purpose. We are living that now. And what we see is that everything is measured against those -- the purpose and those behaviors. And on the structure, what we see is that as the business units become more mature in their operating, then we start to see efficiencies there, which really also bring some additional benefits in terms of higher margins.

Our full 2027 outlook, we said profitable growth. It means compared to 2026, we expect to make a step-up for revenue, but we also expect to make a step-up in terms of EBITDA. And I'm really happy to give guidance on that at our next earnings call in early '27.

The following question comes from Luuk Van Beek from Degroof Petercam.

A couple of questions. So first, on Energy Storage Systems, which obviously was very front-end loaded this year. Can you give any -- and you also mentioned that you see a higher baseload and a more stable pattern going forward. But based on your current order book, should we expect a more stable pattern in revenue? Or will it also be front-end loaded? Can you give some guidance on that?

Then in the press release, you mentioned the supply -- the tight supply situation. Can you elaborate on which components that involves? And if you see any impact on your input prices and gross margins going forward? Then thirdly, on the personnel costs, you mentioned that you are now having a balance between cost control and basically, the investments in the transition. Would that also mean that once the transition is complete, your run rate of personnel costs could be at the current level or even below?

And finally, can you comment on the mix effect of -- on gross margin in the EV Charging and especially if you see that -- if you experience any support from the new models that are more efficient to produce and may generate a higher margin?

I'm sorry, Luuk. The last question, could you repeat that one? We didn't quite hear.

The gross margin in EV Charging, if there's a positive effect from the move to the new, say, new generation of chargers and the new platform.

Okay. Wonderful. Happy to take the first question on ESS, and then I think the second and third question for Bart. First one on ESS front-loading. As mentioned, what we see is for the mobile batteries, we see the volume increasing and that starts to provide a nice stable and predictable baseload for our battery system business. But there is, however, and that is if we score 1 or 2 of the larger projects that are now also in our pipeline, they do have a quarter-on-quarter effect. If they are towards the end of the year, they can even have a year-on-year effect, which we try to mitigate by having smoother project accounting, but I cannot eliminate fully that there is some quarterly effect of large battery systems still to be seen in '27.

And a quick follow-up for batteries. How much of your revenue is now in ESS?

Still, I'm a little reluctant to give specifics there, but I think what we see is that it is becoming more significant and it starts to be a baseload. Perhaps we can have a look at that later and come back to you on that.

Yes, thanks. And then indeed, on the question of the supply market, is something we carefully follow and monitor. We recognize constraints in e-components, in transformers, inverters, leading to higher prices and basically also longer lead times. No material effect for this year, a bit more next year. And if we foresee, we build up stock, like I said earlier, inventory, but not across the board, very focused on specifically the components we need. So that might be the answer on that question.

Cost control, indeed, direct and indirect personnel, H2 versus H1, the indirect staff very much related to the transformation, which we run. Transformation won't be over before Christmas, and we continue to transform -- but the broader effort involved will decrease as, of course, the size is now and the main focus is for 2026. So throughout the year and especially throughout the early part of '27, we will decrease efforts and result in also decreased personnel costs there.

I think there was one question from Luuk that was regarding the gross margins on EVC.

Yes. Yes. So there is this mix effect of phase-out of the old -- the current models on the old platform and the phase-in of especially the business charges on the new platform, that has a mix effect, a net effect on not only revenue, but especially also gross margin. That's what you see. Thus we'll continue to see that net effect and that change also for the coming quarters. For Q3, we ended up well in the middle of the range we gave earlier. And that range we keep going forward, obviously.

The next question comes from Ruben Devos from Kepler Cheuvreux.

I had a question on EV Charging. I think in your slide deck, you show European Battery Electric Vehicle registrations going up 55% in Q3, with the Netherlands and Belgium rebounding. Of course, your charge point deliveries, I think they fell 11%. I mean, it seems like business growing. So the pressure seems to be in residential, right? So maybe looking at '27 as well, when do you expect units to return to growth here? And how much could the home charger change in '27?

Ruben, thanks for the question. I think what is indeed interesting is that on the software platform side, we see the stability and the features that we wanted coming in across the portfolio. And on the business chargers, indeed, we saw stronger commercial traction with growth there in volume and revenue. We just launched the home charger last week. And as we start to ramp-up for mass production and delivery, we would expect to see an effect of that in 2027.

And of course, we're excited about it. We've put a huge effort into making a smart charger with all the features that the market now expects and highly competitive and now all hands on deck to make it into a reality. But you're indeed right that the residential segment of the home charger is where we want to fight quite strongly, and we would expect to see volumes that are noticeable also in these calls from Q2 onwards next year.

Okay. And roughly what share of EVC revenue is now in business versus residential?

I think we've not disclosed that detail before. I think as we go into next year, we have to see if we could make something, a little more detail available.

Okay. Okay. And then on that Eve software platform, how many are now connected? And do you expect software to show up as -- when do you expect the software to show up as a revenue line here?

Software per se, I don't think will show up as a revenue line directly. What I can say is that the AHP platform on which the new chargers run has been in place from after summer 2025, so last year and the Eve Single Plus and the Eve Double Plus were the first chargers on that new platform. And so everything, if you go back since then, all those new deliveries are on that new platform. So the total sum is from around September last year, that volume until today.

Okay. Okay. And then maybe just one on SGS smart grids. I mean the deliveries were up 19% again and Elkamo had a record. I think there was also like a report from Netbeheer which is saying that basically the grid operators are building more than ever, right?

Yes.

