Landis+Gyr Group AG (LAND) Earnings Call Transcript & Summary

Good afternoon, and good morning, everyone, and welcome to our Capital Markets Day 2023. My name is Eva Borowski, I'm the Senior Vice President of Investor Relations and Corporate Communications, and thank you all for being here today with us, here at the Google Campus in Zurich, and of course, virtually from your devices around the globe. We would like to think Google, who spread out here through the room for hosting us today, and of course, for your extraordinary partnership. This morning, we issued a press release and presentation, and you can find those documents on our website. Some of the information discussed today contains forward-looking information, and we ask you to interpret the information discussed today in the context of the disclaimer that you can see behind me or find on Page 2 of the presentation. We also have some guest speakers today. We have prerecorded their messages in advance of the event, and we'll share that later. Thank you again for joining us. We have about 3.5 hours of event in front of us. About halfway through, we'll take a break. And at the end, there will be plenty of time for your questions. Now it's my pleasure to introduce Werner Lieberherr, our Chief Executive Officer. But before he takes the stage, we'll take a quick look at what Landis+Gyr is all about. [Presentation]

So welcome to our CMD Day, and thank you very much for being here. It means a lot to us. Before we dive a little bit into the presentation, I want to say 2 things. First of all, thank you to Google. We have Daniel Holz here from Google Cloud [indiscernible]. Really, it's a phenomenal occasion. Thank you that we can be here, and I think it's also a testimony of our partnership. Secondly, you saw this morning press release, very exciting about data management services about SaaS, and then that will also [indiscernible] 500,000 meters. You can see, guys, we are building the backlog, okay. I think very important, we have -- we started just [indiscernible]. Today, we will go through the presentation, and before that, I wanted to say that when you think about our customers, it's clear that our customers are investing in green energy [indiscernible], in technologies to actually enable the technology [indiscernible] you as investors and analysts are investing in a greener future. So thank you for that. Around [indiscernible] passionate employees [indiscernible] to empower people to preserve resources, decarbonize the grid by innovating efficiency [indiscernible] tomorrow, but we are doing much more than that. And you will see that in a glimpse here. You actually see the agenda. I think it's very well laid out. I think you will like it. First, we talk about financial. We talk about markets, strategy and ESG. And then we actually go into the 3 big pillars, meaning smart metering, grid edge intelligence and smart infrastructure. We will have a break in between to caffeinate you, of course, also very important. And we also have, as Eva already said, we also have video clips from customers around the globe, which I think you will like. And then we also go into a Q&A session. We will actually have the presenters here, and feel free any questions you may have, we highly value that. At the end of the day, we have solutions [indiscernible] a glass of wine or champagne, you can [indiscernible] kind of solutions do we have. We structured our afternoon in 5 chapters, again, that we don't lose you in the presentation, know exactly where you are, I think that's very important. And then of course, we also have Eva as our master of ceremony, who'll actually guide you this afternoon. We are all investing in the future, and we are doing that by envisioning a green future. You have come to the right place. Landis+Gyr is well positioned to do that. What are our key investment highlights. Clearly, there's an increased need for intelligent power grids. You see this more and more. It was pretty much known in the U.S., but you also see a much stronger need in Europe, when we talk about potential power outages and so on, and this is clearly further amplified by this current energy crisis. In order to make [ efficient lead ] data, so we also structured this afternoon, not just about half of that, but pretty much about [indiscernible] because that's something where we are in the process for the last 3.5 years actually to reposition Landis+Gyr. We are doing that with targeted investments where we actually shift from a smart metering more into grid edge and more into smart infrastructure. Last but not least, I would like to say we're also recession-resilient. What does that mean? For us, a recession at this point in time, it's a good thing in the way that utilities are still rolling out. But we see actually material costs, labor costs and so on, normalizing. So in the light of that, it's definitely something we are prepared for. But again, we are in the sweet spot for the energy transition and the trends clearly underpin that. And that's what you see here, actually, when you look -- so here, decarbonization, energy transition, geopolitical developments, consumer empowerment, electrification, digitalization and external threats. These are all trends actually which underpin what we are doing as a company. Addressing industry trends through portfolio expansion and shift in R&D investments. What does that mean? You can see that on this chart, in '19, we are pretty much a hardware-driven only company. We invested heavily in smart metering at that point in time, not wrong. And then you see actually in '21 and going into '25, a much bigger emphasis into grid edge intelligence and smart infrastructure. Why is that? Look, we still need smart metering. That's the basis. That's how we collect the data, that's how we process the data, but then it's very critical that actually, we are in a position to actually really manage this data, prepare this data accordingly for the utilities, but also for the end consumer, and that's what you see here. Then as you also heard from me before that we are investing in '21 and '22, 11%. And then we are going back to 9-plus percent of revenue, but really important that we made this technology push exactly actually with the initiatives like Google. Guidance '23. I always said I would communicate with you very straightforward, very direct. I also said that I can see the guidance '23 in a more normalized supply [indiscernible] what we see that the supply chain is normalizing, but not exactly with the speed we actually expected. And with that, net revenue unchanged. Then you see adjusted EBITDA. We announced last week in a top statement, a 9% to 11% free cash flow, $60 million to $90 million. That's really mainly driven by the strategic inventory investments, which we are doing. But from an overall track as a company perspective, there's no change as you well know. And we are a dividend company. We are a strong cash generator, and we want to keep it like that. There's a question in our fundamentals, what we want to achieve. I think you can also see that here in the midterm guidance, FY '25, which -- relative to FY '21. Why '21? Because these are the last certified numbers. Therefore, organic growth of mid- to high single digit. That's really the strong backlog we have we are rolling out. So I think very solid numbers. And adjusted EBITDA 12% to 14%. We feel in a normalized supply chain absolutely doable. That means, in the U.S., we will see historical margin, 17%, 18%. You will see EMEA at 10%, and we will see APAC also at 10%, which brings us to this number, dividend clearly progressive as we said before. Last but not least, strong focus on cash conversion, something we are watching. Again, we are a dividend company, and we want to maintain a very strong cash generation. Expanding for attractive shareholder returns, and that's actually what I want to hand over to you, Elodie. Thank you.

