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Good morning. and welcome to Envipco Q1 2026 Earnings Presentation. My name is Mikael Clement, Chief Strategy and IR Officer at Envipco. And with me today, I will present together with Bob Lincoln President of Americas and heading up our U.K. business.

As usual, we'll walk you through the highlights of the quarter. We'll talk about our financials, and we will go into deeper discussions of market developments and our outlook. We will open for a Q&A session following the presentation. But first, today, I would like to welcome Mrs. Jose Matthijsse, who joined Envipco as group CEO this week. Jose brings a wealth of experience from related industries. And before we move on, I would like to give Jose an opportunity to introduce herself.

Thank you, Mikael. My name is Jose Matthijsse. And indeed, I joined Envipco as CEO this week, indeed in May. I think it's a very exciting business opportunity that Envipco brings a possibility to contribute to the circular economy shift that's happening in Europe right now. I bring experience indeed, and let me talk a little bit about that -- the last 5 years, I was part of the Executive Board of SIG, a company selling packaging equipment and after sales and service and having long-lasting relationships with customers like Envipco has. Before that, I spent a lot of time in my career in fast-moving consumer goods, working for FrieslandCampina, being responsible for cheese sales for the retail across Europe and before that at Heineken in multiple different countries where I was Managing Director for companies and smaller companies and larger companies with different maturities.

So as much as the technology of Envipco is new to me, its customers, the value chain and the business of scaling a commercial business is not. I'm very excited to join Envipco at this stage of their maturity. I'm also very familiar with the different legislations that leads to the rollout of DRS in Europe, which, of course, creates a great momentum for Envipco. And I believe that the team has laid down a very good foundation for that growth to capture that growth. We have good teams across the European countries, and we obviously have a strong team in the U.S. We have a good buildup of capacity to capture the growth that is coming. So I believe we're very well prepared, and we have a very good portfolio that also caters for the different needs of a wide variety of customers.

So all in all, I'm very excited to join. I'm very grateful for the trust that the board has given to me, and I'm happy to be here today with the team to present Q1 results.

And with that, Mikael, I give it back to you.

So with that, let's move into the financial review and some highlights of the first quarter of 2026. Group revenues in the first quarter of '26 were EUR 19.7 million, a decline of 6% on stable operations in our North America and somewhat mixed performance in Europe. Our gross margins improved sequentially to 34.1%, driven positively by product mix but still reflecting a building of our service organization and underutilization of our assembly operations. With OpEx at EUR 11.2 million, EBITDA came in at negative EUR 2.1 million in the quarter, with operating profit at negative EUR 4.5 million.

The quarter has been characterized by strong commercial activity with several new wins and with anticipation of higher activity levels going forward. We have built our inventories and continued to build our team. We exited the quarter with cash balances of EUR 41.6 million. This has been a very active quarter for Envipco and the commercial momentum for the company is building. We're very happy to welcome Jose as the company's new CEO from this week. We have had a number of new commercial wins. In Portugal, we have announced a win with the operator, SDR Portugal for Quantums. We have announced retail wins with [ Kovida ] and also Spar-Portugal.

In Poland, we're very happy to team up with Netto Polska and will install up to 700 RVMs across Poland in the current year for Netto. We have had breakthrough orders in the U.K. market and announced 2 major wins in the U.K. with up to 3,800 RVMs being installed from first half of 2027. And in the Netherlands, we've had strong commercial momentum, many new wins and continue to drive deployments of our Quantum technology for bulk feed collection across the Netherlands reaching 50 installations in total now just a few days ago.

We continue to build our organization close to 600 employees at the end of Q1 and with the growth in the last period, driven largely from new employees in our assembly facilities and expansion of our field service capacity in new markets. For those of you who are new to Envipco, Envipco is a global recycling technology company. we make reverse vending machines, enabling the automated collection of empty beverage containers used in the DRSs deposit return schemes globally. Historically, a North American-based company, the company pivoted into Europe a few years ago and has since won significant market share in new greenfield DRS markets.

Building on a delivery capacity and seeing a very strong tailwind from new deposit legislation across Europe, Envipco is looking very positively to the opportunities ahead. Then let's move a little further into the financials for the first quarter. P&L first. revenues, as mentioned, EUR 19.7 million, down 6% year-over-year. The decline is largely explained by stable operations in North America and somewhat mixed operations in Europe, a few markets such as the Netherlands, and new sales in Poland are positive drivers, whereas some of our existing markets, such as Hungary and Romania are down on a year-over-year basis.

Gross margins improved sequentially to 34.1%, but are down on a year-over-year basis. They continue to reflect the lower capacity utilization as we have built our production capacity and the building of our service organization in new markets. Operating expenses were EUR 11.2 million, up EUR 100,000 from Q4, with EBITDA at negative EUR 2.1 million. European revenues were EUR 12 million in the quarter, down 2% year-over-year. and timing of markets continue to cause quarterly variations. That is an important factor for Envipco. This quarter, RVM sales are down somewhat year-over-year, EUR 10.2 million versus EUR 11 million last year with some of the difference being explained by a higher share of deliveries on throughput and lease, thereby giving the revenue recognition over the contract lifetime versus as an upfront sale in the quarter.

Slower sales, as mentioned in Hungary and Romania, but with very positive developments in Poland and the Netherlands. Program Services in Europe in the quarter were EUR 1.8 million, up from EUR 1.3 million. in Q1 last year. North American operations revenues of EUR 7.7 million, down 11% year-over-year in euro terms. FX adjusted, the decline is 1%. So U.S. operations are relatively stable versus the first quarter of last year. Program Service revenues were down 5% to EUR 7 million. up on an FX-adjusted basis, whereas RVM sales were down 47% to EUR 0.7 million, difficult comparisons with a few Quantum deliveries in the first quarter of 2025. With new orders in North America, the company expects RVM activity to increase for the remainder of 2026.

The gross margin, as mentioned, 34.1%, up sequentially from an adjusted margin of 32.3% in Q4 reported margin in Q4 was 25.1%, including some write-downs on inventories as discussed in March. And then moving on to OpEx. OpEx up marginally on a sequential basis from EUR 11.1 million to EUR 11.2 million this quarter. up 14% year-over-year from EUR 9.8 million in the first quarter of last year. We exited the quarter with 597 employees, of which close to half are in field service and assembly.

Over to our financial position. Balance sheet total is down sequentially from EUR 158 million in Q4 to EUR 151.1 million in Q1. We exit Q1 with cash at EUR 41.6 million, down from EUR 59.8 million in Q4. This is partly explained by an increase in working capital. Working capital growth is up EUR 10.8 million to EUR 68.3 million in Q1. Inventories are building up more than EUR 5 million and trade receivables are also increasing on late sales in the quarter. The inventory build is raw materials increasing as the company is securing components for anticipated higher deliveries through the year.

Total borrowings are down by EUR 0.7 million to EUR 18.7 million at the end of Q1 on scheduled repayments. There is a reclass in our long-term and short-term borrowings this quarter. Subsequent to our Q4 '25, report, the loan facility was reclassified due to a temporary confident [ beats ] at the year-end. A formal waiver has been obtained, and there have been no consequences and going forward, the company expects to reclassify the loan as long term. Current liabilities at the end of Q1 were EUR 44.4 million, up from EUR 33.1 million at the end of Q4, with trade creditors down EUR 2 million to EUR 13 million.

From there, moving into the cash flow. The company started out the quarter with EUR 59.8 million in cash. Cash from operating activities were negative EUR 15.2 million with working capital increase explaining EUR 12.5 million. Cash flow from investing activities, negative EUR 1.3 million in the quarter, capitalized R&D, EUR 0.7 million and regular CapEx of EUR 0.6 million. Cash from financing activities in Q1 were minus EUR 2 million with debt repayments of EUR 0.7 million in the quarter exiting Q1 with EUR 41.6 million in cash balances.

Then let's move into some outlook and market discussions. As a reminder, Envipco has a growth platform based on 4 solid pillars. One is, of course, to continue to develop our existing business. So moving from installations to service businesses in existing markets after a period of warranty. Then the largest driver for the company in the last few years and anticipated to be in the next few years, are greenfield growth opportunities, driven forth by new countries putting forth DRS legislation, introducing deposit return schemes. Through our technology, we are also able to develop business and drive selected growth in existing DRS markets through a brownfield growth strategy. What we have done in Sweden, what we are doing in the Netherlands are strong examples of a very successful growth field -- brownfield growth strategy.

And on top of that, we have a selected M&A strategy, such as the acquisition of Sensibin in 2024, giving us the compact product for the convenience store segment. There are a number of countries driving new market opportunity for this industry in the years ahead. The EU packaging and packaging waste regulation are setting clear targets for all EU nations to collect 90% of all empty beverage containers by early 2029. This is a regulation mandating the introduction of DRS unless existing systems reach certain collection targets over the next few years. Ahead of us now, we are looking at Greece seeking to introduce DRS -- National DRS this year. U.K. is actively progressing towards the introduction of a national DRS from October 2027.

We are seeing that there are movements in Turkey to introduce a staged rollout of the DRS potentially from this year. And then we have a range of other countries coming along in the next few years. There are still some countries that are yet to introduce activity towards introducing a deposit return schemes we expect them also to follow as we get closer to the EU deadline.

With that, I think I would like to give the word to Bob for a brief introduction on our products and the U.K. and U.S. markets. Thank you.

Thank you, Mikael, and welcome to everybody that's on the call. I'm going to -- some of you have seen this slide before because it's very important because essentially, we're a product company. And we're very proud of our product portfolio because it allows us to attack every single segment of the retail market regardless of what country we're operating in. I want to spend a little more time on the low end, the compact and Flex products, but I will take you through the rest. When you look at the market composition and you look at how many convenience stores are in Poland and in the U.K. combined, that's about 75,000 locations. And the compact product has been purpose-built to attack that channel. Obviously, that's a huge opportunity. What have we done with this product? Well, we've engineered cost out of it, the detection is done with a single camera versus multiple cameras.

We use AI technology for shape and barcode recognition. We've redesigned the compactor as a low-cost compactor. It's designed for stores that are doing several hundred containers a day. It's not designed for supercenters or large retailers. It's a very discrete size, it's plug and play. You can roll on store personnel can move the machine around the store, plugs into standard electric. And in this channel in the convenience channel, the threshold for capital investment is low. And so you need a product that meets the performance to affect meaningful sales and we're very bullish in our ability to promote this product and take advantage of this huge market segment.

As retailers get a little bigger or their returns are more than expected, we can move them up to Flex, which is a high-performing multi-camera, more advanced compactor, faster machine. And then as you move into bigger stores, -- we have the Optimum platform, very flexible, it can take a single bin for comingle containers, can and pet together. We can separate the 2 commodities within the machine. Then we can move to Magna, which is a new product -- this is environmentally rated products. So this product can go outdoors and minus 20°C and extreme heat and work perfectly, doesn't require an enclosure and it's very flexible.

So this product, you could expand the product in the store in about 3 hours. So if queuing becomes a problem and a store has 3 Magna and they want to add a face, we can do that in 3 hours, which is a very compelling offering. We have a backroom system in modular, which is state-of-the-art and deployed and performs incredibly well. And then on the highest end, we have Quantum. And Quantum has proven to be a very important product for us, not just at retail, which it resonates. I mean, we have them at retail locations in every single country we operate but a clear pattern is emerging with Quantum with the system operators because you cannot get to the threshold, the EU demands on return rate with just direct to retail redemption.

So that's what we're seeing in Portugal, where they are acquiring Quantum. That's what we've seen in Sweden. That's what we're seeing in the Netherlands. And what's unique about the product is there's really no competitive answer in our view to how this product performs on speed, capacity and reliability. So when you look across this product portfolio, we are really well positioned to attack any retailer, whether it's exclusive, and they have different form factors within a single Tier 1 chain. We have a product for them or individual sales on the low end with compact and Flex.

A bit about the U.S. market. I mean, the market is mature. It's very steady. We have a very nice share of market. We did introduce Quantum in the U.S. market. It's been a big success. We started in New York. The platform is working tremendously well, doing huge volumes, multimillion volumes a month. And now we've further introduced it into the Connecticut market. And this is segmented to high-volume redemption centers they really can't afford a full accounting system in a warehouse. They can put the quantum in the front or inside their facility to get densification and exact accounting. And it's an important product. It's also a product we're looking to California, which is still early days, but we believe the Quantum can play a role in California as well.

We did succeed on 2 competitive RFPs with national retailers with locations in Connecticut. We won them both exclusively. It's 200-plus machines. Those are rolling out as we speak and will be complete by the end of this year. We have a continued focus on business development across the board. If any legislative green shoots show up, there's some activity now in Texas, we have a team to go in and make sure we're represented and can kind of direct and control how that law moves forward.

As far as outlook, we expect RVM sales to increase during the year, and we feel quite confident that the U.S. business is in a good position. Now to the U.K. We have announced 2 meaningful exclusive commercial deals with a leading U.K. retailer, Iceland, we announced 1,500 compact kind of proving the points I'm making on the portfolio. It's an exclusive deal. It's in every single store. We filed that with a Tier 1 win with 2,300 RVMs across our compact Flex and Optima line, a highly regarded retailer. These are -- we're proud of these wins. They're very difficult competitive situation, and we prepared -- we succeeded on an exclusive basis.

The DRS in the U.K. is moving very systematically. We see them being extremely organized this October 2027 date, in our view, is not going to move. The system operator is also looking to incent a much broader network of return points. How are they doing that? Well, they've introduced a scheme on handling fee where 5, 000 which is quite significant, goes to small retailers that do about 200,000 units a year. Well, that is a huge tranche of subsidy to allow us to sell and compact and Flex. It makes the ROI in many cases, immediate. They're also introducing a $60 million subsidy fund which is another incentive to get the low end markets, so they can get as many points of redemption as possible, which is great for the DMO and it's great for Envipco.

Now we have a laser-like focus on Tier 1. Those debates have been going on for months. We expect them to conclude in the next several weeks. And as I said in previous calls, -- we have a high degree of optimism about our position on Tier 1 and Tier 1, just to be clear, are the large retailers, the Sainsbury's, Asda, Tesco and so forth. So we feel good about the U.K.

And with that, I will turn it back to Mikael. Thank you.

Poland, Envipco keeps building its buses in the Polish markets. And we recently announced an agreement to supply 700 Optima Flex RVMs across Netto Polska's store network in Poland. The Polish DRS went live in October 2025. There is a gradual ramp. It has been a so-called slow or soft start of DRS. In the first 7 months, market intelligence tells us that there is roughly 1 billion containers that have been collected out of the 14 billion container markets. So the ramp-up is gradual. It's slow. Envipco will continue to build its market position through preferred supplier agreements with a number of big retail groups and on the basis of announced orders.

In addition, Envipco sees a significant long tail opportunity in fragmented retail in Poland. As we have discussed before, I mean, initial expectations were a market sizing of around 15,000 RVMs through the Polish market. But there are a number of opportunities outside of that number. So that overall market could end up potentially being larger than that initial market assessment.

Poland -- excuse me, Portugal, went live in April with the DRS. That's also a soft launch with a grace period for the industry. but installations are coming along in that market. Envipco has announced multiple agreements, positioning the company for a solid market position in Portugal. We are the sole supplier of bulk feed collection systems for the operator, SDR Portugal, supplying up to 50 Quantums across Portugal. We have an exclusive frame agreement with [ Kovidal ] an Iberian retail group. We have recently announced a frame agreement with SPAR Portugal. And on top of that, we have the previously announced LOI that we are delivering on with Intermarche.

We recently also moved into new facilities and are building our Portugal team. The Netherlands has been and continues to be a big success for Envipco. The Netherlands introduced cans in through its DRS a couple of years ago. and collection rates dropped. The operator is looking for new ways to increase collection rates and the Quantum bulk technology has proven to be a very effective product in reaching that. We signed a frame agreement with the operator starts to get Netherlands last year. and are continue to deliver on that opportunity. Statiegeld has announced plans of a very broad network of bulk feed, maybe up towards 200 bulk feet collection points during the current year, and Envipco continues to target and build on that opportunity.

Greece is progressing towards a soft DRS launch in 2026. Last year, DRS [ Hellis ] was appointed the system operator. an operator backed by major beverage and retail stakeholders. Recently, they have introduced tenders, both for RVMs in-store, out of store and also for accounting centers. Envipco has a very strong position in the Greek market. Having been there a number of years, working closely with our partner -- we've installed around 500 Quantums across the Greek markets in a pre-DRS phase. We are attempting to build further on that and see great opportunities both for our Quantum technology, but also for our broad RVM portfolio. We have a strong market fit with the Quantum S purposely built for the Greek market. So we are very optimistic as to the company's opportunities in the Greek market as well.

That brings us to the end. This has been a very active quarter where we are -- have seen a very solid commercial momentum. We continue to see that into the second quarter as announced through recent wins. We are overall seeing very strong market tailwinds with legislation driving new opportunities that is creating very exciting long-term opportunities for the company.

For 2026, we expect Poland and Portugal to build. We expect Romania to continue to be robust, however, lower than last year as we are on the tail of market opportunities in the Romanian market. Hungary came down last year, is expected to be relatively steady with last year's activity level, whereas Netherlands is picking up momentum, and we are very optimistic to our opportunities in that market. Greece tenders are advancing, and Greece could offer significant commercial opportunities for the company when that market starts moving ahead.

Looking a little bit further down the road. We are very happy with the initial wins in the U.K. market, building visibility, building market position in the U.K. markets. As you heard Bob mentioned we expect more activity from the U.K. market in the next weeks and months as well. We expect a stable U.S. business with some growth in RVM sales based on recent wins. And we will continue to manage our operating costs, manage our working capital. And as always, -- this is a market driven by regulation. We will see quarterly variations, but the long-term progression of this industry is very exciting.

So with that, I think, Bob, if I can ask you to come back up. I think we will open for questions.

See if we have some questions coming in here. Here's 1 question. How do you see the competitive landscape in Poland and Portugal?

We have -- on several occasions, said that the Polish market is very competitive. There are I think the largest number of RVM supplier is in Poland, then we have seen really in any other markets. So very competitive on all dynamics, Portugal. The number of competitors are fewer, I would say, than in Poland, more on what we usually see in other markets. So the usual names, I would say, we see in the Portuguese market.

Let's see here. Contract wins have been significant year-to-date with deliveries picking up from Q2. What should we expect as sales run rate? And how will that affect margins?

Well, with deliveries increasing, revenues should increase. However, as we also pointed out in our Capital Markets Day last year and we've repeated on occasion. Keep in mind that there are several outside factors that also influence our quarterly sales, thus the argument of quarterly variations. We are -- the company is reliant upon DRS legislation being enacted. And the timing of that is outside the company's control. And we have seen notoriously that the timing has tended to shift -- the type of agreement we enter into, if it's a sales contract, if it's a throughput contract, if it's a leasing contract, also impacts the short-term or long-term revenue recognition.

So these factors will play a part in how the sales will develop. But as pointed out in the question, Commercial activity is sharply up. We are looking positive to the outlook in terms of future commercial activity as well. And thus, that should drive sales. On the margin level then, gross margins, as mentioned, are today also affected by the underutilization of our assembly facilities and the upfront investment in field service capacity to enable this installation, thus a higher revenue should give an uplift in gross margins. And we have operating leverage in terms of OpEx now at EUR 11 million plus per quarter, that will continue to build carefully, but of course, revenue growing for faster than OpEx should give some leverage as well.

Let's see here. Are there any reasons to expect a sequential increase in revenues in the second quarter?

Yes, Envipco expects a sequential growth in revenues in the second quarter, driven by Poland, driven by Portugal, driven by continued growth in the Netherlands -- those are the key drivers. On top of that, there could be depending on how the process in Greece develops, Greece could become a factor for the company in the next few months as well.

Let's see here. What is the accumulated number of installations of RVMs? For Envipco that is roughly 15,000 RVMs installed.

Higher share of throughput -- is that primarily related to the Netto Polska agreements? Or is this broad mix? it's not a broader mix shift, but it's a somewhat broader than 1 individual customer. We had 1 LOI announced last year where customers were the customer was given the choice between sale or throughput that share of customers choosing throughput has been higher than we originally anticipated. So it's a little bit broader than just 1 customer this quarter.

And I would add to that, that most of the U.K. and EU opportunity is sales of the service agreement. But there's the throughput deals, we've been doing those in the States for years. They're very good model from a margin perspective, and they're a very good model for us to have experience with in order how to construct it. So if a customer comes to us and wants to do a throughput deal, we're happy to but it's kind of a smaller percentage than sales and service on the front end.

Yes. Can you quantify the Romania impact in the first quarter? What's the expected timing of recovery?

Timing of recovery, the customer is already back in a significantly higher activity than what we saw in Q1, and we expect that to continue this year. The exact number, it's a fair share of the DVMs to Q4.

See here what we have in -- there are a couple of double questions here. U.K. you mentioned that you see more retailers making decisions. Can you put some more color on what's going on? What's your focus?

Yes. Well, when you have October '27 as a hard deadline, for this scheme to kick off. So these containers are going to be flooding into all these retail locations on day 1. Now there will be a small grace period for smaller brand holders to get the barcode initial -- but the main players will be ready to go. And when you look at that time line, the Tier 1 retailers with multiple locations, multiple different store formats need to make decisions now because the work ahead of them is as significant as a work ahead of us. They have to get the groundworks, the electric, the permitting -- they need to know what machine, what size, how many in every single location. It's a tremendous amount of work that needs to be accomplished between now and go live. That is why we feel that these debates are going to conclude in the next several weeks.