With quite a catalyst in '27 as well in terms of legislation. So yes, what visibility do you have maybe on the grid operator in the Netherlands for next year? And do you have the capacity basically in both the Netherlands and in Finland to grow, let's say, double digits in volumes?

I like the sound of double digits. From our capacity point of view, certainly, we are ready and we are prepared for that growth. We've seen that, of course, coming for quite a while. The 2 big questions that remain in which we try to reflect as well in the webcast this morning is permitting speed and execution speed at the grid companies. Those are external to us in terms of bottlenecks for the deployment of the substations, but we are able to scale as the market grows.

Okay. And then just very quickly, like, does Elkamo carry actually a different margin from the Dutch business here?

I would say it's similar to slightly higher. And it's our subsidiary, 100% Alfen subsidiary, but it's kept at arm's length, so slightly different setup costs.

The next question comes from Tijs Hollestelle from ING.

I also have a follow-up question on the EV chargers. I think in the press release you mentioned the revenue per charger rose 4%, and that is quarter-on-quarter. That I think was also the trend in the second quarter. I guess that is also a direct impact of the more complex, more future carrying charges you introduced already. So the way I understand is you also have, let's say, commercial introductions planned for these chargers in end of Q1 next year, early second quarter. So strength of this average selling price in the charging business continue well into also the second half of 2027. And of course, I know that you don't have full visibility on the mix. But basically, all things equal with the introduction of your new models, is that kind of the trend we have to follow? That's my first question.

Thanks, Tijs. I think the question there is, indeed, we reported this 4% increase. The business charger and public chargers have a different price points than the home charger, the residential segment. What we see as a general trend is that the home segment has, on average, lower pricing. And so if we start to sell more home chargers, we would expect the average price of our chargers to be slightly lower.

Yes. But is it fair to assume that, let's say, with your new products that you are able to win much larger, let's say, projects in this phase. I mean, the consumer business is more like one-by-one following more general market trends. Now you have a new product, so you should be able to get significant, let's say, volume orders from these public charge operators.

Tjis, I understand the question. On specifically the home, it is a residential product, but you are right, if we are able to address the needs of fleet operators, larger parks, then we would look at having bigger projects with larger volumes in one go. The average price of those home chargers would still be lower. On the public chargers and business chargers, we would expect that it would still continue in the same way. For us, the mix effect would still be a slightly a lower price.

When you look at public charging specifically, that it's a tender business. It's not sales of one-off. And we make public when we win tenders and with whom we do that. And those are then called off over several years. Different market dynamic, and I don't foresee any major shifts for the moment.

Okay. And then I also had a question responding, let's say, to your comment on -- you expect the order backlog at the end of the fourth quarter to be above EUR 127 million at the end of last year. So that's quite a significant order intake. How concrete is that? So we are halfway through the fourth quarter. Can you comment on that, please?

Sure. I think, of course, we have a pipeline of projects that we are -- for which we have submitted quotations where we are in negotiations with customers. And if we -- and we do -- like all businesses, we do a weighting on our expected win rate historically and looking forward of those -- of that pipeline. And with that in place, we are confident that we reach the EUR 127 million or higher. But it's still -- we still have to work through the next 8 weeks left of this year to close that. Of course, ongoing efforts. It's an everyday effort. So with what we already had as backlog and what we see as the pipeline and where we stand with negotiations, we're comfortable that we reach the numbers.

Okay. That's helpful. And is there some kind of seasonality in this client behavior tendering towards the end of the year for this business?

No, no, not really. What I do -- what I think is -- what I think is important here is that that business is also becoming internationally attractive for us, and we have projects in the Netherlands and in the countries around us. And I think the skill set that we have developed for those type of larger projects now sets us up also for success for larger projects in the countries around us. We've shown that we can do that in the Netherlands. We have international track record with smaller projects already and midsized projects. And now we're really eager also to do larger projects internationally.

Okay. It's helpful. And then one final question for Bart, I guess. You mentioned that the business remained into a net cash position at the end of September.

Yes.

You gave the cash flow number in the press release, but was it higher or lower than the net cash position at the end of June? EUR 6.2 million, it was.

Thanks, Tijs. It was give and take comparable. Yes. So compared to the cash position in June, we slightly decreased, but just minor changes here, just following the normal working capital development. And as a result, also the net cash position, give and take comparable with H1.

And is that also the right assumption towards the year-end position?

No, we have said earlier in the half year, and I think I repeat that the ambition is to end up at least cash flow neutral. So preferably cash flow positive throughout the year compared to the liquidity position last year, very much dependent upon the ESS ordering. So if we just would win the tenders and we would need to procure just before Christmas in order to deliver in the first half of next year, then that would, of course, have an impact on the cash. Although for all those projects, we really try to structure them in a cash-neutral way in general. So our ambition still remains the same, at least cash flow neutral.

The following question comes from Thijs Berkelder from ABN AMRO - ODDO BHF.

A follow-up on the cash flow from operations. You're reporting the EUR 1.2 million. Can you explain what the working capital effect in that EUR 1.2 million has been? And if I, let's say, exclude energy storage from the picture, I conclude CFFO of the other segments is negative. Yes, a follow-up on the previous last question indeed with you're expecting '27 to come back to gross which probably would mean you need to increase working capital. So we will first see quite some cash before you hopefully can cash in later in '27. Maybe some comments there.

Then on EV Charging, saying an impact from the new charging platform from Q2 onwards. Is that -- should that already be visible in Q2 or only thereafter? And my third question is on the very large substations, the panic article from Enexis in the press on that the rollout is not taking off because of all kinds of permitting restrictions. What are your expectations on the rollout of very large substations next year?

