Alfen N.V. (ALFEN) Earnings Call Transcript & Summary

Hello, and welcome to the Alfen Q3 Trading Update Call. My name is Laura, and I will be your coordinator for today's event. Please note this call is being recorded. [Operator Instructions] I will now hand you over to your host, Marco Roeleveld, CEO, to begin today's conference. Thank you.

Thank you, Laura. And good morning, and welcome to this webcast regarding the 2023 third quarter trading update of Alfen. We appreciate the fact that you've taken the effort to participate. This webcast and the questions that may come forward are handled by the management Board of Alfen being, Jeroen van Rossen, CFO; Michelle Lesh, CCO; and myself, Marco Roeleveld, CEO. In this quarter, in the third quarter, we increased our revenue with 11%, and we have been able to improve our EBITDA percentage compared to the first 2 quarters of this year. And you may conclude that 2023 is from Alfen, the breakthrough year for Energy Storage Systems. In this webcast, we will start with the highlights of the third quarter, followed by a short review of the business lines. And next, we will go in more detail regarding our financials and outlook. We continue with Slide 3 with highlights of the third quarter this year. In this quarter, we realized EUR 136.4 million of revenue. This represents a growth of 11% compared to the same period last year, and the revenue of our 3 business lines developed as expected. The overall gross margin was 29.4% compared to 34.8% in the same quarter last year. This is purely driven by a shift in the business line revenue mix towards Energy Storage Systems, and we are able to maintain the gross margin levels of the individual business lines. As a percentage of revenue, the adjusted EBITDA declined from 19.9% in the first quarter of last year to 12.7% in the same quarter this year. Like I said, we've been able to improve our EBITDA percentage compared to the first 2 quarters of this year. And we will confirm our 2023 full year revenue balance of EUR 490 million to EUR 520 million. And lastly, I want to mention that our CFO, Jeroen van Rossen has decided to leave Alfen after the AGM in April 2024. We highly appreciate his contribution to the growth of Alfen in the past 8 years, and we are happy that we directly can announce that his successor is in the person of Boudewijn Tans. Boudewijn is 45 years old and has an extensive investment banking background and worked the past years as CFO at another company active in the energy transition. Jeroen will go in more detail on the financials and his decision to leave later on in this presentation. In the coming 3 sheets, we'll go in a little bit more detail on each of our business lines. In the EV charging equipment business line, the Q3 revenues were EUR 34.9 million and this is about half of the revenue in the same period of last year. The decline was driven by low volume due to the destocking at our customers and a somewhat lower market demand. In retrospect, the year 2022 can be characterized by -- for Alfen by an exceptional post-COVID demand for EV chargers. Almost all of our customers have moved through their inventory. Throughout Q3, we have seen customers ordering again, however, at a lower volume than in 2022. In the third quarter, about 57% of our revenue was generated from outside the Netherlands, and we produced roughly 36,000 charge points. For the next quarter, we continue to expect sequential increase of EV charging revenue, and for the coming year, we expect a revenue growth of 15% to 20%. We now continue to see Smart Grid Solutions, where the revenue was 41% higher than the same period last year and amounted up to EUR 49.9 million. Both the grid operators and the private networks segments grew strongly, but private networks even doubled in revenue compared to last year when the revenue was hampered by the supply chain constraints in 2022. We continue to prepare for a step change in growth in coming years as grid operators in the Netherlands are scaling up their investment plans. In the third quarter of 2023, we produced about 789 substations, a decrease of 1% compared to the same period year. The decline was driven by a pivot in business strategy of Alfen Elkamo towards lower-volume, higher-value substations. And in Benelux, the produced number of substations increased with about 10%. We expect Q4 revenues to be aligned with Q3 revenues. And in 2024, we expect to grow the revenue in this business line with about 20%. We go to Sheet 6 regarding Energy Storage Systems, where we tripled our revenue in Q3 relative to the same period last year. The Q3 revenues were EUR 51.5 million, and this revenue increase was driven by both TheBattery elements, our stationary systems and our mobile systems being TheBattery Mobile. We continue our growth trajectory for this business line in Europe in 2023. The momentum in the energy storage market remains powerful, mostly driven by continued renewable growth and the need to balance electricity demand and supply. For the fourth quarter, we expect a revenue level in line with Q3, and the outlook for 2024 is also positive as we steadily build our lead pipeline and grow our backlog for '24 with new order wins. In '24, we expect to grow this business line with about -- with at least 40% relative to this year. Please do note that the revenue for Energy Storage is highly susceptible to project execution and the timing of component allocation. Now our CCO -- CFO, Jeroen van Rossen, will continue this webcast.