They can't conclude much longer or the retailer themselves won't be ready for us, luckily, we have substantial manufacturing capacity. So we're ready to go. But that's why we feel that these debates will end quite quickly.

Good. Can you give some details about the Turkish market and your strategy in this market?

Well, Turkey has, for some years, planned the introduction of DRS. Once again, a process that has taken a lot of time and been through several developments. Signals now are for a staged introduction of DRS this year or starting this year. Staged maybe in the sense of requirements for retailers to have a part of their outlets start collecting empty beverage containers and introducing a deposit. Envipco is tailoring a product for the Turkish market. We are working together with a local partner for the Turkish markets and we'll target the Turkish market that way. And we're working where we'll come back to, I guess, more details on the Turkish market as we move through the current year.

See, there are many questions here that are overlapping. Yes, how should we think about revenues for the current year? How should we think about Q2, Q3? As mentioned, we expect sequential growth from Q1 into Q2 and remains to be seen how the second half develops, but -- if markets develop the way we've seen so far, they should continue to build. But once again, all these factors impacting near-term sales, will also play a part. Overall, we're optimistic to what we see going forward.

Let's see here where are we, many on Q2 U.K. when secured before DRS has even launched how much of the remaining U.K. retail market is still undecided and how is Envipco positioned? A little bit overlapping, but

I think there's been our announcements and another announcement -- so it's moving. I would say that 70%, something in that order is in front of us in terms of concluding. And that -- you have to look at the U.K. market and in really 2 categories. One is Tier 1, which everything is consolidated under 1 buying and operational group. And then you got the wholesaler groups, companies like SPAR and others that negotiate preferred supplier agreements. And that's obviously those wholesaler accounts into small convenience is a huge, as I mentioned, in the U.K., we have that market at 40,000 a locations. So that's going to take a little longer. So I would say that's as good a percentage I can come up with to date that most of it's in front of us.

Yes. Regarding Greece, what do you mean by the statement public tenders scheduled to close shortly?

Well, there have been public statements or tenders since April, they were initially expected to close in April. They were extended somewhat into May. I don't have the exact dates on that, but we're, I think, fairly close to the extended deadlines for that. And probably will be some process testing, et cetera. But it seems to be closing in, as we mentioned, fairly shortly.

Yes, we're running a little bit out of time. Many questions here.

The average service revenue per installed unit is higher in the U.S. than in Europe. How is the service revenue why is that? And how do you see that developing?

Well, the service revenue in the U.S., we have a somewhat aged fleet. So when our service contracts come up, we have escalators and things -- techniques that we will use in the EU to burnish and build our service revenue line. But right now, we're heavily into warranty period. But when we come out of that, we still believe strongly that we'll get 10% service revenue against the ASP of a machine we sell -- so that service revenue will rise closer to U.S. standards over time.

I think with that, we're reaching an end to -- for this presentation. Once again, we're very excited about the commercial momentum that Envipco is building. The company sees a number of opportunities, both short term, medium term and long term. And we'll continue to try to harvest the opportunities that we face.

Thank you for your time and attention today. The next time, Q2 will be on August 12 and hope to see you back then. Thank you so much.

Good morning, everyone, and a very warm welcome to Q4 2025 results presentation from Envipco. My name is Simon Bolton, Group CEO, and I'm joined by 2 colleagues, Mikael Clement, Chief Strategy and IR Officer; and also welcome back to our old friend, Bob Lincoln, President of the U.S. and responsible for the very important U.K. and Irish markets.

Maybe before we get into the presentation, just to say that you will have seen the announcement. I'm stepping -- this will be my last quarterly report. I'm stepping down at the end of April, personal decision. And whilst 2025 was a transitional year, you'll see the exciting future that this business has.

It's been an honor and pleasure to lead the business and also thanks for your continued interest and engagement in the business. I know many of you have followed the business for many years and hope that support interest continues in the future.

Okay. Let's talk about Q4. Again, 2025 overall was a transitional year as some of our existing markets were become delivered and some of the new markets, while started, had yet to really ramp up. So revenue, EUR 23.8 million, so year-on-year, 27% lower. Gross margin, that was impacted by continued investments and also some one-off items, which Mikael will take you through in a little bit more detail.

Overall then for the quarter, we had EBITDA of EUR 0.7 million, which included EUR 4.1 million in other income, and we exited the quarter and the year with a healthy cash balance of EUR 60 million. We continue to make targeted long-term investments in the business. And this results in delivery. So we continue operationally to build our share in Romania.

We're now up to about 40%. Brownfield markets are also exciting. And we have a little bit more detail later, but we continue to build into Netherlands, working with Statiegeld Nederland and also some key retail customers. We continue to invest in product development and technology. We had 2 really exciting products launches recently, great excitement in Euroshop when we showed these a few weeks ago, and Bob will go through some of those in more detail. And we continue to invest and develop our employees.

We exited with 529 in terms of number of employees. And we also launched the Envipco Academy, which supports development and growth of staff as we become a larger and more complex business. That's important. For those who maybe just joined us, Envipco is a global recycling technology business.

We've been doing this about 40 years, and we are focused in the recovery of beverage containers. That's what we do. That's what we've done since the beginning, and that's what we'll do in the future. In this segment, there is an unprecedented growth opportunity driven by legislation, particularly the EU packaging and packaging regulation targets 90% recovery by 2029.

What does that mean? Well, there's about 100,000, 120,000 reverse vending machines, the actual the equipment that accepts the bottle operating in the market. It's taken 40 years to deliver those units. In the next 5 years, about 200,000 more will be needed. This multibillion-dollar euro market is where we're active in.

We continue to invest in products, technology and our platforms delivered with an increasingly experienced and seasoned team. And ultimately, that will drive revenue and profitability, which we are very excited about. Now with more detail for the financial review, let me hand over to Mikael.

I'll start out with the P&L as usual. Group revenues in Q4 '25 were $23.8 million, down 27% year-over-year from a very strong Q4 '24. The prime driver behind the decline are lower European RVM sales as existing markets are increasingly maturing and also largely on Greece, which has been a very important market for Envipco over the last few years, is preparing towards a DRS launch. Gross margin, 25.1% in the quarter, adjusted for nonrecurring items 32.3%. I'll come back to that in a later slide. OpEx, EUR 11.1 million, flat year-over-year, reflecting continued investments in the organization. Our headcount is down slightly this quarter from Q3.

In addition, we had other income of EUR 4.1 million stemming from the reversal of parts of the earn-out provisions from the Sensibin acquisition. EBITDA this quarter, EUR 0.7 million, down from EUR 4.6 million in Q4 '25. For the year, revenues were EUR 90.4 million, down 18%.

Key driver once again are lower European RVM sales, largely explained by lower revenues in Greece and other maturing markets, together with the delayed launch of DRS and activity in Poland and Portugal. Gross margin for the year, 33.3% or down from 37.1% last year. Adjusted for the nonrecurring items, gross margins for the year were in excess of 35%.

Operating costs for the year increased by 8% to EUR 41.8 million, with EBITDA ending at EUR 1.2 million. Europe in Q4, EUR 15 million revenues, down more than 35% year-over-year. I've touched upon some of the key drivers here. It's lower RVM sales, key driver. RVM sales, EUR 12.7 million, close to half what it was in Q4 '24 at EUR 24.8 million.

We did have our first Poland deliveries in Q4, offsetting some of the declines in other markets, existing markets. We had very positive development in both Sweden and the Netherlands, while Greece, Hungary and Romania were down year-over-year. Romania revenues were -- have been pretty stable through 2025 and Q4 is no exception, but Q4 '24 was very strong, so the year-over-year comparison is down.

Program services in Q4 were EUR 2.3 million. North American revenues in 2025 were flat year-over-year for the year as a whole. In Q4, revenues of EUR 8.7 million were down 3%. Adjusting for the weaker dollar, the North American revenues were up by 5%. Key explanatory factor, as you know, program services make up the [ lion's ] share of revenues in North America.

Program services were down 13% year-over-year to EUR 6.9 million, largely driven by volume declines, but also some material pricing effects. RVM sales this quarter, EUR 1.9 million, a pickup from where it's been in the last few quarters on replacement sales and new sales into existing customer accounts.

A comment on the gross margin. The gross margin this quarter reported at 25.1%. This includes some nonrecurring items. Adjusted for this, the gross margin underlying was 32.3%. The nonrecurring items can be divided largely into 2 key components. One, explaining around 2/3 of this are inventory provisions on end-of-life products.

So what we have -- we've replaced the leasing portfolio gradually in -- specifically in the North American markets. We've done quite a bit of product innovations, which has led to some obsolete parts inventory in our business. This has been adjusted this quarter. And then the remaining parts are explained by some year-end true-ups as we harmonize our positions across the entire organization.

32.3% adjusted margin still reflects an increase in our service personnel and a low utilization in our assembly facilities in Europe primarily. So as a result of the lower revenues. Operating costs, as mentioned, flat year-over-year at EUR 11.1 million. We exit the quarter with 529 employees, down 5 employees from Q3. We have EUR 4.1 million in other income from the reversal of parts of the earn-out provision.

We will continue to maintain a disciplined approach to manage our operating costs, investing to make sure that we are positioned towards new markets, but also managing this in relation to the activity levels. Over to the balance sheet. Not very large changes in the fourth quarter. The total balance sheet is down slightly on a reduction in working capital.

Our working capital is down by roughly EUR 5 million, driven by both the reduction in inventory levels and accounts receivables. In addition, our trade creditors are up slightly. On the equities and liabilities side, a reduction in our borrowings explains the change from Q3 to Q4. So balance sheet totaled EUR 159 million, down from EUR 165 million, and we exit the quarter with EUR 59.9 million in cash, down from EUR 62.7 million in Q3. So the cash flow in Q4 started out the quarter with EUR 62.7 million, a working capital release added EUR 4.9 million, offset by investments of EUR 4.1 million, driven by CapEx in excess of EUR 3 million and some capitalized R&D at EUR 1 million this quarter.

And then repayment of borrowings, minus EUR 3.5 million, ending the quarter with EUR 59.9 million in cash. For the year, starting out with EUR 30.7 million in cash, working capital build of EUR 9.7 million largely explained by lower receivables. CapEx total, both CapEx and capitalized R&D at EUR 9 million, relatively flat with the previous year and then plus EUR 47.9 million in cash flow from financing, largely explained by the private placement in Q3.

So with that, I would like to give the word on to Bob.

Thank you, Mikael, and hello, and good morning to everyone. I am going to spend a bit of time on the product portfolio, particularly to give some insight on how we're positioning our products to win quite large RFPs, not just in the U.K. but in Poland. If you look at our product portfolio, it's very broad. So we go from very small applications in convenience stores to medium-sized convenience stores to the middle tier, which are traditional supermarkets, all the way up to Maxi stores with our backroom systems and of course, the quantum, which has proven to be the gold standard in bulk feed technology.

But a couple of these products are very critical as we move through these large RFPs, particularly that are near term in the U.K. First off, the compact product. Now our team in the U.K. has mapped every single store throughout the U.K. and 75% of the store count in that country is small stores, convenience or medium-sized convenience stores.

This is a very important product to help us attack the lion's share of stores that are out there. And this product has very significant product attributes. One of the things we've done is we've engineered a lot of the cost out of the platform. How do we do that? On the in-feed, we are using AI technology to validate the container, the barcode and the shape, which eliminates cameras and cabling, allowing the machine to be less costly.

We've also designed a new compactor technology that sits much higher in the machine, allowing for the bin below to be much larger. So it's a very high-performing machine in this form factor. The other brilliant part of the platform, it's truly plug and play. For these stores, you roll the machine in, you plug it into standard electric and you're running immediately.

It also can be moved around the store. And these points resonate with the customers we're talking to about it because during high merchandising seasons like a Christmas, they want to be able to move the machine around with one store personnel. You can do this very easily with the compact.

So the product also is a bit shorter than the standard RVM and the area on top can be used for merchandising. And it seems like not that big of a criteria, but it is resonating quite heavily with these accounts because they're giving up floor space already. Now they can merchandise on top of the machine with a captive audience that's using the machine.

We've also been asked by Tier 1 retailers to install a monitor above the machine so they can run promotions real time to customers using the machine. So very important product, huge market potential in the U.K. and in Poland. But what's really important about it, it's kind of a gateway product because if you have an account, let's say, in the U.K. that has 2,000 store locations, and we have a fantastic product with this and FLEX to penetrate 1,500, it's very easy for us to then start to position our higher technology products.

And Simon referenced this earlier, but this product called Magna, which we introduced at Euroshop really has a lot of very positive features. First off, it's a fully environmental machine. So this machine can work at minus 20 C up to plus 40 C, so it can be placed outside and work perfectly. And we know from the U.K. that a lot of retailers want the machines outside, either under the vestibule or in the kiosk, and this machine meets that need.

The other thing the machine has is an accessibility kit. Some retailers want a machine, a bespoke machine for the handicap to use. So we can graft onto this machine, brail audio and different buttons at the reach height for folks who want to use the machine that are handicapped.

Importantly, the machine is very modular. So you can take this machine and let's say we go to a retailer and we say, let's not over CapEx your commitment for the go live. We'll start discretely, say, for Magna to start with. And then when it ramps, if they need to add a machine within 48 hours, we can come in and put a machine next to it.

But importantly, that additional in feed can feed an existing bin. So they don't have to put an entirely new machine in. They can get another queuing station by adding the machine.

We can also take it away and move it to other stores. So that flexibility, that modularity of the platform is very important. Additionally, there's a dynamic in this business where you can look at a spec sheet and say, oh, the bin full is x number of containers. But in reality, when those containers are ejected from the compactor, they nest in the bin.

And when they do that, they come up the sidewall of the bin and they cut the bin full sensor causing store personnel to go to the machine and shake it down. Well, that's OpEx. And this machine has a self-automated self-leveling device, so the bins fill perfectly evenly. And when you're looking at an account that has 1,000 stores with this product, that reduction of trips to the machine across the life of the platform evolves into a huge number and a big advantage to the company on positioning this product.

So gateway product with compact and FLEX, high-performing product for the middle tier that we can then move them up to backroom systems or to quantum. Now we've had some advancements in quantum as well. Now the standard quantum requires 4 parking spaces. And some retailers can't give up that many parking spaces. So we designed a smaller version of this machine. We did a lot of engineering in terms of the storage area. So we are reducing the capacity of the containers, but it's modest.

So this is a machine that only takes 2 car spaces, which is incredible. It's also very good logistically to move this machine around. If you look at a market like Greece, which has a huge confederation of islands, this machine is very easy to move into applications like that.

So this brings more customer targets in play because it's a smaller unit and takes less parking spaces. Additionally, when you look at Quantum and Quantum has been just a huge success. We have one in every single market we operate in, and the consumer response to it has been dramatic. But it does require retailers to trench electric to the site, and that requires permitting and expense. And it is a barrier that we need to push through.

The product is strong enough to push through it, but now we have a solar version. So this machine doesn't require trenching that you can simply drop in, run it on solar. It saves OpEx because we're not using electric. So this is another great product to further widen our target audience for Quantum.

So that gives you a preview of some of our new products and how we position our products. Now let's spend some time on the U.K. The U.K. is moving through the commercial cases urgently, and we're involved in every single Tier 1, Tier 2 debate. We very much like our position. And these commercial cases are going to come to fruition very soon in several weeks because the requirement for these retailers to roll this out, essentially all retailers rolling out at the same time to meet the October 2027 go live is a huge undertaking, and they're taking this extremely seriously.

So how do we feel about the U.K.? Well, first off, we had a phenomenal success in Scotland. The same team in Scotland is prosecuting the U.K. case. And these are highly skilled professionals. So we feel very good about our position. We feel very optimistic that we're going to be able to announce orders in the short term. And the Tier 1 section, which is obviously quite large, will largely be decided in the first half of the year.

So the activity is high. Our position is strong, and we're looking forward to a very nice result in the U.K. And with that, I will turn it back over to Simon.

Okay. Bob, thank you very much. Excellent. Very exciting for the U.K. I want to show this slide again. This is, I know, a favorite of many. So I think Bob has given us a very good insight into the U.K. Clearly, as we head towards 2029, we still have a large number of markets to come.

Obviously, we talk a lot about the near term, Poland, Portugal, Greece, as we mentioned, it's still to be determined the exact form, but certainly, there's -- we understand there's plans to introduce a deposit return scheme this year.

And then going slightly further forward, we have Spain, France, towards the back end of that period. And also, we've added one more market this time, Serbia. Again, in reference to the EU Packaging and Packaging Waste Regulation, which requires 90% recovery using a DRS by 2029. That country is now have plans to introduce a scheme. So remains very significant activity.

A reminder, we generate growth through 4 areas. We have now an expanding existing business. So even those countries that went live a few years ago are still requiring services, of course, and also additional machines. Greenfield, new markets. Bob talked about the U.K., but also, of course, Poland, Portugal, Brownfield, I'll talk a little bit about the Netherlands.

So using technology to penetrate an existing market and grow and then occasional M&A example, Sensibin Technology Group a couple of years ago. In terms of Netherlands, look, a great example, like Sweden was before it of Envipco using our technology to penetrate an existing market where we didn't have a foothold. And we're in the process of working with private operators, working with the opera Statiegeld Nederlands to actually roll out Quantum across the country. Very, very positive. That's one of the first that we actually put in place with Bungas, and that is now done getting on for 8 million containers, really fantastic.

Poland. A lot of discussion about Poland, big market, of course. It's gone live. So officially, the market went live in October 2025, but very, very few containers before Christmas, but we see the container number increasing. With that comes the demand for machines.

So even though we weren't successful in a couple of larger deals autumn last year, we still have a big market to go after. We've been successful in that. In last update, we said we were about 300 orders. We're up to about 1,000 as we work through frame agreements with most of the large store networks in the country.

So we continue to work with those groups. We've got some pictures there taken around Warsaw of actual installations. So this is not press release. This is not general frame agreements. We are working hard day in, day out to actually get units on the ground, which we think is the most important thing. And that's really that kind of no nonsense type approach is really resonating well with customers. And we will continue to do that such that we are confident about achieving our target market share.

In Portugal, since the last update, we've had a couple of great announcements. One, up to 50 quantum with [ STL ] Portugal. So a network of Quantum's from the -- early in the scheme, which is great to support their recovery targets. And then another frame agreement with a large Iberian supermarket, which will roll out over the next 12 months.

We've moved like Poland, we've moved to a new location to support that rollout and support the service, expanding the technical team and really ready to get busier and get going further in that market. Overall then, we're building momentum at Envipco. So 200,000 units is multibillion opportunity.

2025 was a transitional year, but you see really great strength as we go into 2026. Poland, Portugal, building momentum, great case, lots of commercial activity in the U.K. All of that bodes extremely well for the business. And of course, we maintain a disciplined approach. We've improved working capital management.

We've kept an eye on OpEx. CapEx is specific and focused, and we will keep that disciplined approach as we grow the business. So I think with that, that finishes the presentation. Thank you very much. And I think, Mikael, we may have some questions. So the next event is May.

Maybe I understand there were some sound issues in the first few minutes of the presentation.

Yes. Okay. Great.

Great idea. Can you maybe just do the intro?

Okay. So good morning, everyone. So we're in [indiscernible]. So yes, my name is Simon Bolton. And once again, I'm joined by my good colleagues, Mikael Clement, Chief IR and Strategy Officer; and our old friend, Bob Lincoln. And also, I did announce that I would be -- a reminder that as an announcement, I will be transitioning out of the business at the end of April.

And just to reconfirm, it's been an honor and pleasure leading this business. So this will be the last quarterly update that I give. And as you saw, it's a transitional year in 2025, but the business is positioned extremely well for the future, and I'm confident that the best years are ahead for this business. So that's, in summary, what we went through the first couple of minutes. And I think now we've got even more questions, right, Mikael?

Yes, we do. I can start with the gross margin. Adjusted gross margin is down from Q3 to Q4 despite slightly higher revenues. What's the key reason for this?

Well, we are investing in service personnel in Poland, in Portugal to be able to install machines as we move ahead. Those costs are into cost of goods sold, and there is a further increase from Q3 into Q4 on that. So that weighs a little bit. On that relative change. And then there are also, I think, some geographical mix changes and some product mix changes that explain the decline from Q3 to Q4.

Yes. CEO transition, when do you expect that completed? Well, in the press release on January 12th, the Board said that the process of recruiting a new CEO was well underway that Simon would be staying on with the company until April 30th, and that the Board did expect to be able to announce a transition before that time. I have not heard anything yet since that. So I assume that still stands.

Yes, very much.

Then we have a question on the deliveries in Poland and the revenues in Poland, a couple -- a few questions here.

I think I should take that as well. I mean in Q3, we announced firm orders of around 500 RVMs in Poland. And we -- with delivery both in 2025 and into 2026, we delivered roughly half of that volume in the fourth quarter of '25 in Poland. Let's see here if that's more.

Yes, there's another question on the inventory provisions and year-end true-ups. Just to repeat that then. So from 25% to 32.3% gross margins, those are nonrecurring elements. The majority of those stem from inventory provisions, and that is an adjustment on certain parts inventory for RVMs that are no longer in use.

