PORR Aktie

Welcome to the earnings call of the PORR AG regarding the Q1 figures for 2026. I would like to welcome CFO, Klemens Eiter, who will guide you through the figures in a moment, followed by a Q&A session via audio line and chat.

And with that, I hand over to Head of Investor Relations, Lisa Galuska.

Hello, good afternoon from my side. Hello from Vienna, and a warm welcome to today's conference call. Please find all the relevant details and materials on our website ready for your convenience.

And without further ado, I would like to hand over the call to our CFO, Mr. Klemens Eiter.

Thank you, Lisa. Good afternoon, everyone, and thank you for joining our conference call on PORR AG's Q1 results '26. As we published the trading statement for this quarter, this will be rather a short presentation. However, be prepared to get a full report again in August and in November '26 for our half year and first 3 quarters results.

Now for the task at hand, let us start with a quick overview over this first quarter on Slide 3. First of all, despite the ongoing uncertainties in the global economy, we are still positive about the European construction industry, especially in our CEE countries like Romania and Poland, we see continuous growth. This performance shows that our strategic focus is paying off even in a challenging market environment.

Following ongoing investments from the European Union as well as national road, railway, and energy network operators, we saw a strong order intake with an increase of 14.7%. This was mainly driven by continued high demand in infrastructure construction, also in the segments, Austria, Switzerland with a growth of 20%, and Germany with an increase of 36%.

Moving on, I want to talk about our record order backlog, which reached an all-time high of EUR 10 billion, not least to major order intakes regarding design and build projects. Continuing with the top of our P&L, I would like to talk about our revenue, which, despite the harsh winter, remained broadly the same compared to last year. On the other hand, our output increased by around 2.3%, a result of the higher share of joint ventures. With EBIT coming in at EUR 14.3 million, we reached an EBIT margin of 1.1%, another increase of 15 basis points. Finally, we confirm our outlook for '26 and expect moderate growth on the top line, combined with a further improvement in the EBIT margin.

That said, let us now take off by again taking a closer look at the current market situation on Slide 4. Truth be told, there is not much new since the last time we talked at the end of March. Currently, all home markets indicate growth according to Euroconstruct with CEE standing out where we are expecting growth rates of 3.2% for '26 and 3.3% for '27. Residential construction continues to show signs of recovery with our PORR Living modular construction, we expect to participate in upcoming opportunities in social housing. Nonresidential building construction remains resilient. At the moment, specialized services such as health care construction, educational buildings, and data centers continue to show particularly strong growth. A recent example is our hospital expansion project in Warsaw, which highlights the sustained demand in the higher-margin segments.

Civil engineering remains the key growth driver and carries on offering the strongest momentum. This development is mainly supported by the strong backing of European funding, especially from the NextGenerationEU program and the Recovery and Resilience Facility. On a project level, we see further opportunities in our home markets. In Poland, tendering has started for the new Central Polish airport, the CPK. This is one of the major infrastructure projects in the region with a total investment volume of more than EUR 30 billion. As PORR has already won a railway project, the Lódz tunnel, leading to that airport, we feel in a good position for the upcoming tenders. The airport will not only raise the need for runways, but also for terminal infrastructure and accompanying roads and railways leading to the big Polish cities.

This further underlines the strong demand for large-scale transport infrastructure. In Germany, the key question remains how quickly the EUR 500 billion infrastructure package will hit the market. As we always have said, we still expect first measurable impacts in '27. However, we think that the newly proposed Infrastructure Future Act has the potential to speed up the approval processes. The draft is aimed at accelerating and digitizing the procedures of infrastructure projects by amending administrative planning and environmental law. In addition, the tendering authorities are pushing new integrated project models, again to speed up, to get closer to the design and build contracts we used in CEE markets.

We continue to expect major investments in both Germany and Austria coming from national infrastructure operators, while Poland and the CEE countries will further benefit from EU fundings. Our growth drivers are still strong. In terms of market environment, we certainly also have to talk about our input cost structure. Let me give you a quick touch up on that topic on Slide 5. Overall, construction input costs have remained well manageable for PORR. While we have seen significant price volatility in recent years, especially caused by the Ukraine conflict and the Iran war, our contract structure and risk management have proven resilient. Early procurement, hedging measures and price escalation clauses have been the keys to protecting our margins.

In terms of energy input, be assured that we continue to do our homework. Gas and electricity prices both are fixed through framework agreements until '27 and '28, respectively, with around 90% of our gas demand already secured until 2030 through commodity swaps. Diesel consumption is monitored monthly with input costs being hedged if needed.

Now let us dive into our PORR figures, starting with the order intake on Slide 6. The strong momentum continued, leading to an overall increase of more than 14.7% compared to last year's quarter. With this, order intake stood at slightly more than EUR 1.7 billion. This underlines the current growth path of the construction industry. The strongest increase came from Poland, where order intake more than doubled in the first quarter. This was mainly driven by infrastructure with continued strong momentum in tunneling and railway construction.

In Germany, we also saw a strong pickup, supported by higher demand in civil engineering. This indicates the first signs of the turnaround of the German construction industry. If you follow me on Slide 7, you will find an overview of our biggest order intakes during the last 4 quarters. Here on the far right, you can see our main new orders in the last quarter. As already said, civil engineering and infrastructure in Poland, in particular, once again was the key driver. Major orders include the construction of the motorway S6 Section 1, the Western bypass of Szczecin, the extension of National Road 25 between Konin and Rychwal, as well as the bridge DW281 crossing the River Oder in Pomorsko. These projects really reflects the continued strong momentum in the Polish infrastructure market.

In Building Construction, we secured a first medium-sized residential building project, the LIL-Y in Vienna. Furthermore, PORR is now responsible for the reconstruction of the headquarter of Raiffeisen Landesbank in Klagenfurt. The positive development in our order intake is mirrored in our order backlog on Slide 8. Here, we reached a new record level of EUR 10 billion, mainly supported by design and build infrastructure project. Here too, the strongest growth came from Poland, Romania, and the Czech Republic.

Getting more on the hard fact side, please follow me onwards to Slide 9, discussing our output and revenue. At first, please let me remind you that the construction industry is a very seasonal business. So these figures are mostly not indicative for the year '26 as a whole. This is especially true for our revenue, where we experienced a slight decrease as a result of the strong winter, especially in our biggest home markets, Austria and Germany. Nonetheless, we saw strong growth in Poland and CEE based on the high order backlog. Output was further supported by a higher share of consortiums and JVs, naturally not included in the revenue figure.

Coming to our results for the first quarter '26, please follow me to Slide 10. Our EBIT increased by 13.1%, a new all-time high for the usually seasonally weak first quarter. EBIT margin improved by 15 basis points to 1.1%. This development was supported by a solid operating performance across the group. Absolute cost reductions and an increased order backlog in the last years leads to an improved performance, particularly in Poland and CEE. At the same time, depreciation, amortization, and impairment remained on the same level, a result of the reduced CapEx of the last year.

Finishing up with the outlook on Slide 11, I would like to confirm our bigger picture. Based on the increased order backlog and the expected market development, we anticipate moderate growth in output and revenue as well as an increase in the EBIT margin in '26. Our long-term target of an EBIT margin between 3.5% to 4% by 2030 remains unchanged. To sum it up, our strong order book, improving profitability, and secured cost base give us confidence in our guidance for '26 and in our development beyond.

And with that, I would like to thank you for your attention so far and open the call for your questions.

Thank you very much, Mr. Eiter. Ladies and gentlemen, around the world, now it is your turn, and we are opening the Q&A session. [Operator Instructions] Stefan Scharff, the stage is yours for the first questions.

Stefan from SRC Research. My first question is about -- first, congrats to a good start into the new year. And my first question is about Germany. You mentioned that there is not too much impact or effect coming now from the Merz government German infrastructure package, but you still made 36% hike in order intake. So perhaps you can say a bit more about this hike in order intake. It was from about EUR 300 million to more than EUR 400 million and also about the situation in the German residential market and also about your initiative about affordable housing, which might be more important for the future.

Yes. Thank you for your questions, Stefan. First, our increase in order intake in Germany. There are some projects, infrastructure projects coming up. One of these is the Fehmarnsundquerung, where something is going on that we think, in general, will lead to a speed up of the investments in Germany. This project has been designed as an Allianz model, an IPA, integrated project execution model where the authorities put together several tasks and contracts in one framework agreement. And we've won a special foundation of that, and that's really a big share. And so it is one of the first projects coming up on the market with the new project models that we expect will help improve the investments.

And as I tried to point out in our presentation before, we also expect positive impacts from the Infrastructure Future Act. That should give priority to main investments in infrastructure and release most of approvals and speed up.

For residential construction, we still see the interest for our modular construction approach for PORR Living. We are in discussion with landowners here about realizing models. So this is still, let me say, in the pipeline. Besides that, that approach is also very helpful for what is going on in the defense area as Germany wants a lot of new soldiers, a lot of new barracks will be built. And there is a big tender out for these. And we -- I think we're very good prepared for that with our modular housing approach.

Okay. I see. My second question is about your cost side. You mentioned in your presentation that you did some hedges to avoid price increases on materials and other expenses. So how long do these hedges work?