Thank you, Thijs. I think I wrote down 1, 2, 3, 5 questions. I think the first 3 to be taken by Bart.

Yeah, thanks. Let me anyhow address the point on working capital. No major changes, Thijs, compared to H1, basically stable throughout during the quarter following the normal elements on receivables, trades, our tax position. So it's basically on par there. I'm afraid I missed the second point. What was?

I think Thijs asked about if we exclude ESS, do you then see negative cash flow for the other businesses? That was my understanding of the question.

Not for the -- not for the third quarter. Again, the working capital development was hardly there compared to H1, just normal, not very much relating to a specific business. I understand where you come from, of course, we win orders and we procure them that has an impact on working capital, at least on cash position. That was not the case for the third quarter. The more we win, the more cash flow strings we see. Again, although we really aim to structure also in the beginning cash neutrality in that sense. Yes.

Okay. Then a question on the 2027.

Sorry, but going forward working capital.

I think the question was about...

The growth you need for working capital?

Yes. So in '27, I think we are looking to be -- we said we strive for neutrality, especially because the biggest swings are in the ESS area.

Yes. So yes. So from where we are now, we continue to really focus on strict control of our working capital elements. That is one. When it comes to our payables, to our accounts receivable positions, and we do that together with the full management team now, which is in place. Our BU directors are in place. So that's super helpful. And it's paying off. I just -- I see that happening. Towards the year-end normal pattern in that sense as our business will -- for the coming 8 to 10 weeks will simply evolve towards year end. If we again win orders on ESS and that has a procurement effect, then we will see that in our working capital position. And that could then impact the current cash position.

For 2027, we basically don't give a detailed outlook there. It's following the activity mix which we have more visibility in the coming period. And we'll also explain in more detail to the market during the full year publication, Feb next year.

Yes. Okay. And then Thijs, regarding your question on the Eve Home launch and the visibility for revenue in Q2. Yes, we believe that we should be able to see an effect from Q2. So that in the Q2 earnings, we should be able to come back and have a discussion about that.

And then your last question regarding Enexis. Yes, of course, we also saw the article. Our outlook for the larger distribution stations is actually cautiously optimistic. We see growth. We are planning for growth. Our supply chain is ready. We have a close alignment with Enexis on the development of these projects and the teams there. And what we see is that the ramp-up is indeed slower than initially planned, but steadily increasing, and it's gaining sufficient attention from government, both local and central government to allow us to plan for a larger volume for next year. So there might be also a political push needed to make this happen, and we are confident that this will change in '27.

The following question comes from Jeremy Kincaid from Lanschot Kempen.

I'd just like to ask a few more questions about this new home charger just so I understand what's happening correctly. So have you completely stopped production of the old model? And so now you're just producing the new model. Do you still have inventory of the old model you need to sell down? If so, how much do you have? If I understood the question correctly or the response correctly, are you selling this new charger at a lower price point than the previous home model? But if I understood correctly, the margins are still the same approximately? And then you mentioned that it should happen in the second quarter next year. What's the delay? Why won't the ramp-ups happen in the first quarter? Is there a marketing push you could do to accelerate this? Curious on your thoughts.

Okay. Thanks, Jeremy. I think quite a number of questions there. On the first one, on the old models, yes, of course, we're not stopping our old business as we ramp-up a new product. So there will be an overlap period where we have both available. And customers are also adjusting. People who have been working with us for over 15 years, giving them the opportunity to build out their build out their projects with similar products, sometimes just for simple reasons that they want only one look and feel on their parking lot. So we're doing that gently and allowing customers to make the change with us. And so we still have some inventory there and allows us to keep delivering. And of course, we have our obligations for spare parts and maintenance for the coming 10 years on all those products that we've delivered to the market.

Then I think in terms of the home product, it is a new design aims to be even more competitive in the market. And we would expect that competitive, aggressive level to also give us the momentum for growth in that segment. And this is something that I think in a commoditizing market, everyone expects that also to happen.

And then your last question regarding the ramp-up. We announced the charger formally last week, ongoing effort with customers for testing, for validation, for initial series production. That's all ongoing work. I think we said mass production and deliveries start from early Q2 and just because historically, again, similar to the financial figures that we are presenting here today, we want stability, predictability and really doing things properly in this market because we need to regain our footing and show growth.

All right. It appears we have no more questions coming in. So I would like to give the call back over to Mr. Colijn for any closing remarks.

Thank you, everybody, for joining us today. I'm really looking forward to sharing with you our full year results on Wednesday, 17th of February 2027.

Hello. Welcome to the Alfen 2026 Half Year Results Conference Call hosted by Michael Colijn, CEO; and Bart Meussen, Interim CFO. [Operator Instructions] And I would now like to hand the call over to Michael Colijn. Mr. Colijn, please go ahead.

Thank you, Elba. Good morning, everybody, and welcome to Alfen's 2026 Half Year Earnings Call. Thank you all for taking the time to join us. I'm Michael Colijn, CEO of Alfen, and I'm delighted to be leading this trading update with you today. Before we start, let me introduce Bart Meussen, who joined us as Interim CFO on the 1st of July and is with us on this call for the first time.

With his appointment, continuity of the finance function and financial leadership is safeguarded. Bart joined at a demanding moment and has made a strong start. He has been closely involved in preparing the results we are presenting today. As such, he will take you through our financial performance and join me during Q&A. It has been a pleasure working with Bart these first few weeks.

Let me give the word to Bart for a short introduction.

Yes. Thank you, Michael, and good morning, everyone, also from my side. I joined indeed Alfen as the interim CFO on the 1st of July and got a warm welcome by the team. I've been working closely with Michael, the Alfen management team and the finance department over the last weeks.