Thank you, Werner, and good afternoon, everyone. So I'd like to walk you through now our key financials for the company. We'll talk about our revenue growth and what the main drivers are. Then we look at our EBITDA evolution and our improvement initiatives, how we plan to optimize our manufacturing footprint and linked to that, our capital allocation strategy. I'll dive into our balance sheet. We'll talk about dividend policy, and I will finalize with going back to our guidance for 2025, future projections for the group and for the regions. So with that, let's start right in. Let's look at our revenue first and the growth that we are planning. As you can see, from 2021 to 2025, we plan to grow our top line with a mid- to high single-digit CAGR. This growth is supported by a portfolio shift from smart metering to grid edge intelligence and smart infrastructure. As you can see, grid edge intelligence meters are becoming the technology of choice, and we, Landis+Gyr, we are very well equipped to serve that demand. This is evidenced by the successful market introduction of Revelo and its app ecosystem in the U.S. and as well the successful launch of the E360 in EMEA. With this, we have also released some new products, smart ultrasonic water, smart ultrasonic gas. This is part of our key strategic transformation drivers. And these new products will drive growth also in our existing markets. Finally, leveraging on our acquisitions that we've done, particularly in the EV space, we are planning to expand sales of EV chargers and smart charging solutions. This will drive growth in our smart infrastructure segment. As we grow our revenue in all of these markets, we are also looking to capture recurring revenue streams in software and services more consistently. Overall, grid edge intelligence and smart infrastructure will represent about 48% of our revenue by FY '25. If we look now at our EBITDA and our profitability, as Werner just mentioned, we expect to be in the range 9% to 11% of adjusted EBITDA by FY '23. This is lower than we originally anticipated in our previous guidance, and yet, this represents a significant improvement compared to FY '22, where we expect to be between 5% and 8%. So there are 3 elements here that I've been playing. First, supply chain. As you know, supply chain has had a significant impact on our financial results since 2020. There were 3 factors there: first one has been component shortages, which are impacted our top line; second, higher material prices; and third, higher transportation cost and increased lead times. We estimate the impact of this to be between 4% to 5% of EBITDA in this current fiscal year compared to last year, and this is in line with our guidance at the beginning of the year. What we are looking at for next year is some recovery as we start to see some of the easing of the supply chain. And we have 1% to 1.5% of EBITDA recovery coming from supply chain. Now looking at another very important part of what we've done in our company is the R&D and the investment in the transformation. As you know, in the last couple of years, we invested about 2% in R&D, and this was done to support our portfolio shift and enter into new markets. As you will see later on in the presentation from our team here, these developments are well underway, and we have exciting new products, software and solutions. As we made these big developments, we expect to start to scale back R&D spending back towards our 9% target that Werner showed you. This means that we expect about 1% of improvement in our EBITDA coming from this in 2023. Last but not least, we continue to drive operational improvements [indiscernible] in FY '22 and in FY '23, with a particular focus on 2 things, [indiscernible]. If I look at our profitability, one of the key initiatives that we're driving is the optimization of our manufacturing footprint. Our supply chain footprint strategy is [ added ] key for cost, but also for agility to the external market developments. We continue to rely on our EMS partners for PCBA production based on regional requirements. But we are, at the same time, also in-sourcing some production of [ box-free ] components to leverage our internal production capabilities. Looking at the regional strategy. First, the Americas. We will continue to serve this market from our key plants in Reynosa in Mexico. Here we have completed this year capacity expansion to be able to accommodate the volume growth that we expect in the Americas region. In EMEA, we pursue a focused approach on 2 key sites. One is Greece, in Corinth, where we have also increased our capacity to support the growth in the EMEA market, but also to now be able to produce our EV charging solutions. And then, in EMEA, the second big plant is our acquisition in Luna in Turkey, where we are also looking to leverage this low-cost platform now for heat and water meter production that we will be transitioning from Nuremberg. Finally, in APAC, we came to the decision of closing our India manufacturing site and shifting our focus on operational efficiency in China and in Australia. All in all, this will optimize our cost position, and we will get economies of scale as we will focus on fewer production facilities. We will occur onetime restructuring charge in the next fiscal year for all of these projects, and we will start at the same time, seeing the benefits, obviously, of these allocations in lower cost in the coming years. This strategy is well translated into our capital allocation. First, our EMS model and the manufacturing footprint optimization enables us to operate at a low CapEx. We expect to remain at approximately 2% of net sales, with disciplined investment in our key sites for excellence and optimal capacity. We are an asset-light company. Second, working capital. In particular, our inventory position, which is a critical element of our cash conversion cycle. As we announced last week, in FY '22, we are carrying higher inventory position. We do this to satisfy our strong backlog and the anticipated revenue growth. We are experiencing a volatile supply chain and with some component shortages and longer lead times. And here, we are holding more inventory than in an ordinary normal climate. Whilst we expect these effects will somewhat continue in '23, we do expect the situation to normalize over time as the supply chain will ease. As you will have heard from Werner, cash generation has been and will continue to be a very strong focus in our company. Now looking at our net debt and balance sheet. Our net debt-to-EBITDA ratio was approximately 0.6 at the end of September '22. We have a strong balance sheet, and this is a very solid foundation and a great platform for future opportunities for growth. Over the last 2 years, we performed some strategic acquisitions that have positioned ourselves in new markets, like EV charging, and also enabled our supply chain consolidation efforts and are giving us a low-cost platform with Luna. Earlier this year, we have also completed the sale of our share in IntelliHub, which has aligned our operation to our cost strategy and resulted in a very significant cash in position. While we transform the company, we are also committed to return profits to our shareholders. And you see here, our dividend payout ratio with a progressive dividend policy. So finally, let me tie back to our midterm projection for FY '25. As you saw, our guidance is a mid- to high single-digit CAGR for net revenue, and in terms of adjusted EBITDA, range between 12% to 14%. If we look at our regions, in Americas, this will be driven by focusing on the execution of our backlog for the major deployments, including the Revelo rollout and expanding software and services revenue. In EMEA, we plan to scale our recent acquisition, focus on expanding EV solution and promoting smart water. We will, at the same time, continue to focus on streamlining and optimizing our operations, and we are expecting to drive improving EBITDA margins in line with our midterm target of 10%. APAC, we will grow in our key markets. Australia, Southeast Asia. We're expanding our offerings with new streams, smart water, smart gas and EV [indiscernible]. We have strong revenue growth on the back of the delivery of our [indiscernible] and also related growth in our strategic initiatives that we've been driving in the past couple of years, smart gas, smart water, EV charging. And with this, we are driving strong margin improvements, operational leverage coming from the strong revenue, positive mix coming from our portfolio shift and operational improvement that we see in our manufacturing footprint. With that, I will hand it back over to you, Werner.

