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

Hello, and welcome to Fastned First Half 2025 Trading Update. 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, Michiel Langezaal, CEO, to begin today's conference. Thank you.

Thank you, Laura. And I'd like to extend a warm welcome as well to everyone on this call as to those joining via webcast. You can find a copy of the presentation used during this call on our Investor Relations website found at ir.fastnedcharging.com. Before we dig into the presentation, I wanted to point out something special, which is in the picture you all see now. In the front, you see an older Fastned design, smaller station with 4 chargers. Behind it is a much, much larger station in a new modular design. I think this is a really cool photograph to represent what's happened with station expansions in the first half of H1 as we expanded 6 stations in the Netherlands, -- and in these locations, we needed much more charging capacity, and we often had to sell no to customers. We were particularly proud of this one because we did not have to close down the existing station during construction. And obviously, at a station that is crucial to hundreds of EV drivers each week, not having to close down is great. And as we've seen, making more capacity available at such congested sites like this one does bump sales after opening. So more about that later. Moving on to Slide 2. With reference to the information provided in these slides and discussed during this call, please ensure that you 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 with me on this call today. And together, we will present this webcast. Today, I will take you through the highlights for Fastned during the first half of 2025 with, amongst other things, our latest headline results and an update on network growth. Also, I will discuss the accelerating electric vehicle sales and talk you through some of the commercial initiatives that we've launched. Following this, Victor will provide more detail on the commercial results of H1 and of course, take you through the financial results for the first half of 2025, which were also recently published in our H1 report available on our website. After our presentation, we'll be happy to answer your questions. If possible, please limit them to 2 questions per analyst so we can give everybody the opportunity. We've scheduled this call to last for 1 hour. So let's get started. The following slide presents the highlights of the first quarter of 2025, skipping the page divider and moving to Slide 5. Our H1 commercial performance is positive with strong growth in revenue and station performance. And at the same time, we continue to add top quality locations to our network. To give you a real-life example, it is only months ago that we opened our first charging station in Italy, the station Brescia on the road from Venice to Milan. Last week, the station regularly delivered revenues of EUR 7,000 a week, which annualizes to around EUR 360,000 a year. Logically very much driven by holiday traffic. But still, given it is located in a region that has EV adoption levels that are a magnitude below that of the Netherlands or Belgium, that is quite an achievement and a testimony to our great concept. EV stock grew by 28% year-on-year, and Fastned delivered 30% more energy in the same period. With the holiday traffic of Q3 currently pushing sales and with the colder temperatures of Q4 leading to cars needing much more energy to drive around, I'm very excited to see growth accelerating in the coming periods. We also passed several milestones this summer. We now have more than 600 great locations in our portfolio. And the majority of our operational stations are now outside the Netherlands and 2/3 of our real estate portfolio is outside the Netherlands. This is quite an accomplishment for the team. In 2021, Fastned raised significant capital to build a leading pan-European player out of a, at the time, leading Dutch charging network. It is great to see us delivering on that road map. Before summer, we launched several commercial initiatives such as the launch of Spark Alliance and the SU Dir marketing campaign. The results in the months after launch are positive and worth mentioning. More about this later. Such campaigns and the creation of Spark Alliance also make a lot of sense in light of our mission. Not only is it simply that more EV drivers charging more often at Fastned stations leads to increasing amounts of fossil fuels not burning up in the atmosphere. It is also about creating awareness for the ability to make the choice to go electric, accelerating the transition and our market. Skipping the next page divider and moving to Slide 7 to dive into the developments on the car market. As predicted before, BEV sales are accelerating again after a little over a year of stagnant regulation. Moreover, support is growing as well. Germany has come back with proper incentives to electrify company fleets, and the result of this changing policy is well visible with a serious uptick in BEV sales in the country. All across the EU, the growth in electric car sales was 22% in the first half of 2025, showing the impact of the step change in CO2 regulation. More about this later. And although not on the slide here, it is worth mentioning that some of the Nordic countries such as Denmark and Norway are well on the path towards 100% of sales being fully electric before 2030. Norway is very close with figures above 90% for the first half of this year. Denmark is above 60% for the period with highs of more than 80% for June. Moving to Slide 8 to look at what we can expect to see next. One of the factors driving EV sales up is EU policy. Here on this slide, we zoom in on the 2035 targets agreed with the car industry. The pathway and methodology are quite simple. Carmakers produce cars and the average CO2 emissions according to the WLTP test cycle of all cars produced in their fleet that each of themselves in a certain year needs to comply with the threshold. And this emission allowance is reduced step by step towards 0 in 2035. The first big step was 115 grams of CO2 in 2021, which led to carmakers such as Volkswagen introducing their ID range, the first big step in volume production of EVs in Europe. In the first half of 2025, we have seen the consequence of the next step, the lowering of emissions to 95 grams per kilometer, a reduction of 15%, which more or less requires an increase in EV sales to some 25% of new cars sold. Note that for the first half of 2025, EV sales across the EU amounted to a little over 17% of new cars sold. So more acceleration is ahead of us. This is a consequence of the fact that in Q1 of this year, the European Commission gave carmakers a little extra wiggle room to deliver on this step change. They are now allowed to average fleet emissions over the period 2025 to 2027. This has led to EV sales growing more gradually than initially expected with significant sales growth ahead of us in the coming years despite the emission target being stable. And to give everyone a little bit of a feel on how that can look like, in the last 6 months, more than 800,000 EVs were added to the European fleet on a total of a little more than 6 million electric cars. With larger amounts of electric cars to come, this shows how quickly the fleet is scaling. Back to the graph. In 2030, the step towards -- the step downwards in emissions is even bigger or in other words, requiring a boost in EV sales to roughly 60% of new cars sold across the EU. This means that EVs by then represent the majority of car sales across the entire European Union. Just imagine what markets like the Netherlands or Germany will look like by then. And this is all less than 5 years from today. So what is happening on the legislative front? Well, first of all, it sets the stage for a need for more progressive policies supporting BEV sales. And this is happening. As part of the 2035 industry dialogues, Europe committed to measures to boost EV demand, whereby it said it will focus on corporate fleets. The EU is expected to still this year come up with a package of measures that takes away bottlenecks related to connecting charging stations to our electricity grids. And as you most likely know, a decision is planned to add a binding Europe-wide CO2 target for 2040, right in the middle of the 2030 to 2050 timeline. On this topic of EU targets and transformative timelines, people often tell me, yes, I know about the targets. But will these not move anyway or simply not be met? In today's political context, I understand this sentiment very much, especially when looking at local politics. That said, this is