VERBIO Vereinigte BioEnergie Aktie

Good day, ladies and gentlemen, and a warm welcome to today's earnings call of Verbio SE. Following the publication of the Q3 figures of 2025 and '26, CFO, Olaf Troeber and Head of IR, Alina Kohler will speak in a moment and guide us through the presentation and the results.

After the presentation, we will move on to a Q&A session in which you will be allowed to place your questions directly to the management. We're looking forward to the presentation.

And with this, I hand over to you, Mr. Troeber.

Thank you, Mara. Good afternoon, everyone. Thanks for joining our 9 months and third quarter '25, '26 earnings call. Well, we had a very strong third quarter, supported by improving market conditions. Our teams executed well in a fast-moving environment and the strength of our diversified portfolio did the rest.

We also saw an important positive industry development year-to-date with the final implementation of the Renewable Energy Directive III in Germany and the finalization of the largest Renewable Volume Obligations in the U.S. ever for '26 and '27.

Now given the ongoing strength in market supported by the favorable regulatory environment and geopolitical factors, we are now expecting our full year EBITDA to come in at the upper end of our prior guidance range which we had lifted to EUR 100 million to EUR 140 million in our ad hoc release in March.

Let me now walk you through the key metrics of the first 9 months of '25, '26 which showed a strong performance across the entire quarter. Starting off with production volumes. As you can see from the chart on the left, our biodiesel output was at the same level as the same period last year with 458,000 tonnes in the first half of '25, '26.

Our ethanol and biomethane production increased year-on-year to 431,000 tonnes and more than 1 terawatt hour for the first time, after 9 months, respectively.

The increase in production came from the ramp-up of our bioethanol/biomethane plant in Nevada, and better uptime at the ethanol plant in South Bend. And that more than made up for the lower volumes in Europe due to maintenance and [indiscernible] in the fermentation process which temporarily affected production in Q3. With overall higher production and sales volumes, Verbio was also able to increase its revenue.

Another key factor was the rising demand for greenhouse gas quotas in an increasingly stabilized market environment, which was reflected in both rising trading volumes and higher selling prices. Although material costs were also above the level of the same period last year, their increase was disproportionately lower compared to revenue growth. Hence, our EBITDA increased mostly thanks to a higher gross margin.

Lower operating costs, higher operating income and gains from commodity forward transactions also contributed to the increase in EBITDA. Also, thanks to the improved operating dynamics supported by more attractive market conditions, we saw year-to-date operating cash swing of more than EUR 100 million, bringing operating cash flow to EUR 96.4 million. Meanwhile, investments in PPE amounted to EUR 63.4 million, resulting in a positive free cash flow of EUR 33 million after 9 months.

This led to a decrease in net debt to EUR 126.8 million. Our investments are directed towards the bio-based specialty chemical unit in Bitterfeld as well as the production plant in South Bend, Indiana. The equity ratio improved slightly to 59.3% following debt repayment despite quasi-equity investment grants being recognized as liabilities.

Now turning to our quarterly performance. I will start with EBITDA as our key measure. Our group EBITDA increased both year-over-year and quarter-over-quarter to EUR 60.2 million from EUR 8.2 million in Q3 last year and EUR 30.1 million in the previous quarter. As depicted on the slide, the Bioethanol/Biomethane segment was the main driver behind this development. Thanks to the ongoing greenhouse gas quota market recovery, combined with seasonally high demand for greenhouse gas quotas as well as increased biomethane sales volumes, Verbio was able to report a strong EBITDA in the third quarter of '25, '26.

With that overview, I will turn the call over to Alina to discuss our segments in detail. Alina, the floor is yours.

Thank you, Olaf, and good afternoon from my side as well. As always, we focus on the sequential performance and discuss quarter-over-quarter figures. So let's kick it off with the Biodiesel segment. In the third quarter, again, we achieved a record production volume in Europe. Meanwhile, in Canada, we kept our production volumes at a low level, so a similar level to the Q2 of '25, '26 and actually stopped producing during the winter months of November through February. This was due to commercial reasons.

And while we had discussed this in the previous earnings call, let me quickly reiterate here. So in the past, we have actually used our product from Canada and sold it in the U.S. market. But with fundamental changes in the regulation as well as now protective measures in Canada, the Canadian market is now much more attractive for us. But with that comes the seasonal cash flow profile of the plant that's now changing because in Canada, there's no demand for biodiesel in the winter months.

However, with the renewable volume obligations that have been just recently announced and that Olaf will discuss in a minute, we actually also see upside to that, that we actually can produce during our winter months. Overall, with the new change in the cash flow profile, the annual earnings remain unchanged, and we actually expect similar earnings and similar earning profile than previously.

But now with that information, let me return to the production volumes in the third quarter. Overall, this means that we could still increase our production quarter-over-quarter to 147,000 tonnes. Despite this, our revenues decreased to EUR 203 million. This was driven by lower sales volumes and particularly because we reduced the use of third-party molecules. This also shows in our earnings because we reduced our third-party molecules because of the market conditions. In fact, we achieved still a solid EUR 18.5 million EBITDA in Q3 '25, '26. But the reduction versus the previous quarter comes from change in market conditions, and it has been slightly less favorable than previously.

But with that, let's have a look at the market context. As you can see, we have in the first quarter a decrease in biodiesel prices. You can see that in the graph on the right side of the slide. We as always depict here the price development of biodiesel and rapeseed oil. And on the left side, you can see the spread. The spread is essentially the difference between the biodiesel price and the rapeseed oil price.

So during our third quarter, you can see a pull-forward effect in demand into Q4, which is the calendar Q4, when market players still benefited from the old regulation when double counting was still in place. So with this inventory levels were lifted. And this, coupled with a delay on mandate votes weighed on demand early in our third quarter or calendar Q1. So this is also shown in the biodiesel price development. Biodiesel prices have come down at the start of the quarter.

Later in the quarter, the Iran war disrupted the fossil fuel supply chains and our biodiesel premiums could absorb the large -- a large share of the gas oil price movement. In fact, blending economics have been negative at times, which drives demand of biodiesel. The full utilization of blend [indiscernible] can still be expected or exactly because of that can be expected because if the blend economics are negative, you would want to increase your biodiesel in the mix.

But let's move on to the Bioethanol/Biomethane segment. So again, we achieved a record segment revenue. This was driven by the seasonal strength of the GHG quota market and explicitly, because of the attractive market conditions, and I will discuss that in a minute.

The -- in the revenues, this was partly offset by lower selling prices in the U.S. and reduced sales volume in Europe. Our biomethane production reached new highs as well. And this was driven by the continued ramp-up in Nevada. Meanwhile, as you can see on this slide, depicted by the dark green bar on the left graph, our bioethanol production decreased, and there's 2 reasons.

One being the disruptions in the biological processes that Olaf already had mentioned in Europe. And the second being that our production margins in the U.S. or in general, production margins in the U.S. turned negative in early January. This was actually due to higher natural gas prices, and this led us to scale back our ethanol volumes but increase renewable natural gas volumes of biomethane volumes, as you can see and as we had already just discussed. So overall, this led us to show an EBITDA improvement to EUR 34.2 million, which is largely driven by the structurally tighter GHG quota market and the seasonal demand.

So let's have a look at that. On this slide, you can see the GHG quota price development. In December of last year, the cabinet approved the draft for the RED III implementation, and this already gave some more visibility and clarity in the market. In our third quarter, the calendar first quarter, we also got some more clarity than the first reading took place in the Bundesrat. As a result, the buying activity of 2025 quota picked up. This was then further supported by the approaching GHG quota compliance deadline.

So what is this deadline? The oil companies, which are the obligated parties have until June 2025 to close their GHG balances for the year 2025 -- for the [indiscernible] year 2025. And hence, this is typically when they increase their buying activity closer to the deadline. So this is what we have seen specifically during our third quarter. At the same time, the initial demand for 2026 quota picked up.

And here on the chart, you can also see that 2026 GHG quota prices already reflect the removal of double counting. And prices even did that before it was before the law was finally approved just this May. As we had discussed during our last earnings call, this lifts the competitiveness of biofuels -- of conventional biofuels. And if you're interested to hear more about that, you're invited to hear into the last earnings call again because we did some explicit explanations on this topic.

But now let's have a look at the EU and U.S. ethanol market. Overall, you can see that there was a steep ethanol price [ depreciation ] on the graph on the right side. This was driven by tightening supply due to limited imports and also supportive global blending policies as well as blending economics.

So let's talk about the imports first. They declined at the start of the year because in the past, Netherlands was an attractive entry point for bioethanol. But with changes in regulation there, the import tax advantage disappeared, and hence, the arbitrage is closed. So lower imports met healthy demand, and this especially picked up with the geopolitical tensions. However, due to high freight rates also linked to those geopolitical tensions, they discourage the imports of spot volumes. Now since our feedstocks do not pass through the Strait of Hormuz, they keep largely stable.

And you can also see on this slide how wheat has remained stable throughout the period. With this, the spread increased very strongly, as you can see on the left-hand side of the chart, and margins remain very attractive. So this bullish sentiment goes into Q2. And unless the logistical conditions ease, we expect that the arbitrage remains closed.

So let's jump across the pond and have a look at the U.S. ethanol market. So in the U.S., you see that after the seasoning -- sorry, after the seasonal easing of spreads on the left-hand side, they have settled around a low level in January. What you cannot see on this slide is the high natural gas prices that made production margins go negative during the month of January or at least early on. And as I said before, due to those negative production margins, we scaled back ethanol, but at the same time, increased our renewable natural gas production.

As we move through February and March, demand conditions improved again, particularly on the export side. So more countries increased their blending rates and this trend gained momentum. At the same time, oil prices remained elevated especially in the regions that are dependent on the Middle East, which further supported the ethanol's competitiveness versus gasoline. But Olaf will touch on this topic later on as well.

And with that, I will turn back to him so he can give you some comments about the outlook.

Yes. Thank you, Alina. Much appreciated. We have communicated an upward adjustment of our EBITDA guidance in an ad hoc announcement in -- on March 8 -- March 25. Based on the business performance to date as well as the current sales and raw material price levels at a time, EBITDA was expected to be between EUR 100 million and EUR 140 million. We had formulated a forecast with a wide range as the geopolitical environment remains dynamic.

Given now the ongoing high selling prices supported by a favorably regulatory environment and geopolitical factors, we are revising our EBITDA forecast for the full financial year '25, '26 to the upper end of the forecast range of EUR 100 million to EUR 140 million, so the upper end.

Meanwhile, we had revised our expectations for the net financial debt downwards in the ad hoc announcement, projecting it to be in the region of EUR 140 million. And now following the firming up of our EBITDA expectations, we now expect net financial debt to be less than EUR 140 million at the end of the financial year. So therefore, I'm glad to announce we are on track to bring down our net debt-to-EBITDA to below 1, which is in our opinion, actually a great achievement too.

Let me now turn to current developments, starting with the implementation of the RED III. As a starting point, it is important to note that the regulatory framework is now formally concluded. The package was finally approved by the Bundesrat on May 8. The only remaining step is the publication in the Bundesanzeiger. Against this now-fixed framework, it is worth looking at how the implementation changes the way the quota system translates into volume demand.

On the left-hand side, you see the regulatory-driven greenhouse gas quota path in Germany. In '24 and '25 combined the system operated at roughly a 10% quota which on paper translated into around 20 million tonnes per annum of required CO2 savings. In reality, however, this headline figure overstated real demand. Compliance was supported by double counting for advanced fuels, which inflated reported volumes without requiring the same increase in physical supply.

In addition, the market was clearly oversupplied with excess volumes that are now broadly understood to be fraudulent rather than real CO2 savings. So effectively, a material part of the reported volume in '24 did not correspond to real climate impact. And now looking ahead to '27 and '28, the picture changed fundamentally. Quota level rise materially to 20, no -- 17.5% and 19.5%, pushing required CO2 savings into a range of roughly 35 million to 40 million tonnes.

And at the same time, the mechanics of the system are corrected. These volumes have to be real now. Double counting is abolished, noncompliant feedstocks are excluded and stricter verification and on-site controls significantly reduce the availability of artificial supply.

Now when you put the math together, the implication is clear while the headline requirements rise from roughly 20 million tonnes per annum in '24, '25 to now almost 40 million tonnes in a 3 years period, the demand for real physical CO2 savings more than doubles. In addition, the gradual relaxation of the crop cap for established agricultural biofuels, provides additional headroom for compliant, proven pathways, assuming that blending constraints are lifted as planned.

Now beyond the climate aspect, the quota framework is becoming increasingly relevant from a broader energy and security perspective. Recent geopolitical tensions have highlighted the vulnerability of global supply chains and reinforced the importance of locally available domestic biofuels as illustrated in the chart on the left-hand side.