The first weeks here, I have and you said it already have gone straight into the half year. Like also what's written in the short announcement, I had careers at companies such as KPN, Philips and most recently I served at BAM as CFO of the Netherlands. In all those assignments, I gained extensive experience and knowledge on finance leadership, business transformation and organizational change.

What I found is a finance organization that knows its business well and a company with a clear sense of what it is building with many strong and dedicated professionals. My focus is on continuity, making sure the finance function keeps delivering and that, for example, you receive the same quality and consistency of reporting you are used to.

My second focus is to support the ongoing transformation with everything that is needed to be done on short term. I really look forward to speaking with you later in the call and to meet many of you over the course of the coming months. Michael, back to you.

Thank you, Bart. Let me share what we can say about the situation at this moment in time. The Supervisory Board process is ongoing, and Bart will continue in the role until a permanent appointment is made, and we will update you in due course.

Moving on to today's agenda, which is structured to give you a comprehensive view of the developments during the first half of '26. I'll begin with the highlights. We'll then dive into each of our 3 business lines. Bart will follow with our financials, and we will conclude with our outlook before we open the floor for the questions-and-answer session.

I'm pleased to report that Alfen delivered a solid first half of '26 with revenue reaching EUR 261.5 million, representing a 23.6% increase compared to the first half of '25. This growth was driven primarily by our energy storage system business and continued momentum in our smart grid solutions. Our adjusted gross margin for the period was EUR 68.3 million or 26.1% of revenue compared to EUR 61.6 million or 29.1% of revenue in the first half of '25.

The margin percentage decline is attributable to a business unit mix shift towards energy storage systems. The underlying margins in each of our business units remain healthy and are performing within their expected ranges.

Turning to profitability. Our adjusted EBITDA increased to EUR 16.4 million compared to EUR 13 million in the first half of '25. Our adjusted EBITDA margin improved to 6.3% from 6.1% in the prior year. I'm also excited to announce that we appointed business unit directors for all business units, representing a next step in our transformation. This solid first half reinforces our confidence in our full year guidance, which we're reiterating today. We expect revenue to be between EUR 435 million and EUR 475 million with an adjusted EBITDA margin of 4% to 7% and capital expenditure below 4% of revenue.

As we've indicated previously, our revenue is front-loaded in '26, particularly in energy storage systems. The first half results demonstrate that we're executing well operationally, while we position Alfen for its next phase. Moving on to the business unit review. I'm pleased to report that our Smart Grid Solutions business delivered strong performance in the first half of '26, with revenue reaching EUR 111.6 million, representing a 14.9% increase compared to the first half of '25. We saw growth across the board with the majority attributable to an increase in project business with notable mentioning that our transport distribution stations are now a structural part of this.

But we also saw an increase in revenue from grid operators in the first half, driven by a stable quarter-over-quarter pattern. As a reminder, last year, 2 grid operators adjusted their forecast downwards after Q1 for which we had to correct in the remainder of the year. 69% of revenue came from the grid operator products and 31% from projects.

Operationally, we delivered 1,716 substations during the period, 1,199 in the Netherlands and 517 in Finland. The sharp increase in Finnish substations is attributable to a higher demand. Gross margin performance remained within the expected range at 22.9%, up from 22.4% in the prior year. This improvement was primarily driven by the higher share of project sales in our revenue mix.

Looking at the market dynamics, we are seeing structural grid congestion continuing to drive the substantial need for grid expansions, something that is increasingly recognized by governments across Europe. At European level, we saw the electrification action plan published in July, aiming to accelerate the electrification of transport, buildings and industry.

The objective is to reduce Europe's dependence on fossil fuels, strengthen energy security and competitiveness and ultimately increase electricity share of the final consumption to around 46% by 2040. This requires not only more electrified transport, buildings and industry, but also the charging infrastructure, energy storage and electricity grids needed to support that transition. Relevant for our Smart grid solutions business is that it identified grid capacity as a key constraint to electrification and therefore, urges member states to boost grid investments and accelerate permitting.

Looking at the Netherlands specifically, we are starting to see regulators move from designing measures towards execution with a regional approach targeting spatial planning, site development and permitting. This is further evidenced by the new fast track regime for grid projects that shortens the appeal procedures from October this year.

However, the short-term reality is more balanced with the known key constraining factors still impacting our smart grid solutions clients today, and therefore, we do not expect a volume impact in the current year, but these developments are expected to translate into orders and deliveries over time.

Moving over to EV charging. We faced a decline in the first half with revenue down 17% to EUR 51.1 million, which is in line with expectations as we renew our portfolio. Our performance reflects similar dynamics to those discussed last quarter. First, the gradual ramp-up of features on our new product continued impacting order volume, although less so in the last few months.

Second, uneven order patterns in the public segment; and third, the competitive pressure in the home charging segment, which will stay with us throughout this year until we introduce our new charger for residential segment. Our adjusted gross margin was 39.9% compared with 44.1% in the prior year. This is around the midpoint of the expected gross margin range of 35% to 45% and reflects the introduction of new charger models and ongoing sales campaigns.

From a production perspective, we delivered approximately 53,700 in the first half of 2026, representing a 12.3% decrease compared with the 61,200 charge points delivered in the first half of '25. The average sales price decreased due to more competitive pricing strategies. But here is what gives me confidence. We are not standing still, and we've taken decisive action to address these challenges head on with a comprehensive set of strategic initiatives introduced on this call last quarter.

