Fastned B.V. (FAST.AS) Earnings Call Transcript & Summary

Hello, and welcome to the Fastned First Half 2023 Financial Results. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to CEO, Michiel Langezaal, to begin today's conference. Please go ahead.

Thank you, operator. I would like to say welcome to everyone on this call as well as to our webcast viewers. The presentation used during this call is also available at our Investor Relations website, which is ir.fastnedcharging.com. To start with the title page, this is the station [ Baratte ] in [Belgium or Denis]. Only typical black Saturdays with crazy summer traffic, there were serious waiting lines at our station. This station was commissioned just before summer started and already it often appears top 5 rankings with hundreds of visitors each day. For years, people have asked me how we were planning to make money while looking at the hands full of early adopters, making use of our stations. Well, this brings me to the theme of today. For the first time in our history, Fastned is reporting positive underlying company EBITDA. And as you can imagine, this is something I'm extremely proud of and an important milestone for me personally. And people ask me when Fastned would start earning money, I've always said, it makes no sense to build a petrol station for a few hundred petrol cars in the country. The same is true for a charging station. We are here for the long run, supporting the millions of drivers that want to go electric. Moreover, it confirms that our strategy of cost efficiently building large and visible charging stations at high-traffic locations is paying off. In the same way, the [wining] prices for the best charging network in several countries confirms our great customer experience and concept. We've entered the phase of development of our company, whereby our earnings step by step are starting to fund a larger portion of the CapEx needed to build out our charging network. Fastned is not anymore only providing freedom to electric drivers but also freedom to itself. Slide 2, please. With reference to the information provided in the slides and discussed during this call, please take note of the disclaimer. Slide 3, please. My name is Michiel Langezaal. I'm the CEO and one of the founders of Fastned. Victor Van Dijk, our CFO, is also present in this call. Together, we will present this webcast. Today, I will elaborate on the highlights of the first half of 2023. Also, we will give you an update on the development of our business and touch upon the developments in the car and charging markets. After that, Victor will take over and take you through the top line financial results for the first half of 2023. And as always, we will update you on our station metrics. At the end of this presentation, we'll share our outlook on station openings and upgrades for this year. We intend to take one hour for this call, including Q&A and end at 12 noon. Slide 4, please. [ Next ] to reaching a massive profitability milestone this first half of 2023, our growth continues to be stunning. Revenue is up by 108% compared to the same period of last year. We delivered 110% more electricity to electric drivers and through the number of active customers by 84%. Considering that the stock of electric vehicles on the road grew by 32% in the same period, it is clear that we can outgrow the charging market by a very significant margin. Growing our network continues at pace. We've built an additional 28 new stations in the first half of 2023, bringing the total to 272 charging stations by the end of the period. But as always, we are ramping up towards year-end. And today, I can report that this figure has already risen to 278 stations. Let's look at the pipeline of new locations. There were no outcomes of any large tenders during first half of 2023. Therefore, we do not yet see a serious batch of locations being added to our pipeline. However, we've been gearing up our deal flow and private developments, and we're very proud to report that we acquired 20 additional new locations for the first half of 2023 bringing us very close to a magical number of 400 locations in our portfolio, which brings me to utilization. During the second quarter of 2023, our [ net work list ] versus 10.1% in the same quarter of the previous year. This number logically goes up as a consequence of more people charging with us. while at the same time going down as a consequent of Fastned adding more charges to its stations. Therefore, it is also interesting to note the like-for-like utilization. In Q2 2023, this was 14.4% with respect to 10.1% of Q2 2022, showing again the massive growth in number of customers visiting our stations, which in my opinion, is the more relevant business metric here. Before moving to the next slide, I'd like to come back to revenue growth for a second. It might seem repetitive to report again and again that we're outperforming the market. Some might even think it's boring but I'm sure our investors find it interesting to see us outperform the market again and again. Most of our competitors don't note that the charging market in itself already is an exponentially growing market. Slide 5, please. In order to outgrow the markets, we grow on 2 actors at the same time. One, we only do large fast-charging stations. At our stations, we can welcome new customers and grow our revenue. For example, the station [indiscernible] , I showed you on the title page, we can help a new car roughly every 3 minutes. Note, this is very different from parties that do chargers on parking lots, where parking is the deciding factor on [ dwell ] time, not charging. Two, we acquired new locations to build new stations and welcome even more customers in order to grow our revenue. This slide is about pursuing the second access, building more stations. And I wanted to highlight 3 important drivers for network growth. In all countries we operate in and in countries we have on the radar with our new markets team. We work with authorities on policy reform. Firstly, we make them understand the importance of creating a dense fast-charging network to drive the transition to electric mobility. The best way to do that is to issue concessions for large plots of land along high-traffic