Well, actually, for gas, we've got hedges up till 2030. So after the peak we saw in the gas price and following then the price levels normalizing to [ 30 ] and below, we took the chance and have been saving our gas demand price-wise until 2030, as we've seen really unexceptional increases in gas before. Besides that, for electricity, for example, with contracts until '28. But in general, I think it's very important to recognize that for all long-term contracts beyond 1 year, we got price escalation clauses. And the cost increase leads to an increase accordingly of revenue based on this price escalation clause.

So of course, you cannot safeguard cost development beyond many years, but you're also safeguard by the cost -- by the price escalation clauses. And I think in general, if you look at the situation after beginning of the Ukraine war, we had in nature, the same effects in size and amount, the effects have been much higher. And despite that, you've seen our margin development that was still positive. So in general, I think we are able to manage that situation with a combination of hedging on the cost side and price adjustment clauses on the revenue side.

Okay. I see. My next question is, you mentioned the harsh winter, but you still delivered a plus 2% in output and the stable revenues. But perhaps you can say a bit more about the April and the first half of May about your revenues and the output, how you like it? Or how is the situation here?

Yes. Well, we've seen double-digit increases in our order backlog in Poland and in our CEE countries. And based on that, we've seen growth in the first quarter in these countries despite winter that was also strong in the countries. But based on the strong order backlog, this materializes now in revenue. And I think that's what we generally expected. We didn't see growth in order backlog so far in Germany and not so much in Austria. And that's why the winter effect was bigger in this segment and all over, leading to a slight decrease. But in general, going forward, from our growth business segments, we expect still further growth. And if you look at the orders in Germany and Austria, you also see that they are taking up. We also got double-digit increases. So we are also optimistic of a positive development in these segments.

Okay. I see. One last general question about your guidance. You did a good job on improving the margin. And due to my calculations, it might be possible with some input coming from political developments from this infrastructure packages and all these attempts of policy to improve our infrastructure here in Europe that you might reach the EBIT margin of 3.5% earlier than in 2030. Might it be possible with good numbers for half year or for the 9M results that you say the EBIT margin might go to 3.5% earlier than 2030?

Well, as you're saying, 2030 is actually a long-term goal. And so we've got a long way to go. I think we've got a good start into the year with the first quarter, but the first quarter is always the weakest as our output is the weakest due to the winter in that quarter. And that's why we don't see us in a position to take a look very far now. So I think, in general, we are on track. We did a good job on the cost side. And yes, sorry, but I think a little bit too early to give more guidance on that at this point of time.

We will move on to the questions from Patrick Speck. The stage is yours.

First of all, also from my side, congrats on another very convincing quarter. My first question is also on your guidance. I mean, the first quarter has been very successful, especially on the order side and giving you so much visibility, what is holding you back to give at least for this year, a more concrete guidance already? Or will we see that maybe with the next report that will be more detailed again?

Well, we've been thinking about that. Let me say, after talking to all our managers in the group in our segments, we still see a little bit of uncertainties. And if you take the shorter moment, we will have some slight impact from the cost increase as for the tenders you've got out in the market without long-term clauses, you got some negative effect, and we're still confident to improve our margin despite of that. But I think we need a little bit more visibility on the geopolitical issue going forward over the next months. I think we all expect that situation will normalize. And let me say, we gave us one more moment to give a more precise guidance for '26. But I think the big message is we are on track, and we will give a pricing on that probably by end of the summer at the latest when we present our Q3 figures.

Okay. And my next question is also on the summer because you mentioned the harsh winter that had some impact on your top line. And now we see the opposite. There's a heat wave, not so much in your core markets yet, but could be a very hot summer even in Germany and eastern parts of Europe. Could that become a problem for you? So what temperature is too high for your construction sites?

Well, I think we took a lot of measures for heat and for the summer. So I think in general, we are prepared. And let me say, actually, it's -- increasing temperatures are a risk that's also managed also on a project level. As for example, we've got markets like Romania, we've got heat in Romania for not only the first time, but by calculating our project execution, we are already including expectations of -- general expectation of heat and warming up. So in general, again, I would say we are prepared for that topic. And for exceptional situation, we have also safeguarded in our contracts.

And my last question is on your latest acquisition of rhtb:, could you say a bit more about this? What does it bring to the group? Is the profitability of this company below or above your group level? And yes, maybe some words on their sales contribution.

Yes. Well, actually, it's in line with our general M&A strategy where we say either we are expanding our regional footprint or we are getting more strong -- strength in our value chain. And rhtb: is especially offering an element for our PORR Living modular concept. It's special walls that they design. And so they are a special project element in our approach of modular residential construction. And I think it's a good thing to have them on our side here. And taking that into account, the investment of about EUR 10 million, I think, is rather fine and in line with our general strategy.

And Andreas Wolf is next in line.

It's Andreas Wolf, Berenberg. Congratulations on the strong order intake in Q1. I have a couple of questions. So the first one is related to the profitability of the order backlog. Mr. Eiter, could you comment on that? And related to this question is also the medium-term margin target. Will it mainly be achieved by what I assume a higher profitability of future projects, economies of scale or higher efficiency, which you apparently also have achieved in Q1? So that's kind of my first/second question. The next is related on price escalation clauses that you have in your contracts. Are those also relevant for potential wage inflation? And the last question is related to the employee numbers. Shall we expect the employee number to increase during the course of the year as it appears to have remained flattish in Q1?

Yes. Thank you for your questions. First, on profitability of our order backlog and margin development. I think in general, we've got 2 main sources of business. One is infrastructure. The other is building construction. And within infrastructure, we won a lot of contracts in railway. And railway is the business area where in the past, we had actually the best margins. So in general, from the order backlog as we see now, we also see potential to increase our margin on the infrastructure side.

On the other side, in building construction, we got our special competencies. And you've seen, for example, last year that we increased our margin in Germany from 1.8% to 2.5%, and that's mainly based on increased margins from our special competencies in industrial construction, data centers, and health care business. And as we took investments in these areas and see growing demand, we expect that margin improvement will also be contributed by building construction.

Last not least, cost is still important and the cost increase and inflation we've seen over the last years did have an impact on our margin on the fixed cost side, on the overhead cost side, as our main forces in head office are located in our headquarters here in Austria, and we had an increase of 20% in 2 years from '22 to '24. And this had a negative impact of almost 1% on our margin. And with the growth opportunities in scale and our efficiency measures, especially in digitalization and lean management, we're working on the cost base to decrease the cost and increase our margin.

For the price escalations, yes, they do not only cover materials, they also cover wage inflation. In general, I have to say that the personnel costs are actually easier to manage as the volatility on this cost is lower compared to especially the material side. And it's mainly based on general inflation, which is something that is published in actual and forecasted figures actually every month. And that's why we can always take good expectations and assumptions here into our tenders. So I think wage inflation is something that is rather good, manageable.

And to your third question, employee number. Yes, I mean, in the winter months, we got a little bit less. That's also due to our relatively lower output in this quarter. And I think it will take on a little bit. But if you look at our development in general of our employee numbers, you don't see big fluctuations there.

And we will move on to the questions from Graham Hunt, who is dialing in by phone.

I just have 3 questions from my side, if that's okay. First one on order intake. Maybe just if you can give us a little bit of sense of how things have developed since -- in March and then in April and what you've seen in May, I guess, since the Iran conflict. Have you seen any hesitancy from your customers or even the opposite in terms of wanting to lock in prices early?

Second -- I'll just give you all 3 now. Second question, just on cash. I know you don't report that in the Q1 now, but maybe just any comment on how cash performance is trending in the quarter. Profits were very good, but how is cash doing? And are you seeing any pressure on your CapEx guidance with the inflation ticking up a little bit? And then maybe third question, you mentioned data centers as an opportunity in the buildings segment of the business. I think one of your competitors is ramping up construction of edge data centers in Germany. But just a word on kind of what you're seeing there in terms of demand, whether you're seeing any more coming into the pipeline would be super helpful.

Thank you for your questions, Graham. First, on our order intake. Actually, if you look at the first quarter, Poland and CEE, they are in line with the general development we've seen before. It's just an ongoing process. And as I tried to point out, there are big tenders, especially for the new airport near Warsaw that's being built that will still bring a lot of volume to the market, and we expect this trend to continue in our CEE markets. Actually, development in Austria with an increase of 20% in the first quarter was remarkable. And going forward, we still see positive development here. And in general, I would say that's a little bit of a new development and rather promising also in Germany, the first sign of taking on.

So regarding our order book development, we are, let me say, very pleased about developments and looking forward optimistically. Yes, as we are publishing a trading statement as the first quarter is not that big issue in the construction business, and we do it as I think, not the only one. Some other peers also published the trading statement. But of course, a question of cash situation and development arises. Actually, our net debt position has roughly developed the same as in previous year. We are a little bit better in the net debt position that we've been in the previous year.

So we are in line with the general development and performance that we do have in the construction industry. Also, of course, the first quarter results do not show positive results on operating cash flow. But that's something usual in our geographical area in our business. But -- so results here are in line with our general expectations.