So obsolete parts inventory largely. And then we have centralized our finance function through 2025 with the addition of a new CFO, Patrick Gierman, a new team based in Amersfoort. That team has made sure that we're now harmonizing all our accounting across all organizations in the group. So some of those explain the remaining one-off items in Q4.

Yes.

See what we have here. We've done this Poland. Romania, you said that you continue to build market share in Romania. Where are you now? And what potential do you continue to see in Romania?

Yes. No, I think that's a great question. As we said before, Romania has been a great success story for us. So we've been operating in the country as a supplier manufacturer for over 10 years. We have a main European manufacturing center there. And obviously, we participated in the DRS deposit return scheme.

As we -- as the country exited, they're recovering about 80%, 83%, which is a fantastic achievement because they probably came from maybe 30%. So it shows the power of deposit return schemes. But to get from 83% to 90%, 90% plus, that's hard yards, and that will require continued investment. So we do see continued investment, which is obviously very positive for us.

And I think there will be opportunities for things like increasing Quantum deliveries, municipal solutions to get that final 10%.

Yes. Makes sense. Then there's a question on Ireland. Can you give an update on your performance in Ireland, which you reported was still lagging in terms of market share?

Yes. I mean in the Irish market, there's still a reluctance on some retailers to uptake a portfolio of our smaller machines, but we're grinding on it day in, day out, and we expect our share in traditional supermarkets to grow. But what's interesting about Ireland is Quantum.

We did our first Quantum installation at a SPAR location in Ireland, and it's been an unbelievable success. And coming out of that success, we now have 7 Quantum's already sold and installed and 3 in the pipeline and more to follow. And what's happened is we took a convenience store at SPAR, we put a Quantum in and the volume went from 3,000 containers to 500,000 to 600,000 containers and ramp very quickly.

Now when you're getting a handling fee of a little over EUR 0.02 and you're doing 600,000 containers, that's a significant revenue stream to the retailer. And half of the traffic at the Quantum location has been driven into the store itself. So they get all the incremental sales. So I think Quantum is going to be playing an increasing role in Ireland.

Maybe just to build on that, I think we see this as a real theme, right? We have -- so Quantum in Ireland, I think we're seeing, obviously, the great order in Portugal. And I think now pretty much every market we operate in, including the U.S., we see either the technology coming in, in old and mature markets, Brownfield markets or even like in Portugal, an order being placed for Quantum before the scheme starts. So I think with the additional product formats that you talked about, Bob, Solar, Quantum S, I think Quantum is an incredibly strong platform that more and more markets are understanding.

And I think certainly, we referenced Euroshop, which was the international retail fair a few weeks ago, incredible interest in Quantum. So I think this is a real product platform that's unique Envipco holds a lot of value. And I think now the proof points of hundreds and hundreds of these being rolled out is really very, very powerful. So I think that's really exciting.

Then there is a question on France. We talked about a pilot program in France. What type of potential are we're seeing in the French market?

Yes, great. So France has always been on our famous Gantt chart. We strongly believe there will be a deposit scheme in France. It may have different -- slightly different characteristics to some of the others that operate in Europe, but we believe it will come in. And the early scheme, which we did announce sales for last year is around refillables, refillable glass.

So France has started with that with a pilot, which is going quite well. That could be expanded and then that could be expanded also to include single-use containers. So I think France is going to happen. We've got -- we're working well in France. We've had an entity there for some time, and we'll continue to stay tight with all the stakeholders to see what we can do to participate.

Clearly, France is a big country. So that is another 25,000 to 35,000 unit market depending on the characteristics. So it's exciting. But it will come probably towards the end of the window.

Yes. Then there are a couple of questions in regards to the LOI in Poland. And the 1,500 orders. Number one is the LOI [indiscernible]. And number two, what's the status?

Yes, definitely. So the 1,500 that we said before, 1,000 that we updated, they are smaller orders from independent stores. So these could be 1 unit or they could be up to kind of 10 or 20 units. It does not include the LOI, which is still valid. And obviously, we announced that some time ago.

What we have been doing is we have been working with that particular customer to look at how the scheme is developing and also the product and technology selections that may be most optimum to them. And they've taken that advice on board. And what they've done is they've reconstituted how they're thinking about that. We're still working that through with the customer. And hopefully, we make some announcements soon. Certainly, the overall magnitude, we expect to be similar, but that's not included. And what isn't included is we still have clearly some larger retail chains that have not made a decision yet.

And as you just saw on the slide, we have a really great local commercial team. Not only are we going for and leveraging our frame agreements, but we're also following up hard on these large midsized chains that haven't made a decision. And again, hopefully, we'll make some announcements. obviously, we'll make announcements when we can on hopefully the success in that area.

Are there any new developments in the U.S.

Yes. I mean we continue to focus very much on California, and we are very close to installing the first Quantum in California. It might be followed by 2 more Quantum. And what's interesting about California, I won't digress too much because it's such a complicated market. But essentially, it's called the way and pay market. So customers come in with a bag, they put it on a scale. There's an attendant, they weigh it, they pay them cash and they go.

So that's a very inefficient model because you have no compaction, no exact accounting. So where Quantum comes in is we can count the material exactly. So we eliminate shrink. But importantly, logistically, moving all these full containers all over a very expensive state, there's a real reason to use Quantum to capture better logistics savings and reduce shrink on count.

So we are very optimistic you will see a Quantum and maybe a couple of Quantum's in California this year.

Great. Good. And then there's a question on existing markets. How should you extrapolate kind of the development in some of these existing markets? There's the softness we've seen in '25.

Yes. Look, I think, as you mentioned, Mikael, I think we had a very strong -- in a couple of these new markets, we had a real strong 4Q '24, which kind of gave quite a tough comparable. I would say, look, Romania, certainly, we see continued developments in Romania.

Hungary, it's stable. So it's come down a lot because now we're kind of over 2 years since the scheme went live. But we do see -- continue to see opportunities. And then we have other existing markets now like Sweden, like the U.S. that Bob has referred to.

So I think we've got -- I think in those existing markets, we've got a solid stability. And then I think you'll see the new markets as they start to accelerate add to that, which will obviously have a material impact on our revenue, which we expect to come through during the course of 2026. And of course, as we've said before, some of these markets now we're working out of the warranty period.

So that will start to drive through, and we'll see expansion and development of European service business as the installed base has increased and that -- again, that comes out of the warranty period.

I think we have time for one more. And then it's really on the visibility of the outlook. What are you seeing now as the key -- given 2025, what are you seeing as -- what visibility do you have on new developments?

Right. Maybe we can all answer that. So maybe we start with Bob.

Well, obviously, the U.K. is quite a large market. I mean we estimate at 35,000 machines. In my view, it's going to be more than that. And so that's going to come out of the ground commercially this year. So that's -- obviously, we have a pretty good outlook because we're so deep into the commercial cases now. We have a good sense of where we stand. So U.K. is the prominent one, I think, at least near term in terms of commercial.

Yes, absolutely. And I think just to add to that, I think whereas the U.K. will order flow this year, deliver some revenue in '27. I think Poland and Portugal, we're starting to see now proper momentum. I think -- and that really is containers on the shelf, customers demanding their deposit back.

And I think if we just go back a couple of years, there's some parallels to maybe Hungary, very few containers on the shelf. There's soft activity. As soon as the containers come on the shelf, that heavy summer suddenly it kind of accelerated. And so I think we're going to see some parallels there. So we are very positive about both of those markets. And as I said, I think we've got a good, stable level of business in the other existing markets.

And of course, we have Greece kind of coming up on the side. Now we've been very successful. As you mentioned, '25 was a lower year in Greece as the focus moved from municipal infrastructure to preparing for the DRS. Clearly, DRS possibly coming in, in this year gives us good opportunities. So I think for me, they are the key elements in terms of growth.

That's great.

Okay. Fantastic. Well, once again, everyone, thanks for your time and attention, Q4. It's been great to present our business. Thank you very much. And the next time is in May. Thank you.

Good morning, everyone. My name is Simon Bolton, CEO of Envipco. And a warm welcome to Q3 2025 Results Presentation. I'm joined as ever by Mikael Clement, Chief Strategy and IR Officer. It gives us pleasure to update you about the business and obviously have the normal opportunity to answer questions in the Q&A in the chat afterwards. So I'll go through some introductory pages and then Mikael will be back with the finance and then I will do the outlook.

As we've said before, 2025 is very much a transitional year for Envipco as we deliver and satisfy customers of the large orders that we won a few years ago, as they're starting to come to an end and we're waiting for and looking forward to new markets starting to ramp up. As we've communicated before, the start-ups have been delayed somewhat and that's now, particularly in Poland, going to happen more in 2026 versus the back end of 2025. So something of a slow quarter based on these new DRS delays. Overall then group revenues of EUR 22.5 million, which is 18% lower than the year before really based on this slower and lower European RVM revenues.

Because of the slightly slow and lower volume, that's impacted somewhat gross margins plus we've also invested in some direct costs to be ready to install and support those new customers in those new markets already. This has also impacted slightly gross margins. So gross margin is down slightly at 35%. With good control of OpEx, it means that EBITDA is negative EUR 0.3 million for the quarter and we have a very positive cash balance as we've built the foundation for the business, which we'll talk about in a little bit more detail later. We continue to see and are really excited about the future ahead. This is an unprecedented growth opportunity for us as a business.

For those who have followed the business some time, you'll see that we've talked about the tailwinds of legislation, particularly the EU legislation, which mandates basically deposit return schemes to drive 90% recovery of used beverage containers. That's only achievable by introducing a deposit return scheme and for that, you will need our goods and services that we've been making and delivering very successfully for customers for over 45 years. More specifically in the quarter, we're incredibly proud of what we've done in Romania and we've had a fantastic team there.

Obviously, we've been operating in the country for some time as a supplier. But a few years ago when the Romanian deposit return scheme went live, we really stepped in and acted as a partner to that scheme such that step by step we've built now a very significant market share getting on to 40% throughout for all of our product range. And this shows I think some of the characteristics of some of these new markets, a slightly softer start and then the market builds as retailers decide to adopt reverse vending machines to automate that collection and more and more beverages come on to the market.

For those again who followed the business, we have a great product in Quantum. It is the first to market of a bulk machine. Customers, end users love it, retailers love it and we're seeing real, real traction in brownfield markets. An example of that is the Netherlands. First units now have done multiple millions of containers, actually some of the highest volume per RVM in the country. Based on the success of that, we signed a frame agreement with a national operator Statiegeld Netherlands and we should exit the year with about 30 units and we expect that to really build in the future. This is really solving a problem for the operator.

Netherlands introduced cans quite late in the scheme a few years ago, which suddenly over doubled the volume of containers. This overloaded the system and the use of Quantum outdoor bulk feed solutions has really helped them. So that's really exciting. We continue to commit to communicate in good times and more difficult times. We think that's important. And so we held our first Capital Markets Day a couple of months ago and thanks for everyone who joined in person here in Oslo or online. You can still see the transcripts and the presentations.

And there we wanted to take the opportunity to really paint the long-term vision of the business and why we get so excited. But despite some quarterly ups and downs, this is a fantastic market and opportunity for us as a business. For that, we need capital. We need working capital to really make sure that we can satisfy and take all these opportunities that are in front of us. So we did 2 things on the finance side. We refinanced the debt. We moved from a small regional U.S. bank to an international bank and partner in ABN AMRO, which really understands what we need and is a partner for us we think for the long term. So we're excited about that change.

And then as mentioned, we had a successful private placement in September and that really then has given us a rock solid financial foundation on which to go forward with these markets. We will continue and, as we've said, we continue to invest in the business. We need to bring talent into the business to make sure that we can deliver and that we can really accelerate in all of the markets, in all the different attributes that we want to do; be it product development, be it very high quality service, financial backbone of the business.

And so we've made key headcount additions in a controlled way of course in those elements of the business. For those who may be joining for the first time, just a reminder. Envipco is a global recycling technology business. As mentioned, we have in EU and other countries a real drive to tackle the plastic crisis by introducing a deposit return scheme which we automate. Five or 6 years ago we have moved and we've pivoted such that we adopted a strong position in Europe. We've been successful, Malta, Hungary, Romania and so on; real proof points that we can do that and we will continue to do that in the future.

We invest in competitive delivery platform, be it technology, our organization. We've now got a really good mix of new talent coming in from different markets, plus or so people who have been with the business sometimes 20 or 30 years. So a seasoned team to deliver on this. And then the combination of growth in existing markets and new DRS markets, we can see a real road to drive continued exciting growth and profitability for the business.

So with that, I'll say, Mikael, over to you. Run through the financial highlights. Thank you.

Thank you, Simon. Good morning, everyone. I'll start out with taking you through some of the financials starting out with the profit and loss. Revenues in Q3 were EUR 22.5 million, as Simon mentioned, down 18% year-over-year. Prime driver being lower European RVM sales as we continue to deliver into existing markets on the tail of those opportunities. Gross margins 35%, down from 36.6% in the same quarter last year. Key driver being us building a service organization for new markets, preparing for what's to come and also low utilization in our assembly facilities.

Operating costs relatively flat sequentially at EUR 10.6 million, up 6% year-over-year from EUR 10 million in Q3 '24 resulting in an EBITDA of negative EUR 0.3 million. EBIT came in at negative EUR 2.7 million with net profit at minus EUR 4 million in the quarter. Year-to-date revenues are also down 18% year-over-year to EUR 66.6 million, once again with lower European RVM sales being the prime driver. Gross margins up from 35.7% in the first 9 months last year to 36.3% in the first 9 months this year.

Operating expenses at EUR 30.8 million year-to-date versus EUR 27.6 million in the first 9 months last year. Increased headcount is the prime driver of that increase with EBITDA of EUR 0.5 million year-to-date. So a little bit into regional sales. European revenues were EUR 14.3 million, down 16% year-over-year with timing of markets and us continuing to deliver in existing markets the prime driver. RVM sales were EUR 12.5 million, down from EUR 16.9 million. Looking at the different countries. We had a solid performance in specifically Romania once again, the Netherlands showing promising growth and also solid performance in Sweden.

On the other hand, Hungary and Greece showed declines. Program revenues are starting to build from installed base a few years back at EUR 1.8 million, up from EUR 1.4 million in the same quarter last year. Our North American revenues were EUR 8.2 million, down 10% year-over-year. Adjusted for the weaker dollar, revenues were down 4% year-over-year. Program services down 8% to EUR 7.6 million on lower collected volumes. RVM sales, EUR 0.7 million in the quarter.

Operating costs, we continue to try to manage and have a disciplined approach to our operating expenses. Operating costs in the quarter at EUR 10.6 million compares to EUR 10 million in the corresponding quarter last year and up EUR 0.2 million from EUR 10.4 million in Q2. Key driver is an increased headcount as we prepare for new growth in new markets ahead. And as mentioned, we will continue to maintain a very disciplined approach to manage our operating costs also going forward.

Over to the balance sheet. Our balance sheet total in Q3 increased primarily on the private placement with total assets increasing from EUR 121.1 million at Q2 to EUR 164.8 million at the end of Q3 and cash increasing from EUR 18.9 million to EUR 62.7 million. We refinanced our debt, as Simon mentioned, with debt flat at EUR 22.4 million sequentially with changes in the long and short-term portions with long-term borrowings up from EUR 6.8 million to EUR 17.2 million and short-term borrowings coming down EUR 10 million to EUR 5.6 million.

Under the new facilities, we still have headroom of around EUR 10 million in additional working capital capacity. Working capital this quarter is relatively flat with the previous quarter at EUR 62.8 million. Current liabilities are down by roughly EUR 13 million to EUR 33.8 million with trade creditors down to EUR 13.8 million from EUR 17.8 million last quarter and, as mentioned, short-term borrowings coming down by EUR 10 million to EUR 5.6 million. Finally, a look at the cash flow this quarter. Cash from operating activities in Q3 was a negative EUR 6 million primarily driven by working capital build as payables came down close to EUR 5 million.

Our cash from investing activities negative EUR 2.2 million, in line with what we've seen in recent quarters and also expected to see for the final quarter for the year. This is built up by CapEx of EUR 1.4 million and capitalized research and development costs of EUR 0.9 million. Cash flow from financing activities this quarter plus EUR 52 million, of which the net proceeds from the private placement is the main explanatory factor. This resulted in a net change in cash in the third quarter of EUR 43.8 million and the resulting cash balance of EUR 62.7 million at the end of Q3.

So with that, I think I'll leave the word back to Simon for a few comments on the outlook.

Mikael, thank you very much. Very good. Just a reminder, the chat facility is open. So please, any questions do pop them in there and then we can get to them after these few slides on outlook. We wanted to kind of take a step back and look at the market and the significant demand that's ahead of us. One way of looking at this is what population is covered by new DRS schemes? Because the demand for reverse vending machines is proportional to population. So roughly 500 machines per 1 million population.

So if we go back and we look at some of the markets that have gone live over the last few years; Romania, Malta and so on; that's kind of about 42 million people. If we look going forward the next 3 years, that's 281 million people will be covered. So that gives you an indication of the demand for our products and services. And then if you go slightly further and you take all of the markets that are covered by the announced legislation or schemes that are looking to be put in place, then that's another 150 million. So you get well over 400 million, 500 million people covered by these schemes. So very, very significant demand ahead.

We know people like this slide so we've updated it. In detail, this is what we see the rollout of kind of the overall second wave of deposit return schemes. So the earlier countries, we're well underway and we're seeing that deployment tail off as we've said before and now we're seeing this next wave starting to build up. So mainly around Poland, Portugal. Greece, as Mikael mentioned, an excellent installed base of Quantums in Greece pre-DRS. Now that's transitioning to a DRS scheme. So we're seeing some slowdown and modest sales this year for Greece, but we have high hopes in the future.

And then other markets coming in, particularly the U.K., which is on track and certainly we see as a very, very exciting opportunity. How do we think about our growth? It's not just selling to greenfield. That is important and obviously we spend a lot of time talking about those new greenfield opportunities, but we really see kind of 4 pillars. Greenfield is certainly one of them and will be the biggest driver kind of short, medium term. But as we develop our business and as we enter these new markets, those new markets eventually become markets that exist and develop.

They have recurring service revenue, program services, there's replacement, there's expansion, there's opportunities to upgrade and develop and introduce new products. So they become important. And obviously our biggest existing business is in North America and you can see the strength and stability of that business. There's existing markets that we're not in at the moment. We call those brownfield and they are growth opportunities for us. Great example of that is the Netherlands that we've talked about before.

Maybe the scheme has issues, the scheme wants to expand, the scheme wants new technology and things like the Quantum we can use and we've demonstrated that's very effective. And then maybe a slightly smaller segment, but one that we keep our eyes on is M&A. So this is around likely technology. So for example the acquisition of Sensibin last year for us then to introduce the Compact product is such an example. If that is kind of the growth pillars, then how does that come through into our results and the quarterly results that you see every 3 months? Well, there's a number of things in new markets that affect the revenue profile.

First of all is when the scheme is launched. So does that move and what date is that? That's important. The second thing is the character of DRS launch. So we've talked about hard and soft, what does that mean? Well, soft means there's a gradual increase in the number of containers that are in the market, which gives participants, beverage industry and retailers longer to prepare; but it means then demand for our goods and services are also slower and they increase more gradually over time versus a harder go-live where there's a specific date and everything needs to be ready on that date. So that then drives a firmer and kind of higher peak of deliveries.

What share? We're not in this alone. We have a number of competitors. So what's our share? Contract type, a lot of customers buy the equipment and then have a service contract; but some lease, some have throughput model. All of that impacts our revenue. And then obviously market structure. Is there a few very large retailers or like in the case in Poland, this is highly fragmented. There's many, many different chains, many different buying groups, franchise groups and that also impacts our revenue. And obviously we have experience of navigating this space to make sure that we are positioned in each market to capture our fair share.

So one such market is Poland. Major market. It went live soft launch -- very soft launch October 2025. We acknowledge there's been some noise around Poland for us. We are extremely committed and still very, very excited about Poland. This is a great opportunity. Okay. We've missed out on a couple of early opportunities, but this is just the start of the race and this will develop over years. We've already secured firm orders so about 500. We have an LOI that we've announced before of about 1,000 units. And on a daily basis we're getting a lot of activity and working with major retail groups through already signed and agreed frame agreements.

There is a very significant tail opportunity here. So again, one of the characteristics of a soft launch means that things develop over time. More retailers get involved and certainly very recent announcements by retailers and some major players in the market indicate that that will be a significant long-tail opportunity. On the right hand side was a slide that we actually showed at Capital Markets Day. So we have talked about a 15,000 unit market and we talk about markets in terms of number of units. Actually, there's nearly 20,000 stores that are over 200 square meters that have to collect containers. That's in the law.

However, there's double that that are over 100 square meters that are very likely to adopt the collecting containers to remain competitive and keep footfall in their store. And we've seen recent announcements by some of these large convenience stores that they are indeed going to voluntarily join the scheme. This is a great opportunity. It expands the number of retailers within the scheme and also because they're small retail stores, really allows us to come through with our small offering Compact and Flex product, which are ideal for that small convenience store market where footprint and ease of use is very important.

So Poland just started and we're extremely excited about the opportunity ahead there. So final slide. Once again, we've done a lot of work. We continue to do a lot of work to position the company to take full opportunity of this multibillion-dollar market. We're incredibly excited about the work we've done in Romania and we think that's a really good prototype and role model for other markets like Poland that have their soft launch and then build into a significant market share for us. Quantum installations, they continue to get a lot of traction and interest in many different markets and we expect that to be also one of our major product lines going forward.