not what we are seeing in practice. The 2040 discussion taking place today is about a seriously ambitious target in the middle and following expert and academic advice, this is not at all about diluting targets. It is about aiming to achieve them. Earlier this year, the media was full of messages around the 2035 road map for the car industry shifting, but this did not happen. The target stands. Skipping the next page divider and moving to Slide 10 to tell a little about the progression of our network. To just show you some examples of what we've built in the last 6 months. This is a picture of our Emerainville station east of Paris, a location that is exposed to some 100,000 cars a day and that has great amenities on premise. In this photo, the station is still empty as it is taken during commissioning. But you can imagine the station being full of EVs quite soon afterwards. And one on the next slide is setting the stage for our developments in Spain, getting close to the border. It is our station at Perpignan, 12x up to 400 kilowatts available to the many people driving towards holiday destinations in the South. Continuing to the next slide, one of our urban stations in the rapidly electrifying country of Belgium. Over 1/3 of cars sold in Belgium is now electric. It is these stations that allow people without a driveway to go electric. Just once a week visit a station like this, while next door picking up the well-known Belgian fries. The next one, Couvin, is a very important station for travelers. This picture was taken just a few weeks after opening, a full house with many people driving towards their holiday destinations. In the top right corner, you can see a graph of the ramp-up of station utilization. Within a few weeks, Couvin ramped up towards the country's average. This is what we typically see happening. With Couvin being a great station on the route from Brussels southwards into France, you can see utilization spiking towards summer break. Next are pictures of stations we expanded in H1. For many of them, this was about more than doubling charging capacity. For example, take the stations Aalscholver and Lepelaar on a key route from Amsterdam to Groningen on the A6 near Lelystad. Each of them coped with almost continuous utilization levels of 35%. This is quite high given the size of the station with 4 chargers. So often, we have to sell no to customers. This has now changed. Utilization is back to normal levels and the first indications of growth are visible, growing from annualized revenues of around EUR 420,000 earlier this year to some EUR 520,000 annualized just after opening this summer. And this brings me to Slide 15 and talk about what this accumulates to. Every year, there is seasonality in bill pays. The first months of the year are not great for construction and many permissions and signatures are decided upon year-end. This makes the first quarter heavy in construction preparation. The second and third quarter are periods in which construction ramps up. Late in the third quarter, loads of sites are under construction. And in the fourth quarter, much of the commissioning takes place, making the fourth quarter the one where most stations are added to our network. A part of our efforts to ramp up our construction pace is about getting this more into a continuous process, but that isn't easy. As an example, having buffers of signed locations and buffers of permitted sites in the process will help a lot to make things smoother and accelerate construction. But developing buffers would go against our mission to accelerate the transition and build early. Moreover, what held us back in H1 were amongst other things, the ever-getting bigger stations. The best example of this are the 2 service area of the future stations at Kendbrckke. Here, we instead of building a station with 4 or 8 chargers like we did some years ago, we built something more than 2 or 3x that size, plus a several hundred square meter retail space, including the full interior and a station for trucks and all of that on either side of the motorway. All in all, despite we're challenged to deliver on the targets we set ourselves, I think the team can be very proud of what they achieved. Accelerating construction pace while building bigger stations and at the same time, starting to build retail shops at scale and ramping up the deployment of truck infrastructure. The numbers in the first 6 months, we opened 17 new sites and another 8 reopened after expansion. Just before summer holidays, another 12 stations opened. And on top of that, 3 expanded stations were reopened for business. This leads to a total of 29 new stations added to our network and 11 stations being expanded for future growth. Looking ahead, we are continuing to increase our location acquisition and build base and are confident in scaling this. What we will not do is accelerate things by diluting our investment philosophy. We see this a lot in our market. Companies and policymakers constantly talking about numbers of chargers and how many they deploy. Rarely, they talk about how many visitors per station they realize. For us, it has to satisfy both criteria, and that is why it is hard. The next slide is the page divider that brings us to talking more in detail about the commercial initiatives that we launched. One I wanted to mention is the See You There campaign, improving brand awareness, sparking interest for EV transition and making our way into drivers' minds. We do this via large billboards on motorways or sparking interest for our mission on social media. Our aim here is to build a more emotional connection between Fastned and people. This is why the campaign focuses on people and not cars. Moreover, it is about delivering a contribution to growing the number of people who make the switch to an EV. Moving to Slide 18. Another initiative I wanted to mention is the ramp-up of in-car advertising. An example of this is 4 screen that manages the POI prioritization and visibility in cars such as Kia, Hyundai and Audi. This development makes it easier for drivers to see that a big Fastned station is coming up along their route. Just imagine seeing that on your screen while the kids just mentioned having to go to the bathroom. It simplifies things a lot and would make going to a Fastned station much more likely. The next slide is about the launch of Spark Alliance, our reputable charging companies joined forces to improve EV drivers' journeys. We do this through lifting our networks out of the crowd in each company's apps and improving interoperability across our charging networks. We're also targeting improvements to other navigation tools EV drivers use. All of these initiatives are examples of how we are driving the growth of revenues at our stations and making sure EV drivers have us top of mind when thinking of charging as well as making sure it is easy to find us. In the months June and August, we've seen very positive developments of revenue, which we expect to have strong ties to these projects. Before handing it over to Victor for a more detailed review of the numbers, I want to say something about batteries on Slide 19. And although we've built charging stations with on-site grid storage such as Kotz Hilden and the Oxford Super Hub in the past, we did not yet experiment with our own energy managed solutions. This we did for the first time this year. On 2 locations in the Netherlands, Bista and Linghorst, we deployed 400-kilowatt hour in batteries. These sites were unusually constrained with only 400 kilowatts of power being available from the grid for each location. That while they deliver to a big motorway in the country and having each 10 chargers capable of delivering up to 300 kilowatts. One can imagine that this regularly led to customers being impacted with lower-than-expected charge speeds. The deployment of batteries, and we have been able to improve on several aspects. We greatly improved the charging experience for EV drivers through being able to deliver higher peak power. Buffering electricity on site allowed us to sell more charging sessions and more kilowatt hour. We could optimize the use of the available 400 kilowatts of contracted power through making use of our takeoff profile being more continuous. Being able to manage clusters of chargers on a single connection that is congested with a system that will trip if not kept within its boundaries is a crucial capability. Soon, grids will become congested elsewhere and move towards smart. In that context, I'm happy that Fastned as a consequence of being active in the Netherlands could learn this early on. And on that note, I'll hand you over to Victor Van Dijk, our CFO.