And regarding data centers, actually, we are in discussion with the big providers to establish a business relationship here, and there are several opportunities. I think we are one of the few construction companies, especially operating in Germany that are able to offer that as a total contractor. For example, our data center in Berlin has been awarded as the best-built data center in 2023. And based on that, I think the providers are acknowledging our competence, and I think we're in good negotiations and expectations for development. Did that answer your question?

Yes.

And we will move on to Markus Remis, who is also dialing in via phone.

A few questions, please. Firstly, a follow-up on the price escalation topic. Did I understand correctly that is for all contracts above 1 year? And can you maybe -- I'm sure it depends on the input factor, but can you kind of indicate at which thresholds this price escalation clauses actually become effective? So I'm sure not every percentage point in cost increase can be passed on. Any granularity here would be appreciated.

Well, in general, there are different models. You don't have the same price escalation clause in all the contracts. But especially the bigger the projects are, the finer the price escalation clause is, meaning that you've got a cost base distinguishing in material costs, special material costs like, for example, steel, cement, concrete, energy consumption, and then wages. And then you've got for the really big infrastructure projects, you've got an index for every kind of cost, for every kind of material cost, energy, and salaries and wages. And the price escalation is depending on an index development of these kinds of costs, meaning that, for example, what we see now is that based on the increased oil prices, we see steel taking on something like 10%, 15%. And this increase of steel, which we see now on the short term will increase the index for steel as a cost in general. And based on that development, we will adjust our revenue.

And there are differences. Most of that do adjust at least every quarter, not only by 1 year, but every quarter, some also are adjusted monthly. And let me say, just with the jurisdictions that always had higher inflation like Romania or Poland, we've got actually very good -- a lot of and very good experience with the price escalation clauses, not running into any cost or margin issues. What I said before is that it's more to the closer term or contracts where you don't have the clauses on the short term, where we are out with tenders and didn't have the chance to adjust that, you will have some downside. But that's a short-term effect. And to our evaluation, it's not that big. That's why we're still on a good track with our earnings and margin development.

But is it the case like, I don't know, the first 2%, 3% increases you will have to adjust before this indexation kicks in?

No, it's general adjustment of the index of the cost base. As I said, it's -- there are differences there, but you do get the cost increase. Otherwise, we would not be able in general, in our business. I mean, if you take our jurisdictions in Austria, it's always been called Preisgleitung. And we've been smaller adjustments. And even in years where we got 2% or 3% inflation, you would end up with a decrease in your margin of 2% or 3%. If this would be to what you're saying that you got that base effect that is not compensated.

Understood. Can I then turn to Poland? I would be interested to hear your perception of the competitive environment in that market and how you perceive pricing discipline in general?

Well, if I look at the Polish market, in general, I think it's the market with the highest investments and volume now. And if you look at competition there, I think we got the 3 main competitors. First is Budimex with an output of something like EUR 2 billion and then STRABAG and us with an output of around EUR 1 billion. And then you've got local construction companies, but they are far smaller. I think the biggest one is something like EUR 500 million of output. I mean, as in general, you got political development to, let me say, the right side.

There's also more national aspects in tendering and going forward. But I think we are prepared for that. We also do joint ventures with local companies and with that and our, I think, general market share. I think the big investments can only be done if they are contributed and supported by the big companies and providers -- construction providers in Poland. We're pretty confident to also get a good share of the projects coming up on the market.

But the pricing discipline, what's your perception on this one for the potential for political [ price ] very high?

We are keeping the discipline. And as we got a big volume already and a big order backlog, we don't see the need for going into price wars. So I think we're rather in a good position. You can see that sometimes where you have lighthouse projects that companies are willing to take losses on that, but that's not our strategy.

Okay. Can I then ask you regarding UBM and their plans to raise participation capital of EUR 90 million? And PORR apparently is willing to subscribe. Can you give us any idea of how much you would be willing to invest?

Well, we are now in discussion, but we're talking about something that will first pay off for us investment in according interest. That means that we will get a good return first of that investment. And I think it is important to know that our intention and the reason why we want to go into something like that. Actually, if you look at the past, UBM has always been something like a developer and distribution company for what we are building for the products in the recent years in office and hotel market. Well, office market is not that strong anymore. But hotels are coming back.

And on the other side, we see a big demand in residential construction in affording -- affordable housing. And we think we can realize that model together, and we need a developer and distributor as this is and has not been our part of the business model before. And that's somehow we want to again invest in that model. And as investments on the other side for that kind of business is not that big, we think we will increase our work together with UBM.

On the participation capital, any size you have in mind?

Well, I think we will come up when we're finished with that.

Okay. Yes, you already gave me kind of an intro because from the related party transactions that were carried out last year, I mean, there were a couple of tens of millions spent on UBM projects like on the hotels management company, Marina Tower, et cetera. You kind of gave an intro, but is that a strategic investment? Or how should we think about these related party transactions?

Well, this has been -- these have been projects that we are doing together with UBM as a joint venture, and we have some contribution. I think, as I said, Marina Tower is one of -- is a promising project before we did LeopoldQuartier, which is at the later stage now, and we got a lot of apartments and residential construction there that has been successfully already sold now with also a profit impact to us. And let me say, as in general, financing by the banks for developers is lacking still somehow, it wouldn't have been possible to realize such projects. And that's why to some degree to realize that project, we've been willing to take share also in some projects. And that's what you've seen. And what I said before is that we want to more to go to a general model as we've seen, for example, with LeopoldQuartier, this can be very successful as it has been in the past.

The last thing is actually more a remark than a question. But if I add up the order intake of all the segments, I get to something above EUR 1.9 billion. So there's about EUR 150 million gap in the sum of the parts of the segments compared to the group level. I don't know if you have any answer right away.

Actually, yes, on the holding segment, we had a negative adjustment of something like EUR 140 million. Actually, with the acquisition of VAMED VSG, we also acquired share in the spas. And first, we took also a pro rata share of that orders. As we are not doing operating business or operating services to the spas, we've been eliminating that part. And same for UBM Hotel Management, and that's why we had some negative adjustment on that. But I think the general picture and outcome of our order development is the same.

Sorry, forgive my ignorance, but I did not get this. So there was EUR 148 million order adjustment from the VAMED acquisition, the share in the spas and the UBM Hotel GmbH?

Yes.

And with that, we will move on to 2 more hands up. And with an eye on the time, I am calling out Lukas Spang with your questions. With that not happening, we're going on to Philipp Kaiser to the last questions of the call.

Philipp Kaiser speaking. Congrats to the good start. Just 2 small follow-up questions from my side, starting with the top line output. Your production output grew by roughly 2%, while revenue fell by 1.5%, driven by a higher share of joint venture. Is this a structural shift towards more design and build and large infrastructure or just a quarter-specific thing and differ the JV book margin from your overall margin in any kind?

Well, I think we've always got the distinction between output and revenue development based on that fact. In this quarter, relatively, it's a bit bigger. But if you look at the long-term development, I think the deviations between output and revenue, if you take full year results are relatively stable. So I think if you take the general -- if you take the development from our full year results, I think something still we think that's valid.

Thank you very much for your question, Mr. Kaiser. I see that you are unmuted again. Can you hear us? Okay. And there might be some -- Mr. Kaiser. Okay. There might be some microphone issues. We, therefore, come to the last question of the day from Lukas Spang.

I would like to follow on, on the previous question on the data center area. And it's good to hear that you have a good position there and are in talks with potential clients. So -- but going into Q1 numbers or, let's say, until today, did you win further data center orders or projects within this year?

Well, as I said before, we're in discussion with the big players to establish a long-term relationship, but these negotiations haven't been finished yet, and that's why we haven't a new order intake. But yes, we're optimistic looking forward.

Okay. And then remembering your statements from last year, let's say, Q3 call or also Q2 call, when you explained the behavior of the new big projects when you explained us that there's first 6- to 9-month design phase or preparation phase. So can you give us an update on these big orders? Are the design phases going as planned? And now looking into Q2 and especially Q3, how is the development in terms of going from the design phase into the execution phase?

Well, I think we're on good track with the execution there. What you can see from revenue development or output development in Poland and the CEE countries, they are growing in Poland, even double digit also with a strong single-digit positive effect in CEE. So I think we are on track with that.

Okay. But will we see a further push in Q2, latest Q3?

Well, if you take our whole structure, then you see that about half of our revenue or output is from Austria, about 25% is Germany, and about 25% is Poland and CEE. In these segments, Poland and CEE, we expect overall double-digit growth for the full year. We also expect some growth in Germany and a little bit growth in Austria, too. Taking into account that in Austria, we're starting off really after a harsh winter with a negative base after the first quarter. And taking that all together, I think our guidance of a moderate output growth for the full year for the full group is reasonable.

And Philipp Kaiser wants to try again. Do we take the time?

[indiscernible].

Yes. Mr. Kaiser, please.

Yes. Sorry, I have some technical issues on my side. So yes, referring to the first question, I think you already heard it. I don't know if you already answered it. Could you repeat the answer, if possible?

Sorry, your first question was on JVs or on data centers? I'm very sorry.

No, sorry. It was on the share of JV. So that's a structural shift towards more design and build or just a quarter-specific kind of one-off and differ the JV book margin from your general overall margin in any kind?

Yes. We think that the first quarter is not representing the general expectation. And therefore, I think it's better to have a look at full year results, and we've always got a distinction between output and revenue development. But the difference is rather stable, and we don't expect a big impact on that here in the future.