Thank you, Marco. Let's have a look at our financials and we start with the Q3 revenue. Net revenue amounted to EUR 136.4 million, which is a growth of 11% compared to the same quarter last year. And this growth was driven by Smart Grid Solutions and our Energy Storage Systems business lines. The gross margin in the third quarter was 29.4% compared with 34.8% in the same quarter last year. However, relative to the second quarter of this year, the gross margin improved from 28.8% in the second quarter to 29.4% in this third quarter, which is driven by the product mix within Energy Storage Systems and Smart Grid Solutions. Our adjusted EBITDA was EUR 17.1 million, which was 12.7% of revenues compared with EUR 24.5 million, which was 19.9% of revenue in the same quarter last year. But also here, relative to the second quarter, the adjusted EBITDA significantly improved from 7.6% of revenue in the second quarter to 12.7% of revenue in the third quarter. This is driven by operational leverage in our Smart Grid Solutions and Energy Storage Systems business lines. Of course, at the financials '23, we will provide a full and final statement of cash flows. But as an interim update, we would like to share that we generated a free cash flow of EUR 17.3 million in this third quarter. Hence, the cash flow is developing in a positive way relative to the end position of the first half year, as we also anticipated. On the next slide, we will continue with the outlook. We expect that the Energy Storage Systems and Smart Grid Solutions markets will continue to grow throughout 2023 as Europe's transition to a carbon-free energy system that is not dependent on fossil fuels continues to gain momentum. We said before that for EV charging, we consider 2023 a bridge year after an extraordinary demand in 2022. If we look more long term, we continue to anticipate positive developments for all of our business lines. And as Marco already mentioned, we reiterate our full year 2023 revenue outlook, which will be in the range of EUR 490 million to EUR 520 million. And then finally, a few words on my decision to leave Alfen. Let me start by saying that it was definitely not an easy decision for me to leave Alfen and step down at the AGM in April '24. But after a fantastic journey of more than 8 years, I felt that it was time for me to focus on other opportunities. But before I will do that, I will take a sabbatical to spend more time with my family. I'm very happy with my successor, Boudewijn Tans, who will already start at January 1, '24. This safeguards, of course, a thorough and very extensive handover period. The last remark I want to make is that I fully believe that in the end, it's the people who make the difference. So I'm very proud that I have been able to build such strong teams, and I'm convinced that they together with Boudewijn, Michelle and Marco, will continue to support and drive our profitable growth strategy. We are now at the end of the presentation, where I'll hand over to the moderator for any questions. Moderator, could you please take over?

[Operator Instructions] And we'll now take our first question from Ruben Devos at Kepler Cheuvreux.

Yes. First of all, Jeroen, of course, I would like to wish you best of luck in your future endeavors. And then, of course, also, I hope you enjoy your time off for the sabbatical.

Thank you.

Yes. Maybe a first question on the gross margins, basically, because I think that's a very interesting dynamic what we've seen in Q3, where you obviously have -- you think about EV charging with gross margins roughly around 40%, Energy Storage around 20%. Basically meaning that for a decline of every euro in EV charging you have to make up with it for -- with 2 additional euros in Energy Storage. So very curious if you could talk a bit about the gross margin evolution for Energy Storage in the rest of this year, but also going into 2024? Because I believe you're also mentioning that basically the product mix has also so much changed in Q3, so very interested to hear your comments on this.