Thank you, Elodie. And now we will make out a few little grid edge and smart infrastructure visits. I think you will enjoy it. So anticipating customer needs. I think what do our customers need and which role do we actually play in that, I think that's very important. The industry is changing rapidly. I think you have seen that. Frankly speaking, I lived a long time before I went to the U.S. in Switzerland. I never thought that we would actually talk about power outages and that kind of things, brownout, black outs. So it just shows how important the data is and that we actually drive the grid as intelligently as we can because, as you know, there's not enough power generation coming online, and more people are coming. So therefore, we need to do best with the resources we have. Good. So having said this, you see here actually 60% -- 68% of residential customers are very concerned about climate change and their personal carbon footprint. I think that's a positive. 52% people are concerned about interruptions with their electricity supply and also cybersecurity. And then what I think is also very important, 44% of consumer ask for apps, providing energy consumption insight for proactive energy management to become informed end consumers and prosumers. And I think that's also, first of all, a real interest. How can I lower the carbon footprint, but it's also cost. I was not too long ago at an investor conference, in the U.K. And I said, hey, how much do you actually pay. And he said, well, I pay now between GBP 700 and GBP 800 a month and that's a lot of money. So that also drives, obviously, this behavior. Here, you see actually customer challenges. For main drivers, you see changing end consumer behavior. Clearly, that's become prosumers with photovoltaic, for example, installation. We also see energy consumption. We see rise of EVs, heat pumps. All this creates a much more dynamic on household level. Then second, as part of the renewable build out in integration, we see more distributed energy resources, DERs, as we call it, wind farms, battery storage, EV charging infrastructure and so on, which is taking place. And then you actually see large investments in cleaner, safer, more reliable and more modernized grids, also that needs to come along. And then last but not least, increased demand for data and digital technologies. And that's where we are really in the sweet spot as a company because that's so important. How does that look like in terms of market outlook? Let's talk a little bit about market outlook. You see that here, I will show you in the 3 segments: smart metering, grid edge and then smart infrastructure. And you see actually a CAGR of 7%, not bad. When you think about it, you see smart electricity relatively flat. Main reason for that is actually that the grid edge sensors, for example, like Revelo, they move actually from smart metering into grid edge. Revelo, which we have in the U.S., that's really a grid edge sensor, who is a high computing actually sensor, who has a lot of capabilities just to give you an insight. Revelo meter is 14,600 times per second, actually checking the [indiscernible] curve. That's a very high number. So you have constantly the perfect information as a utility, also as an end consumer, and you will hear more about that. Then you see actually smart gas. Smart gas is interesting because obviously has an emergency shutdown that's coming more and more. Gas under pressure, but smart gas, there's so many installation, I think that's going strong. And then you see smart water. One of the reasons why we actually started really to invest in -- we made a decision together with the Board in 2020 to invest in smart water. It's really the gold of the 21st century. And then you see here a grid edge, strong growth rate, 16% between '21 and '26. And these numbers are all actually from Frost & Sullivan. So these are not our numbers. These are validated official numbers. You see grid edge devices 46% between '21 and '25. So really [indiscernible] you will see that actually how that comes along. When we look into the regions, you see services and software, 6%. And then you also see actually analytics with 15%. So also they are very strong. And then you actually see here smart infrastructure. Here, you see EV solutions. You know that, that's really a big driver, obviously, also together with heat pumps and so on, but a very strong 25% actually from '21 to '25. So when we think about that, then you see here actually our 3 platforms against smart metering, grid edge intelligence, smart infrastructure. The way you need to think is smart metering is really what happens in your household. I mean in terms of the different applications you have, maybe you have a solar panel, you have battery storage, you have EV heat pump, HVAC and so on. And in an environment where as a utility, you have a less reserve margin because you don't have enough power generation coming in. It's more important that you have pretty accurate information, but that's really what smart metering is doing. And then grid edge intelligence is really household community level, where you actually -- what are we now doing with this information that we get a very good picture. How does it look like? And then you have a smart infrastructure, which is very important, where you actually then collect all that and actually make [indiscernible] and of course, all this actually within the Cloud. That's why the Cloud is so important. That's why we are on the way to become a Cloud-based company because you need this type of information to drive grid very efficiently also as an end consumer actually taking the right steps from a cost perspective, also from a volume perspective. Capturing a profitable growth. What does that mean? Let's talk about that. Here, you actually see -- this is smart devices market position. This is also, again, public information, Frost & Sullivan '22. You see on the bottom left, you see actually 2020 data and then you see '21, Landis+Gyr data, and you see it actually split between residential electricity, smart gas and ultrasonic heat. And what I can say that we are in a position where we are actually able to maintain and expand actually our leading market position. I think that's what you see here, and very importantly, we are able to do that in key markets, key markets like, for example, U.S., U.K., Switzerland, Nordics, also Latin America, #1 in the U.K. in terms of gas or also ultrasonic heat in Germany. So that's very important. We want to keep that. Again, we have 300 million meters out there, smart meters, [ 100 of 30 ] of them are connected. And the more connectivity you have, the better actually you are able to manage the grid as overall. Here you see actually, you have -- most of you have seen this like before, it's an updated slide. You actually see, there's a clear shift from left to right in the electricity environment from the early stage going first wave, going second wave. You see U.S., Nordics, really leading actually, but then you see a lot of the countries actually coming into the first wave -- in the first wave. We already have a lot of information to give you. One example, Sharon Stone -- sorry, Sharon Johnson spoke to us and clearly said that actually due to the fact that they invested in actually smart meters, they actually were able to save 3.7% of electricity. So still powerful, very good. Then you see here the different markets. Americas now really going first adopters of actually this grid edge going into a second wave. These are also the big wins you have seen. I think we are very well positioned in the U.S. when you think about National Grid, PSE&G and so on. Also the win this morning, we can't give you the customer name, unfortunately, but also there, it's Revelo and it's a testimony for the technology. And then you actually see, for example, Japan. Japan is a country where every 10 years, they actually change the hardware and the software. I think that's also important to note. When we look into Europe, also in Europe, you see here on the top from '21 to '27, 85 million, actually, you see the penetration levels. And then you see actually quite a lot of countries who now realize, okay, we definitely need more information. We need to be able to manage this grid more efficiently. Same goes for APAC. When you look at APAC, '21 installed base, 16 million going actually in '27 million to 156 million mainly, so massive rollouts, which are taking place. You know that we are very well positioned in Australia and New Zealand, Hong Kong, but then we're also pushing into other regions and countries, for example, Southeast Asia. Rapid electrification requires careful orchestration for continued grid stability. How can we help solve these challenges? I think very important. You see 2 main drivers, two of them, global acceleration of transportation and electrification, first one. And then you see actually power grid becoming decentralized and bidirectional. So you need actually information going both ways. I think that's very important, coming from the end consumer, but also going to the end consumer as part of this. And that's why you need a lot of information, which is prepared in the right way. What does that mean for us when you look actually at the stack in terms of energy efficiency solution? You see actually the devices that's still very important. So that's also what I tell to my employee. If you work actually in smart metering, it remains very important because without smart metering, we don't have the data. Then you see actually connectivity services ensure that these data sets are transmitted. In some cases, as we discussed, Revelo real time. If you would have a Revelo at your home, you can -- at any point in time, you can look actually on your iPhone, how much power consumption do I have, how much is now for the pool? How much do I need actually for the heat pump? How much power maybe I get back from the solar panel and so on. So I think that's very important. Then you see on top of that, the Cloud platform, that's why Google is so important to us that we have this relationship that we together can actually really then prepare this information in the right way and prepare it for the utilities and therefore, the end consumer. Sometimes I'm asked, hey, what do you think in terms of data privacy with Google? It's not an issue at all. What we, together with Google, are doing is actually analyzing the data, dissecting the data, preparing the data in the right way for the utility for the end consumer, but the data belongs to utility and remains with the utility. So there's no risk in that. Data is useless, until it becomes information. We turn information into insights. You can see that here again, powered by Google Cloud. And then you see -- on the left side, you see enabling our customers in terms of real-time insights, in terms of consumer engagement solutions that on the right side is changing the way we work, which really means actually innovation, speed, integration. We have with us Daniel Holz. As I already said, Daniel Holz is Head of Google Cloud Europe, and we will have a fireside chat. I think you will like to hear a little bit his insights. He's the expert, obviously, in this environment. Decarbonizing for a sustainable world. We think we are uniquely positioned, not only do the best thing in terms of utility information and consumer information, but also in driving ESG forward. Here, you can see actually ratings. ESG is part of our DNA. That's we feel about it. Over the last 3 years, we made very substantial improvements in terms of ratings. Just signed up to the science-based targets, we are very proud of that, that we were able to achieve that, and we want to drive this further. ESG, we have actually 4 segments, how we dissect this UN development goals. We have products and solutions, climate environment, people well-being and business ecosystem. Clearly, in the center is for us, at this point in time, the environmental component. Carbon footprint of production. These are Scope 1 and 2 between '17 and '21. Good progress has been achieved. Maybe you ask yourself, Werner, why not everywhere the same? Well, it also depends. Is there actually green energy available or not. It really depends on the environment, but it's something we clearly want to drive forcefully forward. Here, you see the carbon emission in the various scopes, Scope 1, 2 and 3. interesting to note that Scope 3 is the largest one, 99% by state, well, because our meters are measuring day and night, and therefore, obviously, also accumulated the largest footprint. And then you see Scope 4, that's actually where we help our customers to avoid CO2 emissions. So that's not something which we count for ourselves, but where we can actually help our customers. Here you see the Scope 3 breakdown. That's what we just said, really because our meters are running day and night, 24/7, very hard workers. I can tell you that when you think about battery-powered for 15 years and beyond, it's pretty amazing. This equipment keeps on going forever. Carbon footprint, you see here as status quo, the dark green line, and you see actually in signing up to the science-based target initiative, clear difference, 42% reduction for this scope, and that's pretty massive for Scope 2, actually. And [indiscernible] for Scope 3, and we drive that. This is the journey we don't just want to say, well, we will be carbon neutral in 2030, and then we will be carbon zero in 2050. That's easy. We want to have clear road maps. How we [indiscernible] report on it. Obviously, that also will be very transparent, and you can also read about that. Scope 4, we talked about it. That's not something we actually take into account for ourselves, but we work together with our customers. Key takeaways. I hope I was able to really give you a clear glimpse about capturing profitable growth. I think that's very important, but then also expanding for attractive shareholder returns. Also very important, very key and then envisioning a greener future. With that, I hand over back to you, Eva.