roads to charging companies so that the market can build this infrastructure. Second is about competition and market actives. Building charging stations isn't and shouldn't be the privilege of petrol stations. Every company that wants to contribute to the energy transition should be able to compete or [ these ] new permissions to sell charging services. Let's make sure that the best and most ambitious companies build our charging infrastructure allowing petrol stations to just add fast chargers would cancel out any competition. Moreover, we will put the transition to electric mobility fully enhanced of those parties that have a significant business interest to slow it down. That's why for years, we've been advocating for public tender procedures, fair competition and equal market access for all players to these plots of land, and it's paying off. Let me mention a few important recent developments. Early in the year, the European Commission solidified its infrastructure targets in the alternative fuel infrastructure regulation offer. It requires member states to ensure that there will be a serious charging [indiscernible] that there will be a serious charging station at least at every 60 kilometers along their motorways. This is a regulation that paves the way for tenders, tenders in which Fastned can participate, which will drive our network expansion in many of our target countries. Another example is Italy the input of the market, including our input has led the regulator to publish new policies for road operators, requiring separate tender for charging infrastructure independent from petrol concessions. This new regulation opens up the market and gives us the opportunity to show our great concept. If needed, we do not [ way ] from reaching out independent course. In cases for policy reform is slow or access to the charging market is not open and competitive. In the first half of this year, we've seen quite some media attention for the case that we filed against Autobahn GmbH, the German road operator and the subsidiary of the German states. We are of the opinion that the issuance of concessions to build large charging stations is a material extension with the existing concessions that the German state issued to the later privatized company, Tank & Rast. Competition laws in our view, do not allow for such very material extensions to happen without consulting the market first and allowing competitive bids to be made. Luckily, we're not the only ones willing to speak up. And together with Tesla, we have voiced these concerns in court. And court have now referred the case to the European Court of Justice. This could support German authorities considering other routes to develop the needed charging infrastructure and open up tenders for these locations. Also, I would like to mention Denmark where we recently won our first set of locations, making our entry in country #7 with 3 charging stations on high-traffic corridors. As always, we rank very high on quality, supporting an overall winning score for the standard. During our earlier calls, we've updated you on the status of two important tenders in Germany, the Deutschland Netz tenders. As you know, we see these tenders as important developments for the charging market and potentially interesting for Fastned as well. Then there for 200 sites on the motorway would provide the winning charging companies and operate and maintain contract for one of the 6 batches locations. It is noted that the exposure of these concessions to the charging market is marginal as parties are remunerated only with a small percentage of revenue. The tender for 900 locations is primarily a financing scheme to build charging stations in search areas that the government defined earlier. That said, it could offer an interesting opportunity for Fastned. The central government will be allotting concessions to charging companies. And as a consequence, local authorities will potentially be more supportive to swiftly provide the winning party with a location in their community to build that charging infrastructure. Logically, we'll update you in more detail when we can. Slide 6, please. After having talked a lot about growing our network, I wanted to spend a bit of time on what we do to make people choose our stations instead of those from others. Because this is another way for us to outgrow the market. I want to give you 3 examples that form an important part of the work we do to continue to make sure Fastned is the best charging concept out there. We make our own software and run our network on our own back end. For many EV drivers, their charging experience starts when navigating to their destination and deciding where the [ charge ] on routes. This is why we are incredibly proud to announce that the Fastned app is now also available on Apple carplay, making it safe and easy for EV drivers to use our app and navigate our stations. EV drivers love this, and therefore, it also supports our growth. Second example, we pick up the phone for ourselves. Something that is unique in the charging industry. In this way, we can learn from our customers experiencing bottlenecks while charging. Our customer support team is therefore also closely connected to our technical teams, operating our stations and building our software. This ensures a swift improvement process. Again, in H1, we have continued to hire, train and expand our in-house customer support team. This team needs to scale along with the growth of our business. Hiring and training these people takes time and effort but we believe that this is key to maintaining a leading concept. Note that many charging networks have outsourced customer support. They don't need to worry about scaling and picking up the phone. But as a consequence, they also get industry average support. It is that simple. Last but not least, I want to mention our efforts on field operations. There, we take the same approach as with the previous topic of customer support. We continue to hire and train our own teams because well trained engineers are scarce and are key to deliver stunning network uptime. Again, the opposite of many other parties do. Again and again, we hear from customers that they choose Fastned because of quality and