Yes. Well, if you look at the gross margin as such, without -- well, we could put all the numbers in the market, because we said that we will do that on a segment basis, let's say, with the semi-annual report as well as with the financials. But what we can say is that the margin in EV charging is relatively stable and that we saw an increase of margins, both in the Smart Grids and Energy Storage. And it's correct, with Energy Storage, we said that with the product mix a bit more of, let's say, not the extremely large, but still large projects and mobiles kicking in, that blended gross margin percentage would be somewhat different. So we are very happy with that increase in margin, and that's also a trend that we see continuing in '24.

Okay. And I believe one of the earlier comments in one of the other calls was that basically, if you look at the 15% to 30% gross margin guidance range which you've given at CMD, it was said that basically we could be heading towards sort of the midpoint of that guidance range by the end of this year. Is that still how you look at things?

Yes, that's always the aim.

Okay. Okay. Then for, I guess, the business from the private networks within the Smart Grids, with revenues doubling, could you walk us through how the private networks business improved so significantly in Q3? Also, I'm curious about how the, let's say, lingering effects of supply chain constraints in 2022 impacts performance in the first half of this year, but is now -- that is now no longer a drag?

Great. Where -- if we saw, let's say, the year 2022, we saw, especially for the private networks an impact on the execution of projects due to the constraints in the supply chain. But you can imagine that when we have, say, a grid operator business, that they we can -- most could predict quite well what type of components we need in what type of time frame. And with private networks, we had to wait until, say, the final configuration of the project is clear, and then we can say we really order the components. Now sometimes, of course, we try to do -- make reservations. But especially with the private networks, we have the biggest, say, interaction with, say, supply chain constraints. And what we have seen in this year that we've been able to catch up a little bit from, say, the delayed execution of 2022, and therefore, benefiting this year and being able to execute on the relevant projects we have at hand of these projects. It doesn't mean that we will double again next year. We expect more or less that it will be more or less in line with the given number of this year. But we sold this for 2023 and a little bit of an update due to the fact that now we have been able to cope with, say, the supply chain elements that were especially irrelevant in 2022.

Okay. And then just final question still within Smart Grids. You had a quite significant pivot towards higher-value substations. Could you just help us understand how these type of substations differ from what you were historically selling? What's sort of the makeup? How is it different? And yes, how could that further impact, yes, the gross margin, of course.

It is more or less a choice that we aim for like we did in the Netherlands for, say, energy transition-related new business. That means, say, substations for solar parks, substations for fast-charging networks. And what we -- those type of substations they are being characterized that they are including transformers, including high-power switchgear that are mostly tuned towards the requirement of the customers, and that we are able, more or less, also to generate a little bit better margin compared to, say, purely price-driven grid operator business in Finland. So therefore, we decided that we would more or less favor out the customers' grid, where we can also leverage on our experience in coming up to say, proper value substations for the new market area than the more price-oriented part in the business.

And we'll now move on to our next question from Nikita Lal at Deutsche Bank.

First of all, your on, Jeroen, thank you very much for your time and your efforts. And I wish you all the best for your future. Yes -- and yes, one day, for sure, we will meet again.

Thank you.

Two questions, I will go through them one by one. The first one is on Q3 -- Q4. And if we look at the implied adjusted EBITDA margin, it would suggest from the consensus figures we have for 2023 that it will be again single digit after seeing 12.7% in Q3. Is it the way we should think about Q4? Or are we too conservative? I mean you also guided us for the charging business that H2 should be equal to H1, some comments here would be, for sure, helpful.