The chart compares the price development of different commodities. What here stands out is the high volatility of fossil energy prices represented here by Brent crude compared with the much more stable price development of agricultural feedstocks such as wheat and rapeseed oil. This reflects the fact that agricultural inputs are largely sourced regionally and from diversified supply chains. But put it simply, our feedstock does not pass through the Strait of Hormuz.

This combination of local supply, lower exposure to geopolitical risk and predictable economics is one of the reasons why not only governments are promoting higher biofuel uptake, but fleet operators are increasingly turning to BioLNG. Customers value competitive fuel costs and, in particular, improved cost predictability compared with conventional fossil fuels. This becomes clear in the chart on the right.

With relatively stable feedstock prices, BioLNG costs could be maintained well below EUR 1 per kilogram while diesel prices increased to above EUR 2 per liter. On an energy equivalent basis, this represents roughly 1/3 of the cost which is a key consideration for customers with high fuel consumption. And for Verbio, this supports a gradual expansion of the addressable market, the LNG market, the CNG market. As demand shifts towards fuels that can be supplied locally, reliable and predictable economics, renewable fuels gain relevance across a broader range of applications.

With our assets closely linked to the regional agricultural supply chains and end markets, we are well positioned to participate in the structurally growing market. We continue to monitor potential risks, including the impact of higher fertilizer prices related to the Iran conflict.

At this stage, however, most crops for the current season are already covered, which limits any near-term effects. Let me briefly update you on a few further developments. Following the renewable volume obligation decision in the U.S. toward the end of the quarter, we see some additional upside for our Canadian operations. With strong demand coming from the U.S., our Canadian plant may continue running through the winter, which would be above normal seasonal levels and provide additional upside.

More broadly, the RVO decision and attractive blending economics are supporting higher effective blending rates. This keeps ethanol among the lowest-cost liquid transport fuel globally. Export demand is also growing against this background. The ramp up in Iowa continues.

And finally, ethenolysis plant is now in its final construction phase. We are preparing for commissioning and [indiscernible] targeting and start-up in October this year, while at the same time, stepping up our commercial activities ahead of start-up.

We will now take your questions.

[Operator Instructions]

We have not received any questions so far, but I will give you a little bit more time to put them into our chat and type them down. We have not received any raised hands either so far.

Here we go. Mr. [ Sven Kuhnert ] you may unmute yourself now. Mr. [ Sven Kuhnert ], can you hear us? I just send you an invitation to unmute yourself.

We just received another question in our chat box. Mr. [ Kuhnert ], I will come to you later and will first read out the question from [ Mr. Bilek Delange ] he's asking, is Verbio able to meet the demand for increased bioethanol for the next years as the regulations for bioethanol increases?

Thanks for the question. Supply will clearly be challenged, especially for compliant and sustainable pathways. That's precisely why the quota increase is highly relevant. It creates long-term visibility which is essential for investment decision in capacity expansion and optimization. And in the near term, tighter supply conditions support demand stability and which is more important pricing. So over time, the framework incentivizes additional investments into scalable solutions.

We have another question by [ Thomas Piontek ]. He's asking how and when does the Hormuz effect influence the prices of biofuels in Germany?

Well, we had the one chart. When the war was started, I think it was end of -- or mid of March, the prices for especially bioethanol picked up. You can see it here. But with respect to biodiesel prices, we saw actually not bad margin but more or less average margin. So we had an additional cash influx from a higher bioethanol margin, but only for, I would say, 2 or 3 weeks.

We do have no questions at the moment in our Q&A. And with that said, the next one just came in by [indiscernible]. He's asking, can you give more color why the margins of biodiesel are not on the level of bioethanol of 15% EBITDA margins? Why is the German margin so low?

With respect to biodiesel, it's a European margin. It's not a German margin. So the prices are made in Rotterdam. So there's -- the demand for gasoline molecules are higher in Europe and that actually is driving the demand for the blending component, which is the bioethanol. And also -- what you also can see, the price spread here in Germany at a gas filling station between E5 and E10 is widening. So with higher prices, the sensitivity, the price sensitivity actually increased, so more bioethanol is actually in demand. And therefore, the margin, especially for bioethanol increased.

We have a risen hand by [indiscernible], you may unmute yourself now and ask your question.

Can you hear me?

Yes, perfectly.

So I have a couple of questions. So first, could you please elaborate on the sensitivity of your EBITDA guidance to changes in GHG quota prices. So we've observed quota prices rising again recently. So understanding their impact on future EBITDA would be very helpful.

Let me quickly answer that question. Thank you, [ Manuela ]. So the sensitivity that we usually talk about is that for an increase -- thank you. So as we increase the GHG quota -- if the GHG quota price increases by EUR 100, this can have an effect on our EBITDA on an annual basis of EUR 40 million to EUR 80 million. And the range is broad because it depends on the optimization in our plants, what type of feedstock we are using. And we also have some ability to increase our volumes by using third-party molecules as well.

And we understand that there is significant geopolitical uncertainty. However, with your 9-month EBITDA is already in your guidance range and only an additional EUR 34 million would be needed in Q4 to reach the upper end of your guidance. So how realistic is it that you might raise the guidance, especially now with the ramp-up of Nevada?

And the other question would be that -- so you mentioned benefiting from forward in Q3. So could you provide us also an update on the current spread situation, especially concerning rising input prices in the last weeks, such as rapeseed oil.

Well, with respect to the guidance, there are still a few factors. We are here mid-May. So we are still -- we are just trying to figure out the figures for April together. And as soon as we are aware that we exceed the EUR 140 million, we have to notify the market an ad hoc. So that's not happening right now. But as we outlined, I mean, of course, the [ cushion ] is getting smaller. So we are close to EUR 140 million. We communicated this one. So that's it.

And the second part was the margins. Well, we see healthy margins also for bioethanol in the U.S. They are actually above the 5 years average, which is quite promising. But I mean, we are not talking about making an extra few million bucks per month with our U.S. operations. So yes, we are quite happy how the plant is running or both plants are running right now. Yes, that's it. Market margins are good.

We do have another couple of questions in our Q&A, one from [ Diana Toca]. She's asking, are there risks of demand destruction from higher biofuel prices, especially after the conflict in the Middle East ends? How sustainable are the current high prices?

Well, first of all, bioethanol is cheaper than gasoline, especially in the U.S. but also here in Europe. So therefore, bioethanol is competitive. And of course, as soon as the price for the gasoline drops, the price for the bioethanol will also drop in some extent. We don't know, but it will come to, let's say, to a lower level based on the 5-year average or whatever. So there is a risk that the price is going down, but it's not a risk. It's rather that -- it's a windfall profit we are facing. So the risk is actually that we are not facing windfall profit anymore.

And I think that was the one question, isn't it? Yes.

We have 2 more questions -- actually, 3 more questions by Sam [indiscernible]. I hope I pronounced that correctly. He's asking, you mentioned a temporary biological disruption. Has this been fully resolved? And are ethanol production volumes back to normal capacity in Q4?

Yes. The issues have been resolved mid-April. So yes, full capacity utilization here in Germany we are back on track.

Another question of his is given the significant increase in GHG quota prices since March and the strong biodiesel margins we're seeing in spot markets, can you comment on how Q4 is tracking relative to Q3?

So I think we just discussed that biodiesel margins are not very strong, particularly, but rather bioethanol margins. But nevertheless, if we compare Q2 and our expectations, which are clearly implied by our guidance compared to Q3, you will see that we don't expect our EBITDA to be in the same range as in Q3. And this is not because of the pricing effect in GHG quota, but rather the volume effect. So we benefited from strong seasonal demand selling our 2025 quota. And for Q4, we don't expect that to be on the same volume. At the same time, we don't know for how long we will see bioethanol margins at this level. So clearly, there is some upside.

We have another question from [indiscernible]. We already reached EUR 100 million EBITDA in 9 months? At EUR 160 million EBITDA realistic, like the previous question asked?

Well, my answer won't change. Right now, it's a stretch.

I'm sorry?

Right now, it's a stretch. It's not realistic. You will see.

Another question by Mr. [ Sven Kuhnert ], could you give some news about India?

Well, I think Claus visits next week in India again, the topic is still the same, the market itself is really attractive. But India is India. So everything takes a little bit longer. We have everything in mind of -- we would be open for joint venture, whatever, but we will provide you with more details in September with the publication of our year-end financials.

Another question by [ Thomas Piontek ] would be, what is the time shift in selling greenhouse gas quota to market prices?

So there's 2 things to it. We sell GHG quota along with our liquid fuels as we have some contracts where we have fixed volumes, sometimes at fixed price, sometimes at variable prices. And then we have open GHG quota volumes. And these we sell typically in the high season of quota, which is when we approach the compliance deadline.

Another question by [indiscernible]. Can you explain the impact on Verbio's EBITDA resulting from the new Heating Act passed by the German government?

Right now, that will...

[indiscernible], I'm sorry.

Yes. Let me quickly answer that question. So there is no impact on our EBITDA in the short term. For us, this is very important on -- from a strategic perspective because it really underpins that biofuels are the new strategic pillar in the energy security by now adding in the biofuel staircase to the new heating regulation, which is not in place yet to be fair. But it's being discussed, and it will also give biomethane, a bigger market than just in the transport market. So it's really interesting from a market perspective, but in the short term, we do not see an EBITDA effect.

Another question from [indiscernible]. He is asking, can you give more color on the capacity utilization in Canada in Q4?

The capacity utilization will be close to 100%.

Sam [indiscernible] has another question. He's asking, can you elaborate on the India consortium for CBG plants in India?

Well, as I said before, please be patient, we will give you an update in September at the latest.

For now, we do not have any questions in our chat box right now nor risen hands at the moment.

[Operator Instructions]

Mr. [indiscernible] has another question. He's asking with a penalty of EUR 600, how likely do you see GHG quota to go further from today's prices of EUR 470?

There's a likelihood, especially for the current year, but yes, let's see -- and wait and see.

Mr. [indiscernible] another question. He's asking, can you estimate exactly when the work in Bitterfeld will be completed and when the plant will finally be commissioned?

Well. We are in the process of commissioning the ethenolysis plant in Bitterfeld and start-up should be in October, together with the, Alina, Capital Markets Day? Isn't it? Yes. Yes.

With that, that was the last question for now. [Operator Instructions] So I would say if there are no risen hands or anything else, I'd say thank you. As no further questions come in. Thank you for participating in this call today. I have nothing much to add, and thank you for attending. Have a lovely remaining week.

I hand back over to you, Mr. Troeber, for some final remarks. Thank you.

Thank you. I think it's clear that we are going ahead with some tailwinds. So let me close with 3 brief points. First, we continue to see further margin upside with growth not limited to additional molecule volumes, but also supported by optimization, product mix and asset utilization. Second, in our European core business, we see a clear improvement in market quality driven by the RED III. And last but not least, we are capitalizing on growth opportunities through international expansion.

Thank you very much. I would hand over to Mara.

Yes. Thank you very much also from my side. I wish you a lovely remaining week. And if any further questions should appear at a later time, please feel free to contact Investor Relations. Thank you, and bye-bye.

Thank you.

Good day, ladies and gentlemen, and a warm welcome to today's earnings call of Verbio SE following the publication of the half year and second quarter figures of the financial year 2025 to 2026. The CEO, Claus Sauter; as well as CFO, Olaf Troeber, will speak in a moment and guide us through the presentation and the results. And after the presentation, we will move on to a Q&A session, which we will be happy to take your questions.

And having said this, Mr. Sauter, the stage is yours.

Thank you very much, Sarah. Good afternoon, everyone, and thanks for joining our half year and second quarter 2025, 2026 earnings call. Building on the momentum from the first quarter, we delivered a strong first half of the year. Even though we had to work through quite a bit of regulatory noise, the underlying tailwinds are clearly moving in our favor. We are heading in a very positive direction, and we'll keep doing the work that positions us well for what is ahead.

As always, we will walk you through the regulatory developments and what they mean for us later in the call. Given Verbio's solid result in the first 6 months, we are now expecting our full year EBITDA to come in at the upper end of our prior guidance range, which was indicated to be at a high double-digit euro million level.

With that, I'll hand it over to Olaf to review the financial and operational results. Olaf, the floor is yours.

Well, thanks, Claus, and good afternoon, everyone. As you can see in the chart on the left, our biodiesel output was slightly below the level of the same period last year with 311,000 tonnes in the first half of '25, '26.

In Europe, we once again reached a record production volume, which highlights the strong operational stability of our plants. In Canada, we shut production towards the end of the reporting period as planned for the winter. This was a pure commercial decision. Regulatory changes in the U.S. and the protective measures in Canada in response have shifted the seasonal cash flow profile of the plant. Overall, we still expect good full year results. But during the winter months, we will most likely not produce.