reliability. That is why we continue to focus on training the muscles that are needed to deliver on that which brings me to talk about electric car sales. Slide 7, please. For the first time in history, an electric car tops the world rankings of new cars sold. In the first half of 2023, the Tesla Model Y was the best sold car in the world, outselling the Toyota Corolla that for years topped the rankings. This is a clear sign of the transition to electric cars accelerating. When we look at EV sold as a percentage of all new cars in the markets we operate in, EVs are up again in all of our markets, and the Netherlands is topping the ranks with almost every third new car sold being electric. European average is 15%, which when looking at the historical figures gives the Netherlands roughly a 3-year head start. So with the transition accelerating, this gap is closing quickly. It is these car sales that drive our revenue growth. More cars on the road, need more kilowatt hour to drive rent, giving us the opportunity to deliver that charging need. Let's look a little deeper into the EV markets beyond just these sales figures. Slide 8, please. There are 3 fundamental drivers for a rapid transition to electric vehicles. One, consumers preferring electric over fossil cars because of the things like ease of use, supporting the battle against climate change and total cost of ownership; two, public policies supporting the choice for clean over polluting fossil vehicles. Three, as battery prices are coming down, the purchase price of electric cars is moving towards and surpassing price parity with petrol cars. Electric cars will, in due time, be cheaper to buy than fossil cars. During the first half of this year, we again have seen very positive developments on each of these drivers. The European Commission solidified its 2035 target to ban the sale of cars with internal combustion engines. We continue to see more attractive EV models entering the market at more competitive prices, driving sales. With a great example being a Tesla Model Y, just look at the graph showing the price point for Tesla Model Y in comparison to its fossil counterparts on the right side of the slide here. Tesla has invested heavily in lowering the cost price of batteries, enabling them to make such a competitive offering. Or on the bottom right side, they recently launched Volvo EX30, the cars sitting on the platform developed together with Chile. Here, you can clearly see the benefits Chile has from having invested in scaling up the production of electric cars and their batteries. Linked to the Chinese desire for rapid electrification of their car park is well visible in this example as well. You might ask Michiel, if you [ then not ] read the news about the challenges, VW and other carmakers are facing but filling their order books at the moment. Yes, I have. But I do think it is important to read those news articles in the right context. And in my view that context is the challenge they face, a consequence of a slowdown of EV sales that some of the articles are suggesting? Or is it about consumers using a different brands. As I said, Tesla was a newcomer that invested early on in the production of capacity for batteries, which today enables them to offer cars to very competitively. But just as importantly, the revolutionized the user experience in a car with the touch screen approach, the Chinese players that are now entering the European markets of similar offerings and we're going to see much more of that looking at the success of the Tesla Model Y. This could very well post a series of challenges to EU legacy carmakers that are linked with their investments in making cheap batteries and they're plagued with software issues. For Fastned, this development and the [ outpry ] of the European car industry is only positive or maybe even better, it is the first scenario for acceleration because this race for the consumer drives the industry as a whole to bring the market EVs star even better at better prices. This drives sales and our sales and we don't care whether our customers drive cars made in China or Germany. Lastly, I would like to make a comment on messages that sometimes appear in politics and media about Tesla only being available for the rich, whereby the Tesla is then the enactor for a desirable EV. Last decade, these people were correct. And that is how most transition driven by technology innovation go. Products are introduced at higher prices in the premium segment. Scale drives down costs and offerings become available in lower price segments. A few minutes ago, I mentioned the Tesla Model Y being the best-selling car worldwide. This is in the C or D CAR segment, and it is a mid- to high-end offering in the segment. By the way, please go to Slide 9, please. Five years before that, there was a Tesla Model S [indiscernible] pumping the likes of Mercedes and BMW in the premium large car segment. With the industry accelerating, it will not take 5 years, but significantly less to see a very competitive EV offering in the AMB car segments. There could be cars like the Volkswagen ID 2, to Fiat Panda electric from Stellantis or take a look at the stunning Renault 4 and 5 concepts. All aims at a magical EUR 20,000 introductory price. And I haven't even talked about the Chinese entrants then. All in all, for those who are wondering when electric car makers is something interesting to offer, for example, for the typical French car owner in the country side, I want to say that might be sooner than you think. Exponential change is difficult to bring the margin, and I'm convinced that by 2025, new electric cars in all segments will be available in abundance and in 2030, that might well be the case for secondhand disease as well. Stellantis is building the infrastructure that will allow people to make that switch to owning an EV while at the same time, it benefits from the rapidly accelerating switch to electric cars. That's why I found it important to provide you on our outlook on how cost curves of batteries and battery prices will drive this shift and how I expect it to develop. On that note, I would like to hand you over to Victor Van Dijk, our CFO, for a look at the station metrics and our financials. Victor go ahead.