Yes, I think I will first address the EBITDA. Of course, you know that we always focus on operational leverage. And unfortunately, that's not a linear line. So what you -- what we also said is that particularly in the Smart Grid Solutions and Energy Storage, we felt that we were at the beginning of the operational leverage journey. I think what you definitely see is that, in Q3, that journey starts to kick in. And therefore, we also said that we should continue and drive this further in the future. But as said, at certain moments, you need to invest upfront or the output is somewhat lower because of project shifts from one quarter to another quarter. So it's not something which you can mathematically put into place. So that's why we always look at the trend line, and I think the trend is heading up again and that was and will remain to be the aim.

And then in regard to first half equaling second half, we did share that previously. What we are now seeing is Q4 will not equal Q1, but we will expect a gradual increase in Q4 over Q3.

So just to be clear, Q4 will be below Q1?

Yes.

Okay. Understood. And my second question will be on pricing of chargers. What do you see there currently? Because if you calculate the ASP per charger, it is declining and fell below EUR 1,000.

Yes. I think if you look over time and look back to first half 2022, ASP is up, and what we really need to focus on is the gross margin stability. So for us, that's really ASP is driven by mix. Pricing is not coming down and our gross margins are holding.

And we'll now move on to our next question from David Kerstens at Jefferies.

I've got 2 on EV charging, please. First of all, you indicated that the share of revenues outside the Netherlands fell to 57%, down I think from 72% in last quarter. What is driving this much weaker momentum outside of the Netherlands? And what does that imply for your market share? And then the second question is more a question for 2024. How strong is the demand that you're seeing in the public segment currently to offset the impact of a slowing EV market on the home segment? You announced last week that frame agreement with E.ON, I saw some of your peers had a similar agreement. How much volume do you expect under that contract? And will that public segment be sufficient to offset the slowdown on the home segment or a decline in the home segment?

Yes, David. So from an overall share perspective, we don't feel that we're losing share. But yes, obviously, we've seen some of our international countries slow down, specifically I think some of our markets in Germany and the U.K. Some of those markets also had inventory that still needed to be worked through in Q3. And then from a public segment, what we're seeing is that the public and business is a little bit disconnected from EV registrations. So we are expecting growth in public. I don't have the exact volumes for [ Energy ] that we can share, but we do expect that to be a positive contributor over the next couple of years.

Yes. Sounds good. And do you expect the home segment to continue to grow in 2024? Or is it a decline in the home segment offset -- more than offset by growth in the public segment and with a mix effect as a result?

Yes. I -- The home segment has got a couple of subsegments. And I think you've got to look at how are the lease car providers supporting that segment, what's their turnover rate in terms of newer EVs versus the private EV owners. And I think what we're seeing right now is the private EV owners are maybe not purchasing quite as much. In Belgium, for example, they've introduced a new subsidy to try to incentivize secondhand EVs because those price points are still relatively high. But fundamentally, the long-term trend is there. So the home segment will have to -- it will play out over time as we introduce newer, lower-priced EV models and then also look at the lease car providers.

Okay. Understood. And Jeroen, all the best in your future endeavors.

Thank you, David.

And we'll now take our next question from Thijs Berkelder at sell-side analyst (sic) [ ABN AMRO - ODDO BHF ].

Yes. Congratulations on the strong Q3 performance. And Jeroen, you still will do the full year results, so I'm not saying goodbye yet.

Oh, yes, that's absolutely true.

Question on your 2024 outlook on EV charging. You're communicating 15% to 20% growth to expect versus 2023, but '23 has suffered from destocking. Does that mean that if you exclude the destocking effect that you underlying expect '24 market for EV chargers be roughly flat versus 2023?

Maybe an interpretation is what we have more seen now that we expect, say, an sequential uptake of quarter-by-quarter in our EV charging revenue. If we look at, say, the first quarter of next year, the first quarter of 20 -- of this year '23, the number was relatively high still because we then had a still outflow of the chargers which already were ordered way before in relationship to the say after COVID uptake. So the first quarter might be a little bit, say, to debate how the numbers compare. But for the whole year of 2024, we expect that the overall revenue will grow quarter-by-quarter. And therefore, at the end of next year, we expect still an uptake of the revenue compared to this year.