Thank you, Werner. We have now added a little bit of color to our guidance for '23 and share the new mid-term guidance for '25. We've talked about strategy, we've talked about our product, road maps and the markets, and we have also learned about our ESG investments and future plans. So now it is time to let our customers speak. Let's dive a little bit deeper into the technology and how that actually looks like deployed in the field. It is my pleasure to introduce our first guest speaker from the outside, which is Raf Bellers from Fluvius. Fluvius is a large DSO in Belgium, and they are working hard with Landis+Gyr on enabling the energy transition. Once Raf has shared his view with us, Bodo Zeug, our EVP of EMEA, will dive a little bit deeper into how Landis+Gyr is supporting Fluvius, but also other customers in Europe to manage the energy transition.

Hello, Zurich. I hope you are doing well over there in the Google Headquarters. My name is Raf Bellers, and I am the Director of Supply Chain and Grid Management for Fluvius. Fluvius is a Belgium-based DSO, a distribution system operator, active in [ Flanders ]. We are responsible for building, managing and maintaining distribution grids for electricity and gas, but we are also active in sewerage, district heating, cable TV and fibre and public lighting. Altogether, as a multi-utility company, we operate over 7 million connections. And just like many companies all over the world, our most important focus today is the energy and climate transition. Both Flemish and European ambitions aim for climate neutrality by 2050. And Fluvius is determined to help enable this shift. We are currently adapting and reinforcing our electricity grid to be able to support a massive increase of locally produced green power from solar panels and wind turbines, but also to enable a fast-growing number of heat pumps, electric vehicles and industrial applications. Fossil fuels will mainly be replaced by electricity, but we also focus on very promising energy systems like district heating and green gas. A key element in our strategy is digitalization. All over our grids, we are implementing smart applications to measure, monitor and automate energy flows. This helps us to make smart network investments and aim for a cost-effective and efficient energy transition. Our customers also play a very important role in this strategy. They are evolving from passive to active energy users, and the most important tool is our smart energy meter. We have been rolling them out since July 2019. Today, we have more than 2.2 million smart energy meters installed as we already see an important customer activation. Flemish families actively look to lower their energy consumption and spread it out over time. Smart meters also enable new energy services, like sharing or selling surplus solar power. In 2023, we will start rolling out brand new types of meters and data systems, focusing on a rollout deadline of mid-2029. By then, we will have replaced all 6.1 million energy meters. Several other [ utility ] companies, like the energy grid operators in Brussels and Wallonia, but also the 3 largest water companies in [ Flemish ] are joining our project and technology. The way we read out and disclosed the data from all of these meters is absolutely vital. We opted for a data as a service system's, which ensures that the right set of data is delivered on time to the right utility company and customer, and we really bank on the knowledge and experience of several key partners, like Landis+Gyr and their subcontractors. Their long-lasting partnership is key to our success. I'm happy to see we already tackled our first project milestones and looking at it go live of the new meters and systems this summer. I hope I was able to inspire you, and I absolutely look forward to keep on making important steps forward in the energy transition together with all our partners for Flanders, for Belgium, for Europe and of course, the world.

What a wonderful customer testimony from Fluvius, where we are running our biggest project in EMEA. The project with Fluvius is a perfect showcase where and how we deploy our scalable technology for the smart meter rollouts, but to also help our customers on their next challenge. And this is the energy transition, which we believe happened in [indiscernible]. Let's first have a look at what Fluvius has to do. Fluvius put us, and you heard it from the video, our main objective is automotive -- to automate the meter-to-cash process. Deployment and installation needs to be easy and simple. Fluvius had already a service management platform [indiscernible] and our solution had to seamlessly integrate to it. They also want us to maximize remote meter readings and controls to save workers in the field, and all of that has to come with full compliance to data privacy and cybersecurity. But this is not enough. The solution should also be future proven and provide flexibility. We just heard Raf, there's more use cases to come with the deployment of heat pumps, EV charging and alternative energy supplies. And of course, Fluvius is looking for a reliable partner throughout the whole serious period of 15 years. Lots of requirements, how did we fulfill them? Well, we are deploying our leading edge scalable technology. Let's start with our intelligent sensors. We deploy 2.6 million grid edge meters, so called E360, as intelligent endpoints. Why have you chosen this technology? These meters support all mandatory metering functionalities, but more interestingly, they generate data and information about the operating conditions of the low-voltage grid. Information we can think about is voltage fluctuations and degradation of the power quality. These meters automatically push this information back to the grid where decisions can be made by the grid operator. Secondly, we connect those meters with the sensors -- and the sensors with modern IoT infrastructure. Here, we cooperate with Vodafone globally and make full use of their communication services. We leverage their expertise and competencies they have gained from their core businesses. Most importantly, we implement our metering platform as a fully [indiscernible] data as a service in the Google Cloud. This enables our customers to focus on their core processes, while Landis+Gyr maintains and operates the systems, ensuring timely delivery of not only metering data, but also information on the grid status. So far so good, but what are the upcoming challenges the grid operators have? We believe that the energy transition will happen in the low-voltage grid. Challenges the utilities have are related to the following: there's an enormous energy consumption due to the increase of EV charging; utilities need to connect as fast as possible solar panels to the low-voltage grid. And all of that comes to the question, is the grid capacity enough? And is the aged infrastructure reliable and resilient? Therefore, utilities need visibility and certainty about their -- the grid status. That drives 2 objectives: observability and controllability. On the residential side, with the energy prosumers, they need a very dynamic understanding of the network usage, the power quality, degradation, alarms and events, all related to the grid reliability. On the substation side, where transformers are, they need real-time monitoring and send this information directly to the control room to make grid decisions. With that information, the operators define their control schemes and manage their low-voltage grid. Peak saving and congestion management, these are the main use cases for utilities to manage the grid going forward. How is Landis+Gyr helping here? Our solutions enable the monitoring of the low-voltage grid, detection of anomalies and management of flexible loads. Let me make it simple. Our meters are the eyes and ears of the grid. With our meters, we literally embrace the complete low-voltage grid and can observe at any time, what is going on in terms of stability, power quality and voltage fluctuations. This enables the monitoring of the low-voltage grid without any additional hardware to save cost. Our applications like the power quality detect weaknesses in the grid and enable a faster implementation of new elements to the grid. We have a demo outside. Please have a look at that later on. So our solutions from Landis+Gyr, just our smart metering solutions, they are proving at scale like the Fluvius project shows and other major projects across the world. We address the needs of small and large customers leveraging the scalability of the Google Cloud. Grid operators are preparing for the energy transition, which is happening in the low-voltage grid. With our end-to-end solution portfolio, we help them to monitor, detect and manage that low-voltage grid. Last but not least, we are a trusted partner for the grid operators, and they can rely on our continuous innovation to tackle the challenges of the energy transition.