Ethanol and biomethane production also increased year-over-year to 307,000 tonnes and 672 gigawatt hours, respectively. The increase in production came from the ramp-up of our bioethanol biomethane plant in Nevada and also better uptime at the ethanol plant in South Bend. That more than made up for the lower volumes in Europe due to maintenance. And despite the extreme weather conditions in Iowa, our Nevada plant hit a new production record in December, which was great to see.

With overall higher production and sales volumes, Verbio was also able to increase its revenue. This was supported by a renewed rise in demand for greenhouse gas quotas, both in terms of volume and price. Although material costs were also well above the level of the same period last year. The increase was disproportionately lower compared to revenue growth. And this in turn means well, our EBITDA increased mostly thanks to a higher gross margin. Lower operating costs, first, higher other operating income and gains from commodity forward transactions also contributed to the increase in EBITDA. And therefore, on a year-over-year basis, we still felt the impact of lower greenhouse gas premiums in our yearly term contracts which expired end of December last year, but this was more than offset by the recovery in the spot greenhouse gas market prices.

And thanks to the improved operating dynamics supported by more attractive market conditions, we saw a year-to-year -- no, sorry, a year-to-date operating cash swing of EUR 21.7 million, bringing operating cash flow to EUR 35.6 million. Meanwhile, CapEx amounted to EUR 47.8 million, resulting in an increase in net debt to EUR 173 million. And we had already flagged that net debt would increase over the course of the year due to our strategic investments. But compared to Q1, net debt already came down substantially from its peak as we have hit the turning point and delivered a positive free cash flow in Q2.

Investments itself, they are directed towards the specialty chemical units here in Bitterfeld as well as into the production plant in South Bend, Indiana in the United States. The equity ratio remained at 58.2% and hence at a comfortable level.

And now we can ahead, let's take a closer look at the quarterly performance. Our group EBITDA increased both year-over-year and quarter-over-quarter to EUR 30.1 million from EUR 20.8 million in Q2 last year and EUR 15.4 million in the previous quarter. With this, we are finally back in the black also at the earnings per share level.

As depicted on this slide, the Bioethanol/Biomethane segment was the main driver behind this movement. Thanks to the stabilization of the greenhouse gas quota market and the attractive ethanol spreads in Europe. Verbio was able to report a positive segment EBITDA in the second quarter of '25, '26 for the first time, the first time in 5 quarters coming in at EUR 5.8 million. Year-over-year, the capacity ramp-up in North America also helped.

Now let me give you a bit more color on the segment performance. Here, we are focusing on quarter-over-quarter changes rather than year-over-year. In the Biodiesel segment, production in Europe reached record levels in the second quarter of '25, '26. And in Canada, as I have outlined before, volumes were deliberately scaled back during the reporting period due to changes in the regulatory environment in North America.

As a quick refresher, last year's change from the blenders tax credit to a production tax credit in the U.S. along with the lack of guidance has caused many producers to scale back biodiesel production across North America. And such uncertainty has made it harder to run at full rates. During the summer, we have resumed production, thanks to good demand in Canada and our prime location there. In the winter, however, biodiesel use in Canada is very limited, so production naturally comes down. Importantly, with some form of production tax credit in place and solid summer demand further supported by domestic blending requirements, we assume summer margins should be strong enough to make the overall year attractive despite the seasonal slowdown.

Now taken together, these developments led to a lower overall production compared to the prior quarter. We produced 144,000 tonnes versus 167,000 tonnes in Q1. And due to this, revenue also decreased in the second quarter of '25-'26. We generated EUR 223.8 million compared with EUR 244.1 million in the previous quarter, as can seen from the chart on the left. Still, our EBITDA in the segment increased to EUR 24.1 million, and this is thanks to higher selling prices in euro compared with only a moderate rise in material costs.

For some market context now, let's take a look at the reference charts. I think most of you are familiar with these charts already, but I will still go into the details. These charts illustrate how biodiesel spreads have developed by spread itself. We mean the difference between the biodiesel price and the rapeseed oil price. While the charts actually don't capture our specific sourcing strategy, they still give you a useful snapshot of the broader market trends. And to remind you, we typically buy our rapeseed oil 2 to 3 months in advance. Yes, that's actually the difference.

So now with respect to the spreads towards the end of the year, you can see the spread picking up, but came back again a bit in the last few weeks. And after the cabinet decision on the 10th of -- yes, it was the 10th of December '25, confirmed that a double counting would end going forward. Market players actually use the remaining window to increase the share of advanced biodiesel still eligible for double counting. And this in turn actually required more rapeseed oil-based biodiesel or RME or rapeseed oil methyl ester because advanced biodiesel itself has a vehicle cold flow properties and therefore, needs RME to meet winter great specs. But the seasonal push supported RME margins while rapeseed oil prices came off slightly.

Next. Moving on to the bioethanol and biomethane segment. We recorded an increase in revenues to EUR 228 million, which is actually, again, a new quarterly record. Revenues are shown by the green bar on the left-hand side of the left chart. The main drivers were the recovery of the greenhouse gas quota market, higher sales volume in bioethanol, biomethane and increased selling prices in Europe. Lower selling prices in North America had an offsetting effect. Meanwhile, bioethanol and biomethane production volumes were roughly flat compared with the previous quarter, mainly due to maintenance work in Europe, not U.S., to be clear, in Europe. Overall, bioethanol utilization stood at 76.6% and biomethane utilization at 67.9%.

Well, thanks to the stabilization of the greenhouse gas quota market and improvement in ethanol spreads in Europe, we were able to report an EBITDA increase of EUR 15.4 million in the second quarter of '25-'26 compared with the previous quarter. And -- just as we discussed on our previous call, the margins between ethanol price and feedstock costs had widened just for a few weeks at the beginning of the quarter.

And here again, next slide, also take a look at the reference graphs. They show how ethanol market spreads have developed over time. As with biodiesel, they don't reflect our exact purchasing of feedstock strategy -- yes, they don't reflect our purchasing feedstock strategy, but they do give a good indication of the broader market environment. On the slide, we use wheat as a reference feedstock, but production-wise, we also can use corn, rye or triticale, actually essentially anything that's cost competitive or offers better CI values.

Now looking at the price chart on the right, ethanol prices increased towards the end of the first quarter and into the beginning of the second. While wheat prices is slightly, thanks to a strong harvest, in October and November, spot ethanol prices traded above EUR 1,000 per tonne, reflecting some short-term imbalances, but also support from tight supply due to maintenance at European plants, steady demand and lower import volumes. And as you might recall, the discussions we had in Q1 regarding future margin spread development. Looking back, I believe sticking with a conservative margin spread approach turned out to be smart.

Now looking ahead to '26, ethanol fundamentals remain positive and margins have increased in recent weeks. Additional support comes from the RED III transposition in the Netherlands, which now restricts the use of denatured ethanol. So good feedstock availability in countries such as France also supports production.

Now moving from Europe to the U.S. In the U.S., ethanol margins were strong in late summer, helped by low inventories, lower production and solid export demand. As we move into the fall and our Q2 margins came down a bit, which is actually normal for the season. But the margins were still higher than in '24, thanks to strong industry fundamentals. As a result, production was high for this time of the year and inventories started to build up. Stocks are still below last year's levels and near the lower end of the usual seasonal range.

Now looking ahead, margins are supported by these tight inventories and the U.S. corn crop, which is helping keep feedstock costs under control. And on the top of that, domestic blending demand is still healthy and ethanol exports as well, which reached record levels last year and expected to grow again in '26.

Now going back to Germany. Let's turn to the development of the greenhouse gas quota, which, as mentioned earlier, is a key earnings driver, both directly and indirectly as it also reflects the overall health of the biofuel markets. Let me briefly explain why the greenhouse gas quota actually is for anyone who may be joining us for the first time here in this call.

In Germany, the greenhouse gas quota system requires full suppliers -- In Germany -- give me a second. In Germany, the greenhouse gas quota system requires full supplies in the transport sector to reduce the greenhouse gas emissions of the fuel they sell. And Germany is one of the largest biofuel markets in Europe. So this system has a big impact on the market. Fuel suppliers can meet their targets in 2 main ways. They can blend more renewable fuels into their products or they can buy greenhouse gas reduction credits from low carbon fuel producers like Verbio.

So how does it work? In our case, we supply biomethane in the transport sector, thereby generating emission reductions that fuel suppliers then can use to meet their own legal obligations. And the price of the greenhouse gas quota is driven by supply and demand for these emission reductions.

Fraud cases in the market artificially increased the supply of reductions in the past, which caused prices actually to collapse. As a result, at the end of '24, a political decision was made here in Germany to suspend the use of surplus quotas in the obligation years '25 and '26 last year and this calendar year. The surplus buildup until the end of '24 will remain in place, but they can only be used again starting in '27. And this initially pushed prices lower, but '25 prices began to recover as the market adjusted to the suspension. And now the transposition of the RED III into national law provides an opportunity to implement tighter compliance rules and additional controls to prevent fraud going forward.

Since the first draft was published at the end of June, ministerial agreement has confirmed that double counting will be eliminated. And this is a positive development, especially combined with the restriction of [ trust ] protection. Claus will explain the removal of the double counting and its impacts in a bit more detail later on.

So that brings me to a recap of what has happened during the quarter under review. The cabinet finally adopted a draft in December '25 after several delays that had weighed on prices. This had been a bit late than -- this was actually a little bit later than we had initially hoped. But overall, the sector is finally moving into the right direction. The Bundesrat has now already discussed the legislation and the final parliamentary debate in the Bundesrat is scheduled for March this year. Once passed, the law is expected to enter into force retroactively from 1st of January 2026, 1st of January this year.

Now with this, let me turn to our guidance, while the strong bioethanol market has worked in favor, which allows us to specify our EBITDA guidance to the upper end of the previous expected range. The range -- the previous range has been communicated to be in the high double-digit million amount. And -- we expect a lot of questions regarding this. So to be clear, the guidance reflects a prudent expectations, our prudent expectations. The improved results and lower investments compared to the previous year are expected to lead to a moderate increase in free cash flow and reduction in net financial debt year-over-year.

CapEx continues to be under tight control as we have again demonstrated this quarter. A key part of our CapEx right now is the construction of our ethanolysis plant in our Bitterfeld site. We are fully on track. Starting in the second half of '26, we will produce the first renewable molecules for the chemical industry. So we are fully on track with our construction here in Bitterfeld. These specialty chemicals are essentially building blocks for [ detergents ], cleaning products, high-performance lubricants and plastics. And with this project, we are helping drive the shift from fossil-based to renewable raw materials in the chemical sector.

Well, and now I will hand back to Claus, who will provide further insights into the regulatory environment and our broader outlook. Thanks, Claus. Go ahead.

Thank you, Olaf. So now about the drivers. We've talked a lot about the end of double counting, and it was important, very important. But we want to explain you what does it finally mean and what is the effect because some people were asking us, is this not negative for Verbio. So we have conventional biofuels and we have advanced fuels. And we all know that most of these advanced fuels were not advanced fuels. These were conventional fuels with a different passport.

So pre -2026, so in 2025, the price per ton of CO2 saving, the price was around EUR 200. So for our conventional fuel for 1 ton of CO2 saving, we got EUR 200. Now with the new legislation coming, prices doubled, went up to EUR 400. So CO2 savings coming from conventional fuels will now create the double price. And finally, that is 70%, 80% of our production. So that was the most important part for us because we were suffering under that fraud because we must be honest. The fraud will continue at least at the beginning.

So for the advanced fuels, advanced fuels are creating more CO2 savings because of double counting. But it didn't -- or it doesn't mean that they are just getting double price. It was even more. If we are producing biodiesel from rapeseed oil, 1 ton of biodiesel is creating 2 tons of CO2 savings. If we are making biodiesel from a residue, an advanced biofuel, this biofuel was creating in 2025, 5 tons of CO2 savings.

So that is important that this is over because finally, that was the economic driver. The idea to give a better greenhouse gas savings with double counting to advanced biofuels was at least at the very beginning, a good idea to improve and increase the volumes. But finally, it didn't work, and I don't want to recall all these reasons.

So this is the individual pricing, but what does it mean per ton of product. So that is now the real effect, and it shows why our economics, especially now in 2026 will further improve. So for the amount of greenhouse gas savings per ton of biofuel, before this was per ton of CO2 savings. Now we are talking per ton of biofuel and in this case, per ton of biodiesel. So the increase in 2025 for the amount of CO2 savings per ton of biodiesel, the money we received was about EUR 456. Now with the new legislation and the higher prices, the premium is EUR 912.