Okay. Clear. Then second question is on the strategy at Elkamo in Finland. What has now really changed in the strategy there?

In Finland, what we originally had focused on were the grid operators and what we're starting to see is more opportunities for fast charging, renewables, those more complex stations, so we've made a strategy shift. We still support the grid operators, but we're trying to grow more into the renewables, fast-charging space, which comes with higher margins.

But have the grid operators, let's say, left the track on bringing substations on the ground? Is that big project then severely in delay?

Now there was -- in, say, Finland in the past years, there was a trajectory to change our overhead lines to, say, ground-based lines. It's not yet fully stocked with it, but we more or less decided that we would, say, have a minimum margin to be able for us to secure orders. So there's more or less an active choice in not doing revenue as revenue as a goal by itself, but that we also value more or less about kind of margin can we realize. Therefore, say, last year, we made a choice that we would not step away from the grid operators, but more have a focus on realizing the, say, areas where we can more leverage on our capabilities that we built also in the Netherlands. And we -- with say, solutions for fast-charging, connecting fast charges with Tesla, IONITY, but also for, say, solar parks that are now being developed. And in that way, we can leverage more on the experience we build in the Netherlands on how to support those type of businesses, than purely focus on, say, substations where we have limited capability to leverage on, say, the technology base of our company.

Okay. Clear. Then Jeroen, free cash flow, EUR 17 million in the third quarter. Can you explain what the working capital effect has been?

Yes. Well, you'd also see that the EBITDA is roughly the same number. So that means that the decrease of working capital has been there to offset, let's say, our investment cash outflow and our financing cash outflow. So I think what we already expressed that we -- if we are also destocking with EV charging and we continue the production there, like we do, then gradually, also there, the inventory levels should come down. And that is starting to kick in. It will continue in '24 because you cannot, of course, have a reduction of EUR 30 million to EUR 40 million in just 2 months, as I said before. But this trend we saw, this trend is coming, and also we're positive about this trend ongoing in '24.

We'll now take our next question from Paul de Froment at Bryan Garnier & Co.

Yes. Two questions for me. First on EV charging. Can you give us more color on the 2024 EV charging guidance, because 15% to 20% seems very cautious knowing that the market is up more than 60% year-to-date in 2023? And my second question is on storage. How does gross margin evolve in 2024? Do you see any room for improvement?

Yes. So I think one thing with EV charging that we're starting to see is, especially in the public and business segments is it's a bit disconnected from EV registrations. So while we are seeing that trend maybe change over time, we're seeing a catch-up effect in the public and business segment where those projects are still going forward, and the infrastructure still needs to be built out. So I think as we look to 2024, we've communicated the 15% to 20%. I think that's the benefit of being in all 3 segments, home, business, public and being in some in European markets, is we can take advantage of that ongoing infrastructure build-out. And what we're seeing, again, is disconnected in the short term, at least from the EV registrations.

Yes. And I think from a gross margin perspective, we always said that there are, of course, a couple of elements that are influencing the gross margins. We always strive to increase our gross margins by producing more effective and have more efficiency in by running cost engineering programs, but also by our continuous ongoing purchasing programs, which, of course, you can imagine that if you grow, you get bigger, you also have more purchasing power. So those elements will all be taken into account. But I can assure you, we always strive for -- to increase our margins and to get them as high as possible.

Okay. And Jeroen, thank you for the great job as the CFO and all the best for the future.

Thank you.

[Operator Instructions] And we'll now move on to our next question from Jeremy Kincaid at Van Lanschot Kempen.

Congratulations on the results. Can we just talk about the gross margin just for a second? Obviously, that has been a positive surprise in this result. And one thing you've called out has been the Smart Grid Solution movement. And when I listen to your comments, there's some things there which sounds somewhat temporary in nature. Obviously, you said there was supply chain constraints in '22 for the private network, but then also you've made a strategic shift with the Elkamo business. Could you just reconcile those 2 comments and give us an idea as to how permanent the apparent uplift in gross margin has been and how much we can expect going forward? Or if you think some of this is just a temporary sort of pent-up demand from the private networks business, please?