Thank you, Michiel. Let me take a wider perspective first. On this slide, you see the top 10 fast charging companies in the 6 countries, Fastned is active in ranked by overall sales. This is based on aggregated data and Tesla data are estimates because Tesla doesn't share the data with these aggregators. Fastned has one of the highest overall sales, second only to Tesla. Perhaps more importantly, we have one of the highest sales per location. We currently have on average more than 30 sessions per station per day while many others have less than 10 sessions, sometimes far less. Our high sales per location is driven by having a great concept and targeting high-traffic roads only. High traffic roads lead to high natural demands. Our stations have on average 30,000 cars driving by well as supermarkets or McDonald's has around 1,000 customers leading to less natural demand for charging on their parking lots. And here, you can see that others who also target highways, like Ionity and GRIDSERVE in the U.K. also have high or medium sales per location. In contrast, putting charges on parking lots of retailers or adding a couple of chargers to a petrol stating on our highway leads to low sales per location. Why is that important? High natural demand on a location leads to the ability to invest in a large charging station. In turn, leading to a high customer satisfaction and utility. Customers like Big stations. This leads again to a higher demand, a positive spiral. Large charging stations lead to costs and utilization efficiencies and therefore, lead to a great business case. So a great and efficient concepts deployed on high-traffic locations leads to a great business case, which we'll talk about next. Looking at station economics. We see strong sales growth. We have on average 30,000 cars driven by our stations and more and more of those become fully electric, leading to sales growth. Sales per station grew by 43% year-on-year. With that, we outgrew the BEV fleet penetration growth of 34% year-on-year. Note that quarter-on-quarter sales per location. So Q1 to Q2 was negative. And this is natural and due to seasonality. Normalized for general market growth, charging demand in the winter is [20%] to 30% higher than in the summer because cold weather leads to more consumption. So for instance, in the Netherlands, quarter-on-quarter station sales growth was minus 6%, while the BEV fleet grew by 9%, so a 15% difference. This difference can be attributed to the [ 20% ] to 30% lower demand in the summer. That also means that most of our growth is in the second half of the year. And this is a very usual pattern for us, with overall first half revenues being 35% to 40% of total year revenues over the last couple of years. We've also had a strong gross margin per kilowatt hour increase, and that is driven by the electricity prices normalizing. We also increased our station capacity by increasing the number of charges per station by 24% year-on-year. This is important to cater for demand increase with BEV fleet penetration expected to double until more than double until 2026 and sevenfold until 2030 in our markets. Like-for-like utilization. So utilization, if we would have not enlarged our existing stations was 14.4%. Capacity increase obviously also leads to operating costs per station to grow, as you see. All of this leads to operational EBITDA per station more than doubling to EUR 80,000 annualized per station and it leads to an operational EBITDA margin of more than 40% already at our 2025 targets. Next slide, please. The strong growth in operational EBITDA leads to the underlying company EBITDA to be positive for the first time in our history, a very important milestone. In the end, our sales and profitability are driven by electric vehicle fleet growth. We've come at a point in the electric vehicle transition where there's a large demand for fast charging and where as charging hit down well, produces a positive EBITDA. Business at [ appointed ] and transition were still only 3% of the vehicles are fully electric which in itself is a low number. But this number is expected to double in the coming few years and sevenfold by 2030. This will drive strong revenue and profitability growth for Fastned. Our cost growth has always been considerably lower than revenue growth. Therefore, we expect EBITDA to continue to expand from this point onwards. Turning to funding. Our current funding allows us to build more than 400 stations operational, built to more than [ 400 ] stations operational, which we expect to have in 2025. Then on cash flow. We've also reached another important milestone with operating cash flow being positive for the first time in our history in the second quarter of this year. This allows us to start self-funding part of our capital expenditure. Next Slide.