And let me share with you the progress against these initiatives. On the product development front, we are on schedule to launch our new home charging solution, specifically designed to address this competitive market in that segment. For our Plus models, we have introduced new features and are rolling out the next update in the next few weeks, amongst others, solar charging, the availability of the latest OCPP protocol for smart charging and an upgrade of Alfen's own smart charging network capabilities.

These together are significant steps in the right direction. What I'm particularly excited about is that we are rolling out our digital strategy. The Eve Control platform launched last month, and we have since then handled the first service requests remotely through the platform. This platform combines asset management capabilities for our customers with efficient service handling. It saves both Alfen and our customers valuable time and resources.

This renewed approach with connected chargers allows us to scale effectively through digitalization without adding complexity to the organization. I would now like to dive deeper into the market context. Across Europe, battery electric vehicle registrations continue their upward trajectory. European battery electric vehicle registrations grew 35% in the first half. More than 1 in 5 new cars in Europe is now fully electric, 22% against 17% a year ago.

Similar to our market update last quarter, the country-specific picture remains mixed. In our core markets, major car markets are driving European growth figures, while the Netherlands and Belgium are on the lower end of the spectrum, reflecting their mature market status. Conversely, Alfen's expanding markets are demonstrating strong momentum with Italy and Spain showing robust year-on-year improvements in battery electric vehicle registrations.

Current geopolitical tensions have created a reacceleration of demand in 2026, with fuel price hikes driving renewed consumer interest in electric mobility. At the same time, we are seeing renewed policy support across the European markets this year. As a result, this positively influences the total cost of ownership, which was already compelling for battery electric vehicles compared to internal combustion engine counterparts.

This is starting to become a reality for all vehicle segments as new models hit the market that are cheaper and deliver superior performance. It further reinforces our view that electric vehicle adoption will increasingly be driven by consumer adoption rather than regulatory support alone. In all, we are on an undeniable path towards electric transport, and this will translate to sustained demand for charging infrastructure across all our European markets in the coming years. While we are currently renewing our portfolio, we expect to benefit again from this momentum in the coming years.

Moving to Energy storage, where we saw a result of strong execution during the first half of the year. Revenue reached EUR 98.8 million, representing an 88% increase compared to the first half of '25. This significant growth was primarily driven by achieving major milestones in 2 of Alfen's largest projects to date, complemented by positive momentum for our mobile storage systems, which grew significantly in revenue compared to the first half of last year.

More specifically, we have seen an increase in traction against the second half of last year, mostly coming from large power rentals that rent our systems to replace traditional diesel gensets for a variety of use cases, including construction sites, events or grid services.

Our gross margin for the period was 22.8%, which positions us comfortably above the midpoint of our expected range of 15% to 25%. I want to provide some context here. In the first half of '25, our gross margin was elevated to 28.5% due to one-off items, including the release of project contingencies.

Turning to our backlog and pipeline. At the end of the first half, we had EUR 93 million in our backlog with EUR 37 million scheduled for delivery in '26 and the remaining EUR 56 million for '27. The underlying pipeline remains healthy and the pace at which orders are converted reflects the lumpiness inherent in our project-based business rather than a change in underlying demand.

To give you some color, we recorded approximately EUR 30 million of new order intake since the end of the second quarter, including EUR 6 million in mobile storage orders that can be executed in the second half of '26, given their shorter order to revenue cycle. During the second half of the year, we will focus on filling the order book for next year. The trajectory is expected to be consistent with our year-on-year revenue growth ambition.

Now let me address timing dynamics candidly. Given typical project time lines and component lead times for utility scale energy storage systems, the natural window for converting pipeline opportunities into 2026 revenue is very tight. In July, Alfen and CATL announced a partnership to deploy sodium-ion battery storage across Europe. It extends our cooperation we have had with CATL for years now into a new battery technology.

Sodium-ion technology is promising and aligns with our view of where the market is heading. The raw materials are more widely available compared to lithium, about 1,000x more abundant. Its safety performance is strong. It is able to operate reliably across a much wider temperature range and the expected service life is long. The energy density is slightly lower, but for stationary storage systems, that is acceptable and often not the primary buying criterion. With this technology, we aim to diversify our portfolio, meaning that sodium-ion complements our lithium-ion offering.

Let me also share some details on timing. We expect to bring our first sodium-ion project to market from the second half of '27, starting with pilots. This does not yet change what you see in the numbers today. What it does change is our position for the years thereafter. 2 technologies, 2 supply routes and the engineering capability behind both. In short, we aim to be the frontrunner in the European market and are convinced that having access to this technology puts us ahead of the curve.

Now I'll give the word to Bart to talk you through our financial performance.

Yes. Thank you, Michael. I'll now walk you through our financials, starting with the second quarter figures. Revenue came in at EUR 131.7 million, representing a 22.3% increase compared to the EUR 107.7 million in the prior year. Similar to the first quarter, growth is primarily driven by a strong performance in energy storage and Smart Grid Solutions.

Our group adjusted gross margin reached EUR 34.2 million, equal to 26% of revenue compared with an adjusted gross margin of EUR 32.4 million or 30.1% in Q2 2025. The percentage decline reflects our business unit mix shift towards energy storage systems, which typically carries different margin characteristics than our other business units. This mix shift was consistent with our expectations.

Our EBITDA was EUR 4.2 million in Q2 2026 compared to EUR 5.4 million in Q2 2025. The adjusted EBITDA performance increased in absolute terms from EUR 7.6 million in Q2 last year to EUR 8.2 million this year. The adjusted EBITDA percentage as share of revenue declined from 7% to 6.3%, which is attributable to the business unit mix shift.