Thank you, Bodo. That was great to hear from Raf and then for Bodo to dive a little bit deeper. We are staying for a little while longer in smart metering, and we'll look at water next. Werner said it earlier, water is like the blue gold of the century. So it's crucial for us to preserve as much as we can and use what we have as smart as we possibly can. So it's my pleasure now to introduce Laura Olson from South East Water in Brisbane, Australia, who will share their vision and their experiences working with Landis+Gyr on preventing water losses through leaks. And then Steve Jeston, our EVP of Asia Pacific, will tell us a little bit more about the underlying technology that helped South East Water to achieve that.

Hi. I'm Laura Olson, Managing Director of South East Water here in Melbourne, Australia. At South East Water, our purpose is to deliver healthy water for life for our customers, communities and the environment. And to make sure that we can do that into the future, we keep looking out at the challenges that come to us, and there are 3 big challenges that we can see. The first is climate change. Over the last 3 years, we've seen bushfires, floods and increased storms, all posing different challenges to water security. We've also seen a growing customer base. We serve 1.8 million customers currently, and we know that will increase over the next 5, 10 and 20 years. And finally, we've also seen a change and the increase in customer expectations about the information that they receive, and also our own employee information, too, so that they can do a great job and optimize our network. And so for us, a key part is really delivering on the digital transformation so that we can address these challenges and take them head on. And there's 2 key components to that, that I want to discuss with you today. The first is around customers. To date, we've got 67,000 digital meters, and by the end of this financial year, we'll have 100,000. That's providing customers with real-time information so they can make choices about how they use their water. It's also helping customers identify leaks. To date, with those 67,000 meters, we've already identified and saved 384 million liters of water for our customers. Another exciting part is about putting vibration sensors, Sotto, in those meters. Of the 67,000 meters, 22,000 of them have that vibration sensors, Sotto. It gives us real-time information about how our network is performing and enables us to save leaks in our network. Customers want to do that, and our employees want to do that too. And today, with our pilot of 4,500 meters, we've seen that it could identify in 88% of the cases, a leak or a burst 4 to 5 months before it happened. That means [indiscernible] shared qualities. Like Landis+Gyr, innovation has always been important to South East Water. We work with a range of technologies and products, but sometimes we can't find a product or service that we need, and that's really the history behind Sotto, the vibration sensor. Our team wanted a better way to determine and find bursts and leaks before they happened. They didn't want the customer interruption of a leak or the safety implications either or the lost water. And so they created Sotto to help us with leaks and bursts. But the great part about the partnership with Landis+Gyr is working with Iota, our corporate subsidiary, means that, that technology can now go around the world. And one of the shared qualities that we both have, in addition to innovation, is making sure that our solutions work. We've had a third-party verification, show that about 1% of nonrevenue water can be saved through Sotto. And that's why we're really excited about this partnership and the water savings that it might mean both for us, but also others across the world.

Good morning, good afternoon, everyone. It's my great pleasure to be here today to talk to you a little bit about Landis+Gyr smart water initiative. You've just heard from Laura Olson, Managing Director of South East Water, about their digitalization journey. South East Water is one of our pioneering customers in Australia, and we're truly pleased to have this association. I'm more so pleased we can work with them on the commercialization of their vibration sensor technology, Sotto. Why am I up here talking to you about smart water? Because it's actually the Australia and New Zealand business within Landis+Gyr that's done the early work in this business segment. It's important and it's part of Landis+Gyr's continuing transformation. Laura just talked about a number of drivers on her business, and I'll just reiterate some of them as they apply pretty much around the world. We have both customer and regulatory pressure on water utilities, around sustainability and affordability. This requires far greater information to manage those networks. We have super -- the weather events impacting water scarcity, which is effectively the supply and the quality of the water that we saw, that we need. Last but not least, we have population growth. We have urbanization taking -- having an impact on the aged infrastructure. Most of the water utilities [indiscernible] also prone to leaks. So everything is exacerbated with the aged infrastructure. This shows what we anticipate to be as investment in water digitalization over the next decade. They are big numbers, $340 billion anticipated investment in water industry digitalization, 40% of that will be on smart water metering and customer care systems. Landis+Gyr has ultrasonic water measurement technologies. Now we've had it for some time. We have expertise. We now want to train that expertise on the water industry. Behind me you see [indiscernible] market offering. To the left is our smart water meter. Across Australia and New Zealand, we have been working with a third party to have a fit for purpose product, but we will release our own smart water meter family this year. More on that shortly. Communications offering so that we make sure that we can take the rich stream of data from our meter to service management platform. To date we've been using cellular communications. We've also been leveraging the Vodafone relationships that Bodo talked about in terms of a connectivity service. Last but not least [indiscernible] border industry, this will play a key role. Later this year, and you'll hear from Amith later today, we will release our analytics package that we are targeting [indiscernible] cloud-based and offered only as Software-as-a-Service. So just bear with me, and I will take you through a few of the customer benefits associated with [indiscernible]. First, the smart water [indiscernible]. So smart water meters deliver far better [indiscernible]. That's important for protecting leaks. As I said earlier, we'll launch our own product family this [indiscernible] utilizes our expertise in sustainable design principles; ultrasonic metrology, of which we have deep knowledge; and our battery management capabilities. After all, these devices live in the fields for great more than [ 15 years ]. And it's very important that you manage to power supply to the device and its communications over that 15-year life by very clever battery management capabilities. So our meters are hardly featured. They deliver information on flow, pressure, temperature and also can be fitted with the vibration center that Laura talked about a little bit earlier. A little bit more on that shortly. And our product is delivered in a small package. In fact, smaller than our current product and smaller than the products of our contemporaries. Why is more better? Because for installers, it needs to be fitted in quite small locations, think water pipe sitting in pits. So that actually is a benefit as well. All right. Let's talk about the benefits cases. I mentioned that the ultrasonic water meter measures smaller flow rates in conventional mechanical meters. But obviously, that coupled with regular granular timestamped information on consumption allows customers, or I should say, consumers and our utility customers to understand consumption patterns much, much better than today. And in particular, that allows them to investigate excess consumption or unexplained consumption on the customer side. Laura quoted some figures about how beneficial it has been to their consumer base during her talk. Up here, there is a case in New Zealand where they found a primary school leaking huge amounts of water on their premises. Now that's probably easy to detect once you've got a smart water meter in place, and you realize that hang on, it's the weekend. There's nobody here. Why do we have such high-water consumption? So that's the benefit of the digital technology. In Australia and New Zealand, we tend to get a water bill every 1 month or 3 months. So good to get it on a much more regular basis in terms of consumption. Look, that's an easy example. The harder example is the fact that you could have a leaky tap or a small leak, a very small leak on your property, which is costing water and costing you money. And that's also the big benefit of ultrasonic technology. Vibration sensor. This is the technology that Southeast Water took it upon themselves to develop. And this is the technology that we are helping them commercialize. It's available in our meter. In simple terms, it listens to noise and the water grid. As our analytics, the noise is triangulated to identify where a leak is coming from. I can't explain all the maths and the analytics, which is this chart behind me, but the outcome of that is basically this red dot over here, which says you have a leak here. Go on and investigate. And so far, and 80% of the cases, they've had true results or incredible results. Obviously, as the information and the analysis and the analytics gets better, the success rate will increase as well. Non revenue water has been mentioned a couple of times. It's important point. In simple terms, it isn't just an Australian issue. It's a worldwide issue. There are estimates that say nonrevenue water is costing us $40 billion a year. And if you look at some of the flags up there, it's close by as well. So this is a big issue for the water industry. I mentioned pressure sensors before. Pressure sensors simply help our utilities understand if they've got problems with their control systems. They can act ahead of their being a water burst. Last but not least, wrap up. LG&E will deliver 4% of its revenues in smart water in 2025. The drivers are there in terms of regulatory and consumer need. And the intent to invest is there from our customers. Thank you very much. Back to you, Eva.