For advanced, it's -- so it doubled for conventional. For advanced, it's still more because you are calculating with a [ 0 ] amount of greenhouse gas volume on the feedstock, but there is no more double counting. So at a price of EUR 200 per tonne of CO2, the contribution for the product for the tonne of advanced biofuel was EUR 1,168 until the end of 2025. And now with the higher price per ton of CO2 saving is 1,244, still more attractive. But before the gap was between EUR 1,168 and EUR 456. And now it is between EUR 1,244 and EUR 912. So that shows the real impact and the return to a level playing field. But with the fact that the double counting is going away, we also have to adjust our CO2 handprint. But on this, I will come later.

So we also put this chart -- the next one, this chart in our presentation, which shows the difference between -- the different biodiesel products. So what Verbio is producing is rapeseed machine, which is same minus 10. So that is the pricing, what we have seen from January 2023 until January 2026. So price was more or less stable. And the blue line is the price for HVO, hydrated vegetable oil, same feedstock, other process. And also here, you can see the fraud because in January 2023, the differential between our FAME minus 10, our rapeseed methyl ester and HVO based on -- so both residue based was more than $1,000 per metric ton, so much more expensive. And this differential between April '24 -- and April or July '25 went down to $500, $600.

So it came down very much, and that brought our product under pressure. But at least most of this HVO was not advanced. Most of it was palm oil or palm oil derivatives. And now with the new legislation, what you can see now since October, since it is clear that the pricing will change that the gap went out again.

Why is this important? Because it shows -- we will need in 2026 and 2027 in Germany and in most of the European countries, we will need HVO to fulfill the biofuel targets. The cheapest and most efficient solution is still biodiesel first generation. That's the cheapest product.

But there is a blending wall. So HVO prices beyond the blending wall will set the target per ton of CO2 savings. So our biodiesel for the biodiesel business, the volumes and the blending wall will be covered, but everything what is beyond, and this is important for the other products like ethanol and especially renewable natural gas and finally, the CO2 price. So coming to 2026 and 2027, there is a high probability that the price of EUR 400 per tonne of CO2 savings will not be enough. Prices might go higher, but this we will see during the coming months.

But what I want to tell you is there is a strong indication that it needs to go further up because the price setting product for the ton of CO2 savings will be HVO. And with the removal of the double counting, as I said, we are back on a level playing field.

So now let's come to, as I said, the adjustment of -- or update of our CO2 footprint. So the handprint on that slide shows the CO2 saving potential of all major products we produce and trade globally calculated under the German regulatory framework, which until now included the ability to double count advanced biofuel. Under the old rules, we reached 5.5 million tonnes of CO2 savings in 2024, 2025 with a target of 8 million by 2026, 2027. Adjusted for no double counting, the comparable 2024, 2025 figure would be 4.2 million tonnes. So with the new rules, we now expect 4.7 million tonnes by 2027, 2028, driven mostly by the expansion of advanced biofuels in North America and upside comes from carbon sequestration and other emission reduction measures. So we need to adjust our CO2 handprint to the new legislation.

So speaking of North America, let me quickly give you also an update on the regulatory developments. But as I said, very briefly, so the trade policy of the U.S. administration supports and supported exports, which is strengthening demand. Then 2, 3 weeks ago, Mr. Trump was in Iowa announcing that now a year-round E15 approval will support domestic blending. Right now, in the U.S., E10 is standard fuel and is limiting the market in the United States. So the message from Mr. Trump is that there will be a year-round E15 approval. And because ethanol in the U.S. is so cheap, that is really interesting for the filling stations to offer a higher blend and make money on ethanol.

And the most important part is the new draft of the 45C guidance, which provides greater regulatory clarity. And that's what is behind is the concept of production tax credits related to the carbon intensity. So in the U.S., it's carbon intensity. In Europe, it is greenhouse gas calculation. At the end, it's the same, but there are different models. So related to the carbon intensity, there is a possibility to get up to $1 per gallon of ethanol, which is about $0.30 per liter of ethanol in the United States, which is a lot of money and which will bring the price for ethanol further down.

So U.S. ethanol is already the cheapest ethanol in the world. But with the 45C, U.S. ethanol will come down further. And it depends on your production. But if you are getting full contribution from the 45C, a U.S. producer can offer ethanol at $0.20 per liter, which is amazing, which is much, much cheaper than fossil gasoline. And what we expect is that this will further drive the export volumes on certain destinations because with prices like this, it opens up even at crude oil prices at $50 or $60, the so-called voluntary blending because it's just the cheapest fuel.

So saying that, let's head into our Q&A session. Thank you very much for listening. And now let's answer your questions. Sarah, please take ahead.

Absolutely. Thank you so much for the presentation, Mr. Sauter and Mr. Troeber. So participant, we're now open for your questions and everybody is invited to post questions in the chat, and I would be happy to read them out for you. And, analysts have the possibility to ask questions in person via the audio line.

And having said that, we received the first virtual hands. And the first one is from Mr. Kuhn. So please go ahead and ask your questions.

I'll start with the most obvious one, the guidance. Would use EUR 30 million as a run rate per quarter for the rest of the year? And my impression was that with some maintenance work in the recent quarter, it wasn't like particularly strong. I would already arrive at more than EUR 100 million. So interested in your views on guidance and let's say, how much of a safety cushion is probably reflected in it?

Okay. So well, we did not increase the guidance. We said it during the presentation that we think that is a good first half year. But there is still something with the new regulation under negotiations. We think that it's still not over. So there is space for improvement. But there are also other, let's say, uncertainties, which we wanted to wait that we have clearness. So finally, at the moment, there were also -- you saw the chart of the strong ethanol margins October, November, and then it came down. Right now, ethanol again went up. So there is still some volatility in the market.

And let's say we have a cautious approach right now. If the things are developing in the right direction like we expected, then there might be realistic space of some lift up for the guidance, but not before the end of Q3. So right now, I would not say it's a conservative approach. I would say it's a cautious, realistic approach.

Understood. Very clear. Second one on the Nevada plant ramp. I think during the last call, there was some discussion on, let's say, time windows of high utilization widening from like daily operations, weekly and so on and so forth. So maybe you could give us a little more insight on where we stand in the ramp, where we are in terms of utilization and what further, let's say, gradual improvements we should expect for the upcoming weeks and months and quarters?

Okay. As I said during the presentation, we have achieved record production in December. In January, you remember that storm. So there was net gas price, which was incredible. Usually, natural gas price is about $3 per MMBtu. And during that week, it went up to $70. And natural gas is still needed to produce ethanol. So that was a difficult situation in January for ethanol. We stopped our ethanol production in Nevada, and we were just producing natural gas and made a margin on that. So January was not to -- through technical issues. It was a market issue and really extreme weather. So what I -- we are clear on our track to have full utilization now in Q4 of our business year, which means during the summertime, we had already 83%, 85% utilization rate.

So we are very positive here to be able to manage that. And I think that January was an interesting part as well for us because we were able just to take the opportunity and make money out of this extremely high natural gas prices. But everybody to whom you are talking even in Iowa that this January is 10 days or 8 days were really extraordinary and very, very cold. We had up to minus 40 degrees Celsius there in Nevada. So you can imagine what was going on there.

But we are on a good development. And I think you also can see it, Olaf mentioned it, just look how ethanol and natural gas is developing. We were coming from minus 15 in Q2 from the last business year, permanent improving. Now we are back, and this is mainly driven by the U.S. development.

Excellent. And one last question. On the German THG quota, I read in some news letters that there is a discussion to maybe increase from the 16% plan for '27, maybe towards 17.5%, maybe even 18%. What are you hearing out of that discussion? And what would be the, let's say, potential implications of the scenarios currently being discussed?

Well, this is exactly what I meant when I said there is space for further improvement. That is just one point. There are 2, 3 points which are very important or important and which will further increase the value of the greenhouse gas volume.

So to come back to your specific question, 1% of CO2 saving is about 2 million tonnes, 1% of higher quota is about 2 million tonnes of CO2 savings. So the original number was 15% for 2027, but we all know that in 2027, some volume from 2024, which is frozen will come in. So 1% is really too low. That is our argumentation. And if we are going up to 17.5%, that might be another 1.5%, then we talk about another 3 million to 4 million tonnes of CO2 savings.

But this will mainly be absorbed from the frozen volumes in 2024. So what I hear is that there is consent that nobody is saying that what we are asking for here in this specific situation, and we were suffering a long time with this fraud. So nobody is saying that this is unjustified. And therefore, I think the 17.5% or even 18% can be realistic. But we have to wait another few weeks more. But I would say 70%, 80%, I'm sure that it will come.

And then we will move on with the questions from Mr. Hesse. Sir you can commit yourself now.

I've got a few. One of them being, if you can give us a little bit of color in Q2, how much of the recovery in bioethanol, biomethane was driven by the improvement in spot contracts versus the improvement in spreads?

This is hard to answer. Olaf, to you? Most of the volume, I would say the lion's share was driven by better ethanol prices and some for sure of the CO2. But most of the CO2 from ethanol was already covered under the existing contracts. So we are talking about, let's say, 30,000 tonnes of free CO2 saving volumes. And now you can see, well, if we are talking about EUR 100 or EUR 80 better price, then it's 30,000. So it's about EUR 2.5. It's not a big jump, EUR 2.5 million, EUR 3 million can be not more. But this is just a rough calculation.

You saw it Constantin, you saw it that prices especially accelerated at the end, November, December, which is very, very unusual, which is very unusual because finally, now the oil companies are doing their calculation how much CO2 savings they need for 2025. They look how much gasoline they sold, they look how much gas oil they sold, they make their calculation. And finally, usually, in a normal year, they buy the remaining volume in the first quarter of 2026. But this year is special because everybody knew that double counting will go away and also that there is fraudulent volume still in the market. And if you buy it until the end of 2025, you are not responsible. You can trust in the papers what you get even if you know that it is not true.

So [indiscernible] is ending at December 2025. And a lot of people were buying and said, okay, I don't have a risk here. So that was driving the CO2 prices. It is still the same framework like the other years before. So nothing has changed regulatory in Q2, in our Q2, which means Q4 2025. And that was driving the prices. But I also said now that there might be even a better development now in 2026. But right now, they are doing their homework.

That's great color, Claus. That leads me to my second question, which is -- what I'm trying to figure out is where should we expect the negotiations to have gone for the new quota levels in '26 in your year? I mean, I know you obviously don't provide us with a number, but I'm trying to figure out, I mean, quota levels ran all the way up to EUR 500 at the end of last year, and they dropped quite significantly now again at the beginning of the year, I think we're back to about EUR 440. So what I'm trying to figure out is if I look at 2026 calendar year 2026, what is the new quota level that I should be kind of anticipating for the term contracts compared to last year? I think last year, you were somewhere in the low 300s. If we were to use this new quota price, would today -- would 2026 be somewhere around the low 400s?

We are not providing here information like this, just for the logic. The contracts are negotiated between October, November, December. And most of the contracts last year came in very late because everybody was looking what is the final regulation. So if the market shows EUR 400, EUR 450, that will be also reflected in the contracts, maybe a little bit lower, but that is always the level. And that was the difficult situation at the end of 2024. CO2 prices came down below EUR 100. And under the circumstances, because they were frozen and under these circumstances, we had to negotiate the contracts for 2025. And I can tell you our CO2 prices for the 2025 contracts were even lower, okay?

So that is the level how you can calculate without disclosing any details of our contracts. So that was the level at that time for the new contracts for everybody. So now the interesting thing is how efficient you are in your processes. And I said roughly with 1 ton of biodiesel, we are producing 2 tons of CO2 savings. But it can be 1.8 and it can be 2.4. So that is the specific value of a company, how you are able really to get as much CO2 savings out of 1 tonne of your product as possible. And in this case, Verbio is very, very efficient.

Understood. Then if I may, just on the guidance, following up from Michael's question, Olaf to you. When I look at the guidance for the remainder of the year now, you clearly are obviously considering the new contract levels for CO2. So we have recently -- so bioethanol prices dropped significantly again in December. We started seeing a bit of a recovery now in January, February. Is this new guidance taking a more conservative view on bioethanol prices? Or are you already pricing in that slight recovery that we've seen in early '26?

Well, Constantin, don't stress me on the guidance. I think I said enough on it. You know when we make -- you can answer your question yourself. You know when we made the guidance, you know where the CO2 prices were at that time. But it's -- there is still -- the regulation is not -- has not passed the parliament. So I think right now is really the wrong timing to do already something, give us a few more weeks once we have clearance. And even the impact that it might go from 16% to 17.5% or 18% for 2027 will impact the market. Because with 17.5% and even 18% for 2027, that might be a challenge to fulfill this target. Okay?

The molecules will be there. But as I said, the price setting product for the ton of CO2 saving is then for sure, HVO and with a price differential to normal biodiesel with $800 to $1,000 per metric ton, you see what that means for the CO2 savings. So nothing more to the guidance. We will come back in a reasonable time if it is necessary.