Even though it's a slow start, we expect Poland and Portugal to come through in revenue in Q4. We mentioned Greece. We have a great footprint pre-DRS with Quantum in Greece and at the moment, we're seeing a transitional period as that prepares for DRS, which of course we're working with our partner to be positioned for that. And then we are in a transitional period. As Mikael has said, we're maintaining a disciplined approach. We want to keep the business ready of course for the growth and the opportunities ahead, but we'll be taking a close eye on investments, working capital to ensure that we are ready to go and continue to drive the growth going forward.

So with that, thank you very much. That's an update on Q3. We have Q4, 11th of March so it's a few months away. So enjoy Christmas in between. And then we will move over to Q&A. Mikael?

We've got a few questions.

Yes. We can start off with a question on Poland. There are many questions here. Our 30% volume market share target, do we still expect to achieve that for Poland?

Yes. As I think we showed in the slide and I mentioned, definitely. We're going to get there in a slightly probably different way, but certainly we see Poland is still a very, very exciting growth opportunity. And I think what's interesting is whereas maybe a month or so ago, there was a lot of kind of discussion about the complexity of the scheme and the speed at which it's implementing. Now we've got these announcements, it's kind of accelerating the whole market. So we see a lot of new players coming in. As I mentioned, I think the overall market will be probably larger than the 15,000 units that we indicated. But certainly we're excited and we're certainly committed to deliver that 30% market share.

Yes. What share of the announced RVMs in Poland do you expect to have installed in the last quarter of the year and next year?

Yes. Look, I think certainly those customers that are maybe smaller groups from the franchise agreements that we've signed, we expect those to get in quite quickly. So as mentioned, we do expect revenue to come through in Q4. You got to say though the beverage whilst there's a lot of excitement and activity, the number of beverages on the shelves is still relatively few. And from our understanding, it's literally hundreds only that have been accepted through the scheme already. So beverage volume is relatively light. So I think most of the commercial opportunities and the installations will happen in the course of the early part of next year. But certainly I think we're seeing good activity and certainly whatever we have as backlog coming out of this year will be installed early part of next year.

Then there is a question on revenue drivers. What specific factors are expected to drive revenues in Q4 '25 and in 2026?

Maybe I should take that. We will continue to develop existing markets. So existing markets will be the key drivers of our revenues in Q4. We commented on Greece and Hungary in the report so they will be slower. That will be compensated by initial revenues from new markets, specifically Poland, also a little bit Portugal.

See here what are coming in. What do we have here? A question on -- there are many different here. How long can Romania continue to offer market opportunities for Envipco?

Yes. I mean that's actually a good question and obviously we've talked a bit about Romania in the update. I think probably people go back a few years and look at the recording. I think when we started to do these, probably when I had a little bit more hair and it was less gray, I think we were talking about 4,000, 5,000 units as the scheme was just starting. I think what we see now already that that is 6,000 to 7,000 units and they've done a great job. I think the scheme is really working well in Romania. Again, very proud of our team and what we've managed to achieve there.

They've done a great job and they're only 80% and the target of course lest we forget is it's 90% by January 2029 and it's not easy to get to 80%, but it's really another step up to get to 90%. So our view is that there will need to continue to be investment, maybe slightly different. So there may be opportunities for municipal solutions for more rural recycling centers and so on. So we still see definitely opportunities in Romania probably not at the same rate as it has been in the last couple of years, but certainly still significant.

And of course as we've said after the initial delivery, then you have recurring service revenue, which is very important and also support to customers who are expanding their retail footprint and introducing the Quantum machine and so on and so forth. So yes, still very positive about Romania next year albeit maybe at a slightly slower rate as most of the market has been developed.

The pilot in France, could this expand into larger commercial opportunities ahead of a DRS launch somewhere down the road?

Yes. That's interesting. So we show France on our list and I think we talked about France a little bit previously. We've shown that towards the end towards 2029. We think there's a number of things that are happening in the French market, which means that there will be a scheme, but it's likely to be slightly later in the cycle as we head towards 2029. So what's happening? We have the French system has launched a pilot. We've participated in that pilot. So we have about 80 machines. At the moment, that is focused on refillable glass.

So refillable glass could be an important part of a French deposit return scheme. Those machines are working, feedback is great and so we'll stay close with the system and there is talk about possibly extending that pilot nationwide. So obviously if there's an opportunity to do so, then we'd like to participate in that and obviously more widely. If other material fractions, cans and PET bottles come into that scheme, then obviously we'll work with the scheme operator to see what we can do to help that deployment.

Portugal question. What's your position in Portugal? Are you confident in reaching sufficient volumes for a profitable business?

Look, Portugal, a much smaller market of course than Poland. We have announced previously a contract which is going to revenue. So we're delivering on those units. Also not dissimilar to Poland, there's a number of large kind of purchasing groups, which are also now looking to introduce machines. I think it's helpful that the operator has finally and publicly announced a date, that is 10th of April 2026, to go live. That's good. There was some uncertainty, which I think has been taken off the table by announcing the date.

And I think there's going to be an element of, like we've spoken in some of these other markets, working into a market share. But certainly we've got a good team there. Obviously, Portugal is very interesting because it may inform and act as a bit of a case study for Spanish customers who are looking at scheme attributes and how the scheme is run. So certainly we'll continue to be active in Portugal and yes, in the end we believe we will develop a sustainable profitable business down there.

How does Envipco approach market entry in new regions and what key factors will determine success in these areas?

Well, that's a good question. I'll try and keep it short. Look, I think the first thing obviously is to assess market and timing of market. We've shown that. Generally, we like to go direct. We think that gives the best service to customers and I think it's best for us. So it's one of timing, one of focus. And then of course, as we've said before, we think one of the reasons why we have entered Europe and been successful is because we go early, we listen to the customer and as necessary, we make modifications on product to adapt to local needs.

And you could argue maybe we've woken up some of our competitors and they've done something similar. So maybe that's a good thing for the market. So that's what we do and I think that's been proved to be successful. And then obviously when we start to win business, then we build up the team. And of course certainly in Europe as we develop that footprint, then we can take advantage of best practices, we can take advantage of common back office and things like that to improve our productivity and our service delivery.

I guess we'll have time for 1 more question. You touched upon it. But looking ahead to 2026 and beyond, what are key strategic priorities for Envipco?

Absolutely. I mean I think Simon touched upon it in the outlook section of the presentation. We see 4 pillars of growth that we continuously develop. We have a sizable, relatively stable U.S. business with a 40-year-plus history. Then we've pivoted into Europe in the last 5 or 6 years establishing market positions in new DRS markets. So kind of the first pillar is of course continuing to develop those markets, establish strong profitable businesses over time that generate recurring service revenues. Number two is to position then towards new DRS markets. That's our greenfield growth strategy. That is driven forth by legislation.

The EU packaging and packaging waste regulation, other national DRS legislation opening new market opportunities for us as a provider of reverse vending machines. Third pillar is the brownfield strategy using our technology to help develop existing DRS markets. Some markets struggling with reaching the 90% collection targets where we have proven to have technology that in certain markets has been very helpful in trying to achieve that. And finally, M&A. We are continuously on the lookout, very selective approach. It will not be core to our growth, but it could be a complementary growth factor for us. So I think that largely does it.

So with that, maybe I don't know if have any closing remarks.

Yes. I'd just say once again thanks for joining or thanks for looking at this transcript afterwards. Certainly we are extremely excited about the future. We're working hard to drive into these new markets as we've talked about. And again thanks for your attention. Thanks for your questions and we'll see you again in March. Thanks very much. Bye bye.

[Presentation]

Good. Well, good afternoon, everyone. It gives me great pleasure to welcome you to Envipco's first Capital Markets Day. My name is Simon Bolton, Group CEO of Envipco. And again, fantastic. We have so many people here in Oslo and also joining online. It would be my pleasure with the rest of the management team to, in the next few hours, talk about the company in a bit more detail, talk about the exciting opportunities that we have and also the journey that we started and that we continue to see a bright future going forward.

The first thing is, what gets us out of bed? Why do we do what we do? And it's really making recycling easier for everyone. Why is this good? Why is this important? If we make recycling easier, then people do more of it, okay? Our customers typically retailers, they like to use our machines. Internally, people find the company easier and obviously, everyone, external stakeholders understand what we're doing.

We are a recycling technology business, and our focus is beverage containers. So making recycling easier for everyone. Why is that important? If we do that well, then ultimately, we create a cleaner world for future generations. And that's our vision, and that's what's driving us forward.

Why is this important? Well, you can't pick up a newspaper, go online, watch the television without understanding the continued crisis that we have as a world with respect to plastics. And we can play a part in that in addressing beverage containers, plastic, aluminum and glass. And this is the opportunity to do so. We know we have the solution, the solution that works, the solution that works across different countries. And that is really a deposit return scheme.

So for everyone in the room here, this is second nature. You probably grew up using a deposit return scheme in Norway, where a small deposit is added when you buy a beverage container, which when you put that into a return point, you get that back. And by separating those materials at the beginning, it allows that much -- that material much more easily to be used in new bottles going forward. And so this creates then an opportunity for the circular economy to really spring into action and be live. And where there's a deposit return scheme, then the recovery is massively different.

So I come from the U.K. At the moment, we have kind of curbside recycling. Those schemes where different materials are mixed together, 30%, 40% of the containers that my family carefully puts in that bag get recovered. With a deposit return scheme, you ultimately can get to 90% or over 90%, very important.

And Envipco, we automate that system, the products and the services that we deliver help that system run. They help that system run effectively and efficiently through our compaction technology securely with anti-fraud. We deliver reports and data to all the stakeholders in that system. And ultimately, that means that we recover and reuse a lot of these components and materials and delivering on the targets that nation states have. And you'll see there's a couple of examples of our products, our smaller products, which Andrew will go through in a little bit more detail in the technology section.

And in terms of where we operate, there's 3 examples of where we've recently worked in those countries. Malta, Sweden, an existing scheme that we've introduced new bulk feed technology in to increase recycling rates and more recently in Romania.

We've been doing this as long as anyone. Over 40 years, Envipco has been focusing on single-use beverage containers. 80s and 90s, very much focused in North America where the business was founded to help promote and develop those systems in the 10 U.S. states that have legislation. And then more recently, we've pivoted over to Europe, initially in Sweden, and then more as we're spread across Europe. We've used our skills and experience in the U.S. to position ourselves to win in new upcoming markets in Europe.

We have a broad product portfolio that's important. Major retailers have now have a huge variety of space, not just the big out-of-town mega stores, they have gas stations, they have small convenience stores, they have midsized supermarkets, they have situations where they want machines outside, et cetera, et cetera. And we have that broad portfolio to satisfy their needs.

The other thing we have is we have 4 manufacturing sites, photos you saw on the video earlier. Why is this important? There is a huge wave of demand for our products and services coming up. It's going to be important that we have the capacity and the ability to be able to deliver to those customers. Some of these schemes as funds will go through are going to kind of go live at a similar time. It's important to be able to respond to that. And so the U.S. Romania, Germany and Greece, that gives us a highly flexible production capacity up to 30,000 units, similar to what you see on my left-hand side, the Flex and the Compact, and 3,000 of the larger special products. We now have in -- not just in production, but in technical service and administration over 500 people and we operate in about nearly 20,000 square meters worth of facilities to be able to deliver those units.

But obviously, products don't deliver themselves. And our key element is the people. We have done a great job at recruiting talent, motivating and retaining talent in the business. And we have clear -- set of clear values that has come from the history of the business, entrepreneurial. It was family run before. So about commitment, about vision, about performance. We know we need to perform. We think, hopefully, and hopefully, at the end of the presentation, you'll understand the key elements that gives us confidence that we can do this over the years ahead. And always within an environment that shows high level of trust and respect. That is important to us. And that those set of values we feel also differentiate us versus our competitors and some of the other technology vendors out there.

As mentioned, as countries react to legislation, there is going to be a significant demand for RVMs. This is one way of looking at it. In the last 3 years, new schemes have covered about a population of about 42 million people. In the next 3 or 4 years, just under 300 million people will be covered by a scheme. In the next 5 years, that will be over 400 million. And roughly, the demand for our goods and services is in line with population. Obviously, the more people, the more return points you need to be able to cater for that increased beverage flow.

So what does this mean? Well, right now, it's taken 40 or 50 years for this industry to install about 100,000 units, okay? So quite slow -- quite slow and steady development of machines in field, okay? In the next about 5 years, for everyone to hit their legislative targets, we'll need another 200,000 units. So the total addressable market will triple in the next 5 years. And obviously, that creates exciting opportunities for the company.

As you saw from an earlier slide, we really -- around 2020, 2021, we really pivoted hard to generate an infrastructure and organization in Europe. We've had success with that. We put out some long-term targets to help guide our actions. And we're updating those. So these are our new targets, which we'll go through for the rest of the presentation. How can we deliver on these in the next few years ahead.

Our focus of this growth and the opportunities we see is around greenfield markets, okay? So these are countries, U.K., Spain, Poland, Portugal, that do not have a deposit return scheme at the moment. In those countries, we want 30% -- more than 30% market share. Gross margin, we had that as a target before. So around 40%, we're committing to that as we drive efficiency in the business and we get the right price for our product and services. And we've added a new target as we develop and we slightly mature on this growth journey, we want to drive sustained profitability. So we want in time to have over 20% EBITDA margins.

So they're the targets that will drive the business in the next few years ahead. And in the next couple of hours, you will hear detail how we're confident we're going to achieve those.

So what does the next few hours look like? So after me will be Mikael. He'll go through strategy. What's a legislative environment that's driving all of this? Then Fons will go through our commercial processes. What's happening in the market? How are we going to try and tackle and achieve this higher than 30% market share? What about brownfield and what are we doing there? We'll have a short break. And then Andrew will talk us through technology products. We've got, again, we are not easy to get those on a plane in carry on. But anyway, we managed to get a couple of products over here. So we'll go through technology. Patrick will go through finance. And then I'll finish off before we have a curated Q&A session. And Markus, Fabian, thanks for helping us with that. And then afterwards, we've got some drinks outside for those who wish to stay and we're very open to have a chat with you.

Good. Sounds good. Audience goes wild in Oslo and says, yes, that sounds great, Simon, if in case you missed that online. So without further ado, Mikael?

Thank you, Simon. Good. Let's jump into this. So as Simon mentioned, Envipco has been on a fantastic journey. Over the last few years, we've seen revenues grow significantly. Let's take a step back and see what are the groundworks, what has driven this, what's the platform that has enabled this.

This company is stemming from the U.S., 40-plus years history, having a very solid basis, a strong fundament in the North American market, started venturing into Europe in the mid-teens. First, by venturing into the Swedish markets as brownfield and an established market where Envipco developed technology together with the DMO operator in Sweden to help Sweden increase collection rates. Sweden had a system in place for a long time, but was struggling to get to 90%. Envipco technology has helped Sweden do that over the last decade. And they're now starting to approach 90%.

Also, Envipco ventured into Greece, a market that not yet has a DRE in place, DRS in place, a deposit system in place, but that wanted to start increasing collections together with a partner that was a second European market. Then in the '20s, we've seen fantastic growth driven by the entrance into new deposit markets in Europe. Establishing a very strong market share in those markets well north of our targets. The driver is the appearance of new deposit markets.

Most deposit markets in Europe were established in the '90s and early 2000s. It's a whole list of markets. Since the early 2000s, not much happens. One market came about, Lithuania in 2016. But as we approached 2020, we saw an increasing number of countries starting to work towards introducing or wanting to introduce deposit schemes. And the list was long. This list, Envipco started 2 targets. By starting to invest, prepare. The company was already listed in Amsterdam, had a secondary listing and secured funding through the listing in Oslo, started to invest in the organization, started to invest in assembly facilities, putting up, setting up supply chains, et cetera, in the European markets, starting to approach this market opportunity.

Together with that, the company set up targets, announced these targets in 2021, having the ambition of capturing plus 30% of these new greenfield markets, aspiring to grow gross margins up towards 40%. And as a result of the expected introduction of DRS in Europe, saw the potential to increase revenues by 4x to 6x. And Envipco has delivered. Hungary has introduced DRS, opened in January 2024. Envipco has secured a 60% market share in Hungary, where the market now counting more than 4,000 RVMs. We're 1 of 2 RVM providers into Hungary, delivering to the operator, the MOHU Group in that market, and primarily supplying a variety of Flex RVMs that you see here to the right, and Optimas.

Then you have Romania going live in December -- excuse me, November 30, 2023, 35% market share on a market now counting around 6,000 RVMs. In Romania, we've delivered our full fledge of products from the Flex to the Modula to the Quantum and everything in between. As Simon mentioned, we have assembly facilities in Romania. We have a big business and sales team in Romania. Now we also have an R&D facility.

And then there's Greece, a market that not yet has DRS, but where Envipco, together with our partner, has been able to deliver a network and set up a network of more than 1,000 RVMs.

So that's somewhat we're delivering. And if you look at this across the markets that we're in, Malta, smaller markets, Envipco is the only player. Greece, Hungary, 60%; Romania, 35%; Ireland, slow adoption still after the startup 1.5 years ago. But we still are quite confident that we will continue to increase our share towards our targets. Scotland had a DRS pilot in 2022, 2023, is now aligning with the U.K. DRS startup in 2027. And the commercial case that Envipco had in the Scottish market was very, very strong. So overall, the company has delivered well north of its 30%-plus market share target across these markets where we've entered.

Gross margins, solid improvement seen coming out of COVID and all the difficult supply chain that most businesses had, a pretty solid run, not quite at 40% yet, but on our way. Our opportunities are driven forth by political action. Timing will always be a factor in that. That's factors that are outside our control. If we look at the list of markets that were expected or that had plans on being introduced in 2020, and what has actually happened, there are some differences. Most markets have been delayed somewhat. Some haven't gone live yet, and we also see the appearance of Hungary that was not on our list. That's the market. That's the playing field that Envipco was in. This is part of the game. What we can control is how we approach these markets when they are ready. And that is what we will continue to do.

So we've delivered on these greenfield markets that have come live. In addition, we are positioning selectively in brownfield markets where we see that we have technology that can help these markets: a, increase their collection rates; or b, improve the cost structure of those systems. We've done that in Sweden, as I mentioned. We have 170 Quantums across the country, initially only with a system operator, now also commercial installations with the retail stores. They have chosen to take out their RVMs, in-store RVMs, and replace that with outdoor solutions, 170 Quantums out of a total pool of 4,400 RVMs in Sweden. Less than 4% of the RVMs and capture 15% of the volumes in Sweden. These are highly efficient machines.

Also in the commercial space, there's a customer, retail customer in Sweden that swapped out 5 RVMs inside the store initially with 1 Quantum, added another Quantum, and now has 3 Quantums, increasing their collection rates dramatically. And of course, as retailers get a handling fee, the payback on these investments have been very, very good.

We're copying this Swedish example in the Netherlands now. The Netherlands in 2023 added cans to its DRS, doubling volumes sold under this deposit scheme. The infrastructure was not ready for this. So collection rates dropped off a cliff. Public criticism, official criticism, something had to be done. We saw an opportunity, a place sold our first Quantum into the Dutch markets in March 2024, and have since had a number of installations. Now most recently also added a preferred supplier agreement with the operator in the Dutch market to be able to help Netherlands increase collection rates.

So we've had our greenfield markets. We had our brownfield markets that we've dealed about, and that has driven this revenue growth. From being a business of EUR 30 million, EUR 35 million, tripled those revenues to more than EUR 100 million, not quite 4x to 6x, but there are more markets. And as I mentioned, the timing of introduction of DRS is outside of our control. Our job is to be there when these markets go live. And that is what we've positioned for over the last few years, and that brings us to the next chapter.

So where I show that historically, we've seen intermittently countries introduced to DRS. Now there's a regulation backing the rollout of DRS across Europe. So we like to say, it's no more about if, it's rather when. First one, EU packaging and packaging waste regulation set in forth -- force, set in force a year ago, mandating 90% collection of all beverage containers across the EU through the use of a deposit system, entire EU.

In addition to that, really driving the need for technology is to create the demand side for the material. By requiring the industry, the bottlers to increase their share of recycled content in the production of new containers, 25% of plastic containers put on the market this year needs to be made out of recycled material. That increases to 30% in 2030, and more than doubles to 65% by 2040. This requires a clean material stream. Our equipment, our technology enables that. So there's a population of 265 million people in EU yet to have a DRS. That's a fantastic opportunity.

And then there is the U.K. The day after the EU announced their packaging regulation. Keep in mind, this is a regulation. So it needs to be followed by every nation. The U.K. also has passed DRS legislation and is moving quickly ahead for the introduction of DRS in October 2027. That's 2 years away. In national, DRS, interoperable through the 4 nations with the same targets, 90% collection targets. This market will also require a lot of automation.

So we have the PPWR. We have the U.K. DRS. We have a wave of opportunities coming our way in the years ahead. We've been through now, as Simon mentioned, 42 million people in DRS markets being introduced over the last 3 years. So the top 3 markets here have already gone live: Romania, Hungary, Ireland. We're still delivering on these markets. We will continue to deliver on these markets, even though we most likely have the majority of deliveries behind us.