I think for Smart Grid Solutions, there the 2 elements that we indicated, especially for Smart Grids, the project segment that we see that uplift as compared to '22. But we also have more indicated that we don't expect fundamental growth on that area for '24, so that will be aligned. And the biggest growth in '24 for Smart Grid will be the further increase of number of substations due to the increased investment plans of the grid operators to make improvements and extensions of the grid. And the fundamental change that we participated in is in Finland. That is for us [indiscernible]. We concluded that the substations where in similar situations, we could not supply swiftly, we could not supply transformers, that the capabilities to create margin was limited. And then we said, okay, then we will reassess situation and focus on areas where we can leverage on our capabilities that we built. Also, we're in the Netherlands and Belgium on supplying solutions for, say, substations to connect fast chargers towards the grid to support the business for, say, solar fields also in Finland and Sweden, and that's the direction that we want to continue. Because we are convinced that we can -- that is the way to leverage your knowledge base in, say, requirements from customers that are higher is something where we can excel in. Not only grow revenue, but also grow our gross margin.

Okay, sure. And can I ask the same question again for the energy storage. You mentioned there was a mix shift there. Can you provide some comments around how permanent do you think this mix shift is or if it's a one-off for this result?

No, it's definitely not a one-off. I think what we said in the second quarter is that a big -- a very large project was influencing there the blended gross margin percentage of such. So what we see now is more balanced, I would say, product mix within Energy Storage in the third quarter. And also going forward, we do expect that we will be in a certain balance. The only thing is what is difficult to predict is that from a quarter to a quarter, that balance might be not different. But all in all, we feel we are on the right track with our gross margin as we are driving that in our Energy Storage business line.

Okay. Sure. And one final one for me. Just on the OpEx line you've had 2 sequential quarters of declining OpEx. Do you think that's a fair trend to see that continue into the fourth quarter and maybe into FY '24?

I think what we always try to do is we get the operational leverage in which is also for the OpEx valid. Then, of course, from time to time, you see some differences because of the trade variance there and then the quarter after it isn't. So I tend to look more at the long-term trend line there. But the aim is definitely also, going into '24, to continue with that operational leverage perspective. And also, please note that we also monitor our flexible workforce quite intensively. And so we balance that with the output levels that we see. That's how we try and monitor our cost control.

Okay. Sure. And all the best, Jeroen, in your next endeavors.

Thank you very much.

And we'll now move on to our next question from Maarten Verbeek from the IDEA!.

It's Maarten Verbeek from the IDEA. Firstly, could you elaborate a bit on your backlog of energy storage systems? Roughly, could you quantify because you state that backlog continues to increase. I'm presuming it's higher than at H1, and thus, a book-to-bill of over 1?

Yes. So we previously shared the backlog number in order to support the ongoing growth in Energy Storage. We didn't share the number this quarter, but we have added additional order intake to the backlog. But you've also seen we've converted revenue in Q3. So backlog is fairly stable.

Is that more or less stable at [ 170 ] level?

It's a very lumpy business in terms of when revenue is recognized. So it's stable, plus/minus.

Going into '24, you project, again, a very strong considerable growth in Energy Storage Systems. Inventory is weighing heavily in this business segment. Previously, you stated you want to address that with different contracts and supply chain, et cetera. Will you be able to keep better control over inventory within ESS? Whist you also continue a very considerable strong growth?

Yes. And without being able to share the details, because we agreed with our supplier that we would not do that -- or suppliers, I need to say, that we would not do that, we do have a more spread in the supply chain challenge. I'm before that, more than a year before, you needed to put purchase orders in with big down payments. So what we have negotiated now is that the down payments will be lower, and we can issue purchase orders later in time. So we have there more levers that we can use to even try to get the balance between cash in and cash out in a better shape.