Sounds good. Fair enough. Last two questions then. Just if we could have a little bit of an idea of what the contribution is that you expect from the ethanolysis plant. And obviously, I think in '26, it's very negligible. But in '27, if we could have an idea of what kind of contribution you expect from that? And at what level of EBITDA would you feel comfortable again to start investing CapEx to increase your biomethane production again? Those are the two questions.

This is very interesting. So first of all, we are going to start up the ethanol uses in the new business year beginning July. I don't know what will be really the contribution because this ethanolysis gives us new additional optionality. So right now, I think there is also a change in the view in Europe between this discussion first and second generation. The cheapest way to fulfill decarbonization in transport is first-generation biofuel. That's it. And you know that Germany has still a lower target than what is allowed in Europe. We can do 7% volume. There is a cap and Germany has 4.4%. They wanted to decrease it further, but no way, maybe we are also able to bring it up again.

So -- but that product is the feedstock for ethanolysis. So it is a new process. It will be a new market. We need to develop during 2027. So don't expect an additional EBITDA contribution for the next business year. That is something new. It is not -- this market will be not dependent on the transport sector. It's a voluntary market. We want to see how much people are really willing to pay for the green premium. And to the whole market, which is necessary for Germany, this is just a very tiny, tiny, tiny production. But I used to compare it with when we started up with biodiesel 25 years ago in 2000. So it was a new product. We had to convince the whole years to use that biodiesel. We had no approvals from the truck producers.

Ethanolysis is a promising, interesting new segment. And right now, I think when I recall all the ideas, what big players had with renewable chemicals, I think it's just Verbio which remained to follow up that way. But don't expect an additional contribution also for the next business year. We have to develop this market. We have to develop the process. We have to improve it, go through the Phillips curve, bring it into the market. But once it is established, it will create completely new and a different stability to Verbio than we had in the past. The dependence on sometimes crazy developments in the transport sector with fraud, with, I don't know, some sometimes stupid regulation will go away. That's a new pillar in the development for Verbio, but it will take time.

Thank you very much for your questions. Continue.

Yes. We have two questions in the chat. We do not want to miss even if we're a bit about time. But Mr. Tim, he would like to know, since we heard a lot about the U.S. and EU, my question is, are there any updates in India, especially with the GAIL deal? And another question from Mr. Lida is, can you give an update on India and insights into your global trading activities?

Okay. First, India, right now, no, I'm sorry, no new news, except that -- but this you all know that now India and Europe is coming closer in a lot of things. And one of our ideas in India was that we wanted to have the opportunity to monetize greenhouse gas savings also in Europe. So that's now becoming more realistic with this trade deal, which is promising. And to develop new projects with GAIL, we have also now another partner, which is a Japanese gas company. So it's going on, but nothing which can be disclosed at that point.

I also can tell you that the Indian government is preparing a new big package for -- they call it CBG compressed biogas in India. Indian government did a great story with ethanol. You know that India has now E20. So 20% ethanol is the regular fuel in India, and they want to repeat this positive development with CBG. So a big package will be prepared. It will somehow be disclosed in summer, July, August. And that will lift up our activities in India to a new level. But please, I'm sorry, but give me a little bit more time.

So Sarah, what was the other question? The first one about the U.S.?

No, the first one was about India, especially GAIL.

Okay. And the second point was about global trading.

Yes.

So yes, I would say 2 years ago, Verbio was 99% pure producer. And since that time, we established more trading activities in North America and also trading activities in -- for Europe in Geneva. So the development is positive. It's not only the impact with trading volumes, what we are doing. It is also stabilizing our business because with our team in Geneva, we increased our supply market. So we are now also supplying product into France, into Belgium. So it widens up our physical or our ability delivering physical molecules to the market. So the contribution is not only on the pure trading side. And the overall volumes, what we are now doing from Verbio is, let's say, between 10% and 25% more than the volume what we are producing ourselves.

So we had to learn. We have now our logistical abilities in Rotterdam. And yes, so the plan for the future is to increase this further. The plan is to go up to 50% of our physical volumes, so the amount what we can produce on ourselves. But to make it crystal clear, Verbio will be continuously a main producer of the molecule and the trading is just something to make sure that our own plants can always run on 100% capacity.

And this leads me to one question what I forget from Constantin. He was asking at which level we would increase our biomethane capacity. So here also, after this crazy time in the last 3 years, we have now no clear plan at which level we would come back to do new investments. Right now, it is absolutely not on our agenda. The first, what we want to see is that the measurement against fraud will take place, that they are efficient because if the fraud is going on, not from China anymore, maybe from Pakistan, from South America, I don't know from where that it doesn't make any sense to continue doing new investments in Europe.

So first of all, we want to see that the fraud goes down. We should not be naive that it will completely go away. There will be always some fraud, but how effective will be the new regulation? And finally, what does the EU Commission and what does the German Ministry of Environment learned from the situation the last 2 and 3 years because also to be crystal clear, that fraud mainly happened in the biofuel sector. But a lot of other industries where looking what is going on in the biofuel industry and what are the measurements to protect investments which were done with the idea of supporting the energy transition.

So I know that we are not the most loved child of the German Ministry of Environment. But finally, they didn't do a good job. Now they come back with a very, very restrictive new regulation. But at the end of the day, we have to look what they really bring on the ground. And that's the time minimum the next year. Let's see what is going to happen, how the markets are developing, and then we will make a decision. Okay. Some more?

Nothing more to add. So no further questions come in. So that answer concludes our call for today. And yes, I say thank you for attending. Have a lovely remaining week. And Mr. Sauter, some final remarks from your side.

Yes. Sarah, thank you very much. You did a great job. It was a good call. Everything worked. Thank you very much for everybody who was participating. It's an honor for us that you are interested in our company. We know that it was not an easy time in the last 3 years, but it is getting better. So thank you very much. Thank you for everybody who was joining and namaste.

Good afternoon, everyone, and a warm welcome to the Verbio earnings call for the first quarter of the fiscal year 2025, '26. Today's speakers are Olaf Troeber, CFO of Verbio; and Alina Kohler, Head of Investor Relations and Corporate Strategy. They will walk us through the company's performance, touching on key milestones and current market trends.

But before we dive in a quick housekeeping note. The conference is being recorded. [Operator Instructions] Let me pass the word to Ms. Kohler and Mr. Troeber. The floor is yours.

Thank you, Harald, and good day, everyone. Welcome to Verbio's earnings conference call. We will be discussing our first quarter 2025, '26 financial and operating results. I'm also delighted to welcome Alina Kohler, Head of Investor Relations, who is joining me today.

Slide, please. Yes, we've got a bit of a problem with the slide, give me a second. We are there. Okay. So for that one, we achieved a record biodiesel production in our first quarter. Biodiesel production reached close to 167,000 tonnes and the capacity utilization rate was close to 94%. Meanwhile, ethanol production grew by 10% year-on-year to 154,000 tonnes. This was purely driven by the ramp-up in Nevada and efficiency gains at our ethanol plant in South Bend, Indiana. Biomethane production grew by 24% year-on-year, also thanks to Nevada.

Our EBITDA increased strongly to EUR 15.4 million from minus EUR 6.6 million. The year-on-year increase was driven by the main segments. Higher coproduct revenues and favorable developments in commodity forwards and ForEx valuations supported our results. The North American business also contributed positively produced developments, as outlined before. The increase in net debt primarily reflects negative free cash flow stemming from reduced operating cash driven by working capital and investments in our strategic projects.

The working capital effects mainly reflect a lower reduction in receivables and a decrease in payables, both related to cut-off date effects. The strategic investments in the amount of around EUR 20 million include investments into the specialty chemicals unit here in Bitterfeld as well as inventory production plant in South Bend, Indiana. Overall, the development of net financial debt is in line with the planned temporary cash outflows related to inventory changes and the investment program. The equity ratio remained at 58%, and well, it's -- hence, it's at a comfortable level.

Overall, these results are reassuring. We haven't fully reached our goals yet but the progress towards Q2 strengthens our confidence in the path ahead.

Next slide. Here, you can see our gross margin per tonne of liquid fuels versus the sales volume weighted reference spread. Yes, but the spread is basically the difference between the biofuel price and the feedstock cost per tonne of biofuel. Overall, and that shows the capabilities of Verbio. We achieved a greater premium versus the market in Q1 '25, '26 compared to Q4 the previous year, '24, '25 and Q1 last year. This was supported by co-product revenues and the nonrecurrence of inventory write-downs and lower cost and net realizable value impacts.

Our coproducts generate additional value and reduce the effective cost base compared to producers of the main product alone. Year on -- yes, quarter-on-quarter, Verbio also benefited from positive market momentum that gives you a sense of our position in the market.

Let's now move on and see how the segments performed. I will begin with a quick overview of EBITDA development across the quarters. What stands out, again, is that a Biodiesel segment shown as the dark green bar continues to deliver strong earnings support. This increase in EBITDA to EUR 22.6 million in the Biodiesel segment was primarily due to an improved gross margin. Also, we managed to cut our losses by more than half in the Bioethanol and Biomethane segment to minus EUR 9.5 million, which is represented by the light green bar. Year-on-year, this has been driven by the positive development in North America.

Earnings below the gross margin improved mainly because last year's negative effects from the weak U.S. dollar, open commodity positions did not reoccur. Quarter-on-quarter, one-offs, including write-downs on inventory, which had discussed during our earnings call in September did not repeat. The other segment shown in the green, which harbors our logistics and trading activities reported an EBITDA of -- can you mute?

Oh, sorry.

I will repeat it. So the other segments shown in the green, which comprise our logistics and trading activities reported an EBITDA of EUR 2.3 million and reflects, in particular, the positive development of our commodity forward contracts.

Now let me hand over to Alina, and I will be back to give you the financial outlook later on.

Thank you, Olaf, and apologies for the microphone again. And good afternoon to everyone else. Let me walk you through the segment performance, focusing on how things have developed quarter-over-quarter. In the Biodiesel segment, which I want to start with, as you should see on the slide, can we please? Yes. There we go. Thank you. In the Biodiesel segment, we have generated revenues of EUR 244 million in the first quarter which is in line with the previous quarter or Q4, as you can see in the chart on the left side.

Our production volumes increased slightly while sales volumes, which are not depicted here in the chart, remain stable. This underpins the steady market demand that we're seeing for our product as well as our consistent operational performance.

Our EBITDA also grew quarter-over-quarter, thanks to a slight improvement in the gross margin. And now let me give you some more market context, and we will have a look at the reference charts. Does that work? There we go. There, we have it. On the left, you can -- apologies for the technical issues we're having here. On the left, you can see the biodiesel spread chart, which shows the difference between biodiesel prices and rapeseed oil prices per tonne of biodiesel. And as you can see, the spread has widened during our first quarter.

On the right side of the slide, we show how the biodiesel and rapeseed oil prices have driven this development specifically. As always, and we mentioned that during each conference call, we have these charts do not reflect our sourcing strategy but rather give us a good indication of how the broader market has moved. We -- on the other hand, we typically purchase our rapeseed oil 2 to 3 months in advance. That's just as a heads up.

So with that, let's move to the Bioethanol and the Biomethane segment. We recorded an increase in revenues to EUR 191 million, which is a new quarterly record for us. And this record has been driven by an increase in sales volumes, specifically for biomethane. On the slide, we usually say RNG, which is short for renewable natural gas, and the recovery in the markets.

So the biomethane production actually also reached a new record at 336 gigawatt hours for the first 3 months and this is a utilization rate of 68%, whereas the production volumes for bioethanol fell slightly in comparison with our last quarter so Q4 due to maintenance work we had to do here in Europe. Overall, our bioethanol utilization stood at 77%.

The significant increase in earnings that you can see in the chart on the right side is primarily driven by the positive development in North America and the nonrecurrence of one-off items, which Olaf had just discussed a minute ago.

Let us now move to the reference graphs. And here, it's a bit more interesting than what we've seen with the biodiesel. So again, the reference graph, they illustrate how ethanol market spreads have moved and what has been driven that price-wise. Like with biodiesel, they don't mirror our exact purchasing or our feedstock strategy. We show wheat on the slide, but mostly, we can also use corn, for example, or triticale, anything that's available and that comes cheaper than wheat in -- due to availability, for example. So this is rather indicative for the market.

Looking at the price chart on the right, you can see that ethanol prices actually jumped during our first quarter, but wheat prices fell slightly, thanks to a strong harvest. So this move in ethanol prices was likely due to short-term imbalances in the market. However, looking ahead into 2026, the fundamentals should also remain strong for ethanol. A key factor here that we're seeing is the transposition of RED III in the Netherlands, which restricts the use of denatured ethanol.