The next 2 markets coming up is Poland going live from October this year. Portugal going live next spring. And then successively, we're seeing U.K. coming 2027. Spain, we'll see exactly one, '26, '27 type of time frame. And then we have other markets as well. Greece is planning rollout with DRS. We believe it's likely to start happening next year. Czech Republic is more of a 2027 type of market opportunity. And then you have Turkey, which also, over the next year or 2, and they've been working on this for a long time, are preparing to go live as well. These are all key target markets for Envipco. And as you will hear later, markets where we already are engaging and have been for some time. That's our business model. That's how we work. That's in our DNA.

So how can we put numbers on this? Simon put a big number up there, 200,000 RVMs over the next 5-plus years. We can break it down like this. Poland, Portugal, Spain, it's another 45,000 RVM potential. On top, that's close to 50% growth of what's already out there, those 3 markets, U.K., another 35,000. So the 4 markets that are coming up now over the next couple of years, 80,000 units needed.

We've established position. We've proven our ability to deliver. And then EU markets outside of these initial markets, another roughly 75,000 units. Turkey, around 35,000 units, and then some peripheral markets around. Those are the big building blocks of the 200,000 unit market opportunity. At an average selling price of around EUR 20,000 per RVMs, that translates into EUR 4 billion-plus market opportunity. It's unprecedented. This industry has never seen this type of market opportunity reveal itself driven forth by regulation.

So we're maintaining these ambitious targets in our core markets, our greenfield markets, we continue to aim for plus 30% market share. We believe we've proven our ability to do it. We believe we have the products. We believe we have the market presence. We have people and we have the identity, the backbone to deliver on this. These greenfield markets are going to be the clear driver behind the growth over the next few years. But in addition to that, we will continue to work selectively on existing markets as well, existing brownfields as we have been doing in Sweden, as we are in the presence of doing in the Netherlands.

We've now installed our first units in Austria. We're looking at Slovakia. We just now, Ireland is a deposit market, where we just introduced the Quantum there as well. And as you've seen, we've also started to introduce the Quantum into North America. A new segment also, processing centers, collection centers, extremely high volumes where a regular RVM takes in a few hundred thousand containers per year, our Quantums in the North American market are taking in 1 million or 2 million per month. Big numbers. We see a great opportunity over time to build on this.

So our brownfield growth strategy will also be a core part of our growth, even though the growth most likely from this area will not be as big as the greenfield area, but it does offer great opportunity. We will be looking for markets that are struggling to get to their target collection rates off of 90%. We will look for markets where -- that are less cost efficient. Maybe they have a lot of manual collections, maybe they have an old outdated machine park, or where there are underserved segments where our technology can be a complement to what they already have. The Compact here is a great example of that as well.

Finally, we will be on the outlook for M&A. We will look for complementary technology to what we have. We will be looking for access to market. We will be looking potentially for installed base into a new market, could be a brownfield market. But we will stay true to our core. We are a recycling technology business and we will continue to be a recycling technology business. We will have a strict risk, reward assessment on any potential targets. We know the opportunities, but we also know the risks involved in doing M&A. But M&A is such as Sensi last year, a start-up in the Irish market. having developed and introduced the Compact, giving access to a new segment, convenience stores, which you will see makes up a very large share of markets across Europe. That's a fantastic fit for Envipco.

Getting access to a great team, great technologies that we may potentially also over time, can use in our existing products. New ways of thinking that can make our products even more efficient. A good risk, reward assessment, a great strategic fit for Envipco. We're very happy with getting the Sensi team on board.

So Envipco's growth platform is very, very solid. And we have 4 pillars on which we will continue to develop the company. One, we have existing markets. We have a platform in North America. We have now a platform in Europe. We will continue to deliver that platform, to develop that platform and to continue to deliver increased market share, hopefully, over time.

Two, greenfield growth. There is a wave of opportunities coming our way through regulation in the EU, in the United Kingdom, and we see also other markets outside, 200,000 RVMs are needed, a tripling of the market, and 80,000 of those are coming up over the next 2, 3 years as Portugal, Poland, Spain and U.K. go live.

Brownfields, we will continue to target markets where our technology adds value, helps meet national targets, make systems more efficient. And on top of that, of course, have an outlook, have an eye open for other incremental opportunities.

So with that, I'm going to leave the word over to Fons, who will take us through our commercial strategy and how we're going to target these markets, how we're going to win our customers and what other competitive factors we have. Please.

Thank you, Mikael. Thank you very much. To raise the bar, that's very good. Welcome, everybody. My name is Fons Buurman. I'm CCO for Europe and Asia. I started with Envipco around 5 years ago. and I'm based in [ Amersfoort, ], Netherlands. And as Mikael has shown, it's been a great journey the last 5 years, spectacular growth, really hard work with a lot of new teams in the new markets. And I think that laid a very good foundation for us to learn from it and to see how we should approach the next upcoming markets. And that's what I would like to talk a bit about to you today.

But before we do that, maybe it's good to have a look at what is a DRS market, how does it work? I think here for the audience in Norway, like Simon said, second nature. So it's a well-known topic, but maybe for the people listening on the webinar, it's not so much.

So basically, DRS system, there are the 3 main players, which is the government, the beverage producers and the retailers. So basically, the government lays out the law. So they define basically what packages should be in the system, which retailers should collect the packages, when should the system start. And also, very importantly, they define who will be DMO, which is, of course, run by the beverage producers because they have the responsibility to set up the whole DRS system. The DMO is mostly also run together with the retailers because they are the collecting point. So basically, those 3 stakeholders are very important for us to get engaged with.

A good, organized, efficient DRS system is a kind of self-funding because they use the income streams from the materials that they collect. And they also use the unclaimed deposit fee, which is still in the DMO. So if you have around 80% collection rate, that means that about 20% of the deposit is still available to run the system. Over time, when they reach 90% collection rate, they need to be more efficient so that the producers don't have to pay basically the gap that is left because that's the responsibility of the beverage producers.

Although the system is, in most countries, the same. Every country manages to do it a bit a bit differently. So that means that we really have to be engaged with those guys because they think of different materials, different technology requirements, different store formats that need to collect. So that brings us to how we approach new markets. So the main stakeholders were going quite early. So we talk to the government to help them support, how to set up the system. We talk to the beverage producers and also to the retailers.

Like we've, seen the experience we have in Europe in the last 5 new markets is really helping, but mainly the legacy we have in the U.S. is much more helping. Next to that, we have a team of experts in our company, which have been in the business for more than 30 years. So we leveraged that experience with our recent technology. which is helping the local teams.

So what have we been doing in the U.S., basically, in 1979, [indiscernible] invented again Compacting machine. So that was basically the first RVM machine for cans. Later on in 1982, he founded the company, and that's where we have our roots. Over time, we also started to provide services as an operator. So we also arranged the logistics and the clearing system between all the parties involved. So next to the technology, we also have the experience in-house to work as a DMO. That experience is very helpful when we go to new markets in Europe.

By delivering good steady quality of machines but also to deliver very high service levels because you can imagine in the U.S., that's very critical, we've been able to maintain long-term relationships with the main retailers and we have been able to capture a market share of around 45% in a very stable market. Unlike in Europe, where we see now a dramatic growth because of the new regulation, in U.S., it's much more stable. With over 7,000 machines installed, it's a very steady base.

If we look at new countries, so of course, the DRS setup is different in the countries, so we have to be flexible, but also our customers are different. And even certain stores within the same customer are different and they require different solutions for collecting the containers. So basically, we always say there's not a one size fits all, although maybe it looks like a box with a hole in it. If you go deep and you really analyze what is needed, there's much more to it. So basically, we use a kind of graph where we have different elements, and those are typical things that we discuss with the retailer. What's the location of your store? How much storage space do you have? How much staff do you have? What are peak moments in your week to avoid queuing, all those things we add together, we analyze it together with the customer. And then we come basically to the best solution for them.

And luckily, we have a very broad portfolio. So next to all the experience and the knowledge we have, we also have a broad portfolio, which we can use to find the best solution for our customers with the recent added Compact, which you see here, very small machine up to the large bulk feed machine, which is mostly placed outdoors. We can basically cover all the needs of all the customers. So within those 7 models we are now running, within each model, we can even modify certain characteristics of the machine. So we can change the bins inside to accommodate mixed containers or separate containers to have PET and cans. Maybe later on, we can add glass. So these are typical things for customers, which are very important because then they are secured for the future. If things change in the DRS, we were able to change with them.

So next to all that flexibility. We also see that it's very important to offer us a very strong service package as the machines are from high quality, but they're heavily used. Some of the machines are overused because consumers bring back so many containers. So a very good service team is important. A very good help desk is important so that the people can pick up the phone, they get a quick reaction. The machine is up running again because for retailers, it's super annoying that the machine is not working because then they can get complaining customers. If it happens often, the customer doesn't come to your store anymore. They go to somewhere else where the machine is actually working. So it's not only a service, also a potential risk of losing sales to the customers.

So service is important and also the different financing models. So in Europe, we see mostly a straight sales model. So sales of the machines and later on, the service fee for maybe 5, 7 or 10 years. We also offer lease models very much preferred in the U.S. where basically the machine price and the service fee is mixed together in a fixed monthly fee for a period also of 5, 7 or longer years.

Model that also exists in certain markets, and we also see now some more demand coming in new markets in Europe is a throughput model. So basically, the customer base per collected container. So of course, we know exactly how many containers the machine takes. So based on that, we can calculate how much fee they have to pay. So a bit slower ramp-up in the EU market because volumes tend to be slow in the beginning, afterwards, they pick up. So then also, we see our revenue stream go up. But that also means our costs go up because the more the machine takes, the higher the service.

So 3 different business models, very flexible, sometimes we finance it ourselves. Sometimes we work with third parties in the market. And also because the retailers are mostly our customers, they are very good financing options. So in a lot of cases, we will also work with their own preferred bank.

So this is basically what we can offer. Then if you look at the new markets, what we've seen in the past is that we identify 4 basic phases. So the first phase is really the DRS initiation phase. So this is the phase where the government is working on the law, it can take a year, but it can also take 5 or 6 years. So it's very hard to judge when the law will be finally approved and when things really start happening. So that's a challenge always we have when we step into a market. Mostly, the first step is with 1 or 2 business development [ persons, ] so relatively small investment. But we have a local presence, and we have direct feedback from what's happening in the market. So that's the DRS initiation phase.

Then when the law is passed, the DMO is appointed. Then we get more in the preparation phase. So in the preparation phase, we tend to build out our team, add a few more technical people, start to pilot projects with the retailer so they can experience what it is to have a machine in the store, how much time is needed for the store staff, et cetera. So then we have a slightly bigger team locally.

Then when the DRS goes live, of course, 6 months before, it's extremely busy because thousands of machines have to be installed just for it to go live. And that makes our business so unique because it doesn't happen very often that there's one date that the nationwide system goes live with technology. So it's super stressful. All the machines need to be ready. They need to be online and tested. The store staff need to be trained so we spend a lot of time on that. So at that time, we have a full technical team installed who was able to install the machines, but also just before and after they go live, train the store staff and offer kind of hyper care service to them.

After 6, 12 months, you see more stabilizing market people are getting used to the machines. The consumers are getting used to it. The store knows how to operate it. Then it really comes into cleaning habits and those types of things. And then we are more focusing on our service program. Of course, after that, there will be a second and maybe a third wave because you see smaller stores who started manual collection. They see it's basically taking too much time. So I'd rather have a machine. So that's why we have the Compact, very affordable machine, doesn't take up a lot of space. So that's mainly the second and the third wave that we start adding those type of machines.

Also, on the other side of the equation is the Quantum. So people with a Optima or another type of machine, they say, hey, I can use much more volume. So let's put a Quantum outside of the parking. So basically, we can spread out the investment and the revenues over a period of 5 to 7 years basically.

Then Mikael told you about 2 new markets. We were successful in the last couple of years. One of them is Romania. So to give an example, in Romania, of course, we had a production plan. So we were present in an earlier phase. But the actual commercial activities started around 2020. So around 3 years before the actual go live. So we had a heavy involvement with the government, with the municipalities. We started piloting. So we were present. Then when the go live was -- we had a modest market share, but because of our good quality and good service, basically, we managed to build up our market share quite rapidly after the go live. So in 2024 and even still this year, in 2025, we see a lot of stores that have not chosen a machine before, they choose our technology so they have a machine in their stores. So basically, we are one of the few suppliers in Romania, which are growing our footprint in 2024 and '25, giving us about 35% market share. So you see, sometimes, you can have a long tail after go live.

As a system, Romania is performing really well. They are around 80% collection rate. So that's very solid growth. And that's also typical what we see. We also see it in Hungary and in Malta that -- the earlier markets in Scandinavia, they took long periods to get up to 80%, 85% collection rate.

So basically, we expected that those new markets would also take longer. But that's not the case. Basically, you see in a year or 2, they're up to 80% collection rate. So somehow consumers are picking it up much faster than in the earlier countries. So that is something which we take into the new markets to prepare basically all the stakeholders for much higher volumes from the start.

They're doing really well about 80%, but they have to grow up to 90%. So we expect another 2,000, 3,000 machines to be added to the total market in Romania in the coming years.

Hungary is a total different market. As I said, every country is different. Here, the DMO, so the MOHU Group is the operator. They decided to purchase all the machines for the whole country. So they rolled out a tender. They invited a few suppliers. And in the end, they chose 2 suppliers to supply all the machines for the country. And then they define together with the retailers what type of machine they need. So stores over 400 square meters. They need to have a machine. Stores between 200 and 400 square meters, they can choose whether they want to do manual collection or machine collection.

We managed to get around 60% market share. So we have spread over the whole country. We have a full team in place in Hungary who's doing the installations and the service. So it's now running a bit more than 1.5 years, and they are also already at 80% collection rate. So very high collection rate. So basically, the operator now also takes a [ pause ] in installing new machines. So basically, you want to optimize their system to reduce the cost, to optimize the logistics. And then next year, they start focusing on adding more capacity in the market to reach 90%. And one of the things they're looking at is also, again, the bulk feed system, so basically our Quantum.

So those 2 markets gave us a very good experience to jump into the new markets. One of them is Poland. I think Poland is on everybody's radar because it's the largest new market in Europe that goes with the DRS. Again, here, totally different setup. They let the operator market basically to the market. So they said, if you are a beverage producer, you're able to apply to become a DMO. So basically, we saw 8 operators in the end, now it's reduced to 6. So there's now 6 active DMOs competing with each other in one way or the other in the market. So that complexity also means that things take even longer than they normally take because they have to figure out how to clear the whole system between them. They have to find out, they have to fight for contracts with the retailers. What is the handling fees? So they're competing on handling fee. So it's a very complex system.

That's also why we see now more of the commercial opportunity shifting into 2026, whereas earlier, we thought it would be more second half 2025. So you see we are dependent on how the law is structured, how the regulations is being put in place in the market and about the timing. That's really what's driving the timing of our business, and that's also the big challenge for us.

But again, it's a big market. There are some big international chains, some big national supermarket change and also a huge amount of smaller stores, which are independent or semi-organized in the different like franchise setups. So we're talking to all of them. We have a quite extensive team in Poland, which is engaged with all the retailers, which is engaged with all the operators. So really try to follow all developments day by day. And it's -- I can tell you it's a very dynamic situation. But happy, too, that we were able to announce an LOI earlier this year for one of the major retailers in Poland to deliver machines to 1,000 of their stores. So we expect deliveries happening first half of next year.

In Poland, we specifically expect a long tail because there's so many small stores, which typically start manually and then later on, they start using a machine.

Another market, much smaller but also interesting is Portugal. This is also an example of how long it can take sometimes because they started back in 2020, already with working on a law, but it took a very long time for them to -- yes, to be ready with the law. So basically, earlier this year, the law was approved. The DMO has been appointed. So now it's going much quicker. The handling fee has been set. The RVM specifications have been published. So they're basically kind of ready to go. And now we expect that they started DRS go live in spring next year.

Next to the stores above 400 square meters, which is close to around 3,000 stores, and the smaller stores, which is around 2,500 stores. We also see that the operator themselves are looking at accommodating the [ Horeca ] channel to be able to give them the ability to also bring back their containers in an easy way. So for that project, they want to install from the start 48 bulk feed systems spread about -- spread around the country. So we're talking to them about, of course, for our Quantum.

One of the major retailers signed an LOI with us, expecting to start delivering Q4 this year to be ready when the system goes live in spring next year. So interesting market. Also, there are a lot of dynamics. We have a local team in place with technicians, a small warehouse. So basically, we're ready to start installing in Portugal.

Then after those 2 markets, there's another wave of countries, like Mikael explained, the U.K., for instance, huge markets, total different scope. It looks like a very strict planning. They're moving very quickly. A big -- a lot of engagement from the retailers. Also those retailers have been involved in the Scottish setup of the system. So they know what it is. We're talking to the same people as we were talking back then in '23 for Scotland. So that gives us a good advantage to get going. Start date planned for October '27. So in our business, it's rather quick, especially if you look at the number of machines. So I think that there are around 35,000 machines need to be installed before we go live. That's a big job. So basically, we expect already '26 to see some activity in the retail that they are ready for the launch in '27.

Also here, a lot of small stores, small convenience stores. Again, our Compact fits really well. We are very -- already now, in conversations with the retailers to position the Compact and the Flex with them, could be around 40,000 stores, which are in scope for that segment.

Last but not least for today is Spain. Spain came as a kind of a surprise that they quickly announced end of last year that they are going to launch the DRS in Spain. Like at the end of the last year, it was mentioned because they didn't reach their collection targets. They said then 2 years, in 2 years, the DRS will go live. We know from experience that 2 years is very optimistic. At this moment, they have now closed the application for DMOs. So 3 organizations have applied for a license. They will decide early next year on who the DMO will be for Spain. Mostly, after the DMO has been appointed, it takes 18 to 24 months before the system really can go live. So that's the timing we expect.

We are setting up our own local team again in Spain. As mentioned before, we look at the timing, it's the right timing. So Q4, we started with our own team in Spain. Up to now, we have been working with the stakeholders in Spain, via the team we have in Portugal. And also, Simon and I, we have been involved personally as well. So basically, we are already connected with the main stakeholders.

The big challenge in Spain is -- it's the same size, more or less, as Poland in number of people, 40 million, but they have a huge amount of tourists. So around 40 million tourists every year. So if you look at the number of containers in the market, that's comparable to Germany, which have 80 million people. It's mainly driven by the [ Horeca. ] So it's around 50,000 food retail outlets, but they have more than 250,000 [ Horeca ] outlets. So that will be a major challenge for Spain. And also that 80% of the population is located in 20% of the country. So the 20% of the rest is in 80% of the country. So those 2 challenges will, again, be much different in Spain versus other countries. So therefore, it's important for us to be involved soon so we can start if needed, even developing new technology, which is basically needed for Spain. I mean that's also the flexibility we have, as you've seen that we are able to adjust our offering to the local market needs.

So challenging times ahead, a lot of work to do. If you add it up, 4 new markets in the coming couple of years with a total addressable market of around 20,000 in the first 2 years and another 60,000 in the next 4 years. With all the experience we have, with the experience we have in the U.S., with the legacy we have in the U.S., I think we are really, really prepared to capture again [ 30% ] market share in those new markets. We have a very engaged and super enthusiastic teams locally, which is growing basically weekly. So I think we are in a very good position to move ahead.

So with that, this is the first part of the session before the break. So I'd like to invite you for a short coffee break. I think -- what time should we need to be back? In around 20 minutes. Yes. So 2:25, if you would be back here in the room, that would be nice. Thank you very much.

[Break]

I hope everybody got some coffee and refreshments. Next up, we're going to have our CTO, Andrew Keene, take us through our technology map, where we come from, get a better understanding of our best. So word is yours, Andrew.

Okay. Thank you so much. And again, thank you all for being here, and thank you for the very detailed questions as well in the breakout sessions already. So I can tell it's going to be fantastic after this presentation.

So yes, so my name is Andrew Keene. I'm the Chief Technology Officer for Envipco, and my background is 35 years of product design. So I come from automotive industry, designing engine cooling systems. I come from defense industry designing intercontinental ballistic missile defense systems. I come from where you have consumer products out in the field with Procter & Gamble. Gillette blades and razors, for anybody who has a [ Mach 3 ] at home. I'd love to hear about your experiences with that product.

And here at Envipco, I've been for 5 years, and it's been a great journey. As we've gone through transitions from one market to the next and looking at taking the history of the company to the next level. It's been exciting to help grow this group and really build the engineering team, which has been fantastic.

So I'd like to start off with a little known fact about Envipco. So Envipco is the inventor of the DRS system for disposable beverage containers. So this is one way containers that are taken back. Europe has the affinity for the refillable, recyclable, reusable container. In the U.S., it's been a focus from the beginning on a disposable container. And so one-way containers was the original focus of the company from the very beginning. And I'd like to build on that actually by telling the origin story of Envipco.

So Fons highlighted a little with the patent from 1979 right on cue. This is 1976. Imagine a U.S. Marine Corp soldier coming back from his military service, coming back to his home state of Virginia and finding the beaches a mess. He had aluminum beer cans all over the beach. And he said, "This is an embarrassment. I want to do something about this." And he told his friends, I think if I were to design a machine that would dispense $0.01 for every aluminum can put in, we could clean up these beaches. I think they could be spotless. And that's exactly what he did.

So 4 to 6 years, the original patent applied for 1979, granted in 1982 for the can eater, quite a marketing name, and the can redeemer in terms of what we had for original products with Envipco. And we had the original patents over here. So I think it's interesting, Simon, as you noted, making recycling easier. The original vision for the company was just that, was how do I make it easier for people to do the right thing and keep the environment clean while recycling the materials.

So this is 1982. And shortly thereafter, we had DRS laws filed in New York, Connecticut and Massachusetts to support this type of an infrastructure, this type of system. But this was the origin of -- at least from the U.S. side, of what we had for beverage container deposit and return.

Okay. So today, we no longer dispense pennies. You'll be happy to know, it's no longer a copper penny. You can take your iPhone and get Apple Pay. You can take your credit card, you can tap, you can get credit card reimbursement, Visa, MasterCard, whatever you want there. You can have [ Tikkie, ] you can have Revolut, you can have Venmo, PayPal, any form of electronic. You can also have the industry favorite, printed paper ticket to bring back to the retail store. Retailers love the foot traffic coming through, spending more money in the store.

So times have moved on. Today, we are 47 engineers, so 47 design engineers. We have 16 support engineers, and we are a global organization. We have 4 technology centers spread across Europe and the United States. And our design process starts with our sales and marketing team. They bring us the voice of the customer, the needs and desires of the customer, what is each market needing specifically. And then we go off and design our products and technology to match those needs and desires. We take the design, we conceptualize we prototype, we brainstorm, we test, we test, we test, we market test, we pilot test in the field. Generally, these machines have had over 1 million containers run through them before they ever get out to the market and released. So highly validated designs, high-quality designs.

We release to manufacturing. So our manufacturing partners bring the machines to life with our engineering specifications. They build the machines and they distribute them, bring them out to the field service team, field service and support, supports our installations, making sure that each customer gets the machine they need, they want. It gets up and running, it runs smoothly, it runs well from day 1.

They also provide feedback to our sales team and our engineering team on the machine's performance in the field. So we hear about opportunities for improvement. We hear about reliability. We hear about features that customers are requesting. And so it's a fantastic loop that allows us to continuously improve the machines and the technology as we move forward.

Okay. Our engineering team is a full stack development team. So we have every engineering discipline, from mechanical engineering, all the way to machine learning and AI, we do everything with these machines. All the development is in-house. We're able to develop a customized solution that is highly cost-effective, highly reliable and also customizable to what the consumers need. So if we hear retailers are looking for specific features, we're able to do that, which is a great capability to have.

Our core technologies focus on compaction, recognition, customer UI experience. We have our data, IT, fleet operations and then automation. So this is really important because as we think about how we play in this market and our competitors, these are points of differentiation for Envipco. This is what we do really well. We focus on these elements and we lead the industry as we go forward.

Our product lineup. So we go from very small, as you can see here, we have our compact machine, which is the smallest machine primarily targeted towards convenience stores, small-format stores where you don't have a lot of space and you want to set up a machine, you can tuck it in the corner. People put it underneath windows, so you're not blocking too much, but you're also not taking up retail floor space.

Moving up to Flex. We have a Flex machine here. Ultra Optima, HDS Modula and Quantum. Modula is a backroom system. So this is a system that can be extended. It can be extended. It's shown here with 3 modules, you can extend this up to 12 modules. And so you can have PET, you can have glass, you can have one way glass, you can have refillable glass, you can have aluminum, you can add other materials as well. So this is flexible and designed for the future with a flat belt system that we can do more with as we move forward.

And then Quantum, you saw and heard about bulk feed technology. Hopefully, many of you have used a bulk feed machine. It's a great experience. From a customer standpoint, you don't have to stand and put containers in one at a time, getting your hands dirty, spending half an hour. You can take your bag, dump it in, hit the button and walk away. It's a great experience. We have stories from our customers in Sweden where people drive 10 kilometers, 15 kilometers to go specifically to this machine so they don't have to waste half of their day returning their containers. And then they happen to go into the store and spend some money. So it works for both sides, and it's an absolutely fantastic product. And as you also saw in some of the slides, it's also now enjoying some great success in the United States within New York and soon to be, California as well. So a really great story with Quantum.

And yes, so this allows us really to support the needs of any customer, even outdoor. So as you look at like public parks and public bus stations in Malta, we did quite a bit with like local locations that might be in the middle of a neighborhood and you've got a small piece of grass in the middle of a parking area. The city can put this down so you don't even have to have a retailer attached, which is really important as we go forward and talk about getting to the 90% level for the countries of Europe. So I'll add on a little bit more there. But Quantum's design bulk feed, it's designed for outdoor installations. We have this product in the Arctic Circle, very, very far up and very cold. We have this product in the heat in Athens in Greece, and so it's able to survive that huge temperature swing and exist in these environments. And it's a fantastic product for kind of the next level of DRS.

Compaction, so our first core technology area. Envipco very early became a leader in the compaction area, probably because of the origin with disposable containers, having to crush those containers and bring them back in a very compact format. Our technology has been highly copied by our competitors. It's always a sign that you're doing something right. And we continue to be a leader in compaction technology. It's important for a couple of reasons. Obviously, when you compact a material, it's lowering your trucking cost, you can fit more containers in a truck. You don't have to have as much diesel in fleet. But also total cost of ownership. So we specifically design these compactors to last longer to be more reliable, and that gives the customer a better experience. You don't have to replace it every year, every 6 months, you can go for 1.5 million more containers before you need to think about replacing a compactor. So durability is a big point of differentiation. But it's very important for this industry that you have good compaction technology, and we are absolutely a leader there.

Okay. Continuous improvement. So Flex, you can see over here to the side, is a great case study for continuous improvement. So introduced in 2015. We've continuously improved Flex by adding additional features and functions to the product, but we've also addressed the cost. So we brought the cost on the product down by 20%, as we've moved across this continuous improvement cycle and we've increased the performance by 2x. So we're using lean techniques. We're using agile techniques. We're using Six Sigma techniques, and we're improving the product performance by focusing on reliability metrics, measuring and specifically focusing on the areas where we want to improve and we add features to improve the performance of the machine.

So in addition to focusing on new features and new products, we've also got a very strong focus on the core and making sure we've got strong products that have a low cost of ownership and are also able to maximize our earnings as a company, very important.

Technology is a key enabler. So as an investment community, this might be the most important slide in my section other than the cool technology stuff, 90% is the most important number on this slide. So for every country in Europe to reach 90%, they need to get beyond the traditional DRS. So the traditional DRS is you go into a supermarket, you put the machines in, everybody brings their recycling back. That will get you to 80%. I think 87% was what Simon showed on a slide. To get to 90%, you've got to go beyond that. So now you need to get into small convenience stores. You need to get into local markets, you need to get outdoors, you need to be able to go into public parks. You need to be able to go into other settings where traditional RVM systems don't apply and don't work. And this is where Envipco is focused.

So we have solutions at the small end with Compact that can go into convenience and small end stores. And with Quantum, as you saw, we have large format machines that can go outdoors. This is critical to enable these countries to reach their targets. And Fons, I think, is experiencing this now in the commercial end with some of these customers who want to get to the next level, and we have the products to offer them. So it's a fantastic combination of technology and the commercial opportunity.

Okay. So our 3 key priorities in our technology strategy are, number one, focusing on bulk feed. So the experience of being able to take your bag of containers and dump them is clear. As a consumer, that's what you want. You're going to go out of your way to find that experience, and we know that. And so that's where we're focused from an innovation development standpoint.

Number two, convenience store segment. So it's been undertreated for a long time. I think our commercial team did an outstanding job identifying merger and acquisition opportunity with Sensi and the Compact machine. It's a fantastic product that fills that gap right now very nicely, great acquisition there.

And number three, continuous improvement, so making sure that the machines are reliable and that we do lower the cost. So we are able to increase our earnings as we go along.

So that's our key -- 3 key points for our technology strategy. And this photograph, I think, is 1.5 weeks old. So this is straight out of Ireland, the first installation of Quantum in an outdoor setting. So this retailer didn't have to give up any of their parking lot. They didn't have to give up any retail space in their store, and they get a machine that can process over 1 million containers a week, if you want to go. I mean it's an unbelievable machine. People drive from all around to get in and use this machine to process their containers quickly. And so it's going to enable Ireland. Ireland is struggling to reach their 80% and 90%. And so this will help them to reach that. And I'm sure there will be more orders to follow for this machine based on this.

So Quantum S. So we're proud to announce the launch of Quantum S, our latest product, and this is, s for small. So we basically have taken the Quantum and shrunk its footprint down. So we have the performance of Quantum with the high-speed processing of containers, up to 100 containers a minute, fastest RVM that we know of on the market. And it's just a great product. People that have this product want more. They like to purchase more because of the throughput and the performance.

But we had specific asks in the market coming back from our commercial team saying, our customers want a smaller product. They want to be able to go into a space that would only take 2 car parks. So the picture on the right, it might be a little confusing, but you can see the competition footprint for our bulk feed system in white, 6 car parks, okay? And then you can see our Quantum normal in the light green. So that's Quantum XL, 3 car parks. So half the size of the competition.

So we're doing well there. And then we've reduced that even further. So we've reduced it down to 2 car park spaces. So now if you're a retailer who wants to buy this machine and install it, all you have to give up is 2 parking lot spaces. If you don't want to modify anything, then you can drop it, run the electric, and it's ready to go. Or as you saw in Ireland, you can make a nice, off to the side, sitting area, which is very nice. But it's a very economical solution for retailers that don't want to give up any retail space in their store and don't want to give up all their parking lot as well for a huge machine. So there's a lot of interest for this. We were specifically asked about this for California. And so there's a lot of opportunity and a lot of retailer interest in the product.

Okay. And in summary, so for us, as you can see from the very beginning, innovation is our lifeblood. So creating new products that make people's life better. So that improve the recycling experience for people, make it easier for people to recycle. And of course, you need technology to do that. I think somebody did say that it's a box with a hole. Yes, that's true when you look at it. I can assure you there's enough technology in that box to fly you to the moon and back. So rest assured, there's a lot of technology involved in this industry.

A global organization. So that platform you described of having the U.S. and Europe as stable platforms to be able to build on, it's so important for us to be able to develop products in the market, for the market, and be close to the consumption to really understand what's happening, and we're able to do that with our engineering team today.

Leading the product range. So yes, absolutely, to really address the needs of all the different consumers we have in all these different countries, there's a need to have a very broad product range and also have the ability to customize that product range. So I'd say one thing that's unique about Envipco is that we are able to listen to the customer and make changes to the product. I know some of our competitors are unwilling to do some of that. And Envipco has been very flexible, consulting with the customer, understanding their needs and then developing solutions that are specific to address what they're looking for.

And continuous improvement. It's extremely important. It's not the glory and glamour of developing new products necessarily, but it's so important from a core business standpoint to be able to have a reliable product that is a low cost and is very efficient from an earnings perspective.

New market segments. And so as we go forward and say, look, the future is bulk feed, and the future is to be able to get to the 90%, to be able to go outdoors and in small stores, that's where we're pushing. The mid-range of the products is very well understood, and it's very well addressed, frankly. But the ends of the spectrum are really where we're playing from a standpoint of developing new technologies. And that's really about addressing our customers' needs. So making sure that these countries and markets are able to meet their targets of 90% to help them get there is really what we're here for.

So that's what I have from a technology standpoint, and I look forward to questions after. And I think I'll hand over to Patrick, our CFO.

Thank you. All right. I hope we still have everybody here for the best segment here, right? Now, all jokes aside, I think we heard some great presentation already. And before I get into some of the finance right, it's -- this all impacts the financials, right, and the finance segment and how do we get ready for the next phase. And maybe quickly to reflect a little bit on -- and some of the things already have been highlighted here in the previous slides, right? But where do we come from since 5 years ago? A lot happened, right? We're definitely not at the same place than we were 5 years ago. A lot of growth, top line, for sure. A lot of focus went on the top line. But in the meantime, we also almost more than 200% grew in our employee base, right? We doubled our factories. We added a lot of additional ERP platforms along the line with legal entities opening, right? So that created a lot of extra activity. We grew in many aspects from that standpoint.

So what does that mean for finance? And maybe before I get into that, my name, Patrick Gierman, CFO. I joined Envipco, what is it, about 6-plus months ago beginning the year, about 25 years experience in finance. Most of my time, international experience at production companies, service organizations, always highly innovative products, which I enjoy. And great to be here. I would say that the past 6, 7 months have been very insightful, learned a lot and great work with the team here.

But one of the key things for me is, right, is how do we get finance ready for the next phase. A lot of growth we see, a lot of growth that needs to happen. So how do we bring that foundation in place? How do we strengthen that and how do we move forward? A few things here, right? And for me, being a finance person, like what I said, a lot of activity in the organization in the end comes down to finance, right? Everything we do has, at some point, a financial impact. So we need to -- right, we will be looking strongly at our process, how do we further standardize and harmonize across our production platform, service organizations and how do we help the teams over there. How do we think about our ERP platform. But I said, a lot of different systems. So we already started the project some time ago to start harmonizing that. How do we create that consistency? How do we drive visibility across the organization, right? And how do we help control and manage our performance?

And then the third element, really the people, right? So a lot of growth, it's hard to recruit. So how do we get the next phase for the finance team? How do we reposition? What do we do central? What do we do decentral, right? And how can we kind of empower the team to really, to help the rest of the organization, right? So take out the manual work and how can we really business partner with the rest of the organization. That's going to be key if you want to manage the growth ahead of us.

On the right side, a little bit of an area of some of the team, how we think about structure. We'll not go into a little detail, but I think for me, key is what can we do central and what do we need to have local available. Then if you think about further financials, and I already got some questions during the break, right, what is impacting our revenue, right? It's not simple. We sell a machine. The market owns up, we sell machine 5,000, 10,000 machines. It's a combination, right? So timing is critical for us. Also from a planning standpoint, we see the markets sometimes open a little bit later, a little bit sooner. So timing is very critical when the DRS system goes live.

Difference between soft and hard launches, right? So it depends on how do we phase in. So that's really market driven. We can think about customers. How do you think -- customers think about their solution. Fons spoke about how can we help the customer, right? Some want to have a sale with a service contract. Others want to have a throughput contract, right, or maybe leasing, right? They all have their own dynamics. And it means that even if a system goes live, you might not have immediately all the revenue right off the full machine sales in your pocket, it might come in over time, though recurring revenue is not bad either, but it definitely changes a bit the profile.

And for sure, we got competition, right? We target a 30% market share. From my side, I'd like to see more, but -- all right, but if you get that right, but competition is in play, right? It's -- we have seen the outlook. It's a huge market, right? And very interesting. So we will need to work through our share there.

But what do we control? Gross margins, already one of the key targets for Envipco over the last years. How do we improve it, right? How do we get to that 40%. There's a lot of elements, right, that we control. I think about production, right, productivity, how do we scale, right? We got a new factory in Romania. How can we help that to scale up, drive productivity, be efficient, right? So that will drive -- that will really improve our volume. Together with our supply chain team, how do we get our kind of benefits over there, be efficient, work with the vendors.

Technology, right? Andrew already mentioned, continuous improvement, getting new products out, how can we make products cheaper, right? So that's going to be a critical element as well to continue to focus on this and to get better.

And 4, definitely our installed base, right? How can we get better on our service organization, drive there, right? For sure, you will not have immediately service -- all of the service revenue after installation, right, but how can we be over the 5, 7, 10 plus years of service revenue, right, plus renewals, how we can get that in place. So that's going to be key drivers for us if you think about gross margin improvements.

Another thing that we can control, but where we already spent quite something on is on our operating expenses, right? We heard we need to invest a lot upfront. Markets come up, right? There's a lot of free work, right? Think about Poland and Portugal, we need to invest a lot, about 8% to 10% of our OpEx goes into these new markets, right? So there are expenses without corresponding revenue. Revenue and income will come later, right? You can see that a lot of the investment goes into our employee base. Think about fixed TAM. But that's going to be today, but also going forward and big investment, right? For sure, production and the teams have been set up now so we can use this scale. For services, there might be more to come. But that's a big driver for us on the operational side.

But this is something we can control, right? So this is going to be very key for us for the foundation that we already built. But how are we further building on, on that and to get better also from a finance standpoint? And really what is key is, right, the moment we have this foundation, we really can leverage that going forward, right? So that leverage and using that foundation is going to help us further grow and stabilize.

Going then to kind of summarizing a little bit at P&L side, right? So if you think about profitability, EBITDA target, I think Mikael mentioned that, Simon as well, 20-plus percent in the future. How do we get there? For sure, revenue is going to be a huge lever, right, to getting the markets open up, being there, able to sell, support our customers, right, to get the machines in place. That's going to be, for sure, a hell of a driver, combined with what I mentioned, how do we improve our gross profit, right? Find those levers, supply chain improvements, do that continuously, right, get better working on our installed base. That's going to be an important factor. And then for sure, our OpEx where team's already invested a lot. So we get really to the point, right, that we can really start capitalizing on those investments on that structure. For sure, still some things to improve, right, what I said, especially on the finance side and other elements to get better, to get stronger, but that's going to be really our baseline for the growth going forward.

Then if we move over to cash and working capital, definitely, for us, a very important aspect, something we closely monitor on a, I would say, daily basis. Given the markets and where we are, right, there's a lot of investment in working capital, right? We want to be ready for the market, having the product ready, working closely with the production teams, but timing is critical. So we can see that markets can be starting a little bit later. So how do we manage it? So that's where our working capital is closely monitored, and we will continue to do that going forward. It's really to make sure how do we balance that delivery capacity with the demand, right, when the demand comes, are we ready? How do we work with our vendors? How do we make sure that we're not missing the ball there? So both inventory and our vendors is a critical element.

Collection side for sure, customers. I think we've got a very strong customer base. For sure, we're partly dependent on the solutions and the possibilities we have with our customers conceptually. The good thing is credit risk is fairly limited for us. We have a strong customer base. So the focus is heavily there on the on the working capital, right? So that's an important piece for us. What did we do for sure, right? And many have seen in the press release, also to support the working capital, we got into a new finance arrangement with ABN AMRO recently, right, to support us really on the working capital and get that flexibility in place to balance between getting ready for the market and when the market opens up.

Another area for investments besides OpEx, what I said, is our capital expenditures. About 8% of our revenue on average over the last few years, expect to kind of slowly continue with that. I would say key elements in there is really our -- one side is a technology with Andrew, right, the new technology that we developed that's part of our investments. For sure, we had our production facilities in the past, right, where a lot of our investments [indiscernible] as well.

And the third base is really the those machines that we lease or via throughput, right, that are installed at customer sites. So the RVMs at customer locations in different countries is also part of our CapEx that we need to take care of.

The thing is, right, a lot of these things will also not always immediately generate revenue. Think about technology, it can be longer development before this starts paying off. So we have a mix a little bit there on how that plays out.

Then we get to -- the final item is more overall on our capital strategy. As I said, we have different funding requirements, definitely driven by the growth, market expansions, right, there's a lot of medium-term opportunities, right, and for sure, the different contractual, think about leasing throughput contract situation, right, where we need funding for. Now what I said. ABN has been great in helping us over the last few months getting new facility in place. Instrumental, it gives us a lot of flexibility, both short term and also the medium term. So great to have them on board. For sure, we're listed as well. And then addition, right, we were always, depending on the needs in the future, probably optimizing how we look further at our needs. But right now, I think we are in a good place to be.

With that, I hand it over to Simon.

Okay. Patrick, thanks very much, very good. So I've got a -- I've just got a few summary slides now, and then we'll go into Q&A. By the way, there is -- for those online, there is a chat option. So please do submit your questions on chat, and we can get to those in the room and also those from people online.

Great. Well, hopefully, these PRs have given you an opportunity for us to do a bit of a deeper dive into Envipco. In summary, unprecedented market opportunity, 50 years for 100,000 units installed to support the existing deposit return schemes, 200,000 units, and the systems and services around those needed to support the deposit return schemes coming up. Of those -- for those 200,000, 80,000 in the next few years of 4 markets: U.K., Spain, Poland and Portugal, which we are very actively pursuing.

Hopefully, these last couple of hours have given some insight into both the excitement we have about this market opportunity, but also some proof points that we've managed to pivot now and build on our very good position in North America with positions now in Europe. So we've been able to capture that strong #2 position. And we've also used some of the technology that Andrew has talked about to enter brownfield markets. That's not our focus. Our focus is these new greenfield opportunities coming up, but brownfield, helping existing deposit return schemes achieve their 90% or over 90% is still a really great opportunity for us, and particularly with the very small product we have, Compact, and a very large product we have in Quantum, we've got really the technology footprint to make a difference in those existing markets.

And we've made investments. We've been very busy in the last few years. We've had great success in the market, but also we've made the foundation investments already. They've been done. We have now these 4 operating facilities. We have a strong organization, including a fully formed management team. We have proof points and systems that we can use in new markets. We don't have to learn this stuff again. We are improving continuously. We have to do that, we know that. But we've now had scale expansion into some of these new European markets. We're ready for the next one, we're ready for the next one, and that's important.

And really, as we go through and as we increase our installed base, it's important to note that recurring revenue will increase. So we talked quite a lot about service. Customers know they need to service our machines. As you can imagine, they're used by everyone. They use sometimes very significantly 1 million containers a month, okay? There is beer. There is Coca-Cola. There is Pepsi, there's weird fruit juices, okay? It's stuck in a metal box of 40 degrees C, somewhere in Athens, it will get sticky and it will get mucky. So people know they need to service these products.

And so if we have a 6x increase in installed base, then there's maybe a 5x to 7x increase in recurring revenue. So as we go through this next period of growth as our installed base increases, that recurring revenue increases in addition to additional units coming from these new markets. So very exciting indeed.

That's our final slides. Thank you for your attention. Thank you for your interest. And now we're going to rearrange the furniture a little bit, and then we're going to open up for Q&A. And we have a couple of excellent moderators in, Markus and also Fabian, to help us. So I think, Mikael, we're ready to go.

Okay. Thank you. So if I can invite the presenters to come up, so very good. So we don't look like an aging boy band, we're going to get some chairs, I think.

All right. We'll let the audience also ask some questions. So feel free to raise your hand. I'll just kick it off here. You're targeting plus 30% market share, Tomra is targeting 50%, that leaves very little share for other smaller competitors. Do you see any changes in strategy in new markets now where smaller competitors are doing some, let's say, discounting on machine sales to grab market share? We know you need an installed -- a dense installed base to have profitable off the market. Any changes to the strategy you see there?

Yes, I think, especially in the larger markets, you see more newcomers to the market. I think if you look at the main retailers, they tend to choose still the main suppliers of RVMs, which have been around for quite some years. I think we follow the new competition very closely to see what they're doing. Hence, the acquisition of Sensi, which is now our Compact. So I think we also look at it from an opportunity point of view.

Yes. And looking at your margin target there of more than 20% EBITDA margin, maybe you can elaborate a bit on how that you will face? And what gives you confidence as these markets mature as a #2 player, 30% market share, what gives you confidence in that long-term scalability and profitability of your business?

Patrick.

Yes. I think it's what I mentioned, right. [indiscernible] will not be there at day 1. It will phase out. It will be a phased approach, right? But if you really look at our production facility, right, that we already set up with the volume, the skill, that's really going to be driving a lot of productivity and improvement, right, continuous improvement. We're going to capitalize on the installed base. It's going to be a significant driver that we said with recurring revenue, spare parts, service revenue. And that's going to be kind of a baseline also going forward together with kind of stabilizing our OpEx portfolio, that's going to also improve the EBITDA margins.

Just a follow-up. Is there a necessary level of market share that you think you need to achieve to be profitable? Or could it be reached with 10% in some markets and 50% in others.

I think you can say, it largely depends on the size of the market to have a good dispersion of products. A larger market naturally can give you a larger volume and you can leverage on your service organization to a larger extent. We have an average defined 30% as a market on an average market that gives us that necessary scale. So I think that's overall a good target.

I'll just repeat. So the question is whether Envipco is low balling its market share target and if there's upside to it?

Yes, maybe I can answer that. So I think, first of all, we think it's real. So -- and by the way, I remind the whole team about this, there is an important plus in the target. So it's 30% plus, and we shouldn't forget that. So look, there's going to be opportunities. I think in some markets, we do better than 30%, okay? I think there's going to be other markets. It's going to be tough, it's going to be really tough because of different reasons.

So I think to the point that was made earlier, I think 30% plus at that scale gives us really good operational density, gives us really good volume, both on products and also on services to have a really good, sustainable business model.

Now as Fons keeps telling me, you don't put 30% in my targets, okay? We have much higher than that. We, effectively, we go for every big customer in every market we choose to go into, they're our potential customer. But we know we're realistic. We're not going to win everything. We'd like to. In Malta, we did. But we think that's a fair and that's a good sustainable target, which is why we've maintained that in this kind of next growth phase of the business.

[indiscernible].

Yes. So the question is on Turkey. That's it.

Yes, I can take Turkey. So Turkey, as I explained, every market is different, and Turkey is the example. They approach the DRS from a totally new angle. So I think with our experienced team, we spent quite some time on Turkey, trying to leverage with all the stakeholders, bringing our expertise. But I mean, they do the things they want to do. So we just follow the flow. We are actively engaged with a local partner because we believe Turkey is a typical market where we need a local partner who knows how things roll in Turkey.

So I think we found a very good combination. So we are going to be more active in the coming period. And then we'll just have to see how it develops. Like you said, it's a huge market, 80 million people, large, geographically spread. Putting in the approach is so different that we have to be flexible, adapt to how they approach it and then just support them with our knowledge and mainly technology because that's going to be a key driver there. And then because it's such a big market, it's important to be aligned also with the operations in our organization to be ready to supply a large number of machines because it could take a long time, but it could also go really rapidly all of a sudden. So that's the challenging part in Turkey that makes it really interesting.

Sorry, there was a second part, Markus. I think second part, as you would say, Markus, what about California? So California -- and by the way, for those here in Oslo, [ Bob ] will make himself available at the end and during the break. But in summary, California is a deposit state at the moment. I think everyone knows that 1 of the 10 states is California. Obviously, on paper, a huge potential, huge potential. But it's a dysfunctional system at the moment. So everyone who goes to California, if you go there, you pay your deposit, but good luck getting the deposit back, really very difficult. So huge retained deposits becoming a political issue. It's a back to [ depot ] model. So versus back to retail, it's back to [ depot ] model.

However, we see some movement that this is -- people are starting to think about the scheme and trying to think the ways to move it from a dysfunctional to a functional system. It's slow. But we hopefully, certainly in the medium term, hopefully, see some movement. And it's interesting that during this period, we have introduced the Quantum product. That is potentially a fantastic [ depot ] product, high volume, outside by design. It's working really well in upstate New York. So we think there's going to be opportunities for Quantum in California.

Now we shouldn't get ahead of ourselves. It's going to be a slow grind there. But certainly, we'd like to present that technology to the California industry and work with them to try and fix their system.

From a technology standpoint, they're currently working on a depot system, as was stated. It's a manned depot system. So there's a person standing there, taking the material back. And so the case for Quantum just makes sense. It's automation. You can leave it, no attendant necessary. People can bring their containers, get the money, really dramatically lowering the costs for the operators in California. So there's a lot of interest right now in that machine coming from California.

[indiscernible] markets actually now. I was just wondering in terms of the EBITDA margin target of 20%, is that assuming kind of the mix you have today between direct sales, leases, throughput models, et cetera? Or is it based on kind of 100% direct sales? Or how should we interpret it? Cause now you're 8% CapEx to sales, meaning should we expect kind of a long-term EBIT margin of 12%?

Yes. Patrick, do you want to...

No, it's indeed based on mix, right? So it's not only sales. It's the combination with lease throughput, but also straight up sales with and without service. So yes, that's based on the combination. So yes, it's like the 20-plus percent is achievable with that.

But CapEx, to maintain at that 8% level, is that correct? Or should we assume it to come a bit down?

Okay, definitely, right? The moment we grow, the CapEx ratio will go down, right? So there's definitely no -- definitely recently, but also with the production facilities and those things, we invested a lot in that as well. So logically, that will not necessarily repeat every year or every 5 years. But yes, definitely with the top line growth and the improvement, that will definitely go down as a percentage.

And one question on maybe the U.K. and Spain. They are huge markets and of course, very uncertainty on timeline, as you said, where it's a couple of years ahead. But would you expect those 2 markets to be -- there'd be sales there before the official launch kind of through 2026?

Yes, definitely, especially U.K. because it's a large-sized country. I think also the retailers, since they have been involved in the Scottish preparation, they are advanced versus other retailers in other markets, which have not had that experience. So they understand much better what it takes to be prepared, not only from a technology point of view, but also their own organization because they need to arrange all the logistics and they need to train the staff and everything.

So I think especially in the U.K., I think we expect to see 1 year in advance of go live date, already some real commercial activity. Spain, we have to see, they have to, in that sense, catch up to the U.K. So we are working with all the retailers to explain them what to expect, et cetera. So I think, especially after the DMO will be appointed early next year, then it will go much faster after that.

But also there, like I said, 40 million people, so smaller than the U.K., but much more containers to be collected. So I think in that sense, it's going to be the same size of opportunity. And basically, also, they're going to need the same timing to get prepared.

I think maybe just to build on that, Fons. Certainly, what we get from the U.K. DMO is they are really committed to this October 2027 deadline. So that's the DMO, it's the beverage industry, it's all the retailers. So a couple of the team talked about hard and soft launches. We've seen recently more soft launches because really, politically, don't want to change the date in the law, but want to give people 4 months, 6 months to get ready, kind of the U.K. government, and I think you could argue, the industry have said, well, you've had that. You've had those years when we were doing Scotland, when we were thinking about this, the minister in 2018 talked about deposit schemes in the U.K.

So we feel that the U.K. is going to be kind of more of a hard launch, which means they are going to need, to Fons' point, really detailed commercial processes to select their vendors and then to allow them with this huge network that's needed to set everything up.

I'll follow up on Thomas' question there on the margin. Of course, this is a midterm, long-term EBITDA margin target of plus 20%. But of course, your business model or your business activities changes depending on the markets and how many markets go live and so on. And if I use the case study of Tomra from the early 2000s when Germany went live, they've invested heavily in their OpEx base as you have, OpEx is up plus 30% in '23, '24, seems to stabilize more now. Sales doubled. EBIT margins went from 13% to 23%. It seems that machine rollouts are not tied with a lot of incremental OpEx.

So in this phase now when we're going towards 2027 and your mix will be heavily tilted towards machine sales, is there upside to that margin target? Should we expect an extraordinary high margin in the coming years?

It says plus 20.

Fair enough. Okay. So then looking a bit back to Poland, obviously, it's being pushed out a bit. Can you elaborate a bit on how the market has turn out compared to how you expected? And are there still some major retailers that are undecided? Obviously, we have seen some announced orders for several vendors. Or are there still some retailers that are undecided? Or is it more about the long tail for Envipco where you've typically been strong in Poland?

Yes, thank you. I can take that. So indeed, like I explained, the complexity in Poland makes timing more difficult to plan at this moment. I think when we are a couple of months down the road from now, we will be more clear. I think if you look at the total landscape of the opportunity, I think there's around maybe 5% of the total opportunity, which has now been signed off on with retailers. It means that the majority of the long tail included then is still available. So that's about 95%, 90%, 95% of the opportunity still there.

I think there are still the 2 main Polish retailers with the majority of stores. Also, there's another one which has a lot of smaller stores. They have not decided yet how they want to approach DRS because their stores are basically exempt from the DRS system, but they also don't want to lose out on the customers. So they're looking for a good way to give their service to the customers, and we're taking to those guys, obviously, with our Compact machine. So timing, it's -- I think, it will be shifting more towards the 2026, but really the first half of 2026.

[indiscernible]

Yes. So the question is what type of market suits Envipco and what will determine your market share?

Yes, I can get a go at it. Yes. So it really depends on the, I think, on the market size and which players are around. I think if you take again Poland, large market, a lot of entrepreneurial companies around. So you see quite some new start-ups in the market. And so they come with new inventions, kind of mostly in the lower price range of machines. They try to enter the market because they see the opportunity. I think because of that, I mean, we keep a very close eye on them. We respond to them. So I think we will still be able to reach then around 30% market share. But it's a bit more unsure.

If you look at other markets where we don't see that amount of new competition coming up, the playing field is more clear. So there, we can ease -- more easy to achieve a higher market share than 30%. And then there's markets like Malta or Hungary, for instance, where the operator buys the machines. If they choose 1 or 2, if you're in, it's large, if you're out, it's 0.

So for the moment, I think the new markets don't tend to go that direction. So it's more retail-driven, so more retailers that invest in the machinery.

Maybe just to add to that. I think we've -- if we look at Romania, the study, the example that Fons said, we are -- we have some capability and also we have a desire to hit this tail. So it's not a matter of saying, right, we've got 3 or 4 big retailers, great. We'll sell out their 3,000 units, right? We're done. We're going home. We are happy to stay in that market and really work through that tail. And I think the example of Romania is really good where we've done that. And of course, typically, smaller retailers need the product quick.

So especially in Romania, if somebody phones up on a kind of Monday morning, hey, I used to take containers back manually, it's driving me crazy. I need a machine. No problem. We can deliver one, get it working. You need the machine Monday morning, you'll be recycling by Friday afternoon, wherever you are in the country. And that's really powerful. And typically, people are prepared to pay for that. Simple, quick. So typically, the price and margins on those sort of deals are slightly better.

So I think we're flexible enough to adapt to everything, but certainly, where you have that broad market then we see some strengths of our organization to be able to penetrate that. Good question.

[indiscernible]

So the question is about the Quantum S, and the price point compared with the normal units. And technically, how did you manage to get it smaller?

Okay. Maybe, Andrew, you want to take shrinking it into a box? And I'll take the price.

I'll take the technology side. Yes. So Quantum S, yes, reducing the footprint of Quantum without reducing the performance. Essentially, we're taking away from storage. So there's huge storage capacity designed to Quantum. It's originally designed to be able to be serviced by truck pickup. And not all operations want to do truck pickup, some want to do bags and pull out and store the bags in a shed out back, that sort of thing. So reducing the storage is an easy solution to reduce the size and actually have a better fit with what the customer needs. So it's kind of a win-win.

On the pricing side, I'll hand that on to you.

Yes. I think pricing, it's not really a pricing play. This is more an opportunity. So customers, typically, these situations, customers really want the Quantum and are prepared to pay for the higher price point of the Quantum, but they just can't fit it in for some reason or another. So offering Quantum S gives them that opportunity to put in a Quantum in the space that they have available.

Okay. Your gross margins are trending upwards, but obviously, fluctuates with volumes we've seen over the recent quarters. You're almost at your target level now. But you still maintain your target of around 40%, not above or plus 40%. What does that imply in terms of pricing?

Do you want to take that, Patrick?

Yes, yes. So just to -- so you're highlighting the 40% margin target, right? And the question was, to what extent that relates to pricing.

No. I mean gross margins vary with volumes. You're almost at your target already and volumes are going to increase drastically. Why do you maintain your margin target at 40%? And what does that imply in terms of pricing if volumes go up and your margin should follow, that would imply that your pricing is going down?

Yes. I think pricing might be more on Fons' side. But for sure, the pricing does have an impact, right? The moment we get to the larger markets and competition, pricing is a factor that you need to consider, right? So if you go to large retailers, price points might be different than maybe a smaller store, right? So that definitely plays in. And I think Fons can maybe elaborate on that as well.

So that plays and for sure, on our end is then also finding the right countermeasures to improve on the other side, right, we need to cost control and cost manage our supply chain. So -- but yes, pricing does impact, especially when you get to the larger markets, larger retailers. And what I mentioned earlier, right, competition. So that's -- there are more players in market.

Yes, I can just underline that. That's exactly the story.

And sorry, maybe just to add. So again, we're not low balling this, and we're not saying 40% and we stop. I think you're going to see some fluctuation because you've got -- we've got different dimensions, as also Patrick pointed out, we have volume. We have type of market. We have share of services, how that kind of feeds into -- how that feeds into our overall group P&L. So all of these things, we feel that a good solid 40% is a really good foundation for us to then make sustainable EBIT, good EBITDA margins.

[indiscernible]

So the question is that your competitors are also investing in the areas that you are strong. How confident are you in maintaining that lead?

It's always a good sign to see the competition following you and innovating in the same spaces where you have the leadership position. So it's nice to see them coming after us in the bulk feed in the large and then also on the small side. But to maintain the competitive advantage, I think the most critical link is to stay close with our commercial partners and understand what drives that purchase intent. Why do these customers want these products.

Quantum S is a great example of that. We heard we love the technology, we love the speed, but we need it smaller. We need to fit it into 2 car park spaces. And so that drove that. And in terms of the core technology, we're also innovating on that front. And so there's -- while it's fun to watch them chase you, you also want to make sure that you're training to go faster. And so we're doing both sides in terms of that.

[indiscernible]

We're not limiting that to any, I think, part of the segments. It's going to be complementary in terms of that. To repeat the question, our M&A strategy. We are opportunistic in looking for technology that can be complementary throughout our product portfolio. As Sensi does offer technologies where we believe we can incorporate some of that into our existing products, improving performance, potentially taking down costs over time. So that's kind of the approach we look at. There's no specific area that we're looking for.

[indiscernible]

So the question was, first, is there any active lobbying against the DRS schemes, an introduction? And the second was -- what was that again?

Lease and revenue share.

Yes, lease and share going forward of lease revenue.

Okay. Can I take the first one? So I think the key thing is from an EU point of view, this packaging and packaging waste is a regulation. So whereas directive needed secondary legislation to put it into -- to put it into force in a national context, the regulation, if you're in the EU, you need to follow all the regulations. So it's a very, very strong -- very, very strong legislative push and mimic, to a certain extent, for the EU -- for the U.K. deposit legislation. So I think the legislative framework is very strong.

The second thing is, I think you see a lot of the stakeholders, which maybe traditionally were uncertain about deposit schemes, realizing that a well-run deposit return scheme is the most cost-effective way of achieving improved recovery targets for beverage containers and making sure they have a clean source of material coming back in that they can reuse the bottles, particularly in the beverage industry. So there's a lot of strong support.

No doubt, there are some stakeholders where that's more difficult, maybe municipalities or so forth, and different countries are working ways to incorporate those stakeholders into the scheme, very much like they're doing in Portugal by involving or giving the option for municipalities to be involved in the scheme.

So I think the drive to DRS and the involvement of lots of stakeholders, I think it's very positive. So certainly, clearly, it's legislative processes. So timing, as we've said, changes, but it's definitely not, is this going to happen? It's more, when this is going to happen. And then maybe on the second point.

Yes. I mean as we showed, I mean, our U.S. business has largely been built up over time through leasing. Our European customers tend to favor to purchase. So the leasing revenues we have is largely from our U.S. business. Our program services, roughly 1/3 or so of that program services revenues from the North American [indiscernible] business comes from leasing.

And I'll just have another question on legislation and the risk there. Of course, there is a third DRS wave with France, Italy. They need to reach 80% by end of 2026. When do you expect the visibility on that in actions? And second part of that question is, if you don't see any more markets in Europe, what are your main priorities? Is it to go into Germany with -- into sort of brownfield investments or what other adjacent opportunities are you seeing beyond the markets that we can also clearly see?

Great. Maybe I'll start and then -- over to you for the rest of the world. Yes, look, I think maybe reference last answer, I mean, this is a regulation, right? This is a regulation. If you're in the EU, you need to achieve this target. Some countries, no doubt. You mentioned France, you mentioned Italy, maybe get there in a slightly different way. Maybe the format of the scheme has higher components of maybe refillables, which we can also now, with our broad product portfolio, tackle. So we think it's going to get there.

Now we think it's going to -- is it going to be all countries achieving all the targets by 2029? Maybe not. There's going to be probably a -- there'll be a zone where different countries will be slightly different timing, but we think there's a very, very strong push there.

And then we talked about the U.S. So if you look at markets outside of Europe, the U.S., we've talked about California, there's other markets in the Northeast, where we have probably refreshed deposit legislation, we saw good growth in Connecticut, New York and Massachusetts, if that also happens, they will see more growth, maybe new states. And then that's just the existing regions we're in Europe and North America. And maybe Fons, that's not the whole world. Is it?

No. There's other continents left. So basically Asia. There, we see some activity starting now in Singapore and Hong Kong is doing some pilots. So I think they have -- not the kind of regulation that we have in Europe. So it will be a different type of approach. But we see interest growing in those markets also to go into a kind of DRS system.

So we're following that at the moment still kind of from a distance, but we are connected. So we need to stay close to it. And when it needed, like we showed, we started investing also in local resources there.

Africa is another big continent, a lot of litter to be cleaned up. So the interest is mainly there. But of course, the structure in the right countries are organized and the cost structure makes it more difficult to set up a DRS system in the short term. But also there, it will definitely happen.

South America is another region. We see more activity in some of the South American countries, with some smaller countries starting with the DRS. So I think next to Europe and even France and Italy, in a sense they have to do something probably wait as long as they can. But in the end, they have to do something. But then there's this South America and Africa and Asia, so the southern hemisphere is really there.

So if I understand correctly, your pure-play RVM company, that's your strategy. You have seen peers have you sort of diversify but you are a pure play into DRS?

Maybe I can add to that. Yes. We're a recycling technology business. Yes. I mean at the moment, that is pure play beverage containers. Now Andy would say, hey, Simon, what's in the box can recognize other stuff? What's in the box can compact other stuff? What's in the box when interacting with the public can take back other materials? So who knows? In the long term, maybe that's something that we think about. But right now, we see so many -- so much opportunities that hopefully we've presented and articulated this afternoon, that this is what we're looking for.

And if we broaden from that, it will always be around technology. We are not going to open recycling plants. That's not our gig. We have the skills, we have the focus to continue to be a technology business, and we see a massive, massive opportunity in beverage containers in the long term.

Thank you. And that concludes our Q&A session. Thanks for the questions, and thanks for the answer from the management team.

Brilliant. Okay, so once again, thank you very much, everyone. Thanks for everyone online, everyone to be here in Oslo. We -- those who are here in person, we invite you, we have some drinks opportunity to network afterwards. Thanks very much. This has been, for us, a delight to host and run through our first Capital Markets Day. We look forward to, obviously, seeing you again wherever you are, and thanks very much.

Good morning, everyone. Welcome to the Q2 2025 presentation by Envipco. I'm Simon Bolton, CEO of Envipco, and we'll run through this presentation with my colleague, Mikael Clement, Chief Strategy and IR Officer.

Normal disclaimer, what are the financial highlights for Q2 2025? As we talked about in the first quarter, this is a transitional year for us as we deliver on the existing markets and then we look forward to new growth markets coming up.

We're seeing sequential growth Q1 to Q2 this year and group revenues of EUR 23.1 million, that is 13% down year-on-year. But as mentioned, we expect that to continue to build as we go through the year, more on that later.