Okay. Perfect. And then my last one is with regards to Poland and CEE. So this growth lends heavily on the current EU funding in place. How long will these programs run? And is there -- or do you see any kind of a potential funding step down in the future?

Well, the airport, the new airport near Warsaw is targeted to open up in 2032. Actually, we think that is really a hard target, taking into account that the tenders for many parts are just kicking off. And if you start a project like that, if you don't want to end up like other airport projects that we've seen, I think you'd rather go for finishing. And that's why we expect at least these parts will run for a longer time, first.

And second, I have to say that when the building -- initial building is slowing down at some point of time, there will be also the start of the first investments in renewing and the continuing business. If you look at Austria, for example, we don't have new -- a lot of new highways or new railway lines that are being built. But our main business is coming from renovation. And actually, we start to teach our business units here in Poland and also in CEE about this renovation and the smaller business that it will probably be the driver of our output and results in the second phase when initial investments will slow down.

Perfect. So no real risk for potential funding step down, let's say, from 2030, 2032 onwards?

Well, we are now in '26. Our long-term guidance is still 2030. As I said, at least the big railway project there will last even longer. So I think for most of our next calls, I'm pretty sure that we're not talking about the pipeline that's shrinking and the output that's going down.

And with that, we have come to the end of today's earnings call. Thank you very much for your interest and your dynamic participation with PORR AG. A big thank you also to you, Mr. Eiter, for your presentation and your time. Should you, ladies and gentlemen, have any further questions at a later date, please feel free to contact Investor Relations, Isabella Steiner and Lisa Galuska. I wish you all a successful day around the world and handing back over to you, Mr. Eiter, for your closing remarks.

Yes. Thank you very much for your questions and attention. Please enjoy the summer that's now kicking off after a long winter. And we would be very pleased to hear you again at the end of August when we will present our half year results.

Welcome to the earnings call of the PORR AG regarding the full year figures for 2025. I would like to welcome CEO, Karl-Heinz Strauss; and CFO, Klemens Eiter, who will guide you through the figures in a moment, followed by a Q&A session via audio line and chat.

And with that, I hand over to Junior Investor Relations Manager, Isabella Steiner.

Good afternoon, and warm welcome from my side as well. My name is Isabella Steiner, and I'm pleased to welcome you to our full year conference call.

I will now hand over to our CEO, Karl-Heinz Strauss.

Thank you, Isabella. Good afternoon, everyone, and thank you for joining our conference call on PORR AG 2025 full year results. Let us start with a quick overview over the past year on Slide #3.

First of all, I'm delighted to report 2025 was truly an outstanding year for the quarter with exceptional results delivered across all major performance indicators. This performance shows that our strategic focus is paying off even in a challenging market environment. In 2025, we saw a strong order intake with an increase of 14.1%. This was mainly driven by continued high-demand infrastructure construction, especially in Poland, Romania and Czech Republic. These countries continue to be supported by major European infrastructure funds, but more on that later.

Moving on, I want to talk about our order backlog, which reached a record level of EUR 9.5 billion not least due to major order intakes regarding design and build projects. We already announced at the beginning of March that our earnings came in at the upper end of the 2025 guidance. Once again, PORR's focus was put on building as much as possible by ourselves, thereby reducing purchased services and improving the margins.

With that, we delivered as promised. The satisfactory development in our cash flow led to an operating cash flow as well as a free cash flow rise. Also, in terms of capital markets 2025 has brought major achievements. We do not only increase our free cash flow, but improved share price performance also led to a promotion into the Austrian traded index. Finally, we stick to our outlook for 2026 and expect moderate growth in the top line combined with a further improvement on the EBITDA margin.

Let us now start off by taking a closer look at the current market situation on Slide #4. After a stagnant market environment in 2025 with Euroconstruct estimating European production output growth of only 0.3%, the experts see strong improvement in the coming years. At present, all segments indicate growth with CEE standing out, in particular, expecting growth rates of 3.2% for '26 and 3.3% for '27. As we have already reported in the past quarters, residential construction starts showing signs of recovery. The ongoing urbanization continues to increase demand for both new housing and renovation of existing buildings.

Nonresidential building construction as a whole continues to remain resilient. However, specialized areas such as health care, education and data centers continue to show outstanding growth rates. One recent example is our hospital expansion project in Warsaw, which highlights the sustained demand in these higher-value segments. Civil engineering is and remains the key growth driver showing the strongest momentum into the market. This is largely supported by the strong influx of European funding especially from the next-generation EU program and the recovery and resilience facility.

Speaking of funding, we also have to talk about the latest development in Germany. The announced infrastructure package of EUR 500 million shows long-term potential. What remains to be seen is speed with which these funds come into the market. In 2025 due to ongoing budget discussions, we did not see any impact there. Nonetheless, we expect first investments to materialize in the current year at the earliest.

Please follow me to the right-hand side of this slide, where we show the current German federal budget plan for 2026. More than half of the infrastructure investments are to be allocated to transport infrastructure, with the majority directed towards rail. While EUR 8.8 billion and EUR 6 billion are remarked for digitalization and health care, respectively, EUR 2.7 billion are set aside for education and research and development. A sum of EUR 2.1 billion is dedicated to energy infrastructure. Around EUR 500 million of the 2026 budget are reserved for subsidies for residential construction.

In Austria, investment programs from ASFINAG and Austrian Railway Organization with a combined volume of around EUR 26.7 billion, together with housing subsidies of EUR 5.6 billion, serve as a solid foundation. In addition, the EUR 4 billion recovery in resilience plan continues to support investments in health care, education as well as energy and digital transformation.

In terms of market environment, we certainly also have to talk about our input cost structure. For that, please follow me to Slide #5. As many of you already know, we are in the comfortable position of passing on our direct construction-related costs to our customers. Proof of that came during the ongoing Ukraine war where the price increases did not have any impact on our margin growth. This clearly demonstrates the resilience of our contract structure and our risk management. Besides these natural hedges, price escalation clauses are actively in use in our contract and also pre-intended in public orders.

Regarding supply security and material bottlenecks in the availability of materials, we, as a major European player, have deployed early procurement with our providers. Another major topic of the moment are energy prices where we take a proactive stance. The detailed calculation system secures not only the prices but also the physical availability of energy sources. These accounts for nearly half of our demand, which is why the requirement is monitored quarterly and hedging actions are taken if necessary. In the case of electricity and natural gas, we count on long-term framework agreements and pricing hedges.

Now let us dive into our PORR's figures starting with our order intake on Slide #6. The strong momentum continued through the last quarter of last year, leading to an overall increase of more than 14% compared to the last year. Thereby, order intake stood at slightly more than EUR 7.8 billion, a new all-time high. This underlines not only the strength of demand, but also the increasing share of technically demanding projects with attractive margin potential. The strongest increase was coming from international tunneling and railway construction particular in Poland and Romania. In these markets, we continue to expand our presence and are now among the top 3 players in these countries. Furthermore, this is particularly reassuring in my point of view, residential construction continues to show stronger signs of recovery.

For more on that, please follow me in Slide #7, showing our strongest order intake on the segment level. Here, we see a continued strong momentum across the whole group. In Austria, we were awarded the remediation of the contaminated site in Angern an der March alongside the A2 pack tunnel chain. Both projects underline our capabilities in technically demanding infrastructure works.

Germany contributed projects such as the community school in Insel Gartenfeld and the hotel and residential project, both in Berlin. Besides that, PORR will be part of major infrastructure works in Munich. In Poland, we secured several key railway infrastructure projects, including the LK108 line between Jaslo and Nowy Zagorz as well as the CPK Tunnel in Lodz. These projects highlight our strong positioning in transport infrastructure and our expertise in complex design and build solutions. Another major order come from the decarbonization megatrend. PORR will be responsible for another incineration plant this time in Wloclawek.

In the CEE region, order intake increased significant by more than 1/3 driven by railway reconstruction projects such as the line between Plzen and Chotesov in Czechia and investments in renewable energy, including the Vifor wind farm Phase 2 project in Romania. The infrastructure segment showed a particularly strong increase with order intake more than doubling, supported by projects such as the railway CF Caransebes in Romania and the CPK channel in Poland, which has worked off together with the segment in Poland.

The positive development in our order intake is mirrored on our order backlog on Slide #8. Here, as well, we managed to reach a new record level of EUR 9.5 billion, supported by design and build infrastructure projects. While the strongest growth came from Poland, Romania and the Czech Republic, Austria and Germany also served well with increases in building construction.

Speaking of order backlog, I also want to briefly discuss our improving book-to-bill ratio on Slide #9. We now stand at a ratio of 1.5, an increase of 9.8% compared to last year's 1.4, thereby indicating an improving market development. In Poland, CEE and the Infrastructure segment, in particular, demand seems to outgrow our revenue, a favorable situation for us as a construction company, which puts us in a comfortable position for the next years.