Thanks, Michiel, and hi, everyone. Starting with station economics. These are the unit metrics for the average station that we show each quarter. These are essential to track. Two key points here. Firstly, gross margin per kilowatt hour increased strongly from a relatively low level in the first quarter. In the first quarter, it was $0.47 per kilowatt hour due to relatively high electricity input costs and energy tax increases in the Netherlands. We said then we expected both effects to recede in Q2, which they have. This leads to a gross margin of $0.54 per kilowatt hour in the second quarter of 2025, our highest level ever. Secondly, energy delivered per station grew 8.2% year-on-year and organic volume growth at the stations was 16% year-on-year, which is lower than BEV fleet penetration growth of 21%. I'll explain on the next slide why that is and why we expect to return to close to BEV fleet growth on a station level in the coming years again. Next slide, please. What we have seen over the last 5 years is that both the number of BEVs and the number of chargers growing rapidly from a very small base and literally hundred folding in both cases. Electric vehicle vehicle growth started first and really took off from 2020 onwards. Charger growth catched up from 2023 onwards after capital raises for charging companies scaled up in the early 2020s and government stimulus. This led to more chargers being available per BEV from 2023, which normally dampen sales growth per charger. It did not lead to a decline in sales per charger, which I'll explain later. So where do we go from here? If you look at the available locations for chargers, there are physical limits to the number of attractive locations. And those limits will lead to lower charger growth in relevant locations. I'll explain more about that later. On top of this, congestion in energy grids will limit charger growth in the second half of this decade. The installed base for both BEVs and chargers is now much higher than 5 years ago. So growth rates naturally come down from triple digits to double digits. This is what we expect and what several market analysts also expect, including LCP delta, which we show on the right graph. BEV fleet growth is expected to be higher than the growth in number of chargers in the years to come. This obviously leads to higher sales growth per charger and per station, which is obviously great. So these were all numbers, but how can you picture this in reality? The situation on the motorways in Flanders in Belgium paints the picture. The Flemish motorways that you see depicted here have about 100 locations on motorway service areas or on motorway exits. Most of these locations are attractive due to high traffic flows, leading to a high natural demand. Fastned has the strongest position here with concessions of initially 15 years on about 1/3 of these locations. Fast charging on these 100 locations was developed between 2020 and 2025 under very supportive government stimulus and tenders. Fastned was first in developing its locations from 2020 onwards, leading to extraordinary station sales levels in 2022 and 2023 despite relatively little BEV adoption in Belgium at that stage. You can clearly see that in the detail we show for Belgian stations in the appendix of this presentation. Others followed mainly from 2023, causing Fastned's sales growth to be less than BEV fleet growth as EV drivers had more great motorway options available and some might be more conveniently placed. So they simply have more location options to choose from. However, by now, the vast majority of the 100 locations have been developed and have significant capacity. This means the location options to choose from for an EV driver does not significantly increase anymore on the Flemish motorways. Therefore, we can expect sales growth on these locations to develop more in line with BEV fleet growth again relatively soon. It is important to note that despite EV drivers having many more options available now, Fastned remains the most favorite option due to our combination of great locations, a great charging concept and a great brand. To picture this, we have about 3% of charging locations in the whole of Belgium. but we have a 20% sales market share. Our station sales are 8x the average in the market. That is a pretty radical difference. So if the number of BEVs per fast charger, and that's on the next slide. So if the numbers of BEVs per fast charger has been going down in Europe in recent years, why did Fastned and some others still show good sales growth per station or charger? That is because fast charging is the fastest-growing charging market. As we said before, public charging grows faster than BEV fleet growth as the early EV adopters were more affluent, have bigger houses with driveways and thus the ability to charge at home. Newer adopters have less ability to charge at home, so need to rely more on public charging. Out of public charging, fast charging is the one that scales best because it has a better business case, it's easier to scale physically and draws more investment. The user experience is better as the charge is quicker and increasingly so. So the proposition for the customer is better, driving demand for fast charging. This explains the good sales growth per charger station. And this means that Fastned is active in the right segment as we solely do fast charging for the above reasons. Next slide, please. So we are in the right segment of the