Thank you, Steve. It was great to hear from Laura, and it was great to hear from Steve. And wow, I was surprised myself how much of a leakage issue we have in different countries, if you look at Sweden with 40% due to the cold there in burst pipes. That is just mind-blowing and a great opportunity for Landis+Gyr to tackle that. So now we will move on to grid edge intelligence, and we will talk about computing at the edge. Werner talked about grid edge intelligence before, and it's now my pleasure to have first Carlos Nouel from National Grid talk to us a little bit about the journey of National Grid when it comes to the deployment of Revelo and some data insights. Carlos, if you may remember, talked to us 2 years ago at our Capital Markets Day 2021. And we will now learn what happened since then and how the deployment of the technology is going. Afterwards, Sean Cromie, our EVP, Americas, will share a little bit more of the Landis+Gyr side behind the technology and what opportunities we see for other customers in the U.S. market to deploy grid edge intelligence that allows computing at the edge.

My name is Carlos Nouel, and I'm with National Grid U.S. Thanks for the invitation to provide a few words on this important event for Landis+Gyr. Last year was a really exciting time for us. We, for the first time, deployed the Revelo meter in 5 customers. What was a dream at some point of creating a meter that would have grid edge intelligence, that would have the level of sampling of energy that we were looking for, felt like a dream when we begun this journey. But now that journey is a reality. We have been able to use that here to run regular bills to all the systems on [indiscernible] and actually produce actual bills for the last 6 months for those customers that were in our early pilot program. It is really exciting to see how the [indiscernible] New York State, which means that now we're -- we've cleared all the paths to ensure that we can deploy this meter at scale across the service footprint of National Grid. It's really an exciting time to see where this is going to take us. This year, [indiscernible] things that we're going to be doing in the partnership with Landis+Gyr. First, we're going to start our soft launch, which means that we're going to start getting into a larger scale of deploying meters in Upsate New York, empowering those customers and giving them the information that is going to come from the meters. And this is, again, not a typical meter, not a typical deployment. We're really going to be pushing the envelope in terms of how much information can we provide to customers to really get them in the driver's seat about how they control their usage. This is especially important in a time when energy bills are skyrocketing, and we need to give customers all the tools in our control to empower them to make best decisions on how to use energy. So as we start to ramp up the meter deployment, we're also going to be introducing new features into what we're going to be offering to customers. One of the features that we've tested with the customers through our focus groups is being the integration with Sense. We've seen an outstanding response from customers on how Sense can actually empower customers to use energy in a different way. It provides the right level of insights and allows them to take actions on the information that they're getting from us. This solution is going to be available to customers later in the summer. And as we start to kind of build our own road map, we are excited to see all the new features that we want to use, whether it's for traditional things like outage detection or the more exciting things on how do we use ADMS and the information from AMI to model the grid to a point that allow us to make different decisions on how do we operate the system. So this year is going to be outstanding for the partnership between National Grid and L&G. We're really looking forward to do great things. In addition to all the work that we were doing in New York, we're also pleased to see that we got approval in Massachusetts to go on to a full-state deployment for 1.3 million end points for all Massachusetts customers. This is a great and exciting news for us, and it's an exciting news for Landis+Gyr because it allows us to reach more customers and give more people the ability to use our energy in a more positive way. So this is going to be a really exciting year for all of us. We're looking forward to the partnership. We're looking to try new use cases of this data that we're producing and looking to build this future for our customers and for our stakeholders. Thanks for your time, and I hope you enjoy the rest of the event.