Taking a look at our revenue on Slide #10, we have to admit that the development is lagging. For the year 2025, this is due to several large-scale design and build contracts entering our books, while not yet in generating output. As more and more of these contracts enter the move or the more active construction phase in 2026, we expect that revenue development to catch up with a strong momentum in our order balance. This situation is especially visible in the CEE segment, where we saw a dropback in revenue, which is to be reversed during the current year. In the slightly smaller Infrastructure segment, the opposite effect is visible with major orders in tunneling already won at the beginning of the year and therefore, already in full swing.

With our Slide 11, treating EBIT and margins, I probably cannot tell you any big news. However, please let me give you some detailed insights on our earnings development. Now not without pride, I want to emphasize our 24 point -- to increase in EBIT to EUR 196.7 million, a historical achievement. Besides the uplift on the top line, one of the main points here was the improvement in income from companies accounted for using the equity method. This rose by nearly 80% as a result of higher profit transfers from consortiums.

In addition to that, the share of purchased construction services in percentage of revenue continued to fall by 0.4 percentage points. This shows the strong focus of PORR of building as much as possible with our own staff. On the bottom line, this leads us to an EBIT margin of 3.1%, slightly ahead of our long-term goal, which we set back in 2021. This reflects the continued effectiveness of our operational measures and our disciplined project selection.

Now to dive even deeper into our earnings performance, please follow me to Slide #12, showing our segment performances. True to our history in segment, Austria and Switzerland remains our solid backbone with a sustainable earnings margin of 4.7%. All our other operating segments managed clear improvements with the CEE being the top performer at a margin of 4.0%. The highest increase is certainly visible within the segment Infrastructure International, which was last year burdened by a negative arbitration decision. In 2025, its earnings turned back again and showed an EBIT margin of 0.7%. The segment Germany and CEE, both showed an uplift in their margin of 0.7 percentage points each, while the segment Germany reported a margin of 2.5%, CEE outperformed with 4.0%.

Let us now move on to our cash situation on Slide #13. With the uplift in earnings, so did our operating cash flow, which showed an improvement of 11%. This was further supported by lower tax payments. Together with the cash flow from working capital of EUR 50.3 million and the clearly reduced cash flow from investing activities of minus EUR 145.5 million, this resulted in a strong improvement of free cash flow. The decrease in CapEx, in particular, which is attributable primarily to lower investments in PP&E leads to lower cash outflows in the cash flow from investing activities.

Besides that, the acquisition of companies accounted for using the equity method lead to significant cash inflows. With the sale of our treasury shares amounting to EUR 44 million, we also improved our cash flow from financing activities. As of the end of the reporting period, this resulted in a net cash position of EUR 93.1 million. Please let me remind you, however, about the one effect coming from hybrid bond transactions, M&A activities and our share programs totaling EUR 9.8 million.

Last but not least, let us come to our balance sheet with a detailed analysis of our equity position on Slide #14. With an equity ratio of 21.1%, succeeded in showing a sustainable and strong balance sheet, despite the redemption of hybrid capital worth EUR 46.5 million, leaving the hybrid share in percentage of equity at mere 16.5%. Equity could be improved by 7.8%. In addition to the year's profit, the sale of PORR's treasury share in June 2025 had a particularly positive impact here.

On Slide #15, I want to sum up last year's performance and put it in relation to our 2021 figures. Back then, we started our PORR 2025 Future program, which now comes to a most suitable finish. The consolidated profit now stands at EUR 136.7 million, thereby more than doubling compared to 2021. The return on equity came in at 16.3%, also increasing clearly by more than 7 percentage points, a major achievement. Coming to the share performance, I first want to mention the Board's dividend proposal to the AGM of EUR 1.05, again, more than double the sum of 2021. And as for our earnings per share, they saw an impressing uplift of more than 150% to EUR 3 per share, thanks to operating improvements and strong dedication to our own workforce. This was also partly already recognized by our shareholders with a slightly lower increase of 126.7%. Compared to the more than 150% increase in EPS, there is still room on the upper side.

This brings me to our share performance on Slide #16. With the pricing uplift, which already started back in autumn 2024, we were in a position to raise more and more interest from big institutional players. Not least due to the sale of its treasury shares in June 2025, PORR as one of the oldest continuously traded shares in the whole of Europe joined the ATX in September 2025. With that, we managed to further increase the share of institutional investors and pave the way for continued share price success. According to our latest data, we now have a share of 32.1% of total share capital held by institutional investors, most of them coming from the U.S. and Continental Europe, including Germany and Austria.

With this impressive performance, I want to come to my closing Slide #17, showing the confirmation of our 2026 guidance. What gives us the reliability we need is clear. Energy prices are secured, providing a stable foundation of our projects and supporting the strength of our order books. Based on the strong order backlog and expected market trends, we anticipate moderate growth in output and revenue as well as an increase in the EBIT margin for the current year 2026. The long-term target of an EBIT margin of 3.5% to 4% by 2030 remains unchanged.

To sum it up, we have strong order book, improving margin and a well-secured cost base, which gives us confidence in our 2026 guidance and beyond. And with that, I would like to thank you for your attention so far and open the call for your questions.

[Operator Instructions] The first person in line with an audio question is Markus Remis.

Can you hear me?

Yes, we can.

Good afternoon. A few questions from my side, please. Firstly, related to Germany, there was some margin progress in 2025. Maybe you can shed some light on the margin quality of the current backlog. Is it fair to assume that part of the targeted margin increase on the group level should come from the German segment in the current year and staying with that market, are you already seeing any signs from the administration authorities when it comes to kind of streamlining the tender processes and kind of reducing the time to bring projects to the market?

Thank you. Germany margin, I think it's still stable now, given we have a big potential for increasing our margin. What we see quicker than expected that the German authority coming from Deutsche Bahn, but also from the Autobahn GmbH is now speeding up with the tender. So they are using now functional tenders participation methods, EPA models and design and build contracts at the beginning. So they will bring much quicker all the tenders to the market. And for that reason, we are more positive on Germany. And so the year '26 will be a year where a lot of projects will show up coming to the market but really affected will this be on '27, '28.

Okay. Sorry, I did miss the first part on the margin quality of the German backlog. Did you say that you expect '26 more of a stable margin trend in Germany, this 2.5%, is that what you were indicating?

Now we have stabilized our orders there and I think all the old projects are worked out on that. And the incoming very dedicated projects we are looking for is, there will be minimum 2.5%, but I think more than that, even in the German market.

Okay. I would then have a question on the Infra International segment. So there was quite a growth in the output bigger, but still no earnings actually. So I think stripping out last year's one-off effect, it was also about breakeven. Can you shed some light on what to expect there going forward? I could read in the annual report about the drivers for the lackluster earnings performance in the current -- in the last year. But is there a scope for a more meaningful uptick?

Well, in Infrastructure and International segment, most part is coming from tunneling. And we started off big projects there, and they will last for some years. And actually, in the early stages, we're a little bit conservative about margins and earnings. So that's due to the nature of business and the stage of development of the projects there. Maybe giving one addition to your question before, I think uplift of the margin in Germany was also due to the positive projects we do have in industrial construction buildings there. They contributed very well. And what we see is that we increased our forces in that regard. We're also awaiting contracts still here in industrial construction data centers. So I think this will continuously lead to a positive development in Germany, too.

One more follow-up on this Infra International segment, please, because when I look at the order intake, it was EUR 480 million for the year, but that was pretty much the figure you also reported for the 9 months, so it looks as if it was no incremental order intake in the fourth quarter.

Well, actually, we are pretty full there. As you see, our bill-to-book ratio is more than 2 in that segment. And actually, out of that EUR 480 million, it's 2 big tunnels that are the tunnel part of infrastructure projects in Poland and Romania. And so actually, I think really fully loaded in the segment, and there was not -- we were not aiming to have another additional order intake in the last quarter there. So not by occasion, but yes, so it was not the target to increase furthermore.

And last question before I get back into the line. Can you indicate the level of factoring by year-end '25, please?

Well, actually, for factoring, it's always about the same. We've got a limit of up to EUR 100 million. But let me say that regarded our factoring to sales, so the cash in is a true cash effect, and it's stable over the years. So we didn't change anything here to our policy of contracts.

Okay. So EUR 100 million roughly?

Roughly.

And we will go on to the next question from Stefan Scharff.

Good afternoon, gentlemen, and congrats from my side for the good results in the last year. My first question is about in the light of the recent U.S.-Israel-Middle East war, the European 10-year swap rates were up in the last, let's say, 3 weeks, about 40 or 45 basis points. And that makes financing difficult perhaps for residential buyers? And, yes, just generally dampened the appetite for new private development projects. What's your view here?

I think that there is still no progress if we go on residences on that one. In single and double houses, there is nearly no market anymore because maybe the properties are too expensive, interest rates are too high. So there is no really market. But this does not affect PORR. What we see now is, especially in Austria that [indiscernible] companies are now realizing their projects, which should have been realized in '22, '23. Now they are coming on the market. There are quite a lot of projects now there, and we do a lot of construction with them.

We see also in Germany that the high pricing market is coming up again. The middle-sized pricing is, let's say, we have to wait. The people doesn't like to get more financing on that. But affordable housing is in all markets, a big need in that one. So we see there a lot of activities and especially what PORR did with PORR Living, we came up with a segment construction basis on PORR Living, which gives us a very nice housing project, which is more than 7 floors up to that with prices below EUR 2,000 per square meter. So we will see that in that one.