Okay. And one follow-up on your working capital. Since you mentioned that EBITDA was more or less flat with free cash flow, and therefore, no reduction in working capital was consumed by CapEx and tax and interest. Could you also more specify where you make progress at your working capital within the 3 businesses of course? At EV charging equipment, there you had more or less the highest level of inventory. Have you seen there a reduction in the other 2 parts? Or has it more or less remained stable? Or have you made improvement across the board?

Yes. I think I mentioned before that with Energy Storage, sometimes you have a very high inventory. And then the day after when you ship the components to a site, then all of a sudden you see a big drop. So I would say that we monitor the working capital as a whole. It's definitely fair to say that we see a decrease in inventory levels for EV charging, and that is also what we fully expected. But nevertheless, we will see some swings left and right. But I think for us, it's very important that we keep on monitoring it. But from a working capital perspective, we knew that the working capital would be better in Q3. So it's fully in line with what we expected. That's also why we were so pronounced on saying that we don't need the capital rights, and we were not plan on.

And we will now take a follow-up question from Thijs Berkelder at sell-side analyst (sic) [ ABN AMRO - ODDO BHF ].

Thijs Berkelder again, ABN AMRO - ODDO BHF. Follow-up question on your chargers. You announced to launch let's say, a fast charger. Can you update us there on the progress? What kind of volumes we might be expecting for 2024? And can you give a more or less similar update on your walk-in substations?

Yes. So first on DC. So we're still progressing with our DC. We've successfully built a couple of units off the line and have gotten those to some of our early test customers. Still planning on taking preorders end of this year into early next year. Right now, we've got a limited market focus, so volumes will not be substantial for next year. Really looking to support our existing customer base, make sure we have the right product for them before we scale more broadly across Europe.

And the walk-in substations?

For the walk-in substations, we have been supplying now both in the Netherlands and Belgium based on one mold. Last week, we started installing the second mold with, say, our -- the partner in concrete. So this will, as a consequence, mean that we can step up towards 2024. So as far as we're concerned, this is developing nicely. And this also gives us a nice inroad into Belgium. Because in the Netherlands, where all of the gridder more or less oriented towards non-walk-in substations, and Belgium, there is a preference to walk-in, so therefore, we are well set also that what's now happening in the Netherlands, we expect that too will happen in the Belgium also in the coming years to it. That gridder will have to expand their investments into, say, improvement of the grids, something that we are well set to profit also from that area. And that we can keep on growing our business in the coming years, not only in the Netherlands, but also in Belgium.

And maybe final one on technology. Can you explain what your planning is on bidirectional charges?

With bidirectional charging, you can more or less see that we -- based on the steady step we did in developing our own DC charger, that we are well set more or less to participate in that market area as soon as it becomes relevant. But there is one, what we see is that there is a lot of talk about, say, bidirectional charging, but the actual business cases we see at this moment are still quite limited. Because, say, 50% of the benefit of bidirectional could also be by optimizing the smart charging capabilities, is what we see now is one of the fundamental areas where people are working on. And we expect that first model changes in the market has to happen both on the car side, because at this moment, only, say, a limited amount of cars are able to do bidirectional charging due to the settings of the -- in the way the cars are being built. And also that the business case is that at this amount is still limited. So we are well set to participate in that market if it is really -- would be -- take a take off. But at this moment, we think that we will, say, practical business capabilities is limited for bidirectional charging.

That was the last question we had. I will now hand it back to Marco for closing remarks.

Thank you, Laura, and thanks for everybody in participating in this webcast. And also that, say, we have seen also, say, if we can interpret and say positive remarks about our results. But on the other hand, these results were more or less in line what we tried to express already in, say, the presentation of this result of the second half year. But nevertheless, we are happy that the appreciation of our grids are as we always wanted them to be. And I would say then we're speaking together again at the year figures in February next year. Thanks, everybody.

Thank you, Marco. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.