Yes. Thanks, Victor, for this drill down on the financials. Let's have a quick look before we get into Q&A. On the guidance, we have provided with the Q1 presentation. We are well underway with our construction activities, and we want to communicate that from all we see today, we are well on track to deliver on these targets, which brings me to the next slide, finalizing our presentation. And I would like to thank you all for listening, and I hand the word back to the operator for questions.

[Operator Instructions] And our first questioner today is David Kerstens from Jefferies.

Congrats on turning EBITDA positive. I've got 3 questions, please. First, on your operational EBITDA margin target of at least 40% for 2025. You said you already realized that in the first half of this year. How do you see this develop in coming years? What is offsetting the operational leverage in your business model to remain at this at least 40%. You're guiding for somewhat higher operating cost per station. Are there any other factors that we should take into account there going forward? Then your second question is around -- a similar question around the network expansion costs per station, they seem relatively stable in the first half of the year. Is that correct? And how do you see the development of this cost item for the full year after you have recently expanded the teams and then my final question is on the securing of new locations. You said 20 in the first half, I think, 7 in the second quarter. Is that at the right pace? And with regards to the court case with Tesla against Tank & Rast in Germany, when do you expect more clarity from the European Court of Justice and how could that impact the securing of locations going forward?

Let me start with a couple of those questions. And then I think we wanted to mention that we'll do 2 questions for analysts because we have a lot of analysts, but we grant you there, David, and also good morning. So operational EBITDA margin indeed that we were at our 2025 targets. And there, yes, we we want to exert some prudency in that target. So of course, there's operational leverage. So that will have a positive effect on operational EBITDA margin. So with sales continuing to grow that drives this margin upwards. At the same time, we have had a very good gross margin over the last half year. And we want to be prudent in our margin expectations towards 2025. I think that's the -- yes, that's a simple answer there. Second question on network development. Network expansion costs per station. I think I'm not sure how you compared. But I think what we see is that that, that will, on a per station basis will increase. And that's also what we've indicated earlier. And that is simply because we're ramping up our private location expansion, which comes in smaller [ batches ] than the tenders.

That set unloaded as well. She first need to hire the people under the results come a bit later.

Yes. So that's -- so we expect actual year-on-year an increase on network development -- network expansion costs per station built.

Roughly by how much? Can you give an indication how much that cost item will increase per station?

Yes, we haven't given guidance on that before. And yes, at this stage, it's difficult to give that indication. I think if you look at it, if you look our network expansion costs on an absolute basis the growth in that sense is relatively linear in that sense, if you understand what I mean.

It doesn't follow revenue line.

It doesn't -- so it's -- yes, we haven't given guidance on that, and I don't want to do that for being too specific about how that's okay.

David, to your third question, I think looking at the pace, as Victor already said, we're ramping up our private developments and logically, then first, you need to invest, find the team and get that going. We're very happy to see those 20 new sites being added to the pipeline. Next to that, we expect also a large portion of the -- yes, the growth of our pipeline to come from larger tenders with authorities. But they come in batches. So I think we're very happy to see that base ramping up, and we haven't, let's say, seen the full result of the ramp-up of that theme yet. So we want to get that to a base of over 100 sites per year combined, and we're working towards that. But that's needed to get an end to the target of 1,000 stations in the long run. When we look at the court case, you were asking like what do you expect there? It's very difficult to say. I think one is what we do know is that the European Court of Justice is not very quick. So generally speaking, they take a year, maybe even 2 years to provide feedback. What that will mean for the outcome of, let's say, the problem why we went to 2 courts is really to be seen. So it could very well be that the German government knows this time line as well and could -- those other ways to resolve the situation. There's various ways in the back this -- but I think it's surely note that the European Court of Justice is not a very quick decision maker. Does that give you some answers to these questions. Cool. Any other questions?

Yes, we're moving on to our next question from Nikita Lal of Deutsche Bank.

First of all, congrats for your positive underlying EBITDA, I think is it great for your business case. I have 2 questions, please. My first question is around your pricing policy. I mean we appreciate your increase in gross margin. But one of your closest competitor now lowered its prices for standard tariff yesterday in Germany and France and it's now on the same level like you guys. So do you intend to decrease your prices also to regain your competitive power? Or what do you see there?

Yes. So Indeed, Ionity decreased their prices actually to exactly our level. So I take that as a compliment that they referred in to our level so that currently, we act as a reference in the market. I think Ionity was a company that had one pricing, [$0.79] throughout the last couple of years and didn't change the pricing at all. I think it was about to change and that changes to our level. And yes, we don't expect that to have a significant impact on our sales. Right now with the main driver for customers choosing a charging station is why my battery is empty? What is the closest charging station. And then do I like the network? Or do I skip one? I have one service area. And then thirdly, yes, it's about the customer experience, et cetera. So the price is not the most prominent in the decision that the customer makes. I hope answer your question.

Yes, this is my second question. It's more strategic. Another peer of you has introduced a fast charger, which has a built-in battery so to be independent from limited capacities in the grid. I mean, we just talked about network operational costs. Would this be also a way for you to decrease grid fees?

Yes. I think it could very well be. I think what you currently see is that in the countries we operate, I would say that the grid fees that we pay are still most often cheaper than using a battery. I think the reason to use a battery probably more to solve congestion issues. That will, in, let's say, the coming years, step-by-step change with prices of batteries going down as well. And with starting powers going up, there will be an intersection point where it becomes more and more interesting for us. But given that we will need serious supply lines to our charging stations anyway, it makes a lot of sense to today invest in that because that becomes a scarce built. While batteries are becoming cheaper and are not scarce. So I think the right strategy to follow here would be first big cables to the network with the stations and then potentially batteries. But if you do it the other way around, then you create yourself a problem. Does that give you a bit more color on the I don't know whether it's an answer to the question, but. Any other questions?

Yes, we're moving on to Joren Van Aken from Degroof Petercam.

First 3 questions, if I may. First on your time line question. Do you have a time line for the Deutschland Netz tenders? Any information there would be helpful. Secondly, I thought I heard you mention that today, you were at 278 stations. Could you confirm this one? And then finally, if I look at the segment revenue per country, I see that France and the U.K. are pretty similar revenue wise. But if you look at the number of stations there are twice the amount of stations in France compared to the U.K. So what is the difference here? Is there that much charging in the U.K. compared to France?

Thanks, Joren, for your questions. I think on the time line for Deutschland Netz, I think we confer -- we communicated earlier that there is some delays on that. I think it's difficult for us to give a very clear outlook on what is happening there in the coming months. Yes, let's say, the government plans earlier to come up with a result of that tender year-end last year. I think it would be strange to expect that it will go beyond this year. But of course, that's to be seen..

There's 2 of them, so the regional tenders is in full work. So parties have put in their applications and are awaiting the outcome. So that is definitely in the works. And on the highway tender that has not been released yet. So that's -- yes, that's -- and because of that, you also don't know the exact time lines, but that is be unlikely to have a result still this year, but the regional tender could be this year.

Yes, the 278 stations, I can confirm that. So that's correct. And then maybe do you want to say something about station revenue segments.

Yes. I think there, France is -- we have more stations there. Also France is a bit behind [ NV ] adoption to the U.K. indeed. That's one element. But the other element is that they're all new stations, their own roads that are dependent on or more dependent on holiday traffic, and that is what concentrates in the summer or the Christmas holidays and over the [ easier ] holidays. So we've just seen a bit of that already. But if you look at current figures in July. So after -- so in Q3, we see those stations in France ramping up extremely quickly. So that's more of a ramp-up [indiscernible] for the French stations. I hope that answers your question. Any other questions?

We're moving on to a question from ING from Marc Hesselink.

First question is actually what you saw next some.

You're very hard to hear, Marc.

Can you hear me now? Do you hear me now?

Yes, go ahead.

Okay. So maybe the first question [indiscernible] traffic? And also the usage, if I look at some of the stations, you see that in the weekends actually more busy during the week. Is this -- so how do you get the normal day-to-day traffic at the Fast charging station. And that trend is maybe a bit slower than I earlier expected. When do you think that this will really start to change and you also get the day-to-day traffic?

You want to say something about [ Patrice ]?

I think, Mark, I think basically, what you see is that it depends, first of all, on the type of station. So let's say, if we look at [ Barter ] location we opened in the [ Belgian or lens ], that is only who to [ suit ] to the south of France that is a station that does very well in those Friday, Saturdays when people go to the holiday destination and we've already seen that doing quite well in, let's say, the May period where people took a weekend to the [ Ardent ] or so, and that's a very different station than a station, which is on the A4 from Amsterdam to the [ ag ] our people on a regular basis charge their car when they're on their way home or to work or to an appointment or whatever. So I would say, yes, there is patterns, but they differ from station to station. And the mix of locations will also, therefore, defined a bit like how that's in the overall portfolio will look like. So I think -- just to give you a bit of color on I think there's no one single answer.

Okay. Okay. And then maybe the second question is maybe a bit broad but we have a lot of news flow on all kinds of technological things. I think in the past, you were very clear that this is the way forward, this kind of batteries but things like happening with solid-state batteries or even some renewal stories around hydrogen and maybe especially for trucking. But maybe just to cover how you see those sectoral developments and how it will impact us?

I think we should be extremely happy to see the message from [ CNTL ] this morning. How about their foresee lithium iron phosphate development. So they published that this morning. If you do the calculations, you're roughly talking about an average car, having 400-kilowatt charging power and charging in middle a little less than 10 minutes and having a range of 400 kilometers and that on being able to do that for lithium iron phosphate. So no rare or materials, long cycle life relatively cheap battery that is, I think, a super development to underpin that growth of more electric cars on the road. It also basically makes clear that charging will be like going for gas quite soon. They have a time line in mind of basically delivering them to the market next year. So that really accelerates the time line on faster charging, I would say. When you look at solid state, I think that's a little further out. I think all of it in the end comes down to batteries that can charge quicker, have more range and are cheaper and that, in the end, drives the transition. So whether or not a solid state or lithium-ion phosphate or what kind of technology is this, I think we see the developments that drive that transition, and that is what is important to us.

Maybe to add is also important for our business guys. So the [ CF ] of that does 400 kilowatts for 10 minutes. That's a huge step change and it also means that our average charge speeds in our network is now 60 kilowatts. So it's a -- if I went grows considerably, that means that you can sell more kilowatt hours over the same investments in the same amount of time and consider more good on ours.

It also means the stations can handle more customers I mentioned, but [indiscernible] charger station. We can help basically a customer every 3 minutes, and it becomes 300 or 400 kilowatts roughly, then you can help every minute a new customer that makes a massive difference and then maybe lastly about H2, I think for trucks, there seems to be a bit of a media, let's say, flow again I think for cars, it's basically decided, and I think for trucks, it's probably going to be very hard to see H2 being a significant part of the market because in the end, the and I'd say, the chain of energy delivery to making kilometers is just 4 or 3x less efficient than the battery electric version, so you either need 4x as many windmills or solar panels. And I think no one is up for making 4x that investment or paying 4x the price per kilometer. But let's say the word is out there and it's not -- for Fastned not a very big thing. We're very much focused on the passenger car vehicles on the big charging stations along the motorways providing, let's say, chargers at logistical depots or so, that's more an operator maintain business that we're not really targeting. So I think it's not very much of influence to us if there would be a move to H2, which I don't see happening. I give you a bit of answer to, let's say, color on these topics, how we think about it because I think it's not really that I can give you.

No, so realized that this was really interesting. Just want to know your view on this kind of stuff.

Thanks for asking because I think it's very important as well. I think these developments they drive as well that's becoming available cars in the A and B segments. And in the end, we know that these segments are the biggest car segment. So that really makes the transition something for more and more people. And that drives in the end against sales for Fastned as well. So very important. Any other questions?

Up next, we have Thijs Berkelder from ABN AMRO ODDO BHF.

Congratulations beautiful performance. First, a small administrative question. Is it correct that I'm not seeing the number of chargers per country? Second question is more relevant maybe Italy, you expect tendering to start, let's say, in the second half. Can you give any ballpark number in terms of number of stations to be tendered, how many will be more or less right for Fastned specifications and what your rough assumption is on your win expectation? And related to that, you now have [ 400 ] locations in portfolio so in principle, a [ defunding ] you have those [ 400 ] stations, let's say, adding Italy or winning Italy will that potentially then triggered also a new [ filing ] round. That's the nearly the only question I'm getting from clients. And last thing is at the start of the year, I think you guided for an OpEx of [ $12,000 ] per charger. Now it's more than [ 13,000 ] due to rising grid connection costs. What is there a logical explanation why H2 should be lower than H1?

Michiel do want to start with that one?

Yes. So yes. So it's the increase is actually related to [ anointed ], at the start of this year, we indicated [ $12,000 ] per charter operating costs that now looks to be for the year, full year around [ 13,000 ]. The reason is actually mainly increased grid fees due to increased capacity charges. And that is -- these rates consists of different parts and one is volume-based and another one is a capacity base. So the rate that you use the grid connection as [ 8 months ] comes at a certain cost. Now the cars are getting faster and faster. The batteries are getting faster and faster. So that also means that we have higher peaks and that leads to higher grid fees. But the fact that those risks are there. And what we will see in the second half of the year is that we'll increase the number of charges. So that will dilute those grid fees. So that is a reason why the second half is slightly lower than the first half when we get to [ 13,000 ] over all year. [ and then ], maybe the administrative question, I think you're mentioning sort of whether or not there's a slide in the slide deck with number of garden per country, Am I correct, Thijs.

Right.

Yes, let's would get back to you that separately because I don't have the exact numbers and the year.

Yes. So it's duly noted. So we'll look at that and Italy, I think it's difficult to give you a ballpark figure now. But I would say, let's say, if I would have to -- let's say, if I would have to model it today, looking at it, I think we're not going to see sort of a, let's say, tender like in the Netherlands where all the, let's say, 400, 500 petrol stations service areas. The [ motorway ] along the motorway network in Italy will all be generated at the same time. And the reasoning is they're all governed by different road operators. So I think given that some of them are quicker than others in replying to that regulation and are taking action and also potentially can take action earlier. I would expect probably maybe less than 100 in the first year in September or so. But that's just putting a figure out there. I think we're probably going to see sort of that total of maybe [ 400 be 100,000 ]in a couple of years' time and potentially not all of them. So that's one way to give a bit of a view on that. And then the win rate, yes, I think we would be very happy to see win rates like in France being amongst the winners put you in sort of the 20% to 25% win rate -- maybe to be prudent, I would put a little bit lower, but that's really what we're aiming at.

Yes. In terms of funding that is depends very much on indeed how quickly you will then come to the market in what size and how quickly do we need to build them. And those are all factors that are at this stage not certain yet. But there are big factors in deciding on when to funds. The sort of good thing there is that once the tender comes out, there is always time to respond to that at sort of time line on the tender once it's come out and until the time you get the results and eventually build the station can be -- be 1 to 3 years. So in that sense, we have time to determine our funding plans. And on funding. And there, we will continue our retail bonds. Then they have proven to be very attractive and also very high in demand that we saw in June this year again, and we'll continue that. And that will definitely also partly funds these type of tenders.

Maybe 1 add on. There is a financial income of EUR 1 million in the first half. What is it related to?

That is actually interest on cash -- so as you see the cash balance on our balance sheet of EUR 136 million at the end of the half year -- sorry, EUR 132 million. And that's -- these days, deposit rates are becoming quite attractive, actually, with the interest rates going up. So that is a interest on the cash and balance sheet.

Cool. I think we can have one more question maybe because we're just a bit over time, but I think it's good to pull out for that if we come -- should we go up for last questions?

Certainly yes. And our last question for today comes from Hans Pluijgers from Kepler Cheuvreux.

Two questions from my side. First, looking at the gross margin and the absolute number was [ EUR 0.47 ] in Q2. And Yes, could you give maybe some feeling on how you get through the year? It's currently at ahead of what a say, normal range would be in absolute terms? a little bit anticipating some, let's say, underlying price increases, the input price and therefore you keep it a little bit higher at the moment, so you can better adjust through the year. Can you give maybe some feeling on your policy there? And yes, last small question, you also registered in Spain. Does that mean that you are also, let's say, expect in Spain to get some stations awarded there in the short term.

Maybe on Spain from my side. I think we are registering entities because we plan on doing things in these countries. Sometimes it's very helpful to register early on because of, let's say, support during policy reform discussions being part there. But Spain is definitely on the agenda, which we find interesting. So we'll have more news on that when the news is there. So I would say a big attention Yes.

On the gross margin, I think there -- like you say, we see electricity prices normalizing. That is one element. There, of course, when we go into the winter, those electricity prices are in [ food ] prices are likely to go up with less availability of solar production mostly and more demand for gas. So that's one part. So that's margin will, as a result, decrease. The other part is our price setting. And there, at this point in time, like we discussed before, we look at it on a monthly basis, does it make sense to increase or decrease our prices with -- we are very happy with our price point purity. We're basically in the middle or maybe even low end of the market versus the DC cost charges. So yes, that's what I can say on the pricing part, that's more likely to be relatively stable over the -- at least the short term. I hope that color.

Yes. But still, your -- let's say, your normal range between [ $0.40, $0.45 ], that's more, let's say, applicable we should look at for a total annual basis.

Correct. And then -- then [ cat ] -- no more range.

Let's say, your normal range, you had also communicated in the past for your absolute gross margin, which was more, let's say, [ $ ]0.40 to [ $ ]0.45 a -- is that something we should look at going forward? Or has anything changed in that field?

No, I think that's I think that's a good number. I don't think we actually communicated or gave official guidance on that. [ 40 ] to [ 45 ] is if you look historically, probably more on the higher end. But of course, if we see an opportunity to keep it at these levels that we see today, then we will also do that. So we're a bit dependent on the energy prices there.

Thank you very much all for listening and here with we're then ending this call. See you next time.

Thank you all.

Thank you. That concludes today's call. Thank you for your participation, ladies and gentlemen. You may now disconnect.