market. And within that segment, Fastned continues to outperform and not by a small margin as we show here. We have 4x more sales per station than many of the other top 10 fast charging companies in Europe. This is due to our location strategy, our great concept and our brands. And just to emphasize, it is not just one thing. It's about doing many, many things, if not close to all things right. These high sales per station are a key indicator of success. A location business like fast charging starts with having customers in the door, and you can optimize from there. There is nothing to optimize if you aren't able to attract customers. It is also key for our competitive position. The ones on top have the best station economics and could start lowering prices once the profitability is there. The ones on the bottom will have unprofitable station metrics for years to come, so they can't lower prices meaningfully. As a result, we see many of those parties actually increase in price. So in conclusion on market dynamics, we have seen charger growth higher than BEV growth in recent years, having a dampening effect on sales per station growth. But it looks like this will reverse in the coming years. We see that fast charging is the fastest-growing charging market and its usage grows above BEV fleet growth, which has an uplifting effect on sales per station. And we see that within fast charging, Fastned has the highest sales per station, which indicates that we are doing a lot of things right, and it's a strong competitive advantage. Next slide, please. This morning, we published our interim report for 2025. Let me take you through the highlights. We have strong revenue and gross margin growth of 44% and 38%, respectively. Again, we are at a more than EUR 100 million revenue run rate. With this, a 44% revenue growth becomes very substantial. Revenue growth came through a range of factors, higher sales price, higher e-Credit proceeds, more volume per station and a larger network year-on-year, so growing on a lot of axes. The number of stations will continue to grow and the volume per station will continue to grow as well. So we can expect strong revenue and gross margin growth going forward. Then on cost levels and EBITDA. Over the last year, we have been investing heavily in our workforce in European countries. We have put full management teams in place in the 5 largest countries and went from a functional and centrally led structure to a matrix structure with local leadership in the countries now driving the local pipeline development. Also, we hired operations staff in various countries, and we hired architects and construction managers to build more and bigger stations. This has increased network operating and network expansion costs substantially. You could see that they grew by 50% or more year-on-year. We think this is the right step to take in light of the EV market having started its next phase of acceleration. This, of course, with the aim to increase the construction pace in the various countries and operate the expanding network under local leadership and with increased local staff. This increase in staff has an effect on today's profit and loss and EBITDA number but will yield in increasing station construction from around 50 stations annually in previous years to more than 100 stations annually in the coming years and in servicing an increased network size. Also, we have started to do marketing, as Michiel explained. This obviously also comes at a cost for the benefits we expect to materialize between now and the next few years. After all of this, operational EBITDA expanded by more than 20% and underlying EBITDA remains positive. The negative underlying net profit of EUR 19.9 million is almost fully attributable to the network expansion costs. Most of these costs, we have to take immediately but will yield in reality yield over the 15 years-plus years of the station's lives. With the strongly developing station economics, the expansion effort is a very valuable investment. Next slide, please. As last year, operating cash flow is near neutral. Note that EUR 4.3 million out of the EUR 6 million negative operating cash flow is related to revenues from construction services in the first half, which is still outstanding with the German government. Operating cash flow being near neutral provides us with a great position to be in. Many other CPOs have significant negative operating cash flow still and financial investors or strategic owners will need to decide if it still makes sense to fund those. In the first half of 2025, we issued 2 retail bonds with total proceeds of EUR 71 million, including extensions. We now have 10,000 retail investors invested, and that number grows by 500 to 1,000 retail investors with each tranche. As a reminder, these bonds are an attractive source of funding for us, having no security or financial covenants and having an attractive coupon of 6%. As said last time, we are in a strong funding position with a high cash position of EUR 113 million, operating cash flow near neutral and growing revenues, an attractive and successful retail funding program and flexibility in CapEx spend. Combining all of the above, we expect to be able to fund a large part or all of our 2026 rollout from this. Next to that, we are assessing bank financing. This has become available to the sector, and we are assessing in what way Fastned can do this attractively and what timing is best. Next slide, please.