So what is denatured ethanol? Denatured ethanol is ethanol that is treated with additives to make it unfit for human consumption. Undenatured ethanol, on the other side, is pure ethanol, and that's what's typically produced here in Europe. So that's also what we produce here in Europe. By restricting denatured ethanol, the regulation reduces the supply that's available mainly from North America, which then helps support the ethanol prices in Europe.

European producers like us also benefit from higher import duties for undenatured ethanol, which then limits the competitiveness of ethanol imports and strengthens the domestic market prices. So overall, all of these factors should create a favorable market environment as we had into 2026.

Coming now to the U.S. market, you will find some similar -- sorry, there we go. Coming out to the U.S. market, you will find some similar charts as ethanol prices bounced back by about USD 0.30 per gallon, which is roughly EUR 80 per tonne in August and September from the summer lows that have -- we have been seeing specifically in our Q4. The increase was supported by tighter supply, and you can see this increase in the chart on the right-hand side.

Meanwhile, the corn prices stayed relatively low, thanks to good weather also and larger yields. Hence, quarter-on-quarter, market spreads improved strongly, as you can see on the chart on the left-hand side again.

So year on the year, the market spreads were nevertheless slightly behind as the summer market remained below its usual seasonal pickup, which also carried into our first quarter or calendar Q3 and that we had discussed in a bit more detail in our last earnings call. So with the fall maintenance done now and peak summer driving also behind us, ethanol prices are now closer to historical levels again.

So last but not least, let me now turn to the GHG quota price development. Here we go. And here, you can see that prices have increased over time. Much of the movement that we have witnessed has been driven by news and discussions around the RED III transposition in Germany. Since the first draft was released at the end of June, we have seen an increased market activity and further policy clarifications have then strengthened the confidence in the sector.

One of them being the ministerial agreement that has been reached confirming that double counting will now be eliminated. This change is actually like really a positive step for the market, especially combined with the restriction of the production of -- protection of trust, excuse me, which we call the [Foreign Language] here in Germany.

Also, as some of you may have already seen in the news, the adoption of the new draft in the cabinet has been delayed multiple times now. But importantly, ministries still expect retroactive application. And while these delays have temporarily shown activity -- sorry, slowed the activity in 2025, which we see here in the graph which was just shown there, the 2026 demand has particularly remained very strong, and prices only know one way and that is up. It's also encouraging that a new draft version has been leaked, which also some of you might have seen, I think it has -- it was covered in the press also on Monday, which we actually overall feel very positively at this time.

And now with that, I hand back to Olaf for the financial outlook.

Thank you, Alina. Well, let's come to our guidance. It might disappoint some of you, but our guidance remains unchanged. We expect to achieve an EBITDA in the high double-digit million range in the financial year, '25, '26. I'm not going to walk through the detailed assumptions, which we already discussed during our full year earnings call 6 weeks ago. The strong bioethanol market works in favor, but we are still early in the year and eagerly awaiting the German decision regarding the RED III. While overall, the preliminary information will look promising, as discussed by Alina, we don't want to get ahead of ourselves. And I believe you got the message and the message is clear.

The next is the improved results and lower investments compared to the previous year are expected to lead to at least a balanced free cash flow and a moderate reduction in net financial debt year-over-year as outlined in the September call. CapEx is under tight control as we have demonstrated this quarter, working capital will be optimized through the year.

And now with this, we would like to open the line for the Q&A. Thank you.

Thank you for these insights, and we will now move on with the Q&A session. [Operator Instructions]

So let's dive in. And we go for the first question. Olaf, Alina, how are the new contract negotiations going? If we see the development of the GHG quotas, shall we expect that the EBITDA will increase significantly in Q1, Q2 and 2026?

Well, we concluded a few contracts already at market prices, but the large chunk of agreements will be done beginning of December, rather mid-December or concluded beginning December, mid-December. And EBITDA increase -- well, I outlined it with my comments regarding the guidance. We are rather a little bit more on the cautious part. What I can say, overall, the downside risk is reduced, the upside potential has been increased. But so far, we stick with our guidance.

That's said, I mean the next question is going into the similar direction. The guidance is conservative. Are we expecting adjustments in the EBITDA to the levels of EUR 120 million to EUR 160 million?

No further comments.

No further comments. So for the time, there's no further question in the line, but I can see that somebody is typing. So let's wait a moment. And let's have a look on the U.S.A. and the business there. Can you provide more color on the outlook in the U.S.? And what assumptions underlying your current forecast for market pricing and earnings?

So Alina?

Yes. I think most important is the utilization at Nevada because that's, in the end, driving our increase in EBITDA year-over-year in North America. And with that, we stick to what we have said just in our last earnings call that we still expect the full utilization in Q4, and we're on track to reach that. We have actually a very good utilization at this point of time.

In terms of market pricing, we have looked at historical data there and are pretty much on par with historical margins.

And still waiting for the next questions. And here we go. Can we run through the potential impact on this year's guidance if bioethanol spreads stay at this level?

Well, I mean that's a simple mathematic calculation. We provide the volumes we produce per quarter and per year and then simply multiplied by the increase we have seen the last 6 weeks. The point is why I'm stressing this that we are not going to adjust our guidance. The year has 52 weeks. And we are seeing just 6 weeks now elevated bioethanol prices. And if this is going forward, we, of course, have to adjust our guidance. But for the time being, we had 6 weeks of elevated bioethanol prices or bioethanol rather -- bioethanol margins. But we also had 2 weeks of compressed or lower biodiesel margins.

So right now, as I pointed out, the downside risk decreased and the potential -- upside potential increased, that's all.

Thank you for answering this question. Maybe let's have a look again to the Nevada plant. How is ramping up going on? And is it almost to its peak levels of 90%?

Well, I had a call -- first of all, Alina already provided some color on this one. I had a call yesterday with Dr. Lüdtke in Nevada, he is on the path. So we are in the -- yes, as we planned. We reached the 80% already of capacity utilization, not on an hourly basis rather on a daily, and now we are getting to a weekly basis and peak capacity utilization was temporarily also exceeding the 80%, but not for a longer time. So nothing of concern right now. And I hope that we really achieve the 100% stable capacity utilization beginning of spring, summer next year.

Thank you for answering this question. Moving on to the next one. In which area are you currently focusing your management capacities, in particular? Which areas require your greatest attention and where should we, as investors, focus our attention in particular?

Well, we clearly communicated our focus. Our focus is on the -- yes, more or less stable production with respect to the existing plants, also capacity -- increase in the capacity utilization of our German plants, getting more out of the raw materials. So it's all what you can do on a common basis without facing larger investments.

With respect to the U.S., we also clearly communicated that our focus is on making our investments profitable. So the main focus is right now on Nevada but not reflecting the South Bend ethanol plant. So it's really focus on these ongoing process. I forgot one. It's the ethenolysis plant in Bitterfeld. So we are also making progress there. And yes, as Alina outlined, we also had a larger chunk of investments there already.

And I'm quite confident that we complete the investment mid end of next year and then starting with the ramp-up phase. What you should have in mind as an investor, well, it's always the RED III development quota prices. We are quite dependent. We had a cautious planning regarding the quota prices. So if they may go up substantially, there is an upside potential. Also what one of the investors mentioned before, the margins with respect to bioethanol remain that high. I don't expect it. But if they remind that high, that would also have a positive impact. And with respect to the U.S. business, well, as long as you stay within our plan, then everything is fine.

Let's have a closer look to the U.S. activities. How smoothly are your U.S. operations running at the moment? And do you anticipate any technical challenges in the upcoming winter period?

Well, we managed last winter quite nicely. We had some minor technical issues, but the plant was running through the entire winter time, both South Bend and Nevada. So with increased production, you produce more heat. So the likelihood of facing any technical issues will decrease, but you never can be certain. I mean, there might be a [ metal ] hitting one of our facilities or whatever. But really, the likelihood is small that something might happen. Right now, we are making progress, everything maybe at a lot of people there taking care of all the insulation of all the external heatings. So from a common perspective, the plant should be safe. So that's U.S.

Speaking about the U.S., what are the current share -- what's the current share in the European markets, speaking in percent, of U.S. ethanol imports, which might be diminished next year?

We have a figure...

I don't have it on top of my head, but volumes that came from the U.S. to Netherlands for around 450,000 -- sorry, 450 million tonnes and -- sorry, 450,000 tonnes. And Netherlands in the U.K., we're the only markets that could receive denatured ethanol here in Europe.

Okay. Moving on to India. Could you say a few words about the market there? What's going on in India and your activities?

Well, nothing substantial. Nothing changed substantially in India. We are collecting the straw, we are producing the biomethane capacity utilization has increased a bit. We are positive on EBITDA but still not there where we would like to be. So no negative -- I would say no negative news from India, all with respect to India.

Okay. Quite quick answer. Let's move on to the next question. Rapeseed oil prices have risen sharply since June 2025. Do you see any risk to EBITDA for Biodiesel segment?

I mean if you would go back a little bit in the presentation, you can see that we are talking about spreads. It doesn't matter if the rapeseed oil price increases, doubled whatever, you're always talking about a margin. And if I have the figures in mind correctly, then the rapeseed oil price right now is approximately EUR 1,080 or EUR 1,090 per tonne and the biodiesel IME price is EUR 1,240. So it's a good margin. And we're just talking about margins and not a price development of one lag of our spread. So the margin is okay, regardless where the raw material price is.

Okay. Thank you for this. The next question. Let's have a look. There we go. Within the next 3 years, does Verbio plan to invest in a new plant in other countries outside Europe?

Yes, we would like to. But as outlined before, we currently, we focus on our current projects. It doesn't make sense to have so many projects not completed. So we focus on Nevada. Here, the ethenolysis plant and just keep in mind, there's also a plant in South Bend where we face a larger investment with respect to the biomethane facility. So the answer right now would be no. We are not going to purchase another plant in somewhere else.

Okay. Thank you. And let me check the question.

But still it depends on the price.

Of course. There get -- so another question, but thank you for the information, Olaf and Alina. And as far as I can see this could maybe conclude our session for today if there are no further questions coming in. But I can see again that somebody want to type. There we go. Let's open the topic with the RED III. How important is RED III for Verbio's outlook and which parts of the framework, do you expect to benefit your business the most?

Alina?

Yes. So most important is the fraud prevention. And we have the inspection of plants also outside of Europe in the new draft, but also the old draft, which is very important, then what we had highlighted in the call as well is the abolishment of the double counting, which has always been a good idea, like Claus also mentioned during our last call, but unfortunately, the way that it was implemented hasn't been exactly going how it was planned.

And then what's also important for us is the [indiscernible] that's going away, which is not part of the RED III, but it comes together as a package basically. And all of those things that really help the fraud to stay out of the biofuels market is what's important for us. Of course, the mandate itself is critical but it's very ambitious anyways. And then in the new draft, they have even higher the mandate. So that's why we are like very optimistic going forward.

Okay. Thank you for this answer. And as far as I can see, there is no further question. And so I guess this concludes our call today. Just waiting a brief moment.

Well, on just a side note, maybe one other investor is still eager to type a question. So what I would like to summarize is simply, we had now many, many quarters of headwind. And I'm happy or a little bit relieved that we face now a decent tailwind for our business and just wait a little bit, give us the chance to demonstrate what we are capable of. I think the Q2 should be a good quarter. So look forward and see how it might affect our guidance later on, but not now.

Any questions, Harry?

No, no further questions, but I guess there were some good and final remarks, I would say. So thank you all for the insightful questions, and a big thank you to Alina and you, Mr. Troeber. To all participants, we appreciate your time and the interest in Verbio, and we kindly ask you to share your feedback with the company, so a short e-mail has been sent to your Inbox for this purpose, and we really would appreciate if you give us a feedback.

And with this, I want to say goodbye from my side, but I'm now handing over back to you for some final statements, Alina, Mr. Troeber.

Well, I already made my final statement. I really appreciate you guys listening to our conference call. Also, thanks for the questions. And Harry, really thank you. Much appreciate your support, the completed work here, managing, moderating, everything. So I wish everyone a good day, hopefully, a sunny day, and then move forward. Thank you.

Thank you.

Good afternoon, everyone, and a warm welcome to the Verbio earnings call for the fiscal year 2024/'25. Today's speaker are Claus Sauter, CEO of the company; and Olaf Troeber, CFO of Verbio. They will walk us through the company's performance touching on key milestones and the current market trends.

Before we dive in, a quick housekeeping note. The conference is being recorded. [Operator Instructions] And now let me pass the word to Mr. Troeber, the floor is yours.

Thank you, Harry. Good afternoon, everyone, and thanks for joining our fourth quarter and full year 2024/'25 earnings call. Sorry, I have -- I regret having to inform you that our CEO, Claus, is currently attending an important meeting at the Embassy in India, which has taken a bit longer than expected. So he will be joining us shortly. And in the meantime, we will get started. And he will join the discussion as soon as he is available.