But affordable housing especially for rent and buying is very much needed in all our markets. So as you know, residential construction is not a big stake in our portfolio, but we see it slightly positive despite with these interest rates and the conflict now in the Middle East.

Okay. I see, yes, I also think affordable housing is a big point for the future. My second question is about your equity ratio. You did increase the equity ratio remarkably in the last years. And you also improve the quality, bringing down the hybrid share. Do you also have a road map for your equity ratio, let's say, for the next 3 or 4 years?

Well, Stefan, thank you. We're working on that, as you're saying, reducing our hybrid share, but increasing our equity and ratio. We have actually a stable payout ratio policy. And actually, it's developing along with our operating results and our profit combined with the payout ratio continuously increasing the equity. Actually, last year also positively impacted by the sale of our treasury shares. But in general, as our payout ratio is between 30% and 50%, equity will grow in the future. And we are in the corridor that we aim to 20% to 25%, probably going up and not down in the ratio in the next years.

Okay. If you have a look at the order intake, it was a steep hike of 20% for Germany and Poland was just flattish, more or less. So you already answered a little bit that we're still positive for Germany for the next 1 or 2 years to come, many public projects. So we should see again a very good order intake number. And how is the situation in Poland?

The situation in Poland is very positive. We have a lot of order intake there last year. Even this year is coming up. So we have more than 2 years order backlog in Poland. And what we can see now is there will come a lot of projects on the market. But there are some regions in Poland where they come up. There are some months, there is no project coming up. But now the next 2 months, they will come up more than 20 to 30 projects at the same time. And this is just because railway infrastructure, they have a budget more than EUR 40 billion with coalition fund and resilience and recovery fund, even for streets more than [ EUR 11.1 billion ]. So even hospitals have more than EUR 2 billion to EUR 3 billion. Now we have more than EUR 4 billion under construction. So we are very positive from Poland in that situation. But as we mentioned earlier, we look very clear for the project, what we can do, where we can profit most out of the ones, and this one, we engage.

And next in line is Mr. Wolf.

Can you hear me?

Yes, we can.

Congratulations on the last year. I have the following questions. So what's the total share of cost that is not protected from higher prices? Would it be possible for you to quantify the share?

And the second question is where you see the biggest bottlenecks over the next 1 to 2 years? Is it mainly personnel? And how do you see personnel expenses developing?

And the third and last question is related to data centers, especially the investments of the hyperscalers, which have increased quite massively. Do you see spillover effects to Europe/Germany?

Well, for our cost, in general, we have a strategy first on our energy cost doing price hedges on our energy necessary for oil, for gas, for electricity. So we are covered not fully, but to a high degree for the next 2 years. If you look at the price development, you see that futures are in a peak for the next year, especially in '27. And we're pretty well covered for that in gas already up to 2030. For us, it's important to have the right strategy for our main materials as steel, cement, concrete. Therefore, we are fixing our supply.

At the moment, we enter into a contract with our customer. So we have fixed for the short-term requirements. And for the longer term, we are fixed with our price adjustment clauses towards our clients, meaning material price increases are fixed with an index, and the index increase can be forwarded to the customer. So we're pretty well safeguarded. And as you see over the last year that worked out pretty well, I have to say, not only in our company, but I think in general, the professional construction industry is able to manage that situation.

Coming to your data center question, I mean we have concentrated all our activities, especially in engineering and project management in a data center GmbH, where we have put in all our special experts which has now constructed more than 7 data center projects from small to very, very big, even a very big one is now under construction in Frankfurt. We see the market, there is a lot of demand, and there are a lot of questions and there are very lot of projects outside there. We don't think that every project can be realized. It's always depending how much NAV -- energy -- with how much energy they can get even in the markets there. So there is a much more question after project than they really can deliver, for sure, energy in the amount they need.

But I think we are quite well, especially with our team. They are well known in the market. We have all the references. And I think we are now very good into the market in Poland, in Germany, in Austria and now even in Czech Republic and Romania, I think where the next big data centers will come. The trend is totally to large hyperscalers, that's for sure. So even the question of enough energy is one of the most critical questions there. If this can be secured, so the project will be done immediately. And there are not only now U.S. companies, even the big tech companies, but also the private equity and tech-related companies are there, even a lot of European funds private equity and companies like Schwarz Group are on the market now here and looking for quite places and reliable partners. And PORR with a track record of now 8 data centers in time, in quality and in budget has a very good reputation for the market.

Thank you very much. I hope all your questions are answered with that, Mr. Wolf, and we are moving on to Patrick Speck.

Also from my side, congrats on your very strong performance in 2025. My first question is on, yes, let's say, at the start of the year. I mean, you gave an overall positive outlook, but should we maybe expect a weaker start into the year due to the poor weather conditions? I mean there were some reports, not your projects, but some reports where they were impacted. Have you anything that might have impacte projects as well, would be maybe?

Well, Patrick, I understood that you're questioning the start into the year. Yes, well, February was a strong winter month. And we see that the year is starting a little bit slow, let me say it like that. Nevertheless, looking weather for the rest of the year, what we see is that we are on track. So winter months are always a bit weaker in our business as we are operating in European countries. And in general, affected by the weather conditions. Yes, February was a little bit stronger, probably for you in Germany and Hamburg so even more. But altogether, we are confident about positive development on the outdoor side for the year.

Okay. Secondly, your free cash flow was very strong and a couple of reasons is that...

Patrick. Sorry, we can't hear you quite well because of other sound and background.

Yes. Sorry for that. There is another earnings call going. I'll try my best.

Maybe place your questions in the chat box if...

Okay. I will go back in the queue.

I will read them out for you. I will go over to Philipp Kaiser.

Congrats on the results. I have a couple of questions starting as a follow-up on the Infra segment. Could you elaborate a bit more on the EBIT turnaround you achieved in 2025? Is that mainly driven by the absence of legacy business from the Middle East? Or is it kind of profitable new work you experienced in the last year?

Well, as we outlined in our report, last year, we've been affected by a negative arbitration decision. This was why the segment result was negative in '24. In '25, fortunately no such negative effect, as I outlined before. We are in the early stage of the big projects, therefore, not the big margin years so far. We still have some overhead negative effect here as we are closing out our business in Middle East. But this is something that is going down. So we expect the positive development.

The next one would be on your PORR Living segment. I mean that's notably low price point, you mentioned in the press release. Could you elaborate more on the economics. So what EBIT margin do you target on these products versus your traditional residential business? And how fast you could scale up this segment?

First of all, PORR Living is a segmental construction, modular construction as we do it. It's very favorable. You can do more than 10 different style of apartments in that one, starting from 30 square meter up to 100 square meter, 110 square meter, with costs of lower than EUR 2,000 per square meter. I think to the normal one, we don't talk about margins in that one, but it's more safe for us. And I think nearly normally you can double the margin with that one because it's kind of a very strict and lean construction constructed project like that.

We just started 2 projects now in Austria. These are the main big projects where we really show and even also learned by ourselves how to do it on really time now. It looks very good, it's on the same. And we are very quick in building up a lot of different sites. We are prepared to do it in Austria and in Germany, too. I think we can go up with both countries very quick coming up because the main thing is constructed and developed by ourselves, and we can do it with our local people who are very much experienced in general building here. This is our system, so we can even go to other markets where we have our construction capacity there. So we can use our teams, our local presence all over Austria and Germany for rising up the market for us.

Very clear. And the last one is on Germany. I think last week, there was an Ifo report out citing that the German government misused 95% of the new debt for the infrastructure program from its intended propose. What's your thoughts on that? Are there any risks evaluating for your 2030 guidance? As far as I remember, you didn't put much of this program into your midterm forecast.

When the discussions started about this special program in Germany, we were very well concerned, but we will see. And we said, okay, let's see how the market is coming up, especially how quick they can bring all the projects into construction like that. I think they performed more and came -- they speed up with this one using international tender methods to get it on the market. I do not believe this Ifo report about debt, that nearly 90% or 95% of this money that -- of course, the government is always taking money, which is there, which is dedicated and not risking any other court decision, which is against them.

But I think that there will be a lot of money. I think more than half of the money will be prepared for the market. You can see this now what is under design and what is prepared for that one. But Germany is an important market for us, yes. But in our midterm planning up to 2030, all our markets play a major role in that. So we are not depending on 1 or 2 markets, like that. If Germany is coming bigger, we can force some people to Germany. If this is coming up, which is in line with our midterm planning, that's very fine for us, so we can do everything what's there on the market.

And we are increasing our market share there, especially now in railway construction. We speed up with special foundation and even with repair and installation of new one and construction of new one, we are very much prepared. So we can very quickly switch between Poland, Germany, Austria, Czech and Romania. And I think this gives us a very strong position in all of these markets. We do not expect that one of these markets will fall out from the line. So I think we will take all the chances, which will bring us to market in the next 2 to 3 years.

And we will jump over to the questions from Mr. Speck in the Q&A. CapEx were significantly lower than in the previous year. Is this the new normal? Or what should we expect going forward?

Well, actually, it's been reduced a little bit unusual, our investment CapEx, as it has also been a positive influenced by cash inflow from M&A we did here. So this was a one-off effect. But in general, we expect that 4% of our output is more than sufficient for going forward with our investments in CapEx.