We end with taking a look at our guidance for 2025, which is unchanged and which we are working hard on to make reality. All in all, I'm very positive about what is to come and proud about what we've realized in the first 6 months of this year. And on that note, I would like to thank you all for listening. I now hand the word back to the operator for questions.

[Operator Instructions] We'll now take our first question from James Carmichael of Berenberg

Just had a couple, if possible. So firstly, I'm just looking at the cash flow statement in the report. You've obviously got operating cash flow outflows, which sort of widened a little bit this year even on a pre-working capital basis. And then just trying to get my head around, I guess, in first half this year, you added 5 fewer stations, but CapEx is sort of more or less doubled to EUR 41 million. So just trying to, I guess, understand those dynamics and it makes it a little bit hard to piece together the route to sort of positive free cash flow. So just interested in your thoughts on the outlook there. And then I guess, possibly related just on the cost side, you mentioned both sort of network operating and expansion costs up around 50% year-on-year. Are they sort of both those areas of the business now fully staffed? Or how should we think about those lines going forward?

Yes. Thanks, James. Let me start on the CapEx question. So indeed, EUR 43 million CapEx first half. Yes, what that's related to, of course, is a multitude of things. One is we built 17 stations in the first half, but we also built 12 stations in July. Obviously, the CapEx spend was in the first half for most of that. We did 8 expansions in the first half that Michiel explained. And we built Burk, 2 large stations on opposite sides of the highway plus 2 big shops, which also had a significant CapEx spend. And also, we have right now at the end of June, we had 40 stations, additional stations under construction that will be built in the first half, and that also comes with prepayments, which is visible in CIP on the balance sheet. So those are -- yes, those all add up to the EUR 43 million. Then on costs, network operating costs, network expansion costs. So we've seen in both, of course, big increase like you've seen in the report. What we also see is that we've been building up our network expansion teams to be able to deliver those more than 100 stations per year. We're not fully there yet, but we're nearly there. Today, we have 420 FTEs. And yes, we expect that number to go to a little above 500 by the end of next year. And that indicates already that FTE growth will taper off in the next 12 to 18 months. I hope that answers your questions.

Maybe just on the first one, I guess, given those dynamics, I mean, I know you're not going to guide on free cash flow, but what are your thoughts around that? And when do you sort of expect the business to be sort of self-financing?

Yes. Indeed, we don't give guidance on free cash flow. I think the way we look at it, if you look at our 2030 targets, 1,000 stations, EUR 1 million revenue, 40% operational EBITDA margin, you can clearly derive that we can -- with that, the cash flow that comes from there, we can build the 100 to 150 stations we would like to do annually. And then a few years before that, we get to that free cash flow. But we're not pinpointing any number or any year yet.

And we'll now take our next question from Thymen Rundberg of ING

The first one on charging volumes. So Victor, I know that you mentioned that chargers grew at a higher pace than BEV growth with a dampening effect on charging volumes at Fastned. And you said that it will -- it looks like this will reverse in the coming years. But then when I look at Q2 charging volumes versus Q1, they were 7% lower than Q1. While you had more stations, chargers, there were more BEVs on the road. So we usually don't see the discrepancy between Q2 and Q1. I was wondering if you could elaborate a bit on this. And then the second one is on pricing. So charging revenue was relatively stable in Q2, good gross margins, but also the sale of renewable energy units continues to increase now to $0.07 per kilowatt hour delivered. So firstly, how do you see the charging prices develop into the second half? Do you think this is sustainable and then perhaps also into 2026? And what can we expect to see from the revenues from these renewable energy units as well?

Yes. So if we can go to Slide 33 in the appendix on your first question. There you clearly see that like every year, Q2 is -- has a strong seasonal effect. Q2 is basically our worst quarter of the year. And that is simply because temperature is going up, which means that electric vehicles have less energy needs. So also the demand goes down. And what we see every year is that for us in July and August, we see growth coming from holiday traffic. We see that in the holiday countries like France very, very strongly. You also see -- we also depicted that here the July volumes of this year already. And what you see when going into September, October, when temperatures are going down, we see a big increase in Q4 and basically have a double whammy there. The fleet has increased year-on-year. The energy needs go up again, and you see basically almost all of the growth, the yearly growth in the last quarters of the year. But that is something that is simply tied to this business. And yes, this is simply how the business -- this market works.

For example, last year, we didn't see that really from Q2 to -- from Q1 to Q2, for example, and the year before that was not really, right? So if you look at volumes delivered.

We did see that. In that same graph you see last year, you clearly see the same pattern. And in the year before, 2022, most of us have forgotten, but early 2022 was still COVID. So that had locked down. So that had a dampening effect on the Q1 levels in early 2022. So it's very clear that Q2 will always be a lesser quarter.

And I think it's important to also mention that with the BEV fleet scaling, the growth of the EV fleet scaling is going to be lower, while the seasonal effect of temperatures technically will remain the same. So, the seasonal effect year-over-year will increase as a consequence of that -- of the fleet growing. So it's logical that the number goes -- that the effect goes bigger.

And then on charging prices, yes, what we see there is we see no pressure on prices. On the opposite, we see many of the -- also the top 10 players actually increasing prices. The oil majors having done that. Some of them have prices that are -- go above $0.80, $0.90 even. And that is also natural because this is a location business. Demand is relatively price insensitive. So if you have some demand, you increase your price to increase your profitability. Yes, so we don't see that -- and the reverse also is true. So, if you lower your price, you don't really increase your volumes. So it doesn't make sense. So people try that sometimes and then they see it doesn't work and then they don't do it anymore. So for that reason, this market is not a very price-sensitive market.

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

I have 2 questions, please. First, on the CO2 emissions you highlighted on Slide 8. How do you calculate the corresponding sales mix with a 15% reduction to be 25% and then 60% with another 47% reduction? And why do you expect a continued overcompliance based on this chart? And then the second question is regarding the other revenues in Germany of EUR 4.3 million. Where do you expect that, that number could grow to based on your secured locations in Germany? And I understand this is not revenue related to charging. So you leave it out of gross profit margin, and I think you leave it out of operating EBITDA, if I'm not mistaken, but maybe clarification on the accounting treatment would be helpful.

Yes. So on that construction revenue, we leave it out of our main KPIs because it's going to be temporary, and it's tied to the very specifics of this tender. So for this tender, we basically build the stations, we deliver them to the German government, and that makes it that we act a bit as a contractor, and we have all the construction revenues going through our P&L. And that will have this year and next year when we build those stations and thereafter, it will be gone. But it will have a positive impact on revenues and also EBITDA. And this is -- yes, we don't give guidance on how big this effect is going to be, but it is a significant effect both on total revenues and EBITDA this year and next year.

And this is only the beginning of 4.3 million, right?

Yes, definitely. This is really tied to how many stations you're building. And yes, we've only built a few. We only opened one, and we're building others. So this is related to the ones we already did by now or are building by now.

And then maybe about CO2. So I think it, of course, depends on how you do with them, what kind of carmaker you are. But let's say, an average vehicle -- an average combustion engine vehicle has emissions around 110 up to 130 or more per kilometer. So if you want to make the 95 grams of CO2, then you have to, in the equation, make 25% cars being electric, a little bit higher, a little bit lower, depending on like what kind of car fleet you make in terms of combustion engine cars. And the same is true for the higher target by 2030, if you make that roughly 50 grams of CO2, you can only make that by adding that percentage of cars being electric, which is above 50%, a little above 60%, even depending on the emissions of the internal combustion engine car. Does that explanation?

Yes. Thank you, Michiel. That makes sense. But also the dotted line shows the anticipated performance, which is ahead of the target, right? And you're saying the BEV registrations in the first half were at 17%. So theoretically, they should already be ahead of the 25%. And you're expecting continued overcompliance based on the dotted line.

Yes. I think that's in the end what you see. So when we look back at the negotiations in Brussels earlier this year, there was quite a bit of news flow on why are we actually debating this? Because when we look at sales numbers, carmakers are complying. So why would we wiggle the targets? Why would we do that? And I think the consequence is because like not meeting them is a very serious penalty. And two is that these carmakers, they look ahead, well, maybe close to a decade, right? Their car platforms are often investments of, let's say, 2 to 3 overhauls, maybe, let's say, somewhere between 10 to 14 years. That shortens a bit with the electric car, but those investments are very long term. When it comes to electrifying their factories to make them ready for car production on EVs, we're talking about also timelines of, let's say, 5, 6, 7 years. So preparing themselves to deliver on that, that is something that they will not do. They can't just overnight follow that graph exactly. So they won't -- it's just too high of an expense to them.

We ll now take our next question from Luuk Van Beek of Degroof Petercam.

First of all, I have a question about the charge speeds, which increased significantly in Q2. Can you comment on what you expect for the future? And then in particular, the impact of new vehicles entering the fleet? -- there's also more budget models that have lower charge speed. So how do you expect that to develop going forward? And my second question is on the operational EBITDA margin, which, on the one hand, should benefit from your operational leverage on the other hand, you mentioned lots of investments in especially the organization in new countries. So can you give a bit of a comment on how you see, say, mature stations benefiting from the operational leverage and how the markets -- the margins are developing there?

I'll let Victor think a bit about that. Maybe to start with charge speed. So I think there's a couple of developments, right? So one is, I think we see on the top end of the market, we see charge speeds increasing again and again year-over-year with new car models coming to market that have higher charge speeds. And then we're looking at maybe companies like BYD, Porsche, let's say, topping with stories around, let's say, 10 minutes or even 6-minute charge times and power levels of 400 kilowatt or even higher. And we see also the development of the charging standards being adapted to make that happen. So that's happening on, let's say, the higher end of the market. And what we normally know from cars is that these developments, they trickle down to the, let's say, more normal car segments in the years thereafter. And what we currently see is that let's say, the more mid-market cars, they start to reach power levels of 100 kilowatts or a little bit higher more on average. And we expect that to follow as well. And what you then see is that the total car market is a mix of what is added over time, right? So, it's a cumulative. But the interesting thing is that, that market is scaling exponentially. So what's added is significantly larger than, let's say, what was added years ago. So the older cars in the in the mix, let's say, and their influence on the mix fades away quite quickly. So we do expect charge speeds to develop rapidly over the coming years and to continue to develop. And then you're talking about, let's say, getting towards maybe 150 kilowatts on average or so by 2030 and beyond. And that depends a little on also the relation with China. Does that give you a bit of color on that topic?

Yes...

It isn't fully exact, but I think it's good to give you a bit of, let's say, the drivers of that.

Yes. And then on the operational EBITDA margin, maybe best to look at it maybe on a country level. So in various countries, there's various speeds of EV adoption, and that influences this number because it influences our station sales. So, if you've seen the number for the first half, the operational EBITDA margin. If you look at countries like the Netherlands and Belgium for us, where the station sales are higher than average, you see also that, that operational EBITDA margin is considerably above the average one. I won't go into the specific numbers, but there you see that countries where the station sales are higher have significantly higher operational EBITDA margin. So you see that operational leverage working.

Yes. So basically, the -- can you confirm that's an increase in the countries where the impact of, say, investments in growth is lower?

Sorry, I didn't get that.

So in say, the more mature countries, like you mentioned, the margin is increasing and there's, say, a dilutive effect from the investments you're doing in new markets. Is that the picture?

Yes. And we'll now take our next question from Robert Vink of Kepler Cheuvreux.

Maybe a follow-up on the topic that was just discussed that the country performance. Yes, if you look, for example, at Belgium, you see very solid sales growth, but actually, the EBITDA declined year-over-year. It still remains kind of positive and also kind of taking your words from the previous discussion. I assume that's probably related to investments in expanding the network, which we also see in the numbers with the solid growth of the network. So I would be interested to get a sense when the inflection point will occur for Belgium in terms of EBITDA. So when the operational EBITDA will start to really meaningfully offset network expansion investments and starts to become a material meaningful contributor to the group EBITDA. So that would be my first question. And my second question is on the rollout. clearly, with your pace of station rollout during H1, you need to significantly accelerate the rollout for the second half year. I think you also clearly in the presentation laid out how the rollout has a seasonal element. But I'm wondering is, why you decided to maintain the upper end of the station guidance for the year-end, which is 425 stations. I would guess that probably Germany is a key factor for achieving the upper end of the guidance. We know from prior quarters that rolling out in Germany has been taking time. And as a result, you probably have some locations where development is advancing to a point where they could be rolling out rather soon. So I think that will be interesting to get a sense why you maintained the upper end of your station guidance and then maybe Germany plays a role there.

Yes. So of course, we assess what our expectations are for the end of the year, and the expectations are still within the range we indicated. If you look at the total number of stations that have an opening date or an opening date ambition still this year that's even above that range. But we also know that it's unlikely we'll open all of them because there's always a possibility of often outside effects that lowers that number. So we're still in the range. And also, yes, when we're -- and there's also the effect that in Q4, we do a lot of the station openings like every year and closer to Q4, then we have more visibility. So we'll reassess again, of course, ongoing, but also at the Q3 trading update, whether we still expect to be in that range and whether we can narrow the range, for instance. So on that one. On Belgian EBITDA, that's very much tied to what I explained during the presentation. So in Belgium, we put in place a full management team over the last year. And that is -- yes, it's a great example of a country where we were functionally led, so led by the respective pipeline directors, but we decided to put in a management layer to accelerate that station rollout. And that's -- and add also capacity on -- with people and hiring great people in construction management and architects to accelerate that rollout. And of course, that has an impact now, but it is with an anticipation that rollout in Belgium will accelerate. And that, of course, will increase revenues and revenues will increase in any case on the already operational stations. So that is a bit of a -- yes, an effect of costs already happening, while the benefit is in future years. So when will that EBITDA accelerate? Yes, that -- yes, I'm not going to pinpoint a year on that, but that should accelerate in the next few years.

And we'll now take our next question from Jeremy Kincaid of Van Lanschot Kempen.

Thanks for the additional charts in the pack. It's very helpful. I'm just going to pick up on a previous question around volumes. Obviously, the volume outcome was below where the market was expecting today. And if we look at the amount of electricity delivered per station, that still grew compared to the same period last year, but obviously less than what the market expected. So just trying to understand why that was. And obviously, you provided the chart of there was an increase in supply of chargers in the market relative to the fleet of electric vehicles. And you provided the commentary saying we expect this to change because of grid congestion issues and physical limits to charge locations. I'm just trying to understand why you think the change in market supply will happen in the next couple of quarters as we have had grid congestion issues for a while now. And I don't know if there's been a drastic supply change in the physical limits of charge locations. And then my second question just follows on from that, which is if you are expecting it to be harder for the market to add new fast chargers because of congestion issues in physical locations, you still hold to your 1,000 chargers by stations by FY '30. So can you provide some color as to why you think that it's not going to impact you, but everyone else and all your competition?

Yes. Thanks for your question. I think maybe, let's say, let's go in a bit to a higher level. I think when looking at that 2035 road map and the step change, we've seen or are seeing in car sales, so we're seeing car sales accelerating now. And I think basically, when we look at the development of infrastructure, we've seen that, let's say, continuing during the more stagnant years of car sales in 2023 and 2024. And the consequence of basically is that equation where Victor was diluting to alluding to saying like we've seen sort of that BEV per charger, let's say, being impacting or softening our sales in recent periods, given that car sales is accelerating rapidly now again, that should quickly basically increase car sales again. On top of that, basically, the rollout of chargers becomes more difficult. As a consequence of simply there is a physical limit to locations. And then we're talking, I think, initially mostly around the countries where we expect those sales to increase, right, like countries like the Netherlands, Belgium. And, let's say, the rollout will focus more on countries like Spain, France, the areas where BEV fleet growth is still -- is still a factor lower, right? And I think if you look at that, I think then bringing to that topic of it being harder. This is why we're focusing so much on developing that pipeline of locations. So today, we have over 600 locations signed. Logically, we have a massive pipeline under development to be signed in the coming months and years. So that's how we're working towards that goal of 1,000 sites. And yes, if you look at, let's say, other parties in the market, like if you don't have that pipeline, if you don't have that real estate portfolio, then the only way to add capacity to markets either diluting on your type of sites that you want to build, which we see happening a lot or simply not building. And both will happen, but both will not add addressable capacity to the market because whether you not build a station or you build a station in a place where no one is coming anyway, doesn't add capacity that's used. And that's, I think, what is going to trigger a lot in the coming years that these cars are going to add to the market, but the infrastructure that's meaningful has been built, and that will scale its revenue. I give you color on that topic because I think it is a bit -- it isn't a numerical analysis. It's much more like picturing sort of the logic of it.

We will now take our next question from Nikita [indiscernible] of Deutsche Bank.

I would have 2 left. So the first one is on your stations, which are currently closed to be expanded, like you mentioned in the presentation. Are there any closed for now? And when do you expect them to open again? And are there any financial impacts to be considered? And then my second question is on your operational EBITDA margin. It came in at roughly 30%, 31% in H1. What should change in H2, so you are able to reach your full year guidance of 35% to 40%? Is it just your operating leverage by higher volumes or any further impacts to consider?

Maybe on station expansion, I quickly looked at our app, and you can literally follow this live. Currently, there is no station closed for expansion. But yes, logically, that does happen in the periods to come. But I don't think it's -- I think when talking about financial impact, we're not taking -- we're not talking about serious numbers. So I think it's good to be aware of that.

Yes. And on operational EBITDA margin, you mentioned 30% to 31%, but it's actually -- we look at it versus revenues related to charging. So then you get slightly higher, 33%. So that's the starting number. And then indeed, yes, what we see normally is that if you simply look back, 60% of our revenues are in the second half in a normal year. And that gives an acceleration of revenue and gross margin and that operational leverage indeed, as you mentioned. So it's coming from that.

Okay. Understood. Just a quick follow-up. So the 35% to 40% is always related to revenues derived from charging only, right?

Yes. And operational EBITDA is also only related to revenues related to charging.

We'll now take our next question from Thijs Berkelder of ABN group.

A couple of questions from my side. First remark, you're constantly talking about the strong boost in BEV sales, but except from the U.K., I don't see that. I see a strong spike in Tesla exports currently happening in the Netherlands, meaning that the BEV fleet growth in the Netherlands is in decline and not accelerating. Then coming back on the question of Nikita, do you reconfirm that you target 35% to 40% operational EBITDA margin for the full year? I don't see that anywhere. So it's probably a soft guidance. 33% was margin in Q2, something like 31% in Q1 and it's purely a function of the lower electricity price in Q2 versus Q1. So...

If you look at Slide 31, Thijs, you see a reconfirmation of that operational EBITDA margin guidance. So we do reconfirm it 35% to 40%.

Sorry for that. I overlooked that. Does that mean that you reconfirm the, let's say, the operating cost per charger to end the year at EUR 21,000, where it in H1 already was EUR 10.4?

Yes, that's correct.

Okay. Just to understand that. Then more structural questions. ACM, the regulator came up with a report in July, advising the government to only hand out auction licenses on highway locations in the future and probably also by the reauctions of your existing sites, having at least 2 operators per site. How somehow, is it possible that the regulator decides on this? They must have talked with you quite a lot. Somehow it feels that they see you're in a monopoly situation and want to get rid of that monopoly in the Netherlands. Second question is on the Spark alliance, where especially Electra is extremely aggressive in their pricing, in my opinion, far lower than your pricing. So how long does it take before you need to lower your prices to come back in line with the market simply because I think competition is simply making use of the low electricity price and forwarding that to clients, whereas Fastned is not yet doing that. Then Third structural question is coming back on the rollout in Germany. Yes, but you had a presentation of 3/4 of an hour. On the rollout in Germany, can you remind me on the number of stations where you will book those station revenues in principle? And I would say, roughly EUR 1.5 million to EUR 2 million each probably. Under the license conditions, if you do not deliver according time frame, we then lose the license, we then have to pay penalties for not meeting the deadlines provided. Can you please explain?

Yes. Maybe let me start with the ACM. I think that's a good one to maybe pick up. I think yes, we were surprised and the industry was surprised about this report. They did this, let's say, within close quarters. So there was no industry consultation. Political environment was quite surprised as well because, yes, let's say, the argumentation there is much more around competition between locations, which would be more supportive of solving the problem around grid congestion and would accelerate investments more. So yes, basically quite a bit of surprises on that report, why there will be a logic for the ACM on seeing a position of us that there is no legal basis or a logic for that as the concessions have a definite timeline anyway. And yes, the industry and also, let's say -- yes, let's say the industry was quite surprised given that there is quite some loopholes in their logic related to sort of the competition regulation in Europe when it comes to the services directive. So all in all, a bit of a vague action by the ACM. Yes, that's -- I think that's basically on that topic. And we're happy to see basically that the government, basically also the most industry sort of groups are still supporting a more logical route towards proper charging stations and competition between service areas. So that on the ACM, I think Spark and pricing, yes, I think we can't talk much about like the, let's say, the pricing policy that Electra has or any other member of Spark in that sense. But I think when we're looking at pricing, I think we talked about earlier in this call, we continue to see basically parties that have relatively low revenues on site here and there experimenting with lower pricing, but in the end, again and again coming back with raising their prices to improve their station economics. And the only parties that could actually drive prices down and profit from that in due time are companies leading the market and having leading station economics. So yes, we don't see a logic for that.

Maybe to add on that. If you look at Electra s pricing in Belgium, that's one of the markets they're expanding rapidly in with the Delhaize corporation. Their pricing at the terminal is $0.73 per kilowatt hour, which is exactly our pricing. So if you look at the pricing, it's exactly in line. And if you look at the whole market, the whole market is actually higher than us. If you look at the likes of other top 10 players, EBW, Total, Shell, the likes of those, ION is slightly lower. So you...

Lowered prices.

And they increased them again as well recently. So when you say if you want to be in line with market, we would actually need to increase prices to be in line with market. So that's the reality. I think what Electra is doing is indeed, I think they -- you can see that their sales are lower. I think they have a great customer experience, and we respect them a lot for that. But I think they're also looking for ways to increase their utilization, and they're experimenting with this. They're also good in price perception, first month offers, et cetera. I think we can learn from that. But it's price perception, and that's not the price you pay in the end. So I think that's -- yes, it's clear to have the data points right. And if you look at them, then we're probably -- if you look at top 10 players, so the players that do serious revenues, serious volumes, we're probably on the lower end of that range. And then on the rollout in Germany, so the station revenue related to construction we report as other revenues. As you can see in the half year report, that's EUR 4.3 million. So there's a separate line for that. And like I said before, we -- basically, in all our communication, we focus on the revenue related to charging for the reasons I mentioned before. In terms of penalties, there is penalties in those contracts, but we don't expect significant impact from that. I think the German government is really looking to accelerate that rollout. I think we're probably at the forefront of that rollout if you compare to others and the German government wants to have that roll out there. They're not in the business of levying penalties. So we don't expect a significant impact there. I hope that answered your questions, Thijs.

Yes. Many, many more, but...

By again soon, Thijs, and we can discuss them all.

Happy to.

That was our last question. I will now hand it back to Michiel for closing remarks.

I would say thank you all for listening. And yes, it was great to see you, and looking forward to see you again with the Q3 update that will be very, very exciting. So looking forward to that.

Thank you. Bye-bye.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.