Today, we will walk you through the key financials of the year and quarter, then cover our market outlook, strategic initiatives and guidance before opening the line for your questions. We've had a challenging year, and now we are looking forward with confidence to the opportunities ahead.

So let's begin with the full year figures. Once again, we achieved a record production in '24, '25. Biodiesel production reached close to 620,000 tonnes and the capacity utilization rate was 87%, slightly down from the prior year. This was because our Canadian plant was shutdown from December through March this year. We carried this out as planned, given the tough market environment caused by regulatory changes in the United States.

Purchase and sales contracts that guarantee a high level of production capacity utilization have been in place again since March 2025. While Canada is taking protectionist measures in support of biofuels. In Germany, biodiesel production increased. Ethanol and biomethane production, on the other hand, also reached new highs, primarily due to the continuous ramp-up at a plant in Nevada since the beginning of the year and as a result of our expansion measures in Germany. Yet EBITDA fell significantly to EUR 14.2 million. The decline is largely due to challenging markets in Europe and Germany, specifically linked to the biofuel sustainability certification frauds.

Lower profit margins for bioethanol and biomethane, mainly due to declining greenhouse gas premiums were a key headwind as well as write-downs on inventories. Our ethanol and biomethane business in North America, which I wanted to mention separately as our strategic focus area, delivered an operating EBITDA that was in line with last year, even though utilization has already improved. This has been due to the more difficult margin environment in the U.S. ethanol market in the past financial year.

One-off repair costs in Nevada and write-downs on the remaining quantities of straw for processing into biomethane had an additional negative impact on earnings. The write-down of the remaining straw quantities is linked to the noncash impairment of our straw biomethane plant in Nevada, which we had communicated in the beginning of August already. While we will continue to use the straw, we are now looking into wider use of grain stillage and other raw or residual materials from the industry and agriculture to be able to serve more attractive market segments such as biomethane for shipping.

The change in net debt mainly reflects negative free cash flow from lower operating cash flow. CapEx stayed high even though investments were already down year-on-year, a path we remain committed to and explained a few months ago already. The equity ratio fell to just above 58%, but it remains at a comfortable level. The decline mainly stems from a lower total comprehensive income, including the impairment mentioned before. While we faced challenging markets and a decline in earnings, our market position -- our overall market position remains strong.

Now turning to Slide 4. I want to highlight the premium we hold in the markets, which continues to be a key driver of value going forward. The industry has suffered heavily in recent years from fraud in biodiesel imports, particularly from Southeast Asia and upstream emission reductions. A lack of proper controls has led to the market being flooded with palm oil-based biodiesel instead of advanced biofuels. This decreased margins overall, but specifically also the CO2 premium, thanks to our high core value coproducts, which we are looking to expand, our premium decreased less pronounced than average market spreads, which are calculated as the sales volumes weighted average reference spreads across products. What do we mean by spreads? We mean the difference between the respective biofuel price and the feedstock price. So that gives some context on our market position.

Next, let's dive into Q4 and the performance across our segments. I will kick off with a look at how our EBITDA has developed across the quarters. What stands out first is that biodiesel segment has delivered consistent earnings support and I would say, as always. Group EBITDA has decreased both year-on-year and quarter-on-quarter to minus EUR 8.2 million. This was primarily affected by the bioethanol, biomethane segment and also included on-offs.

The segment Other, which summarizes our logistics and trading activities, reported an EBITDA of minus EUR 2.7 million. This includes unrealized results from commodity contracts brought forward amounting to a high single-digit negative impact.

And now let me give you a bit more color on the segments performance. We are focusing on the quarter-on-quarter changes rather than year-on-year. In the biodiesel segment, production and sales volumes were up on the previous quarter. It generated revenues of EUR 244 million in Q4 compared with EUR 210 million in Q3. A big reason for the higher volumes and the revenue was that we resumed production in Canada, which had been temporarily paused from December to March this year as planned because margins were tied due to regulatory changes in the United States.

EBITDA also grew significantly, rising almost 24% to EUR 20.8 million compared with EUR 16.8 million in Q3. This growth was driven not only by the EBITDA improvement in North America, thanks particularly to the plant utilization, but also by the improved gross margins in Europe.

Now for some market context, let's now take a look at the reference charts. These illustrate how biodiesel spreads have developed. By spread, we mean the difference between the biodiesel price and the rapeseed oil price. While the charts don't capture our specific sourcing strategy, they still give a useful snapshot of broader market trends. And just to remind you, we typically buy our rapeseed oil 2 to 3 months in advance, where the graph depicted is on a daily basis.

The German biodiesel market continued to be challenging in Q4, as illustrated by the dark green line in the chart on the left-hand side. Spot demand for sustainable biodiesel was weak due to the low mileage and new cases of fraud in Europe. As a result, the positive factors like low biodiesel imports from China and adjusted domestic production could only support spreads to, yes, I would say, to a limited extent. However, biodiesel prices have now started to bounce back supporting margins. So yes, what we actually can see that margins came back, and they are quite favorable, especially in, yes, what we see right now in September.

Then let's go to the bioethanol/biomethane segment. The worldwide decline in ethanol prices compared with the previous quarter was more than offset by higher volumes of greenhouse gas quota sales with rising greenhouse gas quota prices and significantly higher production and sales volumes in North America. As a result, Verbio generated revenues of EUR 186 million in Q4 '24/'25 after EUR 181.5 million in the third quarter. Nevertheless, EBITDA deteriorated significantly from minus EUR 14 million to minus EUR 26.3 million. This is due to lower profit margins in Europe as well as on-off effects in the fourth quarter, including the write-downs on inventories also mentioned before.

Now let's take a look at the reference graphs. They show how ethanol market spreads have developed. As with biodiesel, they don't reflect our exact purchasing or feedstock strategy, but I do give a good view of the broader market. Despite stable demand, bioethanol prices stayed relatively weak in the fourth quarter, continued high production in Europe and large imports, especially from the U.S. had prices down. At the same time, commodity prices and particularly wheat didn't come down enough to increase margins for producers.

Looking ahead, demand for ethanol should remain solid as it is still one of the most cost-effective blending components in the market. The European market overall is quite tight as the years before, too. Brazil isn't competitive at the current price level, and that supply gap will have to be filled mainly by U.S. exports. That said, there is -- there are still several limiting factors on U.S. shipments, which means we don't have to worry about an oversupply.

Meanwhile, the European grain market, especially in Germany, is heading into the '25, '26 marketing season with strong harvest expectations and steady production levels. So this also should support margins in the coming months, and we already see improved margins in September.

Now in the U.S., following the usual seasonal pattern, we saw a strong improvement compared with Q3. However, the ethanol market still stayed below its normal seasonal pickup in Q4 mainly due to continued high production and muted domestic demand, even with higher exports. And looking ahead, another record corn harvest is expected, which eases feedstock costs and boost competitiveness of U.S. products. In fact, margins have already started to pick up very strongly as domestic demand increased.

Now higher blending mandates and climate targets in key export markets are also creating new opportunities. We will come back to this later in the call when we discuss the market outlook in more detail.

Now let's have a look at the greenhouse gas quota development, which is a key earnings driver for our ethanol and biomethane segment. Looking at the dark green line, which reflects the current '25 quota prices, you can see an increase versus Q3, particularly at the end. This spike has been driven by the RED III Transposition - Draft in Germany, which has been released on June 29.

So Claus is in the call. Claus will give you all the details in a minute. Overall, it's very promising coming back to RED III Transposition - Draft. So Claus, now the floor is yours.

Okay. So thank you very much, Olaf. Excuse me, I apologize, I was a little bit late now. I'm here in India. So good afternoon. [Foreign Language]. And yes, it's a very dynamic here. But now let's come back to our call.

So let's -- and I think that's the more interesting part how the future will look like. So let's take a closer look at what's in the draft transposition of the RED III. It introduces some significant changes and hopefully, lessons learned from the RED II Transposition. First, greenhouse gas reduction targets are now extended all the way to 2040, aiming for 53% cut compared to fossil baseline previously the targets were only defined through 2030.

The quota obligation is also broader. It will now apply to all fossil fuels including aviation and maritime fuels. Enforcement is getting stricter, including on-site inspections by German authorities. Foreign auditors now need accreditation under German standards and the directive also requires information to be shared, eventually making it much easier to trace where biofuels are coming from. So this is a great progress, but there are other things to come.

So for advanced biofuels, the multiplier has been removed, so no more double counting. And the sub-mandate for advanced biofuels which is measured in energy content is increased from 0.7% to 3% by 2030. For crop-based biofuels as per the draft, the cap is being lowered from 4.4% to 3% by 2030. This, we are not going to accept.

So what does all this mean in practice? Overall, we think this is a very, very positive development. First, the single counting in place, quota prices are moving higher. In fact, prices for 2026 have already doubled. We are at EUR 300 per single ton of CO2 reduction for 2026 today. And this happened despite the fact that the draft hasn't been implemented yet.

The import point here is -- the important point here is that the system now creates the same incentives, but without the loopholes we've seen in the past. Yes, as a German producer, we did like the double counting. Of course, the idea was good, but the execution was very, very poor.

Second, stricter controls will boost demand for genuine biofuels. And once the market distortions are out of the way, HVO, being the most expensive option is likely to set the marginal quota price as it has been in the past. You can -- this illustrated in the chart in front of you. With the ambitious overall mandate, the market expects that additional HVO will actually be needed. So HVO should actively determine the price again.

And third, the crop cap remains a controversial topic. That's despite the fact that the global food supply is sufficient. So the debate needs to end considering that it is a policy choice and not a reaction to actual scarcity. But for now, this would mean tighter limits on crop-based biofuels going forward. Importantly, today, 2025, we are not even at the 4.4% mark and just slightly above 3%.

With the ability to export to other European countries and our plan to shift a significant portion of our rapeseed based biodiesel production toward bio-based chemicals by 2030, we are well positioned for any future. At the same time [Technical Difficulty].

It looks like Mr. Sauter's internet connection has interrupted. We will try to get him back to the call.

Not a problem. I will take over. So what Claus was telling you guys that -- yes, he summarized all the limits and all the stuff together. What you have to keep in mind that at the same time, we shouldn't forget the contribution our biomass so far has made in reducing CO2 in Germany looking backwards. But now going forward again -- so while Germany is once again debating and that's actually quite tiring, food versus fuel, global demand for biofuels keeps growing, and it's not just for advanced fuels. Even first-generation biofuels are seeing strong demand because there is plenty of agricultural feedstock available. For example, India, where Claus is right now, already blends 20% bioethanol into petrol and blends to increase that further. We are talking about the 20%. And in Germany, we are able to blend the 10%. Japan is rolling out E10 national wide by 2030 with a long-term target of E20 by 2040.

And yes, I do not know what actually Asia is now moving really ahead of the market. Even Vietnam has plans to introduce E10 and E10 mandate in 2026 and wants to go higher from 2031. So you can see the demand -- overall demand globally is increasing. And all of this growing demand is increasingly met by U.S. production. Political and regulatory measures like the Inflation Reduction Act are supporting low-emission fuels and CO2 capture.

U.S. ethanol already has the lowest production costs among liquid fuels and remains cheaper than fossil gasoline even at today's oil prices. Just you really get it. So the ethanol is cheaper than the fossil gasoline in the United States. Trade agreements with countries like the U.K., Vietnam and Japan are reducing barriers that should support U.S. ethanol exports as demand rises and margins improve. And our bioethanol and biomethane projects are very well positioned to benefit from this demand environment in the medium term.

Now turning back to Canada. Canada is putting in place protectionist measures for biodiesel like tax credits after similar U.S. incentives. In Ontario, the biggest fuel market in Canada, 75% of the blending mandate has to be fulfilled with Canadian made biofuels. Biomethane demand is also on the rise. This is driven by regulations, security of supply and regional feedstock availability. In China, more than 35% of new heavy-duty trucks in '24 run on methane and eventually on biomethane.

Also, shipping is adding strong demand with bio-LNG emerging as the fuel of choice. We have seen interesting deals lately all here to competitively decarbonizing shipping under fuel, EU Maritime and the International Maritime Organization.

Next, our strategic initiatives, which are positioned to capture growth and align with the market trends. I will take you through the progress on key projects first in the U.S., then India and then Germany. U.S., our biorefinery Nevada, Iowa, which combines ethanol and biomethane, is all about scaling the energy output. Once it's fully utilized, it should drive higher energy sales and a positive EBITDA, which we expect towards Q4 in the financial year '25, '26.

Temporarily, peak capacity utilization is already around 80% today. And the plan is to stabilize and expand by the end of the financial year. The good news actually is no additional growth CapEx is needed. And yes, finally, we are on the path for ramping up the production. And I'm really positive on this one and seeing all the production figures on a daily basis.

So Claus, you are back, will you take over regarding the project in South Bend?

No, let me go ahead. So sorry, for any inconvenience caused by this. But I think we will get technical issues solved soon. So our project in South Bend is about transforming the ethanol plant into an integrated bioethanol and biomethane plant, giving it a strong competitive advantage. And now I think that's quite new. There's also additional upside from carbon capture and sequestration. Already today, we liquefy our CO2 and sell it to the industry by permanently injecting it into a deep underground geological formation. We could improve our carbon intensity score for ethanol and additionally receive tax credits for Carbon Capture and Sequestration.

And for the first time under our ownership, the bioethanol in South Bend has stable production availability. Looking ahead, the focus is on transformation and expansion over the medium term. Also, not to very limited extra growth CapEx would be needed for the upside for Carbon Capture and Sequestration.

[Foreign Language]

Yes. So you can take over.

No, no, no, go ahead. Olaf, please go ahead. You make it much better than me. Go ahead.

No. Sorry. Okay, we meet at the Q&A later on. As I had mentioned at the beginning of the call, yes, Claus is meeting potential partners in India. So therefore, we are now moving to India. Our plant here is designed to process approximately a 120,000 tonnes of agricultural residues each year, material that would otherwise be burned. And this avoids smoke which is absolutely essential to reduce health risk and illness for the people there. It also reduces emissions at an attractive price point, and this is why it is attracting interest from strategic partners for a scalable, profitable expansion. So we are in the progress or process of finalizing the offtake.

And as I said earlier, the shipping sector is looking for affordable bio-LNG. The project has a medium-term horizon, and any potential out would require only limited additional growth CapEx from our end. And now going back to Germany, the ethenolysis plant. So our project in Germany -- the build-out of the ethenolysis plant for bio-based chemicals, strengthens our position by opening new end markets, expanding our chemicals portfolio.

So the planned start-up is in the second half of next year, and we've already hit a key milestone with the catalyst production groundbreaking at CMO in Hungary in Budapest this June. The project involves around EUR 50 million of additional investments, and we are aiming for approximately 60,000 tonnes per year of renewable product. This is all included in our CapEx plan that I will present to you in a minute.

So with these initiatives in place, we can now turn to our guidance. Slide 18 outlines our expectations for the year ahead, including targets and key assumptions. We expect to achieve EBITDA in the high double-digit million range in the financial year '25/'26. I would like to point out that we have conservatively based this on historical market spreads that are below the spreads achieved in the financial year '24/'25 while we expect greenhouse gas quota prices to recover compared to the previous year, slightly recovered compared to the previous year. The improved result and lower investments compared to the previous year are expected to at least balanced free cash flow and a moderate reduction in net financial debt year-over-year. Considering -- and I think that's quite important, especially for the portfolio managers considering the time lag between cash outflows and cash inflows.

I do want to mention at this point that net financial debt will exceed the year-end forecast during the course of the financial year. Now given our net debt guidance, here's how we are approaching capital allocation. CapEx is coming down further from the '22/'23 peak. Investments include mainly the ethenolysis plant and related production assets in Germany and Hungary, but also South Bend.

Investments are phased, which means we spread the spending over time. This helps manage cash flow, reduce risk and gives us -- and I think that's quite important, it gives us flexibility to adjust as we go. Maintenance CapEx remains below, let's say, EUR 50 million per year. Our working capital needs, and if you check our balance sheet, we'll see where the money is stuck. Our working capital needs are mostly influenced by the political decision to suspend the carryover of greenhouse gas quotas in '25 and '26. So around EUR 100 million remains tied up in inventory. So till '27 maybe even beginning of '28. Surpluses will build up until 2024 will be available, again, once -- will be available here from 2027.

Looking ahead, with the expected regulatory changes, we anticipate a significant increase in quota prices in the years ahead. The Management Board and Supervisory Board, this Monday have proposed to suspend the dividend payout for the financial year '24/'25 to keep that extra flexibility. That said, we remain optimistic that we will return to at least the usual level in the medium term.

So -- and with this, we would like to open the line for Q&A.

No.

Am I right or no? Claus?

Yes, yes. Okay. Thank you, Olaf. Thank you very much. I'm sorry that there are some technical issues, but I want to give here some additional remarks. 3 years we are now complaining about that fraud. But what does it mean? One ton of biodiesel is reducing CO2 emission by 2 tonnes, 1-ton biodiesel, 2 tonnes of CO2 reduction. So when we are using rapeseed oil in our plants and produce biodiesel, 1 ton of biodiesel is reducing 2 tonnes of CO2. And it doesn't matter if it's palm oil, soybean oil or rapeseed oil.

So palm oil since 2023 is not suitable for the German market anymore. But with using palm oil biodiesel bringing it to China, labeling it as an advanced biofuel, the advanced biofuel was causing 5 tonnes of CO2 reduction. And there, you can see the effectiveness why we are now so much fighting against the double counting because it was not only fraud, we were seriously harmed, not that we were not able to use palm oil in our plants, no. In fact, it was forbidden. But with not doing something against the fraud, 1 ton of forbidden palm oil biodiesel caused 5 tonnes of CO2 reduction. That was my first remark that shows just the evidence.

The biggest scandal was that our former Minister of Environment, Mrs. Steffi Lemke, didn't do anything because she was an offensive opponent against biofuels. That's a scandal. When I'm here in India, and I want to have a meeting at the Prime Minister's office is no problem. But in 4 years, I was not able to meet Mrs. Lemke. So that's a scandal.

The next remark is we are right now concentrating in optimizing our portfolio, and Olaf mentioned it, CO2 reduction. Recently, we opened together with Nippon gas in our small ethanol plant in Germany, a liquefaction unit. Nippon is liquefying 80,000 tonnes of CO2 at this plant. You saw our capacities, 800,000 tonnes of ethanol. In this 800,000 ethanol during producing ethanol and renewable natural gas, you produce CO2. In our portfolio, we have about 1 million tonnes of CO2, which goes through the atmosphere today. So with liquefying in Germany, we are improving the carbon intensity of our ethanol. So 80,000 tonnes CO2 reduction with EUR 300 means additional income of EUR 24 million.

Right now, we are working on bringing Nippon Gas to our big ethanol plant in Schwedt. There, we are talking about 350,000 tonnes of CO2. So that's the way now how we are doing it in Germany and if you just take these 2 numbers together, then you see that we are talking roughly about EUR 100 million additional revenues without any investment from us.

Olaf mentioned that in the United States, we have another system. In the United States, sequestration is supported by the government with tax credits, the so called 45Q. Sequestration is not everywhere possible, but it is possible in South Bend, Indiana. So right now, we are negotiating with parties and with -- yes, the government that allows us to sequest about 500,000 tonnes of CO2 from our plant in Indiana, between 2 and 5 miles away from the plant. So the CO2, this area has a high content of CAO, calcium oxide. So if you bring CO2 together with CAO, you get calcium carbonate, CaCO3, which is a mineral.

So these are the things, when I say optimizing our portfolio, then that is one of our main focuses. Together with the development, and that's my last remark, we were also mentioning what we are seeing right now is a very big dynamic in the maritime sector. Here in India, we announced that we are going to make a joint venture with GAIL. GAIL is the operator of the Trans-National Gas Pipeline System in India, is a big importer of LNG and is operating 9 LNG ships. And these LNG ships will in near future, need low CO2 fuel. So the idea is to provide GAIL on their ships with biomethane, bio-LNG produced here in India. There is a big dynamic here.

Japanese companies are here because what is also important is related to the Paris agreement. There is a possibility under [indiscernible] article 6.2 that countries can realize CO2 reduction in their home country by doing it in joint countries. Therefore, a so-called joint credit mechanism is necessary. Japan signed this GRM agreement already. And the reason of my visit now at the German embassy was that I want to have here from India support to our German government of environment and economy that Germany is signing something similar. So what I want to say is there is really a global dynamic. And India has big potential with about 20 million tonnes every year of unused biomass, but the plane hasn't taken off yet. We are in that phase, a lot of interest, interesting developments.

So before I hand over to the Q&A, I think there is really a lot of reasons to be optimistic in Europe with -- and in Germany with a clear regulation, in the United States with Mr. Trump opening the global ethanol markets. Trump at the moment is our best salesman. Ethanol is always one of the top topics when they are negotiating economic deals.

And finally, also here, the development in India, in Asia, where now countries in the Far East, Vietnam, Thailand, Japan, are also starting and ambitiously starting their decarbonization programs. And nevertheless, Verbio was never engaged in SAF, Sustainable Air Fuels. We don't think it's a good idea to start with decarbonizing aviation as long as cars and trucks are running on fossil fuels. The maritime sector is more reasonable. There the cheapest solution is important. And we, with our bio-LNG or biomethane products all over the world, in Europe, in North America and now here in India, we have the right product for the right application.

So thank you very much. And now we start with Q&A or you want to say something, Olaf? You are muted. You are muted.

No. As you know, I'm always a little [ pain ]. We have to focus on the Q&A because we are running a little bit out of time, but it's perfect. Thank you.

Thank you, gentlemen, for the insights, and you're absolutely right. We will move on with the Q&A session, and we have received some questions already. So let's directly dive in.

The first question comes from Constantin Hesse from Jefferies. What level of spreads and GHG quota prices are embedded into the guidance? Where could upside come from? And would a further improvement in GHG quota prices still have an impact on your full year'25/'26, or only in the following years?

Olaf, it's your turn.

Yes. As I outlined before, the spreads we anticipated were below last year's spreads and quota prices actually be focused on the quota prices you [indiscernible] as an indication from market participants right now. But what I also pointed out was that the spreads develop quite nicely in favor of Verbio in the biodiesel segment here in Europe, also the bioethanol segment and also the bioethanol segment in the United States. Thanks.

Good. The next question comes from Tim Wunderlich, Cantor. He has actually 3 questions. I would say that we do it one by one. What EBITDA upswing in euro million should we expect in full year '25/'26 versus '24/'25 from stronger utilization in the U.S.?

Yes, it's approximately EUR 30 million.

US dollars, USD 30 million. That's now a difference.

Going to the next question, in full year '25/'26, what is the expected positive EBITDA impact in euro million from a higher GHG quota prices?

Well, the impact won't be that high because you concluded contracts for the GHG, greenhouse gas quota at the end of this calendar year and our financial year runs until 30th of June. So the effect won't be that big.

Okay. Next question is, should we expect H2 to be stronger than H1 in '25/'26 because of the GHG quota prices hedge?

Yes, the planning -- the overall planning is a little bit back-end loaded. So we expect a bit higher, a bit stronger second half compared to the first half. Because in the first half, we still stuck with the old contracts concluded in December '24. We make -- our business here is divided, but now the first half of our business year, which is first of July until the end of December, we have the old contracts. And now in October, November, we start to negotiate the new contracts, there is no more double counting, yes, but there is a higher quota prices. So we expect getting better margins for our ethanol and our biodiesel because the double counting is away. And so the real effect we will see in the second half of our business year, which is the half -- the first half of 2026.

Okay. And we have received another question about the current situation in India, even also have been mentioned in the presentation, please provide a reliable statement on this after there has been some positive news flow expected in the past?

Reliable? What means reliable?

Actually, we have in the last 2 events, there was the announcement of the near future, but nothing has happened so far. What is the specific status in India? Could you please give a statement?

Okay. So here in India, the utilization is about 60%. The plant is cash positive. But it's not at the stage where we want to be. It's not the right timing really to expand. So we had an announcement that we are going to create a joint venture with GAIL. And I think they are doing a due diligence at the moment, so much I can say. And I think that we will be able to make a final decision in Q3. So that means first quarter of 2026.

Okay. Perfect. Thank you for the insight. Actually, there are no further questions in the chat box. So this would conclude our today's meeting. And I just want to say a big thank you, Mr. Sauter and Mr. Troeber. And to all participants, we appreciate your time and the interest in Verbio. We kindly ask you to share your feedback with the company. And for this, you will receive an e-mail in your inbox. Have a great day, and we're looking forward to see you in one of our next events and goodbye from my side, but I'm handing over to you, gentlemen, for some final statements.

Okay. So thank you very much, Harry. Thank you very much, Olaf. Thank you very much, everybody, who was joining that call. I apologize that it was a little bit of hiccup today, but I'm sure that Olaf made it very well. And business first. These calls are important, but we have a lot of work on the table and at least interesting developments. The focus right now was to get the right legislation for Germany, for Europe; and finally, to develop North America and also the business here in India. But there is a lot of potential in our portfolio.

So thank you very much again, and have a nice afternoon, evening, and I am or we are looking forward to see you or to hear you in our next call. Thank you. Goodbye.

Thank you.

Goodbye.