Good afternoon, everybody. Firstly, I like to thank Carlos for sharing an update on the exciting journey as we progress together. And we're excited about the milestones and, of course, the regulatory approvals that we've received. So our technology supports our customers' decarbonization from several angles, beginning of the meter and EV charger, and progressing all the way to [indiscernible] operations. In 2021 alone, we measured over 9 million tons of avoided carbon dioxide through our smart metering base alone. In- house gas savings matter significantly to over 320 utility customers who have 100% carbon reduction targets and who, in turn, represent over 75% of our customer accounts. Our utilities on larger customers are pushing for cleaner, more efficient energy. And this trend will continue in the future. In terms of legislation, over the last 18 months, U.S. Congress has provided and allocated unprecedented funding towards clean energy, electric vehicles, grid resilience, grid cybersecurity and associated smart grid topics. This opens significant new opportunities for both innovation and for partnerships while funding increased market and revenue growth within North America. Under the infrastructure and Job Act, new grounds opened last year with funds flowing through both Federal Government and through individual skills. The CHIPs and Science Act address supply chain concerns by directing funds towards localized manufacturing, particularly for semiconductor production. The CHIPs Act also represented the largest 5-year investment ever in public R&D funding with multiple grid modernization applications. These initiatives will result in an increase in the requirement for a cleaner efficient energy for grid modernization, great resilience and associated grid management. Inflation Reduction Act, restructuring a variety of taxes with a particular emphasis on clean energy and energy efficiency. The impacts of these related investments are anticipated to help the U.S. reduce the greenhouse gas emissions by 40% below the 2005 levels by 2030. I'd like to move on to say hello to Revelo. Revelo reinvents the meter as an IoT grid center. It transform the future of metrology and setting new industry standard. Demands on the grid edge are changing. Our customers are evolving, and the consumers want more insight and control to manage their energy better. Enhanced reliability, CFT and the growing adoption of distributed energy resources requires more than traditional meter-to-cash capabilities from a meter. Revelo is a true grid sensor providing unprecedented insight and control through industry-leading waveform data technology and offer superior edge computing capabilities and a greater ability to sample the process to store and to transmit data to the right place in real time. If you do these unprecedented capabilities, Revelo know -- provides both the homeowner and utility the information on the usage, on their cost and their associated carbon footprint. Landis+Gyr is proud to be the only AMI vendor that made it to the Guidehouse's list of top 10 AI vendors for DER integration. And this provides independent validation of why we created the Revelo meter. This is a small example of due to the high resolution mentions of the Revelo sampling we had compared to other meters, we're able to see individual devices in the home, turn on, turn off and associated anomalies with these devices. This, in turn, allows performance monitoring of both the home and individual devices, which, in turn, facilitates remedial actions to be taken prior to device failure. Let's talk a little bit edge intelligence and edge intelligence ecosystem. This ecosystem [indiscernible] by the utilities, by the [indiscernible] developers enhance performance of both the [indiscernible] and of the home. [indiscernible] take advantage of existing applications R&D to develop their own apps. Here, we start off with the app studio. In this, we provided a developer tool kit, learn to [indiscernible] resources and anticipated online community-led forum for a developer collaboration to work together. All applications and upcoming through must then pass the qualification test before it's qualified for a publication on our app marketplace regardless of whether the apps are developed by the utility or by a third-party developer. This qualification test includes source code review, run time analysis performed by Landis+Gyr to assess whether the edge application meets the cybersecurity requirements, meets the resource future standard and also confirms that it doesn't affect the functionality of the meter. Once an application is qualified through our process of testing, it's then available to utility via the L&G's app marketplace. This is a global universe of all qualified apps available to utility. Landis+Gyr will use this marketplace to catalog applications to versioning them and to ensure device compatibility [indiscernible]. The app manager that is [indiscernible] based cloud platform, responsible for managing [indiscernible] application in Iot today, including the Revelo meter. Through this platform, utilities can install, can activate and [indiscernible] apps available in the marketplace on the IoT device accordingly. [indiscernible] some of the apps we're talking about. Here, we have 3 grid-facing apps available in our platform, which occurs direct consequence of its inherent edge intelligence capabilities. Grid location awareness is the first one. This provides a more accurate map of the grid, which is essential for the advanced analytics software that utilities use to safely and rapidly with floor power following an outage. This application also supports renewable integration, the mass adoption of electrical vehicles to the grid and also helps managing of peak load. The second app is anomaly detection. This is used at high-resolution data to detect the electrical signature of events like a tree branch touching the wires. This will cause momentary power disruption in the near term and potential outages in the long term. Utilities can use this information to reduce cost, prioritize maintenance and [indiscernible] management programs, to prioritize improvements and improve operational performance metrics. And finally, intelligence focused monitoring. This provides real-time visibility and feedback into voltage performance and the improvement on voltage delivery resulting in a reduction of supply chain losses across the system and greater overall grid efficiency. As well as the grid apps for the utility, we also have consumer apps. Consumer apps provide analytics that reveal how and when consumers consume and use energy as well as identify potentially unsafe electrical conditions in the home. Revelo meter come with the following built-in consumer apps. Home analytics. This provides appliance level energy usage details. This empowers customers to make better decisions on how and when they're going to utilize these appliances. And use the energy accordingly resulting in lower bills. High usage alerts. Real-time high usage alerts inform consumers that they may exceed predetermined energy usage threshold based on the type of apps they're currently running and the appliances they have in use at the moment. This app help utilities to implement rates that reward consumers determining the time when they use energy that's less expensive. It also helps consumers develop strategies to better time appliance usage to save money and reduce their bills accordingly. And finally, power meters. This offer real-time aggregated energy usage, streaming by the hour of the day, the week, et cetera, to support enhanced consumer engagement and awareness of energy usage patterns they have to develop. Starting with Revelo at the edge. Revelo, as we talked about, is unprecedented sensing. It's edge compute and has IoT communication capabilities. Provides an orchestration platform for distributed energy resources. Specific capabilities include collaboration, WiFi communication, autonomous decision-making, edge data and enrichment, a standard wide area network communication. All in all, Revelo can serve at the eyes of the utility at the edge, offering visibility, access and unprecedented control capabilities to the utility. To take away slide, strong momentum on demand exists in the North American market. We had a strong backlog of over $2.6 billion. And significant opportunities exist to further increase this backlog. With the release of Revelo, we now have a capability for efficient orchestration of energy management use cases at the meter. We develop both the innovation and the technology to support flexibility management, distributor energy resource integration and effective home energy management underpinned by Revelo scalable app ecosystem. And lastly, these opportunities are supported by Federal Government funding that understands and recognizes the need for grid innovation, for grid security, for grid resilience [indiscernible] with the context of increased market and consumer and customer demands. We're well positioned to deliver these needs [indiscernible] and the ability to deliver profitable growth within a robust [indiscernible]. So thank you for your time. I'll hand back over to Eva.

Thank you, Sean. That was great to see how our journey with National Grid is progressing, and we're staying with grid edge intelligence for a little bit. We're not only computing at the edge. We're not only enabling the energy transition. We are also guarding critical infrastructure. That is crucial for our customers. As you can all imagine, what would happen if, all of a sudden, we would have a successful cyber attack on one of our power grids and we're pretty dark. So Todd is a specialist that we have at Landis+Gyr, our Chief Information Security Officer, who will tell us a little bit more about Landis+Gyr's efforts to keep critical infrastructure safe. Todd, over to you.