In terms of gross margin, we continue to work hard, make investments on our production capability, our supply chain to drive down the cost of operations and cost of our products, so gross margin of 36.6% shows 1% up versus the year before, giving a gross profit of EUR 8.4 million, EBITDA of EUR 0.4 million and cash, which Mikael will talk about a little bit later in more detail, ended the quarter at EUR 18.9 million.

In terms of operational highlights, as we've discussed previously and we'll show later in the presentation, there's a lot going on. Lots of markets are active. Some of those activities haven't gone through to final commercial decisions and agreements and orders quite yet, but still, we're continuing to prepare for the significant opportunity ahead of us. That's both on production and supply chain.

Whilst not all those activities have gone through the final decision, some have, and we're very excited to have announced the first 2 orders in those 2 new critical markets. So 250 RVMs were announced to a major retailer in Portugal. Portugal is an exciting market for us. And we've had certainly a really great business development team on the ground there for some years as that starts to prepare for go live at the beginning of 2026.

Poland, very large market, potential, maybe up to 15,000 reverse vending machines. And we're certainly -- we're excited to announce the first agreement for 1,000 units to a major retailer in Poland. And based on the current scheduling with the customers, that's expected to roll out during the course of the second half.

Romania, it continues to be a real success story for us. And we're certainly -- we're proud of the contribution that we have made to the deposit return system in Romania and also the fantastic team and business that we've built in the country. As you know, we've been in Romania now well over a decade, initially as a supplier, and we built up that business to become one of our major manufacturing hubs and also a very active participant delivering machines, delivering services and support to the deposit scheme in Romania, which is working very well.

As we've continued to work with the retailers and overall, the country at large, certainly, our market share has built up to now over our initial target of 30%, and we expect continued development in this exciting country going ahead.

We continue to invest in the team. This is something we've committed to do as we look to prepare the business for the future. So a number of people were added in the quarter, particularly around business development, the service function aftermarket. That's important, of course. We only sell and deliver a product with a service offering. That's super important for our customers. So we really focus on that. And then we also continue to invest in core functions as we grow the business, as we grow the organization, core functions, particularly around finance and IT also are developed.

For those who may be joining us for the first time, we are a global recycling technology business. We're focused on the recovery of beverage containers. And with the legislative framework to increase recovery, there's an unprecedented market opportunity, really a tripling of the market in the next few years. We have positioned ourselves to capture our fair share of this developing market. And step by step, we execute with a seasoned team, and we're driving both revenue growth and we're developing profitability.

What does this look like? If we go back a few years, here on this chart, you see as new markets come in, and that's our focus really being there when these markets open up, so we can capture our fair share. And as they have, then you see that's propelled our growth over the years. We, of course, still have a strong and stable U.S. North American business, which Mikael will talk a little bit more detail about.

Whilst the number of deliveries was relatively modest this quarter, having production capacity is important. And we deliver North American products in North America from our North American operations in Connecticut. And then European markets, we service through 3 facilities that we have: Romania, Germany and Greece. This is important. It allows us to serve the customer efficiently and quickly. And also that capacity that we've developed over the last few years allows us to respond when customers maybe make decisions later than we anticipated.

So a number of these markets, there's still work going on in the market to frame them and to organize them, particularly in Poland. But when those decisions are made, then we have the capacity, we have the ability to serve those customers very quickly. And we think that's important, particularly as we head towards the regulation target of 2029.

Okay. With that, Mikael, I'll hand over to you for a financial review. Thank you.

Thank you, Simon. Good morning. I'll take you through some of the financial highlights of the second quarter of '25.

Starting out with the profit and loss. Revenues in Q2 were EUR 23.1 million, a decline of 13% from Q2 last year of EUR 26.6 million. The key driver behind that decline are lower RVM sales to Europe. As we continue to deliver on existing markets, whereas in the second quarter last year, we were still in the buildup phase in some of those DRS market introductions.

36.6% gross margins this quarter reflect underlying improvements in our production and supply chain activities, offset by lower utilization in our assembly facilities as we sold out older inventories, finished goods inventories previously produced.

Operating expenses EUR 10.4 million in Q2, up from EUR 8.8 million in Q2 last year. The increase, both on a sequential and a year-over-year basis is driven by increased headcount, as Simon mentioned, 505 employees exiting Q2 this year, up from 416 employees Q2 last year.

EBITDA in the second quarter, EUR 0.4 million versus an EBITDA of EUR 2.6 million in Q2 last year, with net profit at minus EUR 2.5 million in Q2. For the year-to-date figures, Envipco posted group revenues of EUR 44.1 million, a decline of 18% from EUR 54 million in the first half last year.

Gross margins in the first half of this year were 37%, up 170 basis points from 35.3% in the first half last year. Operating expenses, first half of this year, EUR 20.2 million, up from EUR 17.6 million in the first half last year with EBITDA of EUR 0.9 million, down from EUR 5.6 million in the first half of '24.

Drivers behind our revenues. Europe is a market that we are focusing on as new markets continuously are introducing and rolling out new deposit return schemes. Revenues in the second quarter were EUR 14.5 million in Europe, down 16% from EUR 19.9 million in the second quarter last year.

We continue to deliver on markets. This quarter, Romania, once again, very strong performance. We are continuing to deliver in Hungary, but at a lower rate and where Greece started out very -- or quite soft in the first quarter, has built momentum into the second quarter, but is expected to continue to build momentum into the second half of the year.

Our reverse vending machine sales in the second quarter in Europe were EUR 12.8 million, down from EUR 16.4 million in the second quarter last year. Program services increasing still at a low level as we still are in warranty periods for a majority of our installations, EUR 1.7 million, near doubling from EUR 0.9 million in the second quarter last year.

Our North American operations are stable. In the second quarter this year, revenues were EUR 8.6 million, down 7% year-over-year from EUR 9.3 million in the second quarter last year.

We've had a weakening of the dollar versus the euro. So adjusted for that, the underlying growth is 3%. The driver behind the decline are lower sold volumes and therefore, also lower collected volumes in the North American markets.

Program services declined 4% year-over-year. They comprise the largest share of our U.S. business -- excuse me, North American business to EUR 7.5 million. RVM sales in North America in the second quarter were EUR 1.1 million.

Our operating cost, EUR 10.4 million in the second quarter, up 17% year-over-year, and as explained, largely driven by the increase in our headcount.

Envipco will continue to invest to meet anticipated market growth in the quarters and years ahead. This goes in a wide variety of our activities from market and business development through R&D, developing our technology and delivery platform further, our administrative capacity and systems. Including other income, total operating costs in the quarter were EUR 10.3 million.

Moving over to our balance sheet. Balance sheet total declined marginally from EUR 122.6 million at the end of Q1 to EUR 121.1 million at the end of Q2. Noncurrent assets were EUR 39.2 million, down from EUR 41.2 million at the end of Q1.

Major components PPE, EUR 21.2 million, and intangible assets of EUR 14.2 million. Roughly half of the intangible assets are made up of capitalized R&D.

Current assets were totaled EUR 81.8 million, fairly stable from EUR 81.4 million at the end of Q1. Taking out the cash balance of EUR 18.9 million. Inventories were EUR 33.1 million at the end of Q2, up from EUR 31.5 million, with the increase being driven by raw materials, offset by a decline in finished goods inventory.

Accounts receivables were EUR 29.9 million and versus EUR 29.3 million at the end of Q1. Equity stood at EUR 57.9 million for an equity ratio of 48%. Noncurrent liabilities were EUR 16.1 million, flat sequentially, with borrowings at EUR 6.8 million, down from EUR 7.6 million in Q1. Current liabilities were EUR 47.1 million, up from EUR 42.6 million at the end of Q1, with trade creditors at EUR 17.8 million and borrowings at EUR 15.6 million, up from EUR 10.5 million at the end of Q1. Total borrowings on the balance sheet exiting Q2 was EUR 22.4 million, up from EUR 18.1 million at the end of Q1.

Moving then over to the cash flow for the second quarter. We exited the quarter with EUR 18.9 million in cash, down from EUR 20.7 million at the end of Q1. Cash from operating activities were a negative EUR 4.6 million, with EBITDA of EUR 0.4 million being offset by a working capital build of EUR 5.3 million. Higher inventories, higher receivables, key driver behind that build.

Cash from investing activities were EUR 1.5 million negative, with capital expenditures of EUR 1.1 million and capitalized R&D at EUR 0.4 million, key drivers. Cash from financing was a positive EUR 4.6 million, with FX effects of EUR 0.4 million negative. That was driven by an increase in borrowings of EUR 5.2 million, while lease liabilities came down EUR 0.5 million during the quarter.

Since Q2, now in August 5, we announced a new consolidated working capital facility with ABN AMRO Bank, thereby collecting financing arrangements have in different markets that the company has had over time and built over time to a collective facility. This facility gives us a flexible capacity currently up to EUR 21 million. As part of this arrangement, we have repaid all USA-based financing, which then in sum, gives us net of these repayments and increase in working capital capacity of EUR 10 million. A very important stepping stone for the company as we continue to move ahead towards new growth opportunities.

With that, I think I'd like to give the word back to you, Simon, for a few comments on our outlook.

Okay. Mikael, thank you very much indeed. Great. Just a reminder, obviously, on the webcast, you can enter questions, send questions to us. And after this outlook, we will then take those Q&A, so please do send in your questions.

Good. Right. Outlook, we wanted to highlight again the opportunity facing us. So we are recycling technology business. We produce reverse vending machines and services and systems that support the recovery of beverage containers. And that recovery is now very strongly written and driven in legislation, both the EU packaging and packaging waste regulation, which mandates 90% recovery by 2029 and also additional legislation in other countries, for example, the U.K., which is mandating the introduction of deposit return scheme in the U.K. by October 2027. Very powerful pieces of legislation which are driving activity in this market and of which, of course, we want to take -- we are positioning ourselves to take our fair share.

A different way of looking at this is in terms of coverage of population. So last few years, roughly 40 million, 50 million people have been covered in those countries that have recently introduced a deposit scheme. In the next 3 years, there's another kind of 270, 280 people. And then in the next 5 years, potentially another 150 million people and roughly the number of reverse vending machines, our products that you need to cover a population is proportional. So huge opportunity, and we've expressed this differently before to say there's about 100,000, 110,000 units operating globally at the moment. And to cover all of these deposit schemes, we need another 200,000. So about 300,000 units will be needed in the next few years. This additional 200,000 units is a market opportunity of about EUR 4 billion. So very significant, very exciting.

But timing is a challenge that we face. And if we look at this slide, which we keep updated. And by the way, thanks for the feedback, people find this very useful. These are the markets that are finishing off a deposit scheme, so Romania, Hungary and Ireland. These are markets we're still delivering units in, as Mikael mentioned. Hungary, in particular, for example, has done most of the installation last year. So that is being delivered at a slightly lower rate. And year-on-year, we delivered less in Q2 '25 than we did in Q2 '24.

Romania has a longer tail, lots of local independent stores have moved and want an RVM, which is great. So sequentially, actually year-on-year has seen growth. And Ireland and so on is filling in. And then we have Poland and Portugal, which, for those who follow the business several quarters, are really key markets for us during this year and next.

And whilst there's still a lot of activity in both of those markets, there are some things that need to be -- continue to be defined and sorted out. So Poland, there's interoperability questions which are being worked through between multiple operators, retailers in the beverage industry are still working on their final plans. And this uncertainty, therefore, is pausing somewhat some of the very final decisions of retailers, our customers when they buy RVMs. So we're seeing that move slightly into the latter part of 2025 and potentially even to 2026.

Good thing is we've now been there a few years. We have a fantastic business development team. We've won the first agreement, which is great. We have pilots operating in many countries -- in many areas of Poland, which is exciting, and we're ready to win when the customers make those final decisions.

Portugal is smaller market. And certainly, there's been no official announcement from SDR Portugal, the operator, on the go-live date, but we expect that to be in the first of 2025. Again, a slight delay has caused a slight delay from some of our customers. Again, great team on the ground, lots of piloting, and we do expect still in both those markets to win our fair share, which is 30% plus.

The other markets are starting to come through. Greece, which Mikael mentioned, we've got a fantastic footprint in Greece through work with a great partner. And as Greece starts to transition between pre-DRS and DRS, then clearly, there's some things that need to be organized before that gets going again.

So overall, we continue to see really exciting momentum in new markets. It's a multibillion dollar euro market in Europe. And we have, obviously, outside of Europe, continued interest in different markets and obviously, potential growth within North America. The timing and character of these will influence final procurement decisions and delivery. We're ready. We have the team. We have the products. We know we can do it. We've proved we can do it, and we're just waiting for that final go before launching those products onto the market.

We continue to deliver on a tail of very substantial launches, particularly in Romania and Hungary. We have our first agreements in Poland and Portugal. And we're working hard with other customers on their final decision points. And look, we're confident about the future. We're confident about the market, our ability to capture our fair share. So we will continue to invest to be ready for when those decisions are made so we can deliver excellent products and services to those customers.

So that's the end of kind of the Q2 update. We'll take Q&A in a moment. Just a reminder, we are holding our very first Capital Markets Day update in Oslo, 9th of September. So those who are in Oslo or want to travel to Oslo, you are more than welcome. Please register and let us know. For those who can't make it live, then we will be webcasting it live on envipco.com, and it will be between 1 and 4 Central European Time. So hopefully, look forward to seeing many of you there live, should be exciting update. And obviously, the few hours gives us longer to go into a bit more detail about the business, about our targets and as we look slightly further ahead to 2030.

In terms of the next specific event on quarters, we have Q3 results. That will be on the 12th of November. And with that, I'll say thank you very much for your attention. And Mikael, I think if we have any questions, it's over to Q&A.

Yes. And questions are coming in here.

Thick and fast, I hope.

Yes, yes, absolutely. Okay. Well, let's just start on top. Could you comment on what is driving sales of the Quantum in the U.S.? How the characteristics of this machine fits the U.S. market?

Yes, great. Look, I think one of the things is that the deposit schemes are -- have been established in the U.S. for a long time since the 1980s. But as we have announced before, and as you've seen in our numbers, Connecticut as a state has refreshed their bottle bill, which has increased the number of containers, which are coming back to the scheme. We're also seeing increased volume in places like New York.

The Quantum machine is fantastic for high volume. We've seen that in Europe. And now we're introducing that technology into the U.S. Actually, the photo that you see here is, in fact, the U.S. machine. And so we're putting these machines in recycling centers, which can be used by the public, can be used by people in those recycling centers, the team of those recycling centers, and they've been really well received. And we've got lots of inquiries for other machines. And so we feel very positive about Quantum as a product platform in the U.S.

Yes, absolutely. And we're looking at producing it as well.

Yes. I mean it's a big unit. I mean, for those who have had the pleasure of using it, one of the things that customers like is not only it's good for their consumers and the people who use their shops, it's very efficient, but it stores a lot of material. And it's easy to take that material which means you need a big box. And shipping boxes across the sea is not the best thing to do. And there's lots of people who make good boxes in the U.S. So one of the benefits, of course, of having a dispersed manufacturing strategy and having factories that are ours that we control allows us to be very flexible. So just like we have done in Greece to localize the Quantum product, that localization, we can also do in the U.S., which allows us to be highly flexible. And of course, particularly in the current regime, very cost effective.

Yes. Can you provide a bit more color on if you are expecting Poland and Portugal orders to come into the P&L in Q4 this year? Or is it more split between Q3 and Q4?

Yes. Look, I think we wanted to highlight the timing of these opportunities. I think we still -- it's not a matter of if it's going to happen, it's going to happen. Both of those are -- those schemes will happen in the next short period. It's the timing of those. Now certainly, we've announced the 2 new agreements. We expect those to be delivered during the course of the second half of the year before the end of the year. And clearly, we are working hard to add to that. So far, because of the work still going on to solidify and clarify some elements of the schemes in both countries, there's been really no more announcements or conclusions by customers anywhere. We're ready to obviously jump on those as soon as they -- as soon as those decisions are made, and they want the product. But certainly, we do expect an influence of Poland and Portugal in the second half of the year to revenue. The extent of that, again, is the extent of timing. And yes, so we're basically ready to go.

But more in Q4 than in Q3, it's only reasonable that sounds.

Yes, I think so. I mean, here we are, we're mid-August now, and I think it's reasonable that, as we've said, we see momentum building as we go through the year. But like we've seen in the last couple of years, we do expect Q4 to be quite busy.

Do you see anything significant with regards to the decrease in North American sales?

Well, as we explained, program services were down. Q2 this year, lower sequential seasonal growth than we've seen in previous years. From what we gather, the sell in of new beverages has been lower, weather, partly explaining that specifically in North East. Lower sold volumes also then results in lower collected volumes. So all in all, the North American market for us is still looking as a stable market, a moderate growth. It will vary on a quarterly basis, but that's still what we see. There's no difference structural or in the North American market for us.

Do you expect working capital build to reverse over the course of Q3 and Q4?

We've seen -- in terms of seasonality, we've seen a build in Q2 over the last few years. We will have a higher activity level moving into Q3 and even higher activity level into Q4. That will drive receivables. We have different types of contracts with different types of customers. And of course, the mix of that could be changing that dynamic.

In terms of our financing capacity, we're very comfortable with what we have to deliver on what's to come for the Portugal and Poland. We have a strong focus on our working capital, but we also need to have an availability to deliver on the opportunities that are arising. So let's see here.

Can you provide any further color on the Netherlands win and how big this could be for 2026? Do you expect to win any further orders in other existing markets? In other words...

Certainly, we -- one of the things that we have put in the report, a subsequent event is we're very pleased to announce the kind of frame agreement with Statiegeld Nederland, the operator of the Dutch system to kind of formalize some of the pilots and some of the work we've done over the last 6 months in terms of introducing Quantum to the Dutch market.

As we presented before, the Dutch market has grown from big bottles and then introduced small PET bottles and now introduced cans and cans is a huge fraction of the overall beverage containers in the market in the Netherlands. And so this has created kind of an issue, also created an opportunity for us to introduce Quantum.

And we've had several fantastic pilots by private groups, which have also been supported by Statiegeld Nederland, and that's now culminated in recognizing that technology has a huge potential and investment and program that lifts the Netherlands towards the 90% recovery target.

So yes, we do expect, of course, follow-on orders both during the course of this year and during next. It will be step by step. As we talked about just before, in the U.S., these are big machines. It needs planning permission and zoning and so on and so forth. But certainly, everyone is very excited. We've got now a team focused on that brownfield opportunity in Netherlands. We have technical support and so on. And certainly, our -- the feedback from customers, the feedback from Statiegeld Nederland is very positive, so yes.

And in general, what you see, and hopefully, we try and communicate as best as we're able through these quarterly updates is you see a spread of Quantum. I think you go back 2 or 3 years, really Quantum was only in Sweden, but step by step, now we see Quantum pretty much existing in every market that we're working in. It's a very -- it's a great product, unique product to the market. Consumers love it. It's very quick. It's very efficient. They don't have to stand there putting bottles in one by one. And our customers, retailers or even private individuals like gas stations, they like it because it's high footprint. It drives footfall to their facility and of course, with very high volume, they get a lot of handling fees. So overall, a fantastic product, which we will -- is important for us, and we'll continue to develop and also apply in other markets.

Yes. Could you please explain the gross margin decline sequentially?

Q2 production was lower than in Q1. So it's utilization factor. So lower utilization of our assembly facilities. So in other words, part of the sales in Q2 was sell-out of previously produced finished goods inventory. That's the explanatory factor.

Let's see here. I'm just trying to see which questions may be overall lapping. Could you maybe elaborate on your performance in Romania?

Yes, sure. Yes, look, we wanted to highlight Romania. It's actually our biggest single market in Q2 and showed very strong both sequential and also year-on-year growth. Yes, as I mentioned, I think, in the presentation briefly, we've been working in Romania now for quite some years, initially just as a supplier of our compactors, very high-quality, very efficient. And then we've built out that business both from a production point of view. Now we fully make the whole product in Romania and the full range to also then supporting the Romanian deposit return scheme.

And we've made several announcements over the course of the quarters in terms of key wins that we've had with international retailers, but also, more importantly, we have a very active local sales team and commercial team that look at the much wider opportunity of local and regional retailers. And we've built, therefore, into that market. They really like the fact that they can get the product quickly. It's simple to use. It works. It's effective. It's a good price point for them. And so that has developed our market share and we've surpassed now 30% and we feel we can continue.

And this is an interesting dynamic because we see similar dynamics in some other markets like Poland probably being even more like this, so 10%, 15% maybe of retailers are kind of international retail groups or large groups. And then you have the majority being these smaller chains, smaller local retailers, which are very effective at what they do in those markets. But maybe start off with manual collection, then they have an RVM, a reverse vending machine, later in the process. So this market share builds over time. So we've been working in Romania now commercially for well over 2 years. But it shows commitment to the country, commitment to the market, a great team on the ground clearly allows us to have a very nice solid business and ultimately build up to a good market share.

Then we're through all the questions.

Very good. Okay. Excellent. Well, thank you, Mikael. Thank you, everyone. Thanks very much for your attention as ever. Again, a reminder, September 9, do put it in your calendar, it's the Envipco very first Capital Markets Day either online or of course, warm welcome to Oslo. And then we'll see you again for Q3 update in November.

With that, we'll sign off saying thank you very much for your attention. Have a fantastic day. Bye-bye.