Looking at our half year income statement, I'll walk you through the key financial metrics and how they compare to our performance in the first half of 2025. Starting with our top line, we delivered a revenue level increase of 23.6% to EUR 261.5 million compared with the EUR 211.5 million in the prior year.

As previously indicated, revenue is front-loaded this year and this first half performance reflects that pattern. Our adjusted gross margin reached EUR 68.3 million, representing 26.1% of revenue compared with EUR 63.4 million or 30.1% in H1 2025. Again, the group percentage is lower due to the business unit mix shift.

At business unit level, underlying performance remains solid with margins within the expected ranges. No adjustments were made in the gross margin during H1 2026. Moving to our operational costs. Adjusted personnel expenses increased by 6.1% to EUR 40.1 million, mostly due to labor agreement indexations of roughly 5% since June 2025.

Let me touch briefly upon personnel expenses, which we expect to be higher in the second half of this year. During a transition of this kind, the old and the new organization exist side-by-side for a period. Some roles are still being positioned. Interim agreements are in place while permanent appointments are completed, and we are recruiting and onboarding into the new structure.

In addition, we are investments -- we are investing in capabilities ahead of the revenue it supports, such as software and project management, which, as you know, are a deliberate part of the strategy direction. This effect is planned for, and we expect it to fade out over the course of next year as the transition completes and the new organization settles.

Adjusted other operating expenses decreased by 4.3% to EUR 11.5 million compared with EUR 12.1 million in H1 2025 as a result of strict cost control measures, which we will continue. EBITDA was EUR 11 million in H1 2026 compared to EUR 9.6 million in H1 2025, our prior year. We adjusted for one-off costs in the first half year, I'll sum them up for you.

First, we have recognized one-off cost of EUR 3.5 million related to the restructuring we announced in February. This amount was primarily driven by settlement agreements and therefore, impacting personnel expenses. Second, we took EUR 1.7 million one-off transformation costs, which covers nonpersonnel-related transformation-linked costs, for example, advisory costs, therefore, impacting other operating costs.

And third, EUR 0.2 million share-based payments associated with our long-term incentive plans. You have seen the details in our semiannual report. Together, they totaled EUR 5.4 million special items, which brings us to an adjusted EBITDA performance of EUR 16.4 million, representing an improvement in absolute terms from EUR 30 million in the comparable prior year period.

Adjusted EBITDA as a share of revenue increased slightly from 6.1% to 6.3%. Our net loss improved from EUR 1.3 million in H1 2025 to a loss of EUR 0.5 million in the first half of this year. When adjusting though for one-off costs and special items after tax, net profit amounted to EUR 3.6 million compared to EUR 1.3 million in the prior year period. This represents an improvement in our underlying profitability.

Looking then at our balance sheet position at the end of June of this year, starting with the asset side. Noncurrent assets remained stable, reflecting our continued investment in our operational infrastructure to support our growth strategy. Current assets showed an increase of our accounts receivable position due to the front-loaded first half of the year.

Furthermore, I'd like to point out the significant reduction in inventory, which directly contributed to cash generation during H1 2026. This led to a substantial increase in cash and cash equivalents rising from EUR 26.7 million at year-end 2025 to EUR 51.1 million as of June 30, 2026.

Moving to the liability side of the balance sheet. Noncurrent liabilities remained broadly stable. Our debt position, including lease liabilities, decreased by EUR 4.5 million following scheduled repayments. Provisions increased as a result of restructuring measures implemented during H1 2026. The current liabilities increased primarily driven by a EUR 30.5 million increase in trade payables, which contributed positively to our working capital position. This reflects the timing of our energy storage system projects.

Our borrowings position improved considerably. We moved from a net debt position of EUR 20.7 million at the last day of last year to a net cash position of EUR 6.2 million at June 30, 2026. This represents a swing of nearly EUR 27 million. Equity remains solid, supported by our improved profitability in the period, providing a stable foundation for our continued growth investments.

Overall, our balance sheet demonstrates the effectiveness of our working capital initiatives and positions us well to execute on our strategic priorities for the remainder of 2026. Let me now take you through our working capital development, which showed a healthy development over the first half. Our working capital decreased by EUR 23.1 million during H1 2026, an improvement that was the primary driver behind our strong operating cash flow of EUR 36.5 million compared to EUR 10.8 million in the same period.

Breaking this down into the key components. Inventory decreased by EUR 19.7 million compared to end of last year, primarily driven by the energy storage battery allocation for a larger project. Looking at the mobile storage side, with strong mobile sales in the second quarter, we made a significant step in structurally bringing down battery inventory that was on the books with us for some time now.

For EV charging inventory decreased slightly, whereas Smart grid solutions, the inventory of it increased. This increase is related to higher stock levels to bridge summer period and Alfen Elkamo in Finland to cope with increased production levels over there. Since we are discussing inventory, I'd like to mention that in comparing to the last years, we are not anticipating a further reduction for the remainder of this year.

Trade and other receivables as well as trade payables showed an increase triggered by the activity level in the first half of this year. The combined effect is therefore limited. We remain focused on sustainable cash generation from our EBITDA results and working capital management needed to execute on our strategic priorities.

And with that, I'd like to hand back the call to Michael.

Thank you, Bart. Let me update you on our leadership changes that were made in line with our new organizational model. During the second quarter, we announced management changes in line with our new business unit structure. With the appointment of 3 business unit directors, the leadership of our business units is now complete. Each unit will be led by a dedicated director accountable for its performance and its development.

Stephanie Schockaert has been appointed as Business Unit Director for Energy Storage Systems. Stephanie has been with Alfen since 2017 and previously served as Sales Director for the business unit. She knows our customers, projects and the market deeply. Eva Hatzidemou has been appointed as Business Unit Director for EV charging. Eva brings over 25 years of international leadership experience in the energy and mobility sectors.

And finally, Evert Kooijstra has been appointed Business Unit Director for Smart Grid Solutions. Evert brings more than 25 years of senior leadership experience across technology, e-mobility and finance. Together with the appointment of our new HR Director, Marieke Hoorneman, I'm confident that we have the business leadership to guide us in the next phase of our transformation. On the right side of the page, we have outlined our new governance structure.

Now turning to our outlook. The solid performance in the first half reinforces our full 2026 guidance. Therefore, we reiterate our guidance in full, expect revenue to be between EUR 435 million and EUR 475 million. Our adjusted EBITDA margin guidance for '26 is between 4% and 7%, and our CapEx is expected to remain below 4% of revenue.

On business line level, Smart Grid Solutions revenue is anticipated to increase for both grid operator products and projects. While we're making every effort to restore EV charging revenue to growth for our 2026 planning, we assume a reduction as we upgrade our portfolio and services. For Energy storage, we anticipate year-on-year growth, while our revenue distribution remains consistent with the front-loaded pattern we communicated during the last 2 updates. I want to be as transparent as possible on where that leaves us for the second half of the year.

The second half will be softer than the first half, resulting in a lower top line compared to the second half last year and the first half this year. As a consequence, we expect this to affect our adjusted EBITDA in the remainder of the year. For 2027, we remain confident that the transformation, combined with our outlined growth strategies will reignite consistent profitable growth, resulting in year-over-year improvements in both revenue and adjusted EBITDA margin.

Lastly, we are convinced that the European energy system will continue to electrify over the coming decades. Alfen's 3 complementary business units are strategically positioned at the heart of the transition towards electrification. And with that, Alfen aims to be the go-to company when battling grid congestion. 2026, as we said previously, is our transformation year, focused on establishing the capabilities and market position that will drive long-term profitable growth. The progress we've made in the first half year reinforces our confidence in executing this successfully. The future, we believe, is electric.

Thank you. We'll now open the floor for questions from our analysts.

[Operator Instructions] Our first question comes from Nikita Papaccio from Deutsche Bank.

I would have 2. The first one is on your charging business. I mean you're targeting now for 2027 year-on-year improvement and maybe in the long term, returning to initial margins we saw a couple of years back. Do you think that you need the huge turnaround in the chargers to hit this margin level? And especially with the new home charger, do you think that the margin or the gross margin of the business will deteriorate with this new charger?

Or is it as competitive or as profitable as it was -- as the other products were? The second one is on your guidance for the clarification on the margin we should think of in H2. Are there any mitigation measures in H2 to limit the impact from lower top line and also higher personnel costs?

Thank you, Nikita, for your question. I will take the first question on the EV charging business, and Bart will answer the guidance question second. Regarding the EV charging business, as I said earlier, we are using '26 to transform the business by developing new hardware, launching our digital platforms and making sure that we are prepared for future growth in that area again.

The home charger, which is under development is not only the hardware itself, but it is also the first step for us to renew our position in all 3 segments, which are home, business and public because it uses the same software platform that we're rolling out now. And as such, I expect that rollout across those 3 to also keep stable our position there, and it will help to improve profit, but it will also make sure that we get our footing back in our growth.

Regarding the long-term outlook, everything we're doing today is about building our platform stable that is really future-proof with all the features that we need to compete head on in a competitive market.

Yes. And now coming back to the first question, Nikita, you asked. So good first half year. As we just mentioned, we reiterate the outlook. We said also front-loaded here, which means Michael said in his introduction, a softer second half of the year. Market provides us still challenges, both challenges and opportunities. So we keep that outlook. And obviously, with a softer half year, there's this dynamic of the leverage effect, the ability of the organization to cover the organizational costs.

And the labor cost linked to the transformation. And obviously, it's our full focus to your question, to win tenders not only for next year, but also for this year, drive sales, keep our strict cost control and when it comes to more cash, keep a strict focus on our working capital. And that is what we have been doing, and that's what we will continue to do for the remainder of the year.

The following question comes from David Kerstens from Jefferies.

I have 2 questions. First on your Smart grids business, you had a strong momentum in the first half of the year driven by the project business leading to higher margins, but not yet that much from grid debottlenecking, which you don't expect to impact revenues in the second half of the year. But the question is, will you be able to maintain the momentum you had in the first half with revenues of over EUR 55 million? Should we assume that will also be reachable for the second half of the year?

Then the second question is on a follow-up on the personnel expenses. The EUR 40 million in the first half, you said will be higher in the second half. Can you give an indication how much higher? And can you give an indication roughly what the impact is of the transformation that then will disappear in 2027? And what would be a normalized level for personnel expenses given your current headcount?

Thank you, David. I think I'll take the first question, and Bart will take the second question. Regarding your SGS question, I'm really delighted with the question. One of the things that we are doing this year with a focus is to make sure that we are as predictable as possible. And in terms of the SGS business, we would expect that it will be a predictable smooth ride for the remainder of the year, meaning that we would see continuation of revenues as planned.

Yes, exactly. And when it comes to the personnel cost, your second question, indeed, personnel costs second half of the year higher than the first half of the year, really linked to the transformation effort, which is broad and we are fully into it.

Personnel costs, H1 also higher than H1 last year, but obviously, that is not only transformation, but also the inflation, the labor agreement component, roughly 5% coming in. These figures have been included in the outlook of this year, which we reiterated and an outlook for 2027, we don't give at this moment.

And just to clarify, the EUR 40 million is adjusted for the restructuring charge, right? And that is the basis for guidance for the second half. The EUR 40 million will be higher in the second half of the year.

Yes. So we make a distinction between the one-off restructuring cost of EUR 3.5 million linked to the transformation program and the running cost just in our P&L of the launch we mentioned.

The following question comes from Luuk Van Beek from Degroof Petercam.

First of all, a question about your EV chargers. You mentioned a new home charge. A couple of questions about that. So one is when do you expect that to start to improve your revenues? And also, how long do you think it will take you to roll it out to the other end markets and basically use the new platform for all of your chargers?

Furthermore, I was wondering there if the production of the new charge will be more efficient, so that will support your gross margin? And on energy storage systems, I was wondering if H2 will also be front-end loaded or that we should expect the orders to be delivered more evenly between Q3 and Q4?

Okay. Thank you, Luuk, for those questions. Again, I think the first question I will take and Bart will take the second question. Regarding EV charging, we expect to see the full impact of the new home charger in 2027. And all our chargers will also move to that new platform in 2027. So we should really reap the benefits of having a unified platform across our EV charging business.

With production costs, of course, when we designed the new charger, we kept in mind that we are in a competitive market and that we need to see the ability to compete head on in the coming years. And it's an ongoing effort. It's not a one-off. But obviously, we're aware that competition is strong, and we intend to be also competing with everybody else in that market.

Yes. And coming back to the backlog question for our Battery Systems, that business unit, EUR 56 million by the end of June backlog for next year 2027. Since then, we've seen -- we scored additional orders already, not only for this year, but also especially for next year.

And yes, then we recognize a healthy pipeline. And the idea is to get some wins from that in the course of the coming months and quarters. We're confident that we will end up with at least the level we had last year same period, that was around EUR 20 million.

Yes, but I was asking about the split between Q3 and Q4. Is there [indiscernible]?

Yes. So we don't provide details now over the exact month and quarters. And that also relates to the lumpiness of this business. You can just win several small orders or a bigger order that immediately has an impact, a smaller order on the backlog. Of course, the sooner the better, of course.

And one quick follow-up question on the OpEx. You mentioned that personnel expenses will go up in H2. Is there any special movement in OpEx you expected versus H1?

Sorry, on the order OpEx, you mean?

Yes the order operating cost?

No, we just -- that is under control. We continue to do a good cost control like we have done in the past, but also in H1 2026. So no significant movements there.

[Operator Instructions] The following question comes from Ruben Devos from Kepler Cheuvreux.

My first question is to follow-up on a prior question. I think regarding the personnel costs in the second half. So it will step up, but then normalize in '27. I think around in 2024 when you had this restructuring or rightsizing it was said that you had around EUR 13 million of net savings with a payback under a year. I think now you sort of provisioned EUR 4.5 million of restructuring -- so my question is what do you expect that to deliver in annual savings?

Yes. So in contrary maybe to the program you mentioned a few years ago, this is -- this has not been and we have communicated that earlier in our call, program to reduce FTEs is really to reallocate FTEs and building up capabilities. And in that sense, the business case is a quantitative one, you could say, and not by definition related to financial impact.

Okay. And regarding smart grids, Finland was about 500 of the 1,700 total. So quite a big contributor. Should we now think of Elkamo as a structural growth driver in [indiscernible] I mean in Finland, is it still largely concentrated with Fingrid? Or is more of the volume coming from a broader range of operators? And I guess, how sustainable is that trend you've seen in Finland moving into '27?

Thanks, Ruben. I think that the observation is correct that Elkamo did a significant chunk of the SGS business in the last half year. And we're very pleased with that. I think we've taken some measures to make sure that we can maximize the benefits of the Elkamo business. What I can say here is that the business is delivering to a general market trend to a wide range of customers.

And what we believe we see is a general grid revamp across Europe with investment in expanding the grid, renewing old transformer substations and making more available also for the addition of renewable energy into the grid. And we're benefiting from that. Obviously, we've been extremely active to also reap as much of that as possible. Elkamo forms part of the Alfen business, and we will continue to drive it as we do our other STS business as well.

Okay. And in the Netherlands, I think the investment plans, they seem to be stepping up quite strongly. You also are pointing to a fast track regime for larger projects as of October. You don't expect any volume impact this year yet, but of course, interested about how you see that regulatory changes translating into actual orders. Are you seeing any signs of, let's say, tender activity already or framework discussions for '27?

So I think this is a good question. By nature, I'm an optimist, and I'm always pushing for faster. We've mentioned before that we see the regulatory changes coming, and we see laws in progress. But I haven't seen anything concrete yet that immediately accelerates this market or spurs it on that you can have double-digit growth.

What I do see is that the general trend and readiness for everyone in this market is increasing, and we are looking to be part of that, and we're ready to do that whenever it happens. But I think that it is -- there are 2 elements. The regulatory battle is being fought and I think it will be solved.

After that has been solved, immediately comes the question, do we have enough structural as an industry, not specifically Alfen, but also the grid company, do we have enough structural capacity for executing on that growth because installers need training. So we expect a steady, predictable growth there, but not a big boom to come very quickly.

It appears there are no more questions. So I will hand the word back over to Mr. Colijn for any closing remarks.

Thank you, Elba. Thank you all for your time. As a reminder, I want to point out that from next quarter onwards, we will publish our results on the morning of the earnings call instead of the evening on the day before, starting with our Q3 trading update on the 4th of November. Looking forward to speaking to you then.

You may now disconnect.