Thank you very much. Hello, everybody. I'm really excited to be here today, partly because we're going to talk about security and partly because I'm only CISO guy that gets to talk in front of our investors about cybersecurity, which is a very important topic for us. Today, I'm going to run you through some areas around market trends and some opportunities that we see with this. I'm going to talk about customer challenges that we see in this space. And then I'm going to talk a little bit about what we do at Landis+Gyr from a security perspective in areas that we see going into to increase in this market. So let's first discuss the global market outlook. The critical infrastructure security market estimate, as shown in the previous slide, is a 15% CAGR over the -- through 2025. There's a couple of big areas that we see driving this market, and I would like to talk to you about them today. The first one is around smart infrastructure. So smart infrastructure is really putting intelligence at the grid edge. In the past, the intelligence that we've had at the grid edge was really focused around smart meters. And we did a good job at protecting and defending smart meters. But as this area changes, and we see things like energy creation, energy storage, energy manipulation and usage in the smart edge, we need to relook at how we secure this environment. There's a lot more devices that we see in this space. So from a threat perspective, we see a larger attack surface. And because there's more impact that can be seen by a threat in this space, then there's going to be more focus from a threat perspective to target the space and cause damage. The other area that I want to focus -- that I want to talk about today in the space is regulatory. The government knows these risks. And so they are looking at ways to mitigate these risks because one of the ways they're doing this is looking at bringing in regulatory requirements in this space. In EMEA, we've already seen regulatory requirements being put in place. And in the U.S., we had those draft requirements that are already being looked at. Now the good news around regulatory is that governments know that this also costs money. So as Sean mentioned in his slides, there are fundings that is being looked at, that are going to be available to our utility customers to help us in building new solutions and extending current solutions to protect the space. So let's talk a little bit about customer challenges. So it's funny, but the opportunities that we see in the market are also the challenges that our customers are going to have to deal with every day. Having all these new devices on the grid edge, devices that they control and devices that they don't control, are going to be problematic when it comes to ensuring that the grid is safe, secure and always available. Included in this is regulatory. The areas of regulatory are new in this space. It used to be -- the transmission space had a lot of regulatory, but the distribution space did not. This is changing. The regulatory that we're looking at is going into the distribution space. So this is a new place for our utility customers to have to deal with, and it's going to be a challenge for them to understand this and make sure that they comply with this going forward. I'm going to switch gears, and I'm going to talk a little bit about what Landis+Gyr does today around security. We have a very robust security program. We secure our employees. We secure our company. We also focus a lot in operational technology space. This is the same space that we see our utility customers have to secure as well, things like software and firmware. We write software and firmware. We ensure that, that software and firmware is secure. And if we see issues with that firmware or software then we can fix them quickly and appropriately. We also focus on securing our manufacturing sites and our supply chain. We develop meters -- or we manufacture meters. We manufacture equipment in the space, and all that has to be done securely. And finally, we secure our SaaS environment. This is the environment where hundreds of our customers rely on Landis+Gyr to protect their AMI, load management and analytics solutions. These are all the things that we do today that align to us in helping with our customers also secure their environment. So let's talk a little bit about some solutions that we can bring to the market. Well, the first solution is really focused around smart infrastructure. As these new devices come into play, we really need to find new solutions as well as extend current solutions in the space to cover the entire need of this space. Not only do we have to cover the edge, but we also have to protect the solutions that manage all the edge devices called the [ head-end ]. And we do that today for hundreds of our customers. This is something that we think we can extend into as well going forward. From an OT for security perspective, this is really the space that goes from the end of the transmission space to the edge. A couple of years ago, we had an acquisition of Rhebo who play in the space. We're going to continue to focus in this space with Rhebo and also extend this area as well as look to cloud-enable this area. And lastly, smart infrastructure compliance. We have done this for hundreds of our customers. As we have to protect and defend their systems, we also have to comply with it. So taking that knowledge and helping our customers, that is something that we want to look into. So bottom line, cybersecurity will continue to be a challenge in this space. Governments and customers are going to rely on us to help them secure, defend and protect the space. And we want to become a smart infrastructure security partner for them. Thank you.

Thank you, Todd. So Todd and his team are keeping critical infrastructure run nice and smooth. And there's another very important topic that keeps things running nice and smooth, and that is some coffee, a little snack and maybe stretching your legs. So we will see you back here at 4 p.m. sharp European Central Time, and that gives you a good 20 minutes to have a little bit of something of refreshment. And then we see you here again in 20 minutes. Thank you. [Break]

All right. Welcome back. I hope you were able to enjoy the break and got some refreshments. We will now continue with the last strategic pillar, smart infrastructure, and we'll talk about driving EV expansion. First, we have Julien Touati from Allego joining us to talk about charge point operator challenges and how Landis+Gyr might be able to help solve this. Afterwards, [indiscernible] Head of Strategy. We'll talk a little bit more about what Landis+Gyr can do for EV expansion, but also for flexibility management solutions to ensure that we have a balanced grid at all times because you can imagine, with added EVs and some of the other distributed energy resources that Werner and some of the others speakers talked about earlier. There are massive challenges that our utility customers are facing, and we can combine the capabilities perfectly with EV to make sure that we have balance. With that, we will start [indiscernible] testimony, please.

Thank you for having me. I'm excited to tell you more about Allego, our story, vision and ambitions. Allego have actually a really simple mission, developing our position as #1, first public choice network in Europe. Allego is a successful pan-European story, born in the Netherlands and revenue spreading with the support of its shareholders, and I'm proud to include Landis+Gyr among those. Across Europe, with more than 15 countries [indiscernible] to date. Our goal is to be the largest and most reliable public charging network to support transition towards electric vehicles. Of course, the completing of the IPO itself was an important milestone that I believe actual financial and industrial achievements [indiscernible]. Since IPO Allego have mentioned that for, for instance, Allego entering into a long-term marine power the agreement to offer key drivers, a strong visibility on the cost of electricity, the massive [indiscernible] of our charging stations network. I think we are currently opening stations literally every day. And the constant overperformance in terms of [indiscernible] traffic of our charges, validating our site-selection strategy. This is made possible, only thanks to the support of a strong ecosystem. In particular, Landis+Gyr as a key player of the must needed strengthening of distribution networks is a wonderful partner for Allego, helping our company to maintain [indiscernible] flow energy charging segments on top of our fast-charge focus. The next big thing of our industry happening faster than expected is probably the electrification of trucks. With the increasing number of electric trucks and also busses. We see a strong enabler for decarbonization. And at the same time, it will probably create challenges for [indiscernible]. During the pandemic, emissions from trucks and buses [indiscernible] declined [indiscernible]. We need solutions to rapidly decrease emissions over the next decade. This means that we need to reduce by 15% by 2030 emissions from the freight segment related to current level. How can we support this. On the one end, we need the right charging infrastructure to ensure reliable and readily available fleet charging solutions. In order to ensure the scalability of such [indiscernible] services, we need to provide [indiscernible] high power charging infrastructure. On the other hand, we need to make sure that the balance, the utilization of these chargers and the generation of power to maintain great stability. This requires extensive upgrades to the grid infrastructure, but also further build out of unavailable energy sources to enable the decarbonization of the grid and amplification of transportation. This is where our joint expertise comes in. Allego as a leading charge point operator, CPO, is committed to fast forward all the transition. We believe that anyone with electric vehicle should be able to charge whenever and wherever they need it. This is why we and our partners are working towards providing single, available and affordable charging solutions. We offer smart charging solutions for electric cars or motorcycles, buses and trucks, as we discussed for consumers, businesses and cities. Our end-to-end charging solutions make it easier for businesses and cities to deliver the infrastructure we need and EV drivers. We are scalable [indiscernible]. By building our high-power charging infrastructure, we not only support drivers like you and us, but also enable the electrification of Europe. The high-power charging solutions that we developed are the perfect solution for high-traffic locations like stations, retail parkings. Basically, with these solutions, you can add up to 350 kilowatt -- kilometer, sorry, in just 15 minutes. After a good supercharge, EV drivers can be on their way. It is vital to enable the electrification of vehicles. Our high-power charging stations are compatible with all electric vehicles, which can, of course, absorb a DC fast charging solution. As a result, we are well positioned to drive [indiscernible]. Of course, we also offer slow charging, which is one of the reasons why Landis+Gyr is excellent partner. The growing charging [indiscernible] can add additional [indiscernible] and therefore requires a flexible grid. That's why utilities, distribution system operators and key stakeholders [indiscernible] join of mass products of EV charging infrastructure. This is an ecosystