Kempower Oyj (KEMPOWR) Earnings Call Transcript & Summary

Hello, everybody, and welcome to Kempower's Capital Market Day 2023. My name is Paula Savonen and I am the VP of Communications at Kempower and also your host today. This is our very first Capital Markets Day, and we're so happy to see you all here in the studio and also everybody online. I know that we have quite a lot of people following us also on the stream. So thank you for joining, and we really, really wish you enjoy today's presentations. We have Kempower's home management team here with us today, presenting our strategy and future plans. I will present you now our CEO, Tomi Ristimäki. Welcome, Tomi; Then we have Jussi Vanhanen, our Chief Market Officer. Hi. Jussi; Tommi Liuska, our Chief Sales Officer. Hi, Tommi; Sanna Otava, Chief Operations Officer. Welcome, Sanna; Jukka Kainulainen, our Chief Financial Officer.

Hello, everyone.

Welcome, Jukka. And then Juha-Pekka Suomela, our Chief Service Business Officer.

Hi.

Welcome JP. So how we run today's agenda is that we will have short presentations. And after each presentation, we will have a Q&A session. So if you are here in the studio, you can just raise your hand and present your question. But do not say anything before we give you the mic because we have almost 100 people on the line, and we want everybody to hear the question. And then if you're online, you can type the questions in the Q&A box. Any time during the presentations. And we really wish that you take part to the discussion and challenge and ask a lot of questions. So we will start with Tomi and Jukka on Kempower story and the Q1 financial overview. And after that, we have a short Q&A. Then we continue with Jussi, surging market and customer demand and Tomi. And then after surging market and customer demand, we will continue with Jussi on our technology. And straight after Jussi, we continue with Sanna. So Jussi and Sanna, they will have a shared Q&A just before the break, and then approximately [ 20 ] to 3:00, we will have a break of 15 minutes. And then I hope that you will take some snacks and coffee so that you have a lot of energy for the last 2 presentations. After the break, we continue with Tommi on North America. And then the last presentation for today. Last but not least, is our updated growth strategy and financial targets presented by Tommi and JP. So we really wish you stay with us also online. And now I give the floor to Tomi.

Thanks, Paula, and welcome from my side as well. So we go first about a little bit introduction on what Kempower is all about if everybody doesn't know it and then also to the figures of Q1. So our vision is to create the world's most desired EV charging solutions for everyone and everywhere. So this is actually looking at the globe as one and looking at the green transition because this is something affecting us all. Like I said in the Environmental Conference in Stockholm on Tuesday that the CO2 doesn't actually, let's say, mind about the border so the globe is together. So we are working towards that. So Kempower in brief. So what we are all about, looking at also where we have gone, so a top layer in the Nordic DC charging and gaining market share in the rest of the Europe. Two production sites in Lahti, Finland, then subsidiaries, a couple of new names from last year. So we have the Germany, Netherlands, U.K., Sweden, Norway, France, Spain, Italy, still operational, there were most -- and the new one in there is Poland in the same way sales office. We have the local tech support for the customers. We're looking at how to work with the local customers, around with sales and also technical things. But U.S.A. is a little bit different because we are actually looking at it as complete site with manufacturing and the whole operations. Kempower has today more than 30,000 shareholders listed in the Nasdaq First North Helsinki, and some reminders also the recognition of last year being the Finnish Growth Company of the Year 2022 by Kauppalehti and also the Presidental Export Award, et cetera. And also a nice speaker here to look at that also the group of colleagues is growing quite fast. So we ended up with a headcount of 375 and now end of Q1, 465. So almost 100 people more again. So it's continuing on the right way. Looking at how we address the market today and how we address it from now on, we talk about the applications, what we are charging is also giving our investors and especially if we're looking at our analyst crowd here to look at actually comparisons to market studies as well that we look at private car charging, we look at commercial vehicles than the future market with off-high machinery and vehicles as well. And some customers today, important to see wide customer reference base. So this is also telling the story that -- of course, as a new company, you start with a limited amount of customers, the revenue come from a limited amount, but it's getting wider. It's getting geographically wider. We have a lot larger base of customers where the revenues are coming from. So we have typically there, what our typical customers, so there is customer groups, we would have let's say, these public charging operators, so the people who offer electricity for electric vehicle users publicly, then we have commercial fleets. Normally, it is the fleet owners who own the commercial vehicles who are the main customer group for us in that segment. Then we work together with the, let's say, equipment and vehicle manufacturers. In certain areas, we will go actually where that is an important part. And then the rest of the market, what we have and applications is shared by our distribution and the installation partners. Looking at the Kempower technology, and this is a good picture to look at what we do from the product point of view and our solution point of view that what we are famous about. So it is to look at the electric vehicle charging as a solution that serves many vehicles at the same time. There is a lot of manufacturers still in there, manufacturing chargers who think the situation is about 1 vehicle, 1 charger. We are seeing actually the electric fleets is growing. It's moving to different vehicle types. And it's very important once the investments are made for the charger that you can serve many cars, many kind of vehicles with the same system. And especially when you have the grid connections, which might be limited on the site that you can use this limitation in the best way and actually distribute the power to all the users. I know that the people also can be vehicle drivers sometimes behave badly and they actually leave the car there, plugged in even the batteries full. So that's -- if you have a situation, you have 1 charger, 1 car that plays in occupied. Nobody can do anything. And especially our customer who wants to sell electricity cannot sell the electricity. So a system that can change over time with our dynamic charging can actually serve both our customer who wants to sell the electricity but also the user gets actually the car charge. And when we are looking at how the systems work, it's a very flexible solution. We can serve many kinds of applications. If we look at, let's say, when you have more time to charge or you have shorter time to change, in a similar way, you can do from 25-kilowatt to 400-kilowatt reduction in electric vehicles, power means saving time. So it is basically a very flexible system. So you're going to have the system for supermarket, you can be in the highway spaces. So the -- actually, it adapts to the needs. You don't need to have many different products to fulfill the market. And behind everything and combining everything is our Kempower ChargEye System which is our cloud solution, and we have actually more information on that as well today and look at why it is important in the world and what kind of extra value we are bringing to the customers, with our, let's say, intelligent cloud system. And then just a recap on where we are concentrating in the market. We focus on DC fast charging. So DC electricity, which means it's the same electricity that the battery gets. So we have the left-hand side. We have -- what you go home charging. This is what you would charge your car, maybe in the airport when you have a couple of days of time to wait. This is using the actual charging the car, and this is power limited, because, of course, you cannot fit the big charger in a car or the price would get high. So it's getting smaller. And we also see that the main application there is personal cars. And when you have several hours to charge. That's a perfect way. So these are not competing with it. So they are complementary ways of making the infrastructure. But where actually Kempower works is the DC charging. So the faster when you move from hours to minutes, and especially when you look at the applications on the bottom that the heavy vehicles will be mainly the DC chargning. It's also what we have if people have read our notices today that even if you charge a truck overnight, that is typically DC charging, there is no AC charging in this market, maybe for short transportation, but a little bit longer, bigger batteries, you need actually more power. And this is actually giving them the chargers outside of the vehicle, and it is serving many vehicles with the same investment. So this is kind of the idea why you take it out of the car or otherwise, you would be increasing the vehicle prices. That's not something that will work. And then looking at the Q1 results. So -- I mean if I have to smile a bit, it was a quite good start of the year. So record in revenue in our case, we made more than half of last year's revenues in 1 quarter, EUR 55.8 million. And order intake is keeping at a good level. We will have some -- Jukka will have also comments on that. There were some questions I'm expecting on that. And then looking at -- I think the growth percentage I think there were some target internally people said that we need to keep up the double-digit growth. We have never had double-digit growth. We only had the 4 numbers or 3 numbers. It will come, but it's still a very good state and it's showing how the market grows and how people actually value our products and how the demand is going forward and quite profitable quarter as well. Jukka will tell you more about that. Availability of electronic components. This has been listed all the time if people asking what is the risk in the industry. It has improved. But I would say we are not in the normal situation. There is still risks in that field. And it will remain the whole supply chain, of course, an important topic for us because in our production, we like a lot of supply chain. It is subcontractors who are making us, we design somebody manufactures the path to us or it's components, it remains that, that chain must grow at the same pace as we do. And this is why we need to focus a lot on this. And a nicely goes also that we are delivering what we promised on revenue outside of the Nordics is more than the, let's say, Nordics revenue. So it's growing all the time as we have been expecting that. Now the biggest part is the, let's say, Europe outside of the Nordics, which is clearly bigger already than Nordics. That's a bigger opportunity now we are, let's say, more established in that market. Now I give the stage to Jukka to tell you more about the figures.

Thank you, Tomi, and I'm Jukka Kainulainen from Kempower Finance. And like Tomi commented, we really had an excellent quarter -- quarter 1, really great start of the year. So we actually have the highest ever order backlog EUR 124.4 million, highest ever revenue close to EUR 56 million, highest ever gross profit reaching EUR 28 million and also highest ever operating EBIT margin 12.4%. And then maybe the question, how did we do that? So we actually grew in all the 4 geographical regions we operate. So Nordics, rest of the Europe, rest of the world and North America as well. We also successfully scale up our capacity, both production and supply chains, like we commented in our quarter 1 report today. We also improved our lead time -- lead times in the quarter. So we were able to serve our customers better. And all these, of course, reflected on our good sales revenue and profitability performance for the quarter. So it was really a great start for the year. So then let's look a little bit more how our revenue has developed since beginning of last year and also in the first quarter of this year. So like I mentioned, so almost EUR 56 million revenue in first quarter almost 400% growth. So really excellent performance. But what was now interesting in this quarter, so actually, we made absolute churns most of the revenue in the rest of the Europe. So that bypassed the Nordics revenue wise, even though Nordics was also quite significant, like you see EUR 21.4 million. And like Tomi mentioned earlier, also the Nordics part was the -- sorry, outside Nordics, we generated more than 60% of revenue to 62% of revenue. So we start to take more and more share outside Nordics also in our DC charging business. Then let's look a little bit more about our sales performance for the quarter. In order intake, we reached EUR 61.4 million. In order backlog, EUR 124.4 million, which is highest ever, like I mentioned earlier. But also when looking order intake, we had to remove 1 customer order worth EUR 5 million from our backlog and that related to our customers' financial difficulties. So if we exclude that, actually, our order intake would have been also highest ever in Kempower's history. And also, what is, of course, impacted in this quarter on top of this order removal, improved lead times, this is also on the short term impacting negatively in the order backlog, which is of course positive from our customers' point of view, we can serve the customers better, like I mentioned earlier. And then maybe notable one more thing about our order intake, so our order intake won't develop evenly between the quarters. We have some certain existing customers, which do the purchasing in 1 or 2 quarters in a year. So that development is not even, between the quarters also in the future. Then a little bit more about our gross profit and operating cash flow. Also in the gross profit, we had really good development, so reaching this EUR 28.4 million and 51% of the revenue. So we had really good sales mix in the quarter, which was -- which is now visible in the gross profit numbers. And also in operating cash flow, even though like we have communicated earlier, we are growing and growth in our business means that it's employing always more net working capital. So even taking that into account, we still reported positive operating cash flow, EUR 2.5 million for the quarter. Then about our new outlook. We gave a profit warning last week -- positive profit warning, and we raised our profit guidance for this year. And our new guidance, we guide the revenue between EUR 240 million, up to EUR 270 million. In our earlier guidance, we guided EUR 180 million, up to EUR 210 million. In our new operative EBIT guidance is between 5% up to 10% of operative EBIT for this year. And that was also comparing the previous guidance, which was single digit operative EBIT. But we still want to address for this year that we are entering the North American market, which means that we are recruiting quite many people, we are scaling up the capacity opening the factory in North America, and that means there will be some extra costs relating to that. So that is reflected on our profitability this year. Then at the end, Kempower as an investment, why to invest on Kempower. So of course, this electrification megatrend is doing well. You will hear a little bit more today how quickly market is developing. And it's actually growing even bigger comparing how we saw it a few years back. Another thing, what Tomi already mentioned, our customer base already now is quite diversified. It's a global. It's a great platform to build the growth. Also our offering, like Tomi showed earlier, we have really the satellite charging system, creating the technological advantage. So with the dynamic charging comprising with the fact that we can actually serve all the different electric vehicle types and adding on the fact also that we are not only a hardware provider. We have also the software back-end software system ChargEye, really in the middle of our offering. So this makes us really strong in the existing market. And also adding the fact that our business model, operating model, which is really scalable, flexible, like you see from our past numbers, we have been really quickly scaling our capacity with quite a low CapEx needs actually. So it makes us really a strong company as well. And then adding also on that, that, of course, we hear in the state, everyone has the experience of managing and leading the growth company. And even more importantly, we have a great personnel really committed, skilled at in case employees working for Kempower that makes us really a strong company. But still one more thing I want to address Kempower is really a green investment. Last year, we got this in equity designation from the NASDAQ. I think we were a second company in Finland, getting that. And also, our business is 100% process that's [indiscernible] alignment, which means that our business really contribute on the climate chase mitigation. Thank you. That was from my end. I think...

Thank you, Tomi. Thank you, Jukka. And now we move on to the first Q&A session. Thank you, Jukka. And I would like to check first if we have any questions here in the audience? Thank you. Gentlemen, over there. Let's wait for the mic first.

Yes, hello, this is [ Thomas Cogman ], congratulations on good numbers, of course. Still, I would like to ask about order intake. I mean it was up a lot year-on-year. But I mean, if you put on critical glasses, I've glasses myself. So -- so I mean, orders have been almost flat the last 4 quarters. So I would like to understand a bit the dynamics behind this. I mean I understand that the market is continuing to grow, but I also realize you have a lack of capacity, and you might have step changes in capacity. You don't want to have too long lead times and there could also be things on the kind of component side that the customers are eager to preorder more last year than this year. But could you just open a bit more about these dynamics? What is the reason that orders are kind of flattened out?

Thank you, [Thoma's] and I think Tomi can start.

Yes. I think you made a conclusion yourself already in the sentence on also one big impact is the fact exactly that the uncertainty of getting the product is getting less when your delivery time gets better and your delivery capacity is better that the customer is not -- it could be seen as is it positive or not, but they are not willing to preorder as much as, let's say, in the component since last year, and it was known to everybody that electric industry outwin when things get better, then this preordering like 1 year before the delivery is less. But also the -- it has been, I don't know, flat it's several millions above if we, let's say, at the EUR 5 million that we needed to remove but in that way, I think our history is not long enough to make actually conclusions as well from this because the scale of things is growing. But it's -- going to a year with a very strong backlog also, of course, slowed down the [indiscernible] in the first year when he was sold the capacity already, let's say, previous year.

But we know that you will add some 4,000 square meters of production space in Finland and late this year in the U.S. I mean, are these orders kind of already planned for this Finnish extension and are orders already booked for the U.S. factory? Or is it so that you still have not booked any one...

I think the 4,000 square meter is already in use. So it's going ramping up what will be communicated by the end of last year. And it's actually -- it's a continuous improvement. So I think the square meters in production is maybe a little bit difficult figure to use. And I think we will offer today a little bit better figures for looking at the capacity, like we promised in the actual last year, annual, let's say, report that we -- or in the presentation that we will have maybe a little bit better forecast to see how our capacity is, rather than looking only at square meters because we are looking production all the time improving the flow and the flow of goods and how fast you can produce products. So it's not really that much up to the square meters. But yes, this is continuing process actually.

And do you book orders for the U.S. factory already?

We book orders from U.S. I think that's -- some of them are completed in Europe, some are planned for the future in U.S., but before you have, let's say, looking at the factories ready, we are not, let's say, having big orders going to that factory before that's actually running.

Yes. And actually, I have to comment that later on in Sanna Otava's presentation, we touch upon the capacity topic, so you get more info later in the day.

I was just also going to ask about cash flow. It was positive in the third quarter, negative in the fourth quarter and very positive again in Q1. Is there something with payment terms? Or is it more like with how profitability is developing?

Yes. In quarter 1, the main reason was, of course, really positive profitability. But the big change always is in the working capital in our cash flow. So how much inventories, how much accounts receivables are employing the capital. But the biggest reason was the good profitability in quarter 1.

But do you get advanced payments?

We get in some extent advance payment. That's right.

So the payment services, what is upfront and how is it?

So it depends so much on the customers. So...

All the projects type.

In payment terms, it really deviates from the advanced payments up to even 60 days payment terms. So it really deviates from the -- depending on the customers. But of course, advanced payment is something every company want to target.

Thank you. Any other questions in the audience? If not, I would like to pick a couple of questions from our online audience. The first one is the following. The level of investments seem slow, but I assume that is that is due to you capitalizing the majority of those and then start depreciating them sometime in the future. How much capitalized investments and other similar costs, for example, R&D, you now have on your balance sheet? And what is the depreciation plan like.

Yes. I can take that. So regarding R&D, we don't basically capitalize the cost. We have some small costs from the history regarding the IFRS transition, which we have capitalized. But at the moment, of course, we follow the IFRS, but the -- quite really do the capitalization of that. And why we have so small CapEx, so like we have quite many times mentioned, we have really the asset-light business model. So I think last -- when we look last year CapEx, we had a million more than EUR 6 million CapEx, but we still increased our revenue from EUR 27 million to EUR 104 million or so. We are quite capital effective in that sense.

Thank you, Jukka. Do we have any more questions in the audience at this stage? If not, then we move to the next presentation, surging market and customer demand. And we will start with Tomi and then Jussi will follow. Thank you.

Thank you, Paula. Talking about the market, I think we go to the topic of the day, really. And looking at the highlights first and what we are looking at here. So of course, as you have heard before, the faster than expected market growth, but I think it's -- might be even faster than we talked last time. So this is a topic. And then commercial vehicles driving the customer demand. I think this is also a big thing. It's about the electric trucks coming to the market and their effect and how much it actually affects the DC charging market. And then the North America accelerating the growth. And if we look at it from the regulatory from a driver point of view, of course, the big thing behind that is the climate change and how to mitigate with that. But it's also the political decision makers are making decisions spot that -- look at the left-hand side, we see what's happening in Europe. We have the laws that are requiring charging equipment to be installed, and they are quite expensive in the amount. But we are also looking at actually stopping sales of CO2 emitting vehicles in the whole Europe. And this is coming from the legislation of EU. So this is stopping basically. And the actually good option, I will come actually to the numbers that electric vehicles will take a big part of that. I mean, battery electric vehicles. But then we have things happening also on the other side of the Atlantic. This is the Biden administration issued the final rules on actually these national electric vehicle charger network. So this is -- they talk about NEVI, N-E-V-I, and that's EUR 7.5 billion or EUR 5 billion depending on which part you take, but it's a huge amount of funding provided by the federal government to the states who then give it to the people who are building the charging networks. And very similar ideas that they want to have an extensive network that you can move between the states, between the cities and build the networks in the area that people can move it. Similar happening as in Europe, things are happening that first, you get the charging network where the people live, close by, densely populated but the governments actually wanting to support the long distances there, which is actually really, really, really good. And looking at then it from the car manufacturer side. So we can see from the car manufacturers announcement, what's really happening because if you have the vehicles, they would need the charging infrastructure. There's a huge amount, USD 600 billion investments from car manufacturers to start what they have communicated that they will be used to this transition going electric. Several countries have pledged actually to be internal combustion engine free or let's say, new cars will be combustion engines out principle. And then looking at also -- well, I talk about the truck manufacturers. Today, that's very much in the beginning compared to the personal cars, but they're sizable funds already with different truck manufacturers. And this seems to be the winning side. We are -- there was still a lot of uncertainty. What is the technology for long haul, what will happen. But if you look at what the truck manufacturers are communicating to the world where they are concentrating their efforts. It is to be clearly that the big portion of the effort is going to battery electric vehicles. And these batteries will be a lot larger than in a personal car because this really relates to how much weight you are carrying and how much you need to move. And this is a professional market. This is a little bit time with money in a different way than if you have a personal car then there's -- it's more in convenience. People are in a hurry sometimes, but this is a lot more related into this business-to-business market moving goods. And time and then it means for charging it means higher powers, limited time, very controlled network. And if we look at the announcement as well, this is a collection, I will not read the model, we will be spending a lot of time, but main part of the manufacturers is -- the message is very clear also from the truck side. And we -- then the third perspective, how much funding has been gathered to building staffing networks. This is USD 60 billion. So these are also showing that when we are talking now about the market size that this is already funded by the investors. So this is the money actually going. And you can actually recognize when we go into a customer reference if you compare quite many of our customers also on the list. And hopefully, the ones I can tell you more about in a couple of quarters, actually found on the list. So this is showing also there's the money. There is the -- actually, the vehicles are coming. That's kind of very clear path where the market is going on. And this is exactly that if there is the cars coming, and there is a demand they will need the infrastructure to support it. And then I'll give it the floor to Jussi.

Thank you, Tomi. You all remember, 2 years ago, when we started the preparation for the IPO and published our plans there, that we announced that our target market where we are aiming at our prediction was EUR 4 billion, yet 2030. And we were thinking that, that's amazing massive market that we are searching market that we are rushing and going with our good plans. And then we started to -- after the IPO, we started to refine our market model and injecting different market studies and market behavior into our system and building that model. And I was quite amazed when our supercomputer gave us an answer the new estimate for year 2030, that what is the market size there. And a few kind of summaries for the coming numbers already that the market is growing so much faster than we were thinking. And the change is just accelerating. And there's a few reasons there that we will dive in. It looks like that the market will divide to multiple domains that it's not anymore 1 market, 1 easy market, but there will be several businesses that we will go after. And when the market is getting mature, then the demand of the customers are getting higher. And we can see that the customer requirements and expectations, they start to vary in different markets. So let's look at the figures what the supercomputer gave this wintertime. So when we talk now the markets that we talk Kempower target market, which is the Europe and North America. And all that all the figures now rest of the presentation, I'm only referring to Europe and North America, if I forget to mention, you guys remember that. The second, I will talk only about the DC fast charging market, nothing about the AC. So our prediction and foreign cost for year 2030 for Europe and North America looks like that the market size is EUR 14 billion in year 2030. It's amazing growth within the 2 years and how much new business has been opened and generated and finding that business. It's remarkable. And this makes us quiet for a time that can it be true and then we started to brush up the numbers that what was in the market numbers. And we were looking according to estimates for different car quantities that are in the use year 2030. Private cars, trucks, buses and vans both in Europe and North America, and we came up with those market estimates. And then we calculated that average number, how much you drive with those cars and how much energy you need to charge during that year. And those numbers are in that presentation. So then from those, we came up the conclusion that to charge that amount of energy, we need that amount of chargers and it means EUR 14 billion. That was the market model. It looks that the market will be splitted for 2 kind of equal geographic areas that the Europe and North America, it will be roughly equal. At the moment, the market is a little bit bigger in Europe, but the change will be very fast in the North America. That's why we have a very good aggressive plan to enter for that market. A little bit deeper. If we look at -- this is the number I was talking to you after quarter 1 that how much there was added DC charging points in the Europe. And this is the European, North American market that last year, it was 233,000, and the estimate is that the average growth is still going to be 26% per year, year-by-year growth in the quantity of deliveries. And for these quantities, we are planning our operations and Sanna will come back to our plan for -- to gain the market share from there. Then if we look at the Euros, of course, the Euros matter, the quantities we plan our operations, but the Euros -- that's how much we will earn money, it looks that the market will grow 19% year-by-year. So the difference between the quantity and the Euro is that we have estimated and calculated some price erosion for the market model. So that's the difference there. If we look key customer groups and what I was talking that it will be divided for 2 main domains now that the private car charging where we use -- charge our private cars on the street side and charging hubs. And then the commercial vehicle charging trucks, vans and buses. This will be the 2 main markets that we are tapping, and we will get back to that in a strategy, and this is the basis for it. Three main customer groups, CPOs for Public Charging Operators, those like the typical like a recharge in Finland and Osprey, you saw in the presentations. Then Original Equipment Manufacturers, those are the customers that are building their machines and selling our chargers together with their own units. And then the Fleet Operators is the third main customer group. Fleet Operators like fast operators, it's one big customer group at the moment and in the future, also the logistics centers and logistics operators with the vans and trucks. And for the future, the third big market segment that we are building is the off-highway that we have a couple of customers already operating in off-highway. And those are the vehicles that you cannot bring to the highways that those working machines in the harbor areas, construction sites, and so on. Mining, for example, you have seen many times our Epiroc reference or not here. So these are the main customer groups and market segments that we are tapping. And this is interesting now that how these 2 main markets will be divided in the near future. So year '22, the Europe, North American market altogether, it was EUR 1.4 billion. And the big part, the major part, EUR 1.2 billion was private car charging. And now you see year 2030, that the commercial vehicle charging will be, say, 2/3 of the market EUR 9 billion compared to EUR 5 billion for private cars. So it's a major difference in that how the market will behave and how important the bus truck, marine off-highway will be in the future. There is a good growth also still in a private car charging -- it's -- it will be 5x bigger within 8 years, but the biggest change will still be in there that the truck charging that will be so big business in EV charging, but also for Kempower. And this is something that we are tapping our strategy heavily now, very interesting numbers there. Then I was talking about that market behavior that what are the customer expectations that when you are shifting to the multiple domains that 1, 2 years ago, when we were coming to the market, it was more or less so that you have an EV charger and you charge whatever machine comes there with the CCS block that you do the charging for it. But when we are getting the mature market and customer expectations are growing, we need to start doing the advanced integrations and adjusting and adapting the customer needs for our product. And so far, we have been very successful with that -- with our modular product structure that can be -- solution can be modified for different needs, but also one of the biggest stronghold for us has been the charge size software and the software integrations. It's amazing what kind of solutions and the systems we can build together with our customers based on the charge are there. So advanced integrations, that's happening already now. We are well positioned there. But how we see the next steps in the future when these like a big trucks are coming, marine vehicles, marine vessels and so on that we need to start designing the product more for that specific market. That is a crucial in a strategy that we diversify our portfolio according to the customer needs there. I have a few examples here that just visualizing the story that how the transformation of EV goes that this offspring Osprey Charging in U.K. that's the private car CPO customer that we're having a massive rollout of charging hubs in the U.K., 150 high-power EV charging hubs. And altogether, we will have 1,500 charging points in the U.K. It is a very strong collaboration with the Osprey there and very enjoyable developing that future together. That's for the private car charging. Then I was talking about the truck charging Tomi was mentioning that those -- the pipeline is there that the EV trucks are coming, but the EV truck charging infrastructure need to be built already now so that when the trucks are coming that the infrastructure is there. We have a couple of big sites already built last year, this year, like this Falkenklev Logistik's, 1.6-megawatt charging power collected to our ChargEye and controlling the whole charging events. But this is the evidence that the e-trucks are really coming and the charging infrastructure is built all the time already. And then the electric bus depot, 124 Kempower Satellites and charging points 18 power units, 121 buses. And this is done together with the core energy in Aalborg, Denmark. One of the biggest e-depots in the Europe now. And more to come, that this is -- buses are important for us now and in the future and the portfolio what we have, it's very suitable for that business. But all in all, the key takeaways what I wanted you to remember that is EUR 14 billion market size from Europe and North America. It's a big change and that change was in the 2 years already. Let's see what is the real number when we are year 2030. But this is what we estimate at the moment. It's good working number. Then Europe, North American market will be relatively close to each other year 2030. And then taking in account that the European market is a little bit bigger at the moment, the growth rate in the U.S. that will be massive. This market divided for multiple domains and the main split, what we are working on now is a private car charging and commercial vehicles. Totally two different domains that having a lot of synergies and we can utilize the same product portfolio quite well for both of them, now doing with the adaptation and more future designing for those markets. And those truck charging, that's the fourth takeaway that you saw the massive growth in the truck charging. It's unbelievable, you don't see the e-trucks yet in the cities or the highways, but they're coming. And all the OEMs, they have their plans to bring those. And then the fifth one that JP will talk more about when the -- when the customer demand is getting stronger, that we need to build also the services for the business. And all these numbers that I was showing, it's pure equipment sales without the software and services. And there, we have another strategic point of view to tell for you. That was what I wanted to say about markets. And now Sanna will -- sorry.

Q&A.

Sorry, yes.

Yes. We take the Q&A because actually, we have quite a lot of -- quite a few questions here online. But first, I just want to mention that our audience online has doubled since we started. So when we started, we have 100 people online and now 200. I just want to say that thank you all for joining and stay there. We have a lot of interesting topics coming up. But now do we have any questions about the markets in the audience. If not, I have a couple that our online audience has presented. The first question is a little bit linked also to the technology, but I take it now. How is your product different from the ABB solution. Jussi?

Our -- this centralized power unit, decentralized satellite system that have more freedom to build the charging hubs. That is the main difference. We have a similar product also than the ABB has, but that's the main that our system is quite unique -- satellite system compared to any other. But the benefits I will get back to you in a few minutes.

Yes.

And then maybe I will come back to the -- my fundamental difference on that majority of other manufacturers are looking at the single vehicle signal sub charger situation as the main, let's say, challenge in the market that how to solve that, that we are looking at this kind of how to charge a large fleet, a large number with this similar investments and similar systems. So maybe I could summarize of getting people more confused, but this is the basic idea of the whole solution.

Thank you, Tomi and Jussi. And hey, if you have any questions while I'm picking the questions from the online audience, just raise your hand and we take the questions from the audience. Next question is, if there no DC charging market outside Europe and North America, and this is a question because we talk about Europe and North America. So how is it?

Well, maybe I can answer as the Chief of Sales. So of course, there is, but Europe and North America are our focus areas, but we already know, as of today, have sales in other continents as well.

[indiscernible] numbers that this -- outside of Europe, North America, that's 50% more business that this is -- we are aiming for 50% of the market at the moment. But the China is a very big market and that we have excluded from our strategy. The Southeast Asia, Australia, are also big markets. And today, we have some maybe news coming from that region, and it's more like a that we have distributors in that area, but it's not active market that we are directly in yet. And this is -- we will actually come back to that during today.

Very good. Following, yes. Do we have the mic?

Hello, I'm [indiscernible]. I would like to know what is your strategy towards the services market, since you were exclusively talking about the equipment market here earlier. So can you share a few words about this?

JP. JP from the Service side [indiscernible]. It will come up in my part of the presentation in more detail. If that's okay then.

Sure.

Yes. Thank you. Then, yes, go ahead.

[ Alyana ] here from the analysts. You launched the pantograph product. And on the presentation earlier, you mentioned about the satellite for heavy trucks. So I just wanted to have some color in terms of how that is progressing.

I think it's -- and when we are looking at Jussi was also mentioning that the -- it's a different solutions, different market. It doesn't mean it's a physically different product. We will come back to that. It's a more solution offering what you are tying together with the products. It's not that much about this hardware to this customer, when we are finished today. Hopefully, you will get the point as well. But this is the pantograph has a certain market and a position for European cities are doing the bus charging through that and -- and you have certain -- I think the truck charging spatials at it's more or less how to increase the power output because the batteries are getting bigger. And it could be also similar systems could serve the marine market in the truck. So it's not that much vehicle type dependent from the hardware point of view. I don't know if I confused you more with my answer, but it doesn't need to be physically different. If we're looking at hardware products, it could be that the differentiation is done, how we service or what kind of software service we're adding or what kind of integrations.

Thank you, Tomi. Then the next question. Any idea how the different industry categories will be divided for Kempower? Jussi or Tomi.

I think we also don't communicate that, and we are not reporting the different [indiscernible] [ separate ]. I think we are telling now today about the opportunity. I will give our clients how we see the market in one of the slides, but not with clear numbers. But to see how we see that. I think that will answer it. We will have to have some patience.

Yes, yes. We will come back to that later. Then this is about price development. What are your price assumptions over the period to 2030. How do you come up with it? What euros per megawatt charging capacity should we think of?

I think we shouldn't. But it's not that straightforward. Maybe you can calculate some numbers, but it will not be anything related to the sales prices because selling solution doesn't -- it's not a direct relation to that number, but more like a combination of things. So it's..

Yes. And I think Tomi has a question over there.

Yes. This is Thomas from [ Carnegie ]. I mean they decentralize very much on trucks and then if I remember right, out of the truck sales, especially in the U.S., some 9 out of 10 are long hauls and the very small share is kind of for regional distribution. So I guess that will be -- those will be coming quite late in this strategic period. The long-haul trucks, it's not something that the truck manufacturers are preparing in the next 2, 3 years to be on the market, right?

In the U.S., actually, there's quite a lot of news when you look at the truck manufacturers on the other side of the Atlantic, how they're addressing that the long haul is actually the reason there higher than in Europe. Europe is looking at, let's say, the last mile, they are looking in the middle mile deliveries as well, more stronger than we see in Europe that there's kind of like a race who gets the products out. So this is also the focus is because of the market in North America. This is also if you look at the numbers afterwards, if you look at the presentation, why the energy charge in U.S. is higher compared -- even the truck amount is about the same, it's about the structure of that market.

But have you broken -- in your strategy 2/3 for trucks? How much of that is long or because when I look through what the truck manufacturers is saying, that is kind of the only segment that is kind of uncertain whether it will...

I think it's also -- truck manufacturers have been pretty clear now that in lately where they are actually making the announcement, there will be different fuels, different things happening, but it's still based on the assumption, which part will call the battery electric to our numbers. And we are talking about the market opportunity, of course. So it's not evenly split with all the years.

This is also the reason why we want to have that deep collaboration with those truck OEMs that we know there quite well their road maps and their roll out plans and adapting our portfolio for that and it's really encouraging to see how this partial delivery trucks and that is going to the market already, and those are thousands in operations in -- also in the U.S. already.

But just if you look at the numbers, I don't know how much granularity you have used, when you have made those assumptions. But how large share of kind of your sales is going to long-haul trucks in 2030 or not your sales, but out of the market?

We don't have those numbers here now. So I cannot say, but we can get back to that.

Actually, when we get it, what applications we have in truck charging that will clear the things out a little bit later. It's what cases there are for the business.

That's true about the use cases. Then the next question is about fleet management from the online audience. And yes, I take the online question first and then we go to the last question from you. Would you consider fleet management, including the charger hardware as more full solution? You can comment something and then you come back to that later.

Yes. This is exactly that -- we have that charge site for the depots that we are integrating together with the fleet management and scheduling systems of the bus companies. And that is exactly what we mean with the full solution that those software integrations and bringing the hardware together into the customer business processes is, that's the full solution, what we mean.

[indiscernible] Discharging required charging powers are quite high on the trucking segment. So are your products already compliant with the coming needs or what kind of R&D you need to do going forward?

I think the trucks are not ready. I think the charging industry will be ready for it. So it's a kind of chicken and the eggs. But the current truck charging and truck routes built are using less powerful power block. But you can have trucks today with the prototypes that you have several blocks in the same car, you get the powers up. But there is certain limitations with the current charging standard, which is coming from the design of the power block used for that. So that before the new standard were very high power is coming out and then the truck manufacturers have actually adapted and offering vehicles that can do that, we will be there.

Yes. Now we take the last question from the online audience. And by the way, thank you, everybody, who's online, you are so active, it's super nice. What are the biggest risks in the Truck segment given that to date, the business has been quite focused on passenger vehicle charging. But looking at the market development, the future growth will be very much dependent on the success within the Truck segment, concerning us. So the question in a nutshell is what are the biggest risks we see in the truck segments?

I could start and then I'm pretty sure Tommi will complement me but this rolling out the truck charging hubs, it's a massive project for electricity infrastructure. And when you are driving there on a highways that you can see that electrical lines are not where the highways are, and in high ways, we need to build the charging hubs. So how to bring these tens of megawatts power for the charging hubs, and that is the discussion in the industry that we talk with everybody. This is one of the biggest challenge. And that's why the energy management, energy storages and those are in the discussion all the time.

All software integration together with the vehicles, how to prebook the systems and how they secure that this is basically logistics is a business operation and not a Sunday, right? So it's a bit different demand also when you're looking at the times and systematically how you build the logistics channels. But it's very interesting, but it is I think the biggest risk is the time that maybe it takes a bit more time to do things. So it's in every growing industry. Now it's -- the models what we have calculated is a demand-based calculation. So if there is a -- so I think the market will be there, but it's the risk of these numbers is about what is the year of that reach, which numbers. So let's see. With the reality and market expectations meet then you have the realized -- today, actually, the email that has been going over the market expectation every time. So.

Thank you, Jussi. Thank you, Tommy. And now we move forward. First, we hear Jussi talking about technology and then straight after Jussi, we have Sanna Otava, our Chief Operations Officer, talking about the delivery capability. So there will be no Q&A session between Jussi and Sanna. But then we take all the questions about the delivery capability and the technology after Jussi's and Sanna's presentation. Jussi, go ahead.

All right. Thank you. Yes. I was so excited that I was -- I forget that I have still 15 minutes with you. Wonderful. Let's enjoy these moments. So cutting-edge DC charging technology from Kempower. It's a big topic. It's an important topic. I will start with our competitive edge that why we are good, and what are the competitive edges and strongholds that we are building our system. The number one has been the user experience and a charging flow. What is the experience when the consumer and the EV driver comes to the hub. And many people ask that, okay, sounds good. But what is the user experience. And we think that the good experience is something that you feel that it's convenient, that it's easy, and you actually -- we are fanatic about the charging. But the EV drivers, you don't want to think about it. It's just something that you go there and plug the cable and then you go to supermarkets or the coffee shop. One example of this user experience, that is the scary moment, but it's something that when you park the car here, whatever position and every car, you have the charging points, it's in a different quarter. So you want to bring your cable to the different corners of the car and plug it in and the cable management is something really unique what we have developed. And what happens typically, the normal size that the car comes and then you drive over the cable, never happens with our charger. So this is one part of it that we think every aspect that when the user comes and how is the flow that when you come. Second is the screen here that how we communicate it. You don't want to read all the details. You just want to tap it in, put your payments there and forget it. So this is the first stronghold in the -- in our technology. The second is the modular structure. There is a roll up there of the picture about the modules and that modular structure, it's really scalable. It's very easy for our operations, but it's very easy also for maintenance and service. So serviceability of our unit is something special. Also, the redundancies and everything, all those nice features that it's always on the -- it never keeps up that you always -- it gives you power when you come there. So for the reliability figure, the charging success rate is 1 of our KPIs that we measure. What's the probability that you plug your cable and the cars start to just charge. And our success rate with our chargers, that's the at the top of the market. I guarantee that there is no better product in the market from that point of view. And everything is based on the modular structure that is built in and designed in Finland, made in Finland. And this is also something very unique and bring us a competitive edge when we go to U.S. now that it's a European design, and we try to maximize the local content from the Europe. The second is the technological innovations like a dynamic power sharing and that centralized power unit and distributed satellite system that gives you the freedom to optimize your charging hubs and optimize when the CPOs can optimize their earnings and revenue for their business is that, that's something that optimizing the systems that it's uncomparable that you cannot compare the system with others. And then we mentioned a few times already, the software and the charging control that is designed inside, in the Kempower again, the charging control. It's our own IPR and all the software and charge side connected to that. So those 3, 4 strongholds that they are the key that we are building our success story. If we look at the fundaments and the foundations of our charging that Tomi was riding in a block about the reliability. And that was the success rate and those things, what I mentioned there, that the reliability, it's one of the key foundations in our system. And it really matters for the driver, drivers and companies. And then user-friendly, that I was talking quite a bit already. And when I look at these 2 fundaments of reliability, and friendliness that there was something really Finnish in that one that, it's like a Finnish husband that is reliable and frankly, it delivers that it makes me comfortable. Dynamic power distribution that we were talking already. I have a detailed slide coming about it. Data solution and the software. It's something that we should, one time here like open up the charge a little bit better. But I all invite you to come to the Oslo exhibition that we can demonstrate the charge side for you that it's something it's remarkable. Then the integrations with the software for business processes, that it's not a stand-alone unit that stands in a -- there on the parking lot. But how you integrate your fleet management? Or if you are grocery store, that how you integrate your loyalty programs to the charging experience and that kind of. So those kind of integrations, that's -- it's more and more important in the future and we are building based on that. And then there was a question about the services. JP will come back to that, but partnering with our customers and doing a good high-level service for them, it's crucial. And then in the future, that is -- we are developing the product further and further by analyzing the data we are collecting from that every charging station. But we have few data scientists already and they are crunching the numbers and optimizing our road map development bank -- based on those. So those are the kind of fundaments for our technology. This is very so much known information in this slide. But let's try to go through that in 1 minute. That's fair with me. We have more videos in YouTube and so on. The traditional system that you were asking or the online guys were asking. Typically, there is 1 charger, 2 cables and it's splitting the car at the power for each car, 50-50. It doesn't matter what is the actual demand of the car, that the car is demanding the charging power it's splitting at 50-50. And when the other car leaves and leaves the plug empty, it doesn't go back. They all stay 50-50, and you need to unplug your cable. Our centralized power unit system there is talking with the car and allocating exactly that amount of power that the car is demanding at the moment. And it's a dynamic, it goes to dynamic power, it goes up and down according to the charging curve that the car is having. And these 2 features are means that you charge more. Our CPO customers, they earn more money with our chargers. We have more -- lots of calculations and there is one of them, but how much more they can charge power with our charges. There's less idle time that idle time means that your power electronics is not doing anything. It's just sitting in a cabinet and not charging cars, even that there's some more cars there in another plug demanding. So we maximize the use of power electronics, that's why we maximize the charging energy and the revenue for our customers. And all these, it also leads to the smaller grid connection. And grid connection size it's a cost for our customer. And with this system, you can minimize it and optimize the usage of that grid. So that's about the comparing the dynamic power with the traditional charging systems, not mentioning any specific names anymore. Then few examples of the ChargEye, and that's my try, we have 20 people in the ChargEye team developing that already tried to explain the benefits of that system in the 2 minutes for you. But there you -- there's an example there that how the charging flow goes and those are the screen shots there from the screen when the charging event and the session goes forward. The beginning, like the -- showing the estimates that how long you need to still charge and stay at the charging hub. And then finally, when this charging ends, we can give the -- also the cost and how much you earn the money. And all that, you can tap in, in the ChargEye, and track that anytime, and it's online all the time, at any moment, you can go there and see what is happening in the charging. And this all the charging sessions like that, it's stored in a cloud system. And we can have that full access of all the sessions and doing the data analysis for our customers, how they're charging hubs are behaving. So that is an example of the charging session from the ChargEye. The very same screens that you can see here on the real hardware, but they are online in the back end. Then this was about the end user experience. And the second is the advanced optimization of the depots and the fleet. That when you plug in into the ChargEye, the scheduling of the -- of your bus system at what time, the buses need to leave on a -- on their route and we can optimize and estimate like how much -- when the charging session needs to start and so on. To optimize the energy cost for our customers. And this is bringing what we have calculated, roughly 30% of the savings for depots. And [ Kelly Sweden ] is one of the very big customers for us. And that depot, they were saying that once they took the ChargEye into the use that before the ChargEye, they actually had people there on a charging middle of night plugging in the cables, unplugging and they're trying to optimize the energy use of that charging hub. And now with the ChargEye, we do that automatically and it's connected into the energy pricing models and so on. And we guarantee that the buses are leaving with the full batteries and hot batteries in the morning. And they say that -- they all was saying that this is something unbelievable, that this is some tool that they never had before that the tool they were using before the ChargEye in a charging hub that was sledge hammer they were using. So this is something totally different that they have never able to dream of that. But it's a -- anyway, let's go forward. The solution pipeline or road map, what is related very much for the strategy that we've talked and to the numbers there. That the 4 solution -- the first solution that we are now releasing this year for the market is a plug and Charge. And it's an automated communication and billing process developed by the private car OEMs. That means that when you plug the cable to your car that you don't need any payment systems that the car and the CPO with the Plug and Charge that will automatically do the charging and billing for you, that no more apps, no more tax and no more credit card readers there. So this we have ready, it's tested with 1 CPO in a Europe. We're just releasing it for the sales. And next week, you will hear from the media more about it. So it's kind of like a easy promise for you that we will bring as a road map, but it's a ready feature. Then the Eichrecht, it's a German calibration law, measuring the electricity and the energy, how much you are charging. And this is needed for private car charging in a German market. The German market is the biggest in Europe. So dominating market. And that now that now, that Eichrecht feature that is opening the German market for us. And this, we are bringing in the quarter 3 to the market, massive opening for Kempower again. Megawatt charging, MCS it's a big word for the charging industry. And this is a specific technology developed for the truck charging. And this is in the development and we are quite well progressing with that. The truck charging, it's not only megawatt charging, the trucks are charged with the CCS charging also, but this will bring the big powers and on the move charging for the trucks. Big development project for Kempower. And then the fourth solution in the pipeline that we are bringing the silicon carbide technology for our chargers. And this means increased efficiency, increase the switching frequencies and grid behavior, better control and also vehicle to create support. So this means that better integration of energy storages and bidirectional energy feed between the car. And those are the 4 big solutions that we are developing at the moment. Key takeaways from the technology, I'm a little bit over time. So we need to accelerate to get back to that in the Q&A's, but number one, modular structure, flexible and now everybody remembers easy and reliable from this presentation. And then this backward compatibility and the compatibility between the different products of Kempower, it's very important. It's one of the key specifications in all our R&D that a -- the solutions we made, they are future proof and safe investments. And is unique ChargEye. What I have been talking quite a bit. That may be #3. And now finally give the time for Sanna for a scalable delivery capability and operations. So thank you from my side, and we'll get back to you in the Q&A's.

So our operation model -- so operation model has proven to be pretty successful. When we created model, there was 2 targets; scalability and cord flexibility so that we can meet all the customer needs. And the cord product management and the modular product design, those are the bases for the flexibility. With our mass customization production method, we are able to create and build all those solution based on the customer orders, based on the customer needs that's a flexibility. And the scalability is also coming partly from that modular product design because when we have limited number of parts, then we are able to focus better on control on our outsourcing, our supply chain. So really having that to our sourcing strategy alive. And from the very beginning, we also created a model so that we are capable to outsourcing always when there is a benefit for the scaling. And more about the model here. So we have own product design and own production. And having those together, Cord cooperation with R&D and production, we are capable to introduce new products to the market pretty quickly. And because keeping that competence -- production competence in-house, then we are better to do outsourcing, cost-wise and quality-wise. And typically, our own production is final assembly production, meaning that we are doing those last steps of the whole manufacturing chain. So therefore, our production model is pretty asset light. And typically, our supply chain model is so, that we have own factories, final subsidy factories and then this local supply chain. We are having those local subcontractors doing a lot of our parts, components subassemblies, and feeding to our main factories. And the similar model is here in European and in U.S. sales, North Carolina. So the model is so, that own factory, local supply chain, subcontractors doing the production a lot and then support it with global component sourcing. And having that kind of model that we have a local supply chain, we gain some benefits. Of course, we are able to control the supply chain better, have transparency and have those sustainability impacts, like we have pretty good optimized transportation length from the supply chain to our final production. So having that good impact for the emission. And of course, have local supply chain, we are creating jobs and have that kind of benefits for the social -- social local societies. And the whole [indiscernible] . So production itself. So at the moment, we have Lahti, we held 2 sites in Lahti. And we are looking for the extension in European countries. And at the same time, we have that North America factory projects. Tomi, maybe tell a little bit more about that later. But our way is that we will have the similar model for the both site here in European countries and also in U.S. so that we have similar practices, we are able to balance the workload between and the load of the producing and to the deliveries balancing between all those factories. And it's not only the new facilities. Of course, here in Finland. At the moment, we are doing a lot of constant improvements so that we are able to increase the capacity each month. And the capacity-wise, here, please note this is not the financial target. This is true from production point of view. We need some frame, we need to plan how we are going to ramp-up our capacity. And of course, you need to prepare that you have that capacity when they show demand. So this is the planning from products on delivery point of view. We have selected a few index. There's a number of charging points plugs and the power. And those index are indicating pretty well how we are ramping up our delivery capabilities. And like you see, it's each year growing because we are a growth company. That's what we are implementing. And how to implement this, of course, those facilities is the one key that existing facilities, extension in European and then the U.S. facility. Those are one way, but as important way how you increase the capacity is that constant improvement. That's natural, that our mindset that we are consciously improving the balancing the production lines, improving the material flow, looking for all those tools solution, how we are able to increase the capacity being better. That's very natural. That's our way how we are seeing our work. And then a second or third way how to ramp up the capacity if -- is, of course, the supply chain because the model was so, that we are scaling together, increasing our own production capabilities, growing with our suppliers. So managing and helping our suppliers, subcontractors to grow that important task and there we should focus as well. And let -- key takeaways. So first, of course, that scalability, both scaling on production, scaling via subcontracting and still keeping that good flexibility, good cooperation with our R&D, with production understanding, having knowledge insight in-house so be better with that. And third one, is that our global operation model, that we have own final assembly factories, local supply chain, supported with global sourcing and similar model here in Europe and U.S. Having that kind of big competence pool and capabilities to balance the load. And the last one, but not the least, one, sustainability. From operational point of view, sustainability is always there embedded because it's daily decisions, daily choices that we are doing all the time.

Thank you, Sanna.

That was my presentation and I think we have questions?

Yes, we go to Q&A? We go to Q&A, and we have again quite a few questions from the online audience. But first, I would like to check the audience here, and we do have a couple of questions. Let's go to this side first, if we get the mic.

Mika Karppinen here. Thank you very much for a very interesting presentation. The market is, of course, going to grow a huge amount in the next decade. That's quite inevitable. But if you look at scaling up the business and volumes, are you modeling in how much gain in costs and efficiency for the next 10 years, I mean, if you look at the number of charging stations in the market in 2030, Kempower's projected market share, what it could be you growing with your suppliers, of course, they are growing nicely with Kempower. I mean, one would assume in a scaling economy that the costs for your business will come down like you see in solar power or, for example, how much costs have come down per unit in terms of the purchasing cost. So interesting to hear your views on how much efficiency could be gained in the future on this side because that's, of course, linked to your profitability quite a lot. You are -- already now quite profitable, but it could be much higher. And then the -- just a quick point on your production. It would seem that the production in your facilities is not highly automated at the moment. There's a lot of manpower in assembly needed. Is that something that's going to change in the future? Will it be more automated or not?

Let's take the profitability on the cost question first, and Jukka, you could start.

That's a good question. It's actually also one of the key points in our strategy and new strategy. So how we tackle possible price decrease is price erosion. So yes, definitely, we already do that now, and we do more and more in the future. So defending our existing gross profit and also keeping our unit cost competitive, even though it's not only cost game because we see that we also other premium supplier and that is also seen in our business and whole pricing model, et cetera, but that's a really good question, and this is really in the middle of our new strategy as well.

Jukka Kainulainen. And then the next question was about the production and manpower versus automation.

Yes. That's a one tool, yes. And we -- we are all-time screening was those application use cases, where we are gaining enough benefits doing increasing automation. It's not -- it's a little bit complex when you are doing the final assembly for the product like this. But yes, we are actively screening where we should do that effort. And when it's -- there's benefits, clear benefits, then we are increasing. But there are other tools as well. That is one tool.

Of course, we are talking about today's product range and doing more automation requires the full changeovers. But I can guarantee one thing that the products will be not exactly the same in 2030 as we have seen today. The industry moves quite fast at it's not going to remain the same and one of the factories about, of course, the production lead types on the design, and that leads to profitability as well. Is it increasing the company profitability or remaining at the same level. But any way, it's an important topic when we go further as our market model was including the price erosion expectations when the, let's say, competition phase of the market begins.

And I would like to take a follow-up question from the online audience before we take the next question from here. So the follow-up question from online is on automized production also to Sanna and about the productivity. What is your productivity increase target per year? Can you mention, for example, hour spend or the production value. Do you have any targets?

Yes, growing like this, it's a bit complex question. How to answer it. Of course, that's because the whole target, the whole mindset, what we are doing that we are looking for all those ways how we can grow, how we can increase the capacity. So of course, that's embedded as well in the -- it's not only adding the factory space, factory floor, but that constant improvement, that's actually the same.

Yes. Yes. Thank you, Sanna. Now we go to the audience.

Yes. It's Tom here from Carnegie. I wonder if Sanna has been forced to say to the marketing people that you need to hold back orders that you cannot ramp-up capacity quickly enough for if the bottlenecks have been rather on the supply chain side? Or have you managed to ramp-up in the kind of demanded space, what salespeople are asking for?

I can say at the moment work from the lead times, that's not the issue for the sales. Maybe that's given the answer. So because we have quite good situation at the moment with the capacity and all what we are doing. So that's not the issue of the sales that there's no capacity or lead times are too long.

I think you cannot separate a single thing. It's -- and also the capacity plan demand base. So if there wouldn't be demand that capacity would never exist. So it is actually and it's quite quick actually to scale the capacity on our final production. But also remind that, it's then you need to get the supply chain keeping up with the growth. That is a 2-way straight in there that you have to think about both when looking -- we do only the final assembly. And also, when we look -- talking about the manual labor, yes, it's hand-made thing, but it's also small portion of the value. So it's a good question on where the investment should be made in automation if the handwork is only a small part of our bill of materials cost.

And then I wonder when you opened a factory in the U.S., I mean, you show here that 80% of components to the Finnish factory sourced kind of nearby from here. But going to the U.S., I assume you need to have totally different suppliers and what risks and challenges do you see here going into another continent even?

I think the base idea is because we have own design. The product is Kempower's design. Then you -- most of the materials you are ordering is based on the Kempower's design. Therefore, that's very typical that you create that local supply chain and using all that experience we are -- we have got from here, that's what we are utilizing when creating that U.S. supply chain. But yes, in U.S ., there will be that local similar supply chain.

And this was also -- we will come back to that when we talk about North America, but One of the key reasons to choose the location was also the available supply chain in region of North Carolina. And how -- what kind of industries is bought today, that was one of the key reasons where they go in U.S. to have that closeness of supply chain available.

Yes. And this is a wonderful bridging also to the topics we will talk after the break. And to be able to keep up with the schedule, we start the break now. So we will have now a 15-minute break, and we will come back at 5:23. So it's not going to be like a 3 o'clock sharp. We try to start at 5 to 3 in 15 minutes. I would like to thank the online audience for the questions. We see each question here. but it's such a lively dialogue now that we don't have time to take all the questions, but I'm pretty sure that we can continue discussion later on. So after the break, we will go to North America with Tomi and then also talk about the updated growth strategy and financial targets and the services with JP and . So 15 minute breaks. See you soon. [Break]

Hi, everybody, and welcome back. My name is Paula Savonen, and I'm the VP of Communications for Kempower, and you are joining Kempower's Capital Markets Day, the first ever. We are so happy that we have a big audience online and also here in Helsinki studio. And we have one more hour to go with interesting topics. Next, we go to North America, and it's actually 3 o'clock in Helsinki, Finland, which means that on the East Coast, people are wide awake and there may be also audience joining from North America. So welcome all. And I would like to give the stage to Tomi.

Yes. Thank you, Paula. So good afternoon, everybody. My name is Tomi, and I'm from sales. And One of the key missions for me and my team is to commercialize business opportunities in North America. And I will utilize this about 15 minutes slot, so that I will explain you that why we are going to North America, why we do it now. What we are going to do there, how and when and what we have done now and what is going to happen next. So North America accelerating our growth. So this picture explains that why we go there now. So as we can see, the business as of today is relatively small. It's about 30% of the business size in Europe If we think about the DC charging. But what is different that this business will grow faster than in Europe. So like Jussi mentioned in the earlier today, so we expect, our market consensus expects that the market value will be EUR 6.5 billion by 2030. And compared to Europe, the biggest difference is that the private car charging business possibilities are massive, but even bigger our commercial vehicles and especially trucks. And then there are different trucks and different kind of business possibilities. There are these kind of short distance trucks and vans that are, let's say, lighter than 7.5 tonnes so-called last mile vehicles, then there's middle mile and then this first mile heavy-duty trucks that will come at a later stage. So that's the difference. It's growing faster than Europe. And why is that? This is a bit heavy slide, but I will try to make it simple. It's because U.S. government has decided to subsidize traffic electrification heavily. Basically, in any given market, when you start electrifying traffic, you have this kind of classical chicken and egg problem that nobody is interested in investing EV chargers because there's no EVs and there's no earning possibilities. And people and companies don't want to buy EVs because you cannot charge them. So now U.S. government has decided to take a big step or leap in order to remove this obstacle. So there's massive funding and if we think about our business in the very heart or core is this NEVI program, which comes from the word National Electric Vehicle Infrastructure program. It's $7.5 billion support which is spreaded all over the country and the basic idea is that you get more support if you place your charging stations in rural areas and less if you place it in cities, highly populated areas. And the maximum support is up to 80% of the investment value. So it's tremendous that way. Then how do you can -- how our customers can get this NEVI support? There's three things that you have to fulfill, there's certain technical requirements so the charging site needs to have at least 600-kilowatt total power and 4 charging guns and each gun has to give minimum 150-kilowatt charging power. And thanks to our modular design, it's very easy for us to make exactly this kind of product. So we can tick that box easily. Another requirement is that the charger has to be able to support more than one car brand. So it has to be a universal charger, and we are following international CCS standards, so we can also tick that box. But then there is third requirement, which is Buy American Act. So this -- Buy American Act aims for increasing the local manufacturing and value addition in U.S. And as of today, the requirement is that you have to do the final assembly of the chargers in U.S. and it will get tighter so in near future you have to source minimum 55% of the components from U.S. so that box, we cannot tick as of today, but we are building this capabilities and at the end of the year, we can. Then another thing is this Inflation Reduction Act, that's a massive, massive program, $1 trillion funding and has several elements. But I would say that most relevant for us is $1 billion tax credits for replacing dirt old diesel trucks. So that's a big incentive for making truck electrification. Another one is that the consumers will get $7,500 tax relief if they buy an EV. So these are the things which will accelerate this business tremendously. Then let's take a look at where the traffic electrification is -- as of today in U.S. So the darker green tells that there's more EVs than in the light -- light green areas. So we can see that the California has almost 30 EVs per 1,000 people. And overall, the West Coast is leading the development now. And for example, in North Carolina, where we go, it's basically EV dessert, there's only 3 EVs per 1,000 people. So this traffic electrification has not virtually started yet. So one might ask, why do we go to North Carolina, if there's no EVs there? Well, one reason is that we don't believe that that's the most relevant thing. So the electrification has started from the West Coast, but this will become a mainstream and EVs will be relatively soon available everywhere. So in our world, there's more relevant factors to deciding the optimal location. And we did careful analysis and survey how to -- where to go by our internal resources, but also with the help of external consultants. And we selected about 10 factors and gave different wage and points to this different factors. And one, for example, is that we wanted to have as less time difference as possible. So that's why we wanted to go to West Coast because there's going to be a lot of cooperation with our European factory, especially in the beginning. Then we wanted to make sure that there's a labor available. There's North Carolina is strong in that sense there's already a lot of Korean tech industry. Just for example, Siemens making chargers, there's car manufacturers, there's one of our big sales partners is present then we wanted to make sure that there's universities that we can get new talent, attract new talent. For us ESG values are in place and so on and so forth and as a result, we came up with three finalists and one of them was Virginia, then we had South Carolina and then the highest scores got Durham in North Carolina. So it's a result of a careful consideration. And how our sales in U.S. is now structured. So we have salespeople now in these locations. If we start from North, we have in Quebec, another sales person than we have in Massachusetts in North. And if we come to South in Georgia, Texas and then California and in our headquarter Durham. So we are all the time now meeting customers creating demand there. And for the most biggest major customers who are international, we dedicate global the account manager who will orchestrate the business relationship globally. And on top of our own sales team, we have a network of sales partners and sales partners we need because we cannot sell all the customers directly. Some customers are too small. And some customers expect so-called turnkey solution where the installation is included in the delivery. And then we combine our strengths with our sales and service partners. And then some details about our Durham, North Carolina facility. So it's equal in size to our Lahti production factory, 14,000 square meters. And in the beginning we will focus on NEVI compliant charging system because they are very lucrative and the customers are looking for these because they become very, very affordable for them because the government support is so massive. And the investment size is EUR 40 million (sic) $40 million . And in a midterm which is in our world 2026 to 2030, we will employ 300 people in U.S. Okay. And then the concrete plan, what we are doing and what we have done already. So from the schedule perspective, we have actually done already big work, many, many man hours and significant costs as well by getting market approvals for U.S. and Canada. So now our products are ready for sales. We have approval to sell them in these markets. The approvals are different than in Europe. So we are all the time now creating demand, meeting customers, getting orders and building sustainable basis with our customers, but the deliveries will happen as of today from our Lahti factory. Then recruitments are ongoing, not only for sales, but basically for all the functions because what we need to do is to build a similar game power in U.S. that we have now in Europe. So we need talent in all possible margins. And manufacturing ramp up is ongoing, we are renovating our facility and we are committed to start production at the end of this year in Durham, North Carolina. From product perspective, our products fulfill all the requirements as of today. So there's no anything special in U.S. or Canada. However, we expect that there might be some country-specific requirements later on. And that's why we are preparing for that so that we will hire local engineering resources. And how we go to market. Now it looks like it's a similar way like we do in Europe. It's basically same concept seems to work. The same customer segments, the size might be different, but the receipt is the same. What is different that the market is now forming. So it's now excellent time to go into market, we can influence it to customer behavior, who we sell direct and who we sell through partners and so on. And like explained in the beginning, truck charging is a big in potential bigger than in Europe, and we will definitely utilize possibilities there. And from operations point of view, basically, Sanna and her team have already proven that this concept that we have in Europe in Lahti factory, works well. So the idea is to build a similar way production there. And the local supply chain, that's important because of this NEVI compliance, but also because it just makes sense, for example, big massive metal gap in it, they are expensive to export from here in the U.S., it just makes sense to get them locally. So if we wrap it up in a nutshell, it's -- North America is now small but starts to grow very rapidly because of the public funding. We will utilize the best practices that we have already done in Europe and learned the work. North Carolina and Durham as a location is a result of careful consideration and study, and we are confident that, that's best possible place for us. And our manufacturing facilities will be comparable to Lahti factory. Thank you very much.

Thank you, Tommi. Thank you. And now we take questions regarding our North American entry and North American operations and the market. And do we have any questions here in the audience? I would like to check that first before we go to online questions. Not yet. So let's start with online questions. What kind of risks does Kempower see in protectionism for the U.S. expansion?

Well, it's not -- I can take it because it's also the fact with the U.S., I was in -- a little bit talking with the political side as well. And Inflation Reduction Act is considered as protectionism. But that's only for the companies who already have business that are exporting to U.S.. For a company who starts from clean slate that's a pure opportunity. So it actually gives -- it is a protectionism for yourself as well if you don't have anything to compare. So you are building it according to the rules, and you have actually -- it is a good time from that -- and from our side of things, when we are just building the site, it's actually purely positive. And if you already have an existing business that will be reduced, then for us, it's an opportunity. For everybody, it's not -- but it is actually for this case, it is positive.

Yes. Yes. Does Kempower develop wireless electric vehicle charging at the moment? This is came up in the North American section, but yes.

The power unit itself that we have that can support the wireless charging and different dispensers. At the moment, I didn't disclose it in a road map. So I will not talk more about that.

I can comment in a way that it from our view, it's like one of the different type of cable to charge the car. But first requirement would be that such cars would exist that then you can make a charger that would charge this new cars, which would be wirelessly charged because there is no such cars in production, but it's an interesting academic exercises or projects where we are doing this today, but you need first the cars to charge before you can make a standard charger to the chart of cars. So I think it's even more difficult than the egg, what we are talking about, that's really -- if you don't have any cars to charge, you don't want to create a charger in mass production for that. So that's, I think, concludes that.

Yes. The next one is on the investment to Durham -- it's EUR 40 million (sic) $40 million. So how will we fund this? Will there be, for example, some investment support or loan from the U.S. government or how will -- it will be funded?

It is $40 million, our plan investment in U.S and yes, we got to cut certain subsidies from the state and county regarding that, which is mainly the tax exempt, but we will organically -- basically have fund that -- so it's -- we don't -- we have existing balance sheet. At the moment, it's quite a healthy. Healthy in any business in Europe. So we internally basically found that -- want that expansion -- and that is also good to know that it's the planet investment, so it can be more or it can be less. It's depending on, of course, how our business will start developing in the North America.

The next question is about the actual space we will have over there. Are we building a new factory or buying/leasing accepting -- existing factory?

It's the leased premises. So we have a long -- long time lease, and we will now modify and renovate this building so that it fits for our purposes.

It's not a very long time, but it's -- anyway, it's a agreement, but it's a lease -- leased facility.

And of course, you are building own on production lines and all that production platform by ourselves.

Yes. Yes. Then any questions in the audience? Or should I -- okay, you still have time to raise your hand, but we have a couple of questions from the online audience. Thanks for being active. Tommi, how many people do we at the moment have already employed in the U.S.? And how are the recruitments going?

We have now, I believe, approximately 20 people there. And so far, we are positively surprised that the recruitments have been easier than we estimated and it looks like that we have a very positive brand image there and people are interested to join us.

Yes. How much more expensive is the manufacturing in the U.S. than in Finland?

What is the expectation to be more expensive? That's more like a tradition. There is different cost models. I mean it's a bit different where the cost is -- so I think that's not a direct relation of something is more expensive. It's a combination of things. But it is -- I think for the market, it fit, but it's also changed in the U.S. market because it's also the local suppliers have been doing their products, let's say, sub-suppliers in Mexico. And they also need to change their change because it will act the Inflation Reduction Action by American government will affect the U.S. manufacturing as well. They have the same 55% call value created in U.S., which also they don't feel today because they are doing basically importing their parts or importing there. So this is a challenge that will change the industry in there. And that actually has, is creating also the opportunity in there that when you have a even more limited supply of goods that will affect the pricing in a way that is quite positive for the manufacturer side, how I would say politely, yes.

If I may add, it's also that the -- let's say, the North America is not so price-sensitive now because these subsidies are so massive if it's up to 80% of the investment cost, then the customers, they value more other features than price, like the availability, does it work and all these kind of things.

Still time to go for online questions if we don't have any questions from the audience. Are there any competitive DC charger manufacturers in the U.S.? And what are Kempower's competitive advantages?

Well, at the moment, there's a little bit less competition because of this Buy American Act. But overall, this same advantages that we have in Europe that we have dynamic power sharing. We can utilize the grid connection in an effective way, our customers can earn more money with our system compared to competitors, the same things apply in North America as well.

And also today, it's not different competitor base as well. We meet the same companies all over the place. It's quite a new industry and it's not an easy to come to market. It's a special know-how, we need to be a power electronics company under the easy charging business. So it's mostly the same companies you meet in U.S. and there is some start-ups, but it's very small because it's also new market in U.S. It is quite new things. There is no big players in there, which we don't -- wouldn't know already from the Europe side. Which has been a longer developing market. So it's basically the same people.

Thank you. Now we go to the last presentation session. It's about our updated growth strategy and financial targets, and we started with Tommi, and then JP will follow. Go ahead.

Thanks, Paula, again. And we go directly in the subject and what it is all about what we'll talk. So the focus, of course, that we have heard, but let's look at the private car and commercial vehicles, the main focus areas for the upcoming years. Full solution delivery capabilities, we will talk that more exactly in this strategy presentation. All main continents established. So that was also what we promised to come back to, but there is also work outside of North America and Europe. Software and services business buildup and people and competencies, which is probably the, let's say, the basis of whole thing that who are doing the growth in a company. And then looking at our aim to be the dedicated and reliable EV charging solution partner. As a strategy, and I'm actually using that is a vision to be the top 5 player in Europe and North America. It doesn't mean that you are within top 5 with all the customer groups, all the things when in -- when you look at the total volume, that's the ambition. Europe, when we look at where we are, top position in the Nordics, increasing market share in the rest of Europe, we saw the Q1 numbers that's going on. North America, it's a rapidly growing market. Our entry is this year, but let's say, the business -- when we look at the support of the U.S. manufacturing, like we saw that starts by the end of this year. So that's more or less when we expect actually more bigger things to happen. In Rest of the World, we have looked at it. It's for us a business development stage. We are screening the markets we are seeing and where we need to be, what areas, what are good for us, what's a good fit. And we have certain countries we have taken out, which is China, Belarus, Russia. Not all political reasons. China is quite developed, very price-dependent, home market for the Chinese suppliers. So that's not a key market for us to enter. That has been from the beginning of Kempower strategy. And for obvious reasons, we are excluding Russia and Belarus and then a list of other smaller markets, but I would say that those are the main ones we are excluding. And Rest of the World, we do the business today already. And this is done. We have now Malaysian charging network development. We have quite good project in Australia, but they are for us, it's a distributor partner. We have local guys there to support them but we don't do -- in a similar way as we look at the focus markets, we are there present by ourselves with our own sales teams with the full folks. And looking at our financial targets, medium-term, EUR 750 million. So a bit different figure than we looked at 2 years ago, but we see that the market and what we are doing and how market is developing and how our business is growing, that this is -- based on the strategical things we have done that this is something that we are now committing to. Looking at operating EBIT from 10% to 15%. And then in the long term, minimum of 15% and this is also the topic that we will remain in growth stage. There's a lot of focus and focus on growth. But it's also when you're reading now that Kempower will stay as it is. It's -- our intention is to grow as a company, as you see from the revenue company, and that will require -- and people talk about investments, maybe -- sometimes when we talk about growth investments, it could be just hiring people like 2 years before you would actually be needing. So it's or using net working capital more freely in the beginning to support the growth. So for us, that's part of the growth investment. It's not only CapEx, it's looking at how you finance the whole growth path and what you allow yourself to take the freedom doesn't mean the profitability for you to actually support the growth to get to a certain point and be big enough when the market competition face us. Because today, we are still in a situation in EV charging market where there's -- that the whole supplier of all the manufacturers cannot meet all the demands of the customers. So you are in a -- but the situation slowly when you get the capacity is running this will meet the market that you have a real competition stage and you have to be a serious player at that time, and that's, let's say, I think, the core what we are planning. And there's a little bit about the ambition, not figures, but seeing how we see the market and today how we have calculated where the revenues are coming from -- so growing to quite a different size, but also the weight classes that Europe will not remain, we see significant part coming from the U.S. side. But rest of the world is not to be insignificant. So there is an idea how the split is. Of course, we're a European company, and we are growing here. And it's still even Europe -- U.S. is growing faster. Europe is growing bigger in euros all the time. So that's still quite an important market for us. And then we look at the application side. If you look at the private cars, trucks and we have been also calculating that, of course, commercial vehicles will grow -- but there's also a little bit uncertainty, we have to calculate the certain markets, and we had a comment from one of the analysts already that there's uncertainties in the truck space. So we are not calculating everything on that. We are looking at it as a whole. And if we look at electric trucks today, many people in the media are talking only about the megawatt charging. There's a lot of markets and the cases which we will hear from JP as well, what business cases you have in this space. And with these words, I give the floor to JP.

Thank you. Hello. My name is JP, I'm from the service of Kempower. And let's look at the positioning of the Kempower, both in the value chain and the offering. And the customers, they look for the partner in this business, and we want to partner with our customers. And that means if you look to what kind of solutions we can provide to them. We are -- we have a great product. We have discussion about that quite many times. We have great hardware but we want to be even more a solution provider to our customers. And that's relates quite a lot to the software and services. If you look at position and what kind of full solution offering we have. It is basic combined with the hardware, software, services, energy management. And if you looked it bit of the detail, how we sort of divide these. I want to highlight two sort of the parts here, software and cloud and in services. If we start with the traditional services, I call it. There are things which we are familiar with the spare parts, for example, our installed base is growing quite rapidly. So this business will come. That's for sure. Then product upgrades. I'll give you an example, let's say, the 1 year ago, my customer has installed a certain amount of the power on the charger. I was enough at that time. But now we both know that EVs are increasing, the amount of EVs. But at the same time, the EVs -- they have higher capacity to charge. So in 1 year, it can be that your sort of the charger is not capable anymore. And then you can add more power with our concept, quite easily. And we are actually doing it already now with our customers. Then, of course, the maintenance, that's always there. We are doing early today commissionings, trainings and certain consulting. If you look at the software and cloud side, status monitoring. With the chart side, we can see all the choices we have. We have possibility to build up different kind of energy-related services already mentioned about the energy optimization. We have possibility to utilize the charging data. I put it into the expert services, the chart sIde, our cloud is middle of all of this. That enables us to do the traditional and new kind of services now and in the future. Let's look at a couple of use cases, the practical cases. This is the private cars. We have three kind of, let's say, the cases where overnight when you have parking, typically cars are there for the longer period of time. You have more -- then you need less power. Destination, you got the supermarkets, a restaurant, let's say, 30 minutes, two hours and you can charge your car. And then when you on the move, when you have the highway stops and urban hubs and then you need typically higher power. We have less time. It's a classical -- you know the Finland, you go and you want to drive to Lapland. That's exactly on the move. I just did it in this year spring and the person experience good at the moment, got few stops, 10 minutes, 30 minutes, you are there. Situation is now, but of course, the EVs are getting more. So then we have to have this market and market will have more of these EVs and charging stations. Let's look at the commercial vehicle side. Again, overnight, destination on the move. Same thing applies here. Of course, the power, the relative powers are higher. We had the destination, 30 minutes, 2 hours on the move, you have the higher power requirements. And now the both of these, the private vehicles or private cars and commercially vehicles. We have a, let's say, solutions and service already. Today, we can serve them in a certain extent. And the one thing I also highlight that the, when we do the services utilize heavily on our old partners, service partners. We have to -- basically we cannot do everything by ourselves, own people, utilize them for the core competence, core actions. And that's the -- how we want to do it. Okay.

Have it going to the end of the official part, and of course, people are in the center. And how do you do growth, it's really what I believe in as well if you do it with the right people with the right know-how and it's really how we build the organization and get the right people working with us. So agile organization, flashing term, but we are moving fast. So you need people and organization that adapts, copes, learns. So it's best practice is knowledge sharing. The high focus in our customer understanding, of course, how to see the customers. I think part of our success is that we have been good in that, and we need to continue. Competition and skills develop and you cannot find any more talent from the field. So you have to have also focusing your own trainings, how to get the whole team into the space and carrier incentive model are in the core because really believe that one of our major part is really, if you call it risk or the opportunities the people and we need to have the right people to do it growth. And if we look at the sustainability and book it in the reality, I think that's a good word for Kempower that we don't need to look at how much CO2 reduction. If we look at it from the pure, we were been born sustainable, we were born into the green transition. This is the core. That's why we exist. So it is also a couple of cases to show that in the -- like, in the Danske Bank report looking at it, it was the only company 100% aligning revenue and CapEx purely. And looking at the evaluation for the green equity by Cicero green, looking at the -- that we are -- by far, we are dark green from that point of view with both revenue and CapEx. So it's purely I call it the term, I think born sustainable and born through the movement of green [indiscernible] and then changing the world. It's a big part of it. And looking at our impacts today, just as a summary because we are looking at, of course, from the all -- the letters from the ESG and the social impact, looking at how we make the world better, how we affect it than the environmental. And in there, looking at our, let's say, impact in there that we are allowing the electric traffic and electric transportation to be born and that has direct impact of reducing the emissions by 86% based on the Finland energy production price because this is a number from Traficom. It, of course, relates to the whole movement that you are then changing the energy production and everything in the world. So it's -- of course, the EVs will not save the world by alone. It's a combination of things. And then 390-megawatt hours charging energy, daily to customers, it means those are Easter energy, you are not anymore producing by burning things on the road. This is exactly burning things on the road, making moving things where you have like a fire inside. It's a difference to, let's say, induction and electric stove to a camp fire for cooking. So this is basically the transition we are doing with electric vehicles. Circular design, we are focusing that our products will be recycled. This is a big part of the whole road, how to become actually carbon negative for the whole world. in the future. And today, we are already 100% carbon-free electricity in our main factory, and we are moving that way with, of course, all the facilities in there. Economic impact, we are, of course, impacting society. with the direct things, but it's also part of having the local supply chain. It's only not only the environmental impact you are affecting the whole area where you are. So creating more jobs than your company alone, you are supporting also the whole communities where we are present. And then going into conclusions, which could be half an hour, one hour, but let's try to get this that we're going to get also the important questions. So what do you have to remember from today, of course, the market estimation is quite much different than a couple of years ago. And big impact is also the commercial vehicles, especially the truck market being born. And we can argue when does it happen, what does it happen? We try to give you the evidence what the truck manufacturers, what the industry is doing, what is the demand from the customers to see and what is the investments done for the charging infrastructure to support the claims as well. But we see that this movement has now happened. Value creation, how do we look at ourselves? What are the core things in our strategy? It's about secure the existing right vehicle market and win even to be in the, let's say, to the top league of customers and really be talking to the right customers who are growing and identify the right customers who are growing in this market. Develop a new stronghold in electric trucks. This is an emerging market. It's a new market within the new market. So it is new players. There's new market, new solutions and I could remind new solution for us doesn't mean a new physical product. It is very much what we are looking at now. It's a combination of the solution. It might be different software service or more integration to a new system that we'll take a new approach to be more closer to the customers' needs and excel business processes. Replicate the Nordic success in North America. I think there will be questions are you arrogant to say that everything works? Today, it looks like, but we have also been preparing, like with the local engineering team, if the market needs some adjustment that we are ready to answer to the customer is, today, it looks like -- there is the same customers, product seems to be a good fit. But from the experience as well, I believe there will be some local requirements, and we are prepared for that. But today, if there is none, of course, we don't do anything. So customer demand is there. But it is looking at also how we have moved within Europe that we started from the Nordics, we continued to the rest of the Europe doing the same things, expanding in the same way with the success. Secure recurring revenue. This is a long-term goal. Of course, because we have today this grows together with the installation base, how much products you have delivered. So of course, the device sales always grow. So we cannot expect huge percentage, but it will be a significant part of the future, especially when the competition game starts. This will be more secure. It's also a competition way. You better services, you win more customers with the hardware. So it's a combination of things, but it's an important part of the path we are doing today. And as the market is growing faster, I was talking before that it's even longer in the future, but I think the market growth is accelerating. It's bringing this part of the market also faster to the needs of the customers. Mid- and long-term profitability, very coy now. There was also already questions about it. We are looking at the product cost. It might be about product designs, but we have to be competitive in the long. It's part of the things come from the economics of scale. When you're growing, you get better contracts, your volumes will actually make everything more efficient. But it has to come to the -- how companies build, how the products are built, how the products are designed. You cannot just add automation, you have to design it to the product. So it's part of the whole story. In value capture, difference in customer experience. This, we believe, it's not only the EV, it's not only holding the block. It's how our business customers see it. It's how our cloud services integrate directly into the business operations of our B2B customers, how it support. So it's the whole experience in there. If we're looking user customer, they are both. And if you're looking -- it's a little bit different how you see in the commercial vehicle side, and if you're looking at our megawatt charging, it's probably weighs like 50 kg to cable with it, if you want to push 1,000 kilowatt in there, you have to have ways to do it. Moving from product sales to solution sales, very much a big team. And this is a lot of exercise we have been doing what kind of solutions. A lot of this different portfolio to different groups, it's also related, how do you address the customers' needs. It's not only about the physical product. and product visions, public charging commercial fleets, different needs, but like I said, maturing supply chain is a big part. It is even more important than how much factories you have in our model. It's how well you design the supply chain and how well you get your friends, your suppliers growing with you and together with you. and how many things you need to have in place and choosing also the right friends to play with. Focus on product is on lean operational model. That's part of the -- really the profitability path. And in operation across the organization and teams. This relates to the capability of people doing innovation. It's about innovating in production modes, operation models, sales models not only the products. But thank you for this part, and I think we go to the questions.

Yes. Thank you, Tomi. Thank you, JP. Do we have any questions in the audience to start with? Yes, if we get the mic to Tom.

It's Tom from Carnegie here. I really see the benefits with dynamic charging. But what is hard for me as a non-engineer to understand is how quickly will competition catch up? What has happened since the IPO? And how difficult is it to replicate your type of product?

I think the story is to stay ahead with the innovation as well and have the whole solution. I think it's not only about dynamic chargers at least when I look at forward actually the software services might play a bigger role when you look at how well your systems integrate customers' business processes. So in the long run, you have to stay very competitive, but the competition wave might not be purely hardware or purely dynamic charging in the future. But this is not the easiest way to -- I think we have had this question every time. I'm very proud if we are the one to be copied. But I think there is also other customers who are copying other customers. So it's -- I don't know, customers, I mean, competitors. So it's kind of -- I think we are not the biggest company yet. So it's -- I think there will be in some time somebody copying the solution, but we don't see it today.

So the case is still that you cannot order dynamic charging from anyone else?

In a similar way as we do it, I haven't seen it. And we don't know everything from the market and new things are coming. I think it's a fast market there. I think there will be something. But I'm also trying to tell that it's not the only thing in the market.

Yes. We cannot build a competitive edge only based on the hardware that's why like we need to build those other strongholds, partnering with customers and develop that business integrations and go for upper level to sell more intelligent systems and not hardware only.

I think it's a strength today, but if we would rely on one strength, that would be very naive.

I can add, overall, like Jussi described it quite well the whole user experience what we have and how we have built a whole product and offering, it's many more things like this cable heading you were showing, it's software, it's a change. There's many things in the whole user experience. It's not only the dynamic charge.

But you have always used the car as an example, with Dynamic charging, but this today is a lot about trucks. Are the benefits kind of similar despite different sizes of batteries in trucks?

I think it's a good example because it's easy to understand, but we have been using actually, it's a big thing on the bus side as well, which is quite similar to, for example, last mile delivery.

It depends on the use case as you saw there the solution vision that different use cases, the dynamics have some benefit but some not. And especially this on the move that you need to push that full megawatt power on the truck as fast as possible, but there is a little bit less benefit, but overnight charging and warehouses and then you have more benefits on those. Then one, what the customers, they really kind of like our solution now is the multimodality that you can charge the different vehicles since the trucks are not yet there that you can charge the private cars. So not specializing on those, but using the platform for different vehicles.

[indiscernible] When the bus is not there, you can direct put the cable charges next door. So it's that note that you don't use the investment only one case.

Okay. Thank you. Then the next question.

My question is -- I am [ Yana ] here from the analyst. My question here is on the lead time. So you mentioned earlier, it has improved. I wanted to know if it's possible -- what is it right now? How much has it improved? And how does it compare to the competition?

From a system supplier, it's also hard to say improvement of what. But I think on average, we think we could get a 30% improvement or....

In average, yeah. But it depending on the customer cases and orders. But I think we have gained the level that the lead time is not the issue for the sales anymore. But got about 30% is good estimates in general.

Yes. And if I may complement, it also depends on the product. So like we have this movable charger product, which is basically off-the-shelf product and then we have larger systems, which obviously takes more time.

Excellent. Do we have any other questions from the audience? Let's take a couple from online. The next one goes to Jukka and it's about our EBIT margin. Can you share the rough mathematics behind your aspirational 15% EBIT margin? And can you explain how that ties to internal rate of return at the plant factory? Sorry, factory level, please?

Yes. Good question. So this 50%. It's target in the long-term was at least 50%. So that's the minimum what we target. And now, of course, in the medium-term, it was this 10% to 15%. So -- we also want to show in our targets and also in our guidance for this year that we are still also at the investment phase. So we are not kind of the value company that share the dividends, but we also invest at the same time. So like you saw today, the North America investment, what we also described. And of course, we constantly invest on our growth in Europe as well.

Thank you, Jukka. JP, next one goes to you. How does Kempower plan to provide global customer service and support for its products?

Yes. Good question. We have, of course, different let's say, the level of support. Typically, we had the partners for the first level, and then the [ Atkins shop ] our expert level. And then, of course, in the U.S., we will lap service network, partner network, our people and then that we already have in place in Europe and the areas we are present.

Thank you, JP. Anyone here in the studio, if you have a question that pops up in your mind. Yes. Just raise your hand. Thank you.

Yes. As a follow-up to the previous question. How much do you see or what share of service revenue of total revenue do you see by 2030, for example. Is that going to be a significant component or not?

Jukka maybe?

Yes, I can take that. Like you saw, we didn't totally target or we didn't disclose the numbers, but like JP well presented, that it certainly will increase. It will increase on the short term mid-term and in the long term. So it's an important part of the portfolio in 2030.

And then, over there, the next question?

I'm [indiscernible] from [indiscernible] . Tommi, you said something along the lines that DC charging is not an easy business to get into. Can you expand on that? I mean, to a non-engineer, this sounds like established technology. And so what are the barriers?

It's established technology, if you look at inverter technology and how to do powers, but that's quite limited amount of companies who can do that. It's not that you can start to be a inverter manufacturer tomorrow. It is from the complexity of point of view, building that's what I meant. If you are making today, let's say, it would be maybe, high-end solar inverter manufacturer for industry, you might be considering entering EV charging. But if you make, for example, AC chargers, that doesn't make you any more compliant to come into the DC charging business. So it's the business synergies, and it's also where our history is coming from power electronics industry. With this from itself, it's a limited amount of companies who operate in this space. So that was where I was referring to.

I can pick a question from the online audience that actually follows up on this topic. It's about the IPR, do you have some patents that could somehow safeguard your competitive advantage?

I can start that of course, One way to look at the patents is to guarantee that you have a freedom to operate and that we have done quite strongly with the legal department that there is no blockers in the market. And then seems to be on a good track there. And there is some areas that we are attending and protecting our path forward. that some of them are related to cable management. And so -- but we have a bunch of good patent pending now.

About the doing with the data patent, but it's also the part of things that when you patent something, it's not giving you the competitive edge because when you're coming, you can solve the solution in a little bit different way and come to the market. It's also guaranteeing you the freedom to operate when you own your tech and you could patent protect it. So that's even more important when you have done something great that you have the freedom to operate and nobody challenge you from using it. So I think at getting this kind of competitive edge that you would be only one who would charge a car in the world is not the case. It's more that you are secure that you have your IPR and the advantages in some parts.

Very good. Then about the M&A? What is your M&A strategy. Does your targets include acquisitions?

Yes. We have also commented that earlier. And we always have said that we don't exclude the M&A. We are open to that. We have looked small technology companies there, but this is not -- our target strategy is not based on the M&A execution.

Thank you, Jukka. Then we continue with online questions. Are your new targets ambitious enough? It seems there would be more demand and capacity for more, Tomi.

Are they ambitious enough? The EUR 750 million company when we made 2 years ago EUR 27 million. For manufacturing company, come and do the same. That's I would urge the person who asked it, but please repeat the same and say if it's ambitious or not, but it requires a lot of things. And this is -- we still have, of course, where Software as a Service might be easier to scale, but you are scaling a manufacturing company in a newer space. So this is also -- we are looking at it from all the angles when we are looking at. I think the EUR 750 million is not an -- at least the lowest ambition goal I have seen so yes, I think there is no conclusion, but I feel that if you can find an example in the manufacturer space with the same growth plans, I would be happy to see that.

If you look at that, those numbers for that goal we gave that -- the goal is only within a few years. That we have, we will be EUR 750 million. So it's Yes, it is a last year, we were EUR 100 million company. So...

Year before EUR 27 million and the year before that EUR 3.5 million.

Exactly. So if we reach that, we will be happy.

Yes. I would think so. Yes.

So if we reach that, we will be happy?

Yes.

Yes. Kind of.

Very good. I think this is a very good place to -- okay, we have one more question. Let's go, one more question.

One quick last question regarding -- more on the financial market side and then viewing from the investor side I mean, all investors are probably happy investors, I would assume -- but looking forward, there are not that many large international investors yet in the company. I think there has been mention that you are aiming for the main list at some point. Is that something you can collaborate on? And I guess that would have to be combined to the fact that liquidity is somewhat limited for the stock. There is a large family owner. Has there been -- I mean, would the family be open? Or have they stated anything in regards to increasing liquidity in the company at some point?

Please, Jukka?

Yes. Like we have said earlier also that we can discuss about the possibility to move the main list and -- but we have no official decision on that. So far, you can, of course, do the transfer even without having the primary or secondary, you can just do it technically as well. Second question about our main owners, so we don't comment on our owners' topic. So that's takeoff.

Very good. Thank you, Jukka. And let's not start the video yet. I would like to thank you all. Thank you here in the studio and also online for a lively discussion. And -- this was our first Kempower Capital Markets Day, but it won't be the last. So we really wish that you found the discussion and the presentations useful and you stay tuned and follow Kempower. Thank you for all the excellent questions. There was plenty coming from online. So we have already discussed and agreed that we will offer answers to these question somehow in a blog or online Q&A or something. I wish you excellent spring, keep on charging, and thank you all. Bye-bye.