And you scaled back your operating activities in Qatar. How much is still outstanding in receivables from Qatar?

Well, that's a low double-digit million euro amount. We're continuously working on that. And we made good progress last year. We're working on that even in the situation now. So the offices are open. We're working and we're in plan with our targeted progress.

We will move over for our last hand up for today. And Mr. Remis, you have some follow-ups.

Yes, please. Firstly, a question related to the other operating income where you booked a gain on bargain purchase of EUR 22 million. Can you detail that out? It seems that it's related to an acquisition? Is it some sort of badwill recognition? And can you also state in which quarter this was booked?

Yes, you are right. That's some, let's call it, lucky buy. Actually, we've been acquiring the Austrian Health care business of VAMED from Fresenius. Actually, it was their intention to do that rather quick. And in case of closing that till the end of the year, we got something like a premium for the acquisition. And what you see here is merely -- the negative goodwill is merely showing this premium that we received on that. We booked that in the fourth quarter, nevertheless altogether, we also have some -- if you treat that or see that maybe at some extraordinary position, there are also extraordinary positions in other way that we have expenses or negative amounts in same region. So altogether, I don't see an impact in general on our ordinary results.

Okay. So it's a noncash item, right? You say, a negative goodwill?

Yes, but it was -- it has been paid in cash by, let me say, contribution to the share price.

Okay.

You also see...

Then staying with maybe the one-off -- sorry, I didn't mean to interrupt you. Please carry on.

No. Fine. Sorry.

Okay. Staying with maybe one-off items. It seems that in the holdings segment, there was also a negative impact related to the wind down of project in Switzerland. Can you shed some light on this and also maybe give an indication about the kind of normalized kind of EBIT for the holding part?

Well, you're right. That's what I tried to point it out before. And I think in total, they're merely weighing out. You see our operating segments are not touched by that. You see that the holding result is negative, although this negative goodwill is included in that. The result there is including some holding expenses and a little bit more negative one-offs, so that's in total, the picture.

Okay. So the EUR 22 million positive was in holding and Switzerland, equal out this EUR 20 million roughly with a negative effect you say?

Yes, a little bit more than equals out. And that's why, in general, you see here all over, you see a negative amount in the holdings segment, too, consisting of the holding operating costs and some kind of one-off together.

Okay. And what's your strategy on Switzerland? Because I mean, in relative terms, it's importance has come down. I think you're now just operating in civil engineering. Is it getting more towards the kind of project market than a home market? And maybe if you can also indicate where the kind of profitability you achieve in that market?

You're absolutely right. We are concentrating now in Switzerland on civil engineering. These are our civil engineering departments in Altdorf and the surrounding in these cantons around. We are also doing paneling and infrastructure on the big size and hydropower stations like that. We see, in Switzerland in 2025, there was really no big project showing up, but there a lot of big projects will show up by the second half of 2026 until next spring. So we expect to get 1 or 2 of -- 1 of the big infrastructure projects, whether this is a big canton or a hydro power station or something like that with tunneling included in that.

So we go -- on this one, we will not go any more on general building like that because we think the market is too much overcrowded there, and there is too less projects on the market. So it's a big fight for margins and also people there. So we decided not to go and concentrate on our more attractive markets.

Understood. And the last question, it seems that for Q1, we will only release a trading statement. Is that the case? And will that also be then the case for Q3 or just to Q1?

Well, I think that the first quarter in construction industry here in Europe is not giving much information and direction for the total year. So we decided along or in line with other big peers as STRABAG, for example, to report a trading statement, given the main figures there for development. This is aimed to do only for the first quarter, not for the 3 quarters as there is much more wait on that information for the first 9 quarters, and we stick with the full report for that period.

Thank you very much, Mr. Remis. And with that, we have come to the end of today's earnings call. Thank you very much for your interest in PORR AG. A big thank you also to you, Mr. Strauss and Mr. Eiter for your presentation and your time. Should you have any further questions a little later today, ladies and gentlemen, please feel free to contact Investor Relations, Isabella Steiner. I wish you all a successful day and handing over to you, Mr. Strauss, once again, for your closing remarks.

Yes. Thank you very much. Thank you very much for all of you attending our conference call for our full year results in 2025, and we will see us by over here in September next occasion about it. Thank you very much, and stay and healthy. Thank you.

Hello, everyone, and a very warm welcome to today's Austria on Air Conference as a special roundtable session. This session is dedicated to the PORR AG, and we are truly delighted to welcome Head of Investor Relations, Lisa Galuska, who will share insights with us in just a moment.

So without further ado, let me hand over to you, Lisa. The stage is yours.

Thank you, Judith. Thank you for introduction and also a warm welcome from my side. I'm here in Vienna. It's not -- actually, it's not that warm anymore. Winter is starting to show its first outreaches here. I'm happy to share some insights on PORR, especially for all of you who hear about the PORR for the first time. There will be some new impressions, and I'm happy to welcome you all to this presentation.

And with that, let's start right into it about what is PORR. PORR is an Austria-based international construction company with a production output of more than EUR 6.7 billion, so nearly around EUR 7 billion of output and with Austria as the main home base.

As of the end of last year, order backlog stood at a little bit above EUR 8.5 billion. However, with our current half year figures, which have been published at the end of August, we now stand at an order backlog of roughly EUR 9.5 billion. So a major increase also compared to the end of last year.

Our EBIT stood at EUR 158.4 million, as of 2024. And this comes down to an EBIT margin of 2.6% for 2024, and we expect that to improve in '25 to an EBIT margin of 2.8% to 3%. Roughly, I have around 21,000 colleagues, and I'm happy to present their services here.

So what makes PORR so special in the construction industry? Well, PORR is one of the few -- very, very few construction companies to cover the whole of the construction value chain out of one single source, meaning we do not only do the construction, we also take up responsibility for design and engineering, which comes obviously before construction. Then the setup of the whole construction site, the logistics, sometimes even under procurement and then the construction itself.

And a little bit about operations is also one point of our offer and then afterwards, renovation and/or demolition. Renovation and demolition at the same time, obviously doesn't work, so either renovation or demolition. That's the main -- our main focus here.

Speaking of focus, we also have to speak about the countries in which we operate. Austria is our stable backbone market with a share of around 45% to 50% of our production output coming from Austria. Some years ago, meaning in the 2010s, just to give you a brief overview of the history, PORR has been mainly an Austrian construction company. From that on, we expanded via various M&A activities in the years 2014 especially to 2017 throughout Europe.

And now we hold a strong market position in all of our home markets, especially in Poland and Romania, where we are among the top 3 of the competitors. Why is that so important? And why do I mention that? Well, in construction industry, basically, you have to have 3 basic points. First, you have to know your customers, you have to know your market, meaning you have to get well known to your customers, make references with them and get them educated so they can make good decisions and most important of all, timely decisions in the market.

Second, you also have to know your subcontractors, your suppliers. Without them, construction wouldn't work. And third, construction is and will remain a people business. You have to have the right people and the right personnel at the right time to be successful in construction. And that is why it is especially important to have a major market position in the home markets. So Poland and Romania as our main growth markets at the moment, we are among the top 3 players, sometimes even it depends on the statistics you're looking at. We are the second strongest company in the market. And in Germany, we are also among the top 5 to top 10.

Germany is our second most important market where we especially do much industry construction -- industrial building construction and our production output -- share of our production output coming from Germany is around 20% to 25%. Poland and Romania together with Czech Republic and Slovakia also account about -- for about 1/4 of total construction output.

Coming to the opportunities we see in the markets. I already mentioned the CEE countries as the major growth drivers in the construction industry. Especially in Poland, we now see a strong and continuous influx of European funding, meaning from the EU recovery and resilience facility as well as from the next-generation EU budget. This does not only go into civil engineering, but also in infrastructure building construction, for example, in health care buildings.

In Poland, we are now at the moment, working on 5 -- a total of 5 health care or health care-related infrastructure projects. For example, we are expanding a medical technical university. We are expanding an oncological hospital and so on. So that is one major driver in the Polish construction industry.

Speaking of infrastructure, we obviously also have to mention civil engineering. Civil engineering in Poland comes in the form of the CPK, the Central Polish Communication Airport, which will be built near Warsaw. At the moment, we already got the first order for that, which is the CPK tunnel near Lodz, how you spell it in German. And the total, the total meaning all of the infrastructure related to this Polish airport, which includes not only obviously the terminal and runway facilities, but also the connecting facilities in terms of road and railway, has a total investment potential of EUR 30 billion to EUR 35 billion.

In -- besides that, the railway operator, meaning the PKP PLK of Poland also announced an investment program, which runs until 2029 of around EUR 45 billion to EUR 50 billion, which is only dedicated to various railway projects. There, we also gathered one order in August, actually, so not that long ago, 2 major orders in August for 2 -- for the modernization of 2 railway lines with a total value of around EUR 400 million.

In Romania, it's also the railway infrastructure and also the road infrastructure are the main topics there. In roads infrastructure, we are now responsible for the ongoing -- have ongoing responsibility for the Lot 5 of the Sibiu–-Pitesti Highway, which is actually the first highway to go through the Carpathian mountain. So you don't have to drive all the serpentines up and all the serpentines down again. But no, the Sibiu–-Pitesti Highway is now going through the mountains for the first time. We did -- we were responsible for the Lot 1, which is already finished by now, and we are now working on the Lot 4, where we have around 40% to 50% of completion.

Another project that we recently got in Romania is the railway modernization and also expansion. So we built a second track there from Caransebes to Craiova. So another major proof for the ongoing infrastructure demand in Central and Eastern Europe.

In Austria, we see improving demand, slightly improving demand in residential construction. We expect that to pick up very soonish, but more on that later. And also the ongoing programs from the OBB, the national railway operator and also from ASFINAG, the national road operator.

Speaking of national programs, we also have to -- obviously have to mention the German investment program, which is now in everyone's thoughts, in my opinion. This should last around 12 years. And we do not -- and I really emphasize this, we do not expect anything of these contracts to come into the market in this year and 2026 at the earliest, but we count on impact or we expect the first impact on our P&L on bottom line and top line in 2027 at the earliest. So this is something that we see as longer-term growth potential. However, in the short to medium term, we expect Romania and Poland as the major construction drivers.

Before, I mentioned previously the residential construction. For us, residential construction is in -- let me put it like that, some kind of a beauty sleep now due to the high increases or -- the high increases in interest rates, but we are prepared as soon as the activity in residential construction is picking up again. How do we do that? We developed a modular or systemic residential construction projects for the markets of Austria and Germany for now. And we expect that to be -- to deliver production costs -- construction costs below EUR 2,000 per square meter. So that is something that we have put in place and have set up to be a highly competitive player in the upcoming future as soon as residential construction is picking up.

Truth be told, there are already some smaller signs in the small to medium-sized cities in Germany and Austria, where we already have some, I would say, order intakes of the lower double-digit million euro range somewhere. So we already see some kind of momentum in the residential construction sector, but that needs to be determined whether that is sufficient to be continuous in the future.

I already talked about railway tunnels, about railway order intake on railway prospects and road prospects. Tunnels and bridges are also a major part of the German infrastructure package as well as the energy transition.

The German government already told or already announced that around -- out of the EUR 500 billion, EUR 100 billion will be dedicated to sustainable infrastructure. In our view, that also accounts for energy transition projects such as the SuedLink and the SuedOstLink power line, where the green energy from the wind from the Northern Sea and the Eastern Sea come to the center and to the south of Germany. And we already have there 2 ongoing projects for SuedLink and SuedOstLink and expect more to come.

Speaking of more to come, I already talked about health care, where we see not only we, but also Euroconstruct where this forecast comes from, sees a growth of 6.5% in 2025. And we -- they also forecast ongoing growth around 4% in 2026. Data centers is also a major growth opportunity. However, there may be that the restriction of the energy providers or the energy needed for the data centers to be operable.

EPC here now on the far right side of this slide stands for engineering, procurement and construction, where we stand ready as a preferred partner for various industrial companies and well-known brands as well. So this is just a small overview of our service portfolio.

Where do we go from that on? I already mentioned our EBIT margin, which is typically low for the industry in 2024 of 2.6%. For this year, we expect an EBIT margin or the Executive Board sees an EBIT margin of 2.8% to 3%. However, we set ourselves high targets for 2030 with a range of 3.5% to 4%. Where does this come from? This also comes from a Deloitte report. And this Deloitte report is from the all over -- maybe you've heard of the Global Powers of Construction. And there it says that around 3.7% is the average of our peer group. We want to keep up with our peer group and to close the gap there. And I already mentioned 2 of the 4 -- one of the 4 bullet points here, markets and products. So market position and the position in the right products are the first keys for improving the margin.

Another one is lean construction. And what does this mean? Lean construction is reducing the waste of anything unnecessary, meaning no waste of costs, no waste of time, no waste of material, no waste of resources, no waste of human resources. So this is something where we see the future in construction and where we also see major efficiency gains for the upcoming years.

The third bullet point in improving the margins is a decrease in overhead costs. Truth be told, we saw major inflationary increases in the overhead costs in the last few years from -- to be exact from 2023 and to the beginning of '24. I think all of us experienced this inflation as well. Nonetheless, we can pass on. Please bear in mind that we can pass on the costs, the direct costs that are related to one or another construction site can be passed on directly to our customers. However, the overhead costs stick with us. So we have to put on -- we have to put in place a new group-wide cost control program to bring down the overhead cost from 7.6% of revenue to a more reasonable level.

Last but not least, we revamped our risk management system. We have -- truth be told, I will show you the chart in a few seconds. We had some major issues in 2019, 2020. After the strong growth in the years in the [ '10s ]. We experienced -- we had to pay the price for the growth. We had to pay the price for gained market positions. And with that, we experienced some losses and some not so good years. And therefore, we set up -- in 2021, we set up a new gate system in the risk management. We now have established 6 so-called milestones during the acquisition and construction phase of each and every project with a value of more than EUR 20 million. So during each of these milestones, the total figures or the absolute figures are compared with the planned figures.

And as soon as there are any divergences, we can counter them and we can set countermeasures or just refrain from the acquisition in total. So we take a step back from the tender. We are now at an order backlog of EUR 9.5 billion. We can step back from a tender without further ado and can say thank you, but no thank you. The figures just don't sum up for us, and we are not at the target margin. So that is next to the other 3 points I just mentioned, one of the major drivers for our improvement in our margins.

I already talked briefly about the difficult times in the years 2019, 2020, you see them here in our earnings per share and also in our -- unfortunately, also in our share price. So during the years 2017, 2021, we were not able in a position to -- we were not in a position to fulfill the expectations of the market and had to suffer major losses there.

In 2021, we then set up the so-called PORR 2025 future program to improve not only the efficiency and our revenue earnings, but we also improved the trust in our share price. So from 2021 onwards, where we did a capital increase of EUR 12 per share, our market -- our share price increased to now at EUR 28, EUR 29. You see here the takeoff started not as many of you may think, in March 2025 when the infrastructure package of Germany came into market, but it already started somewhere in autumn 2024, when we managed to gain further trust and rebuild the trust in our earnings forecast. So now we are here again at a more reasonable level, but still not good at the value as our peer group, for example.

Coming to my last -- coming to my second to last slide, to be honest, a brief talk about our dividend policy. We always strive for a payout ratio of 30% to 50% of EPS. Last year, we came around at 40% of EPS. So we expect that to be at a payout ratio at this round again. Of course, dividend yield with the high increase in our share price has to be compared to the end of last year at 5.1%.

Now this is -- now coming to my last slide for today, our broker coverage. We -- nearly all of our analysts give us a target price higher than the current market price. And what I also want to mention here, just recently, I think a few hours ago, Jefferies published their initiation report with a price target of EUR 37 and a buy recommendation. To be honest, this presentation is old for 3 hours now, so sorry about that, but just to get you on the latest information on PORR here.

And with that, I want to thank you for your attention and want to hand over for the Q&A session and Judith, thank you.

Thank you very much for this insightful and engaging presentation, Lisa. Ladies and gentlemen, the turn is yours now as we move forward to our Q&A session. [Operator Instructions] And we will start with some questions we have received before the roundtable. What is the one thing that you are most proud of for PORR?

Well, the one thing I'm most proud of actually happened pretty much exactly 1 month ago when we -- when it was announced that PORR would be included in the ATX, in the Austrian Leading Index. So since 22nd of September, we are now part of the ATX Index. And with that comes a higher share of visibility in the international markets. And for a construction company like PORR, this is really a milestone in the capital markets.

And what are the biggest competitive advantages for PORR?

I already tried to mention some of them actually. But first of all, the major point is we are -- our unique selling proposition, we are a one-stop shop in construction, meaning to cover everything from design and engineering to -- up to construction up until the renovation and demolition. So in fact, we want to close the value chain to get to a value cycle. And that is something that I think not many of our construction companies can do.

[Operator Instructions] I have one more question. Do you think about the market entry in the Ukraine?

At the moment, for -- Ukraine is not the market for us. I already explained the 3 major points, meaning suppliers, customers and personnel, people business for us to enter a new market. And we not want to -- we do not want to take any adventures now into an unknown market where you cannot come up with the right compliance. They might come up with compliance issues and so on. So at the moment, no, but thank you.

And where do you have the most order backlog from?

The most order backlog comes from our biggest market in -- which is Austria. And also there, we have an order -- the share of order backlog, just let me briefly jump there. The order backlog is from Austria. And in terms of construction segments, we have around 60% of our order backlog in civil engineering, which is railways, roads, energy works and also tunnels and bridges.

And I will hold the room for another moment. Should be any questions left. And that doesn't seem to be the situation. As no further questions have come in, we now come to the end of today's roundtable of the PORR AG. Should further questions arise at a later time, please feel free to contact PORR's Investor Relations team. Thank you dearly to Lisa and to everyone for attending this call. We're looking forward to this day and kindly invite you to our panel discussion at 1:00 p.m. with Vienna Stock Exchange.

And now I hand over again for some final remarks to you, Lisa.

Thank you, Judith. Thank you also for the moderation and introduction, everything. And thank you all for coming and attending this presentation, and I wish you a nice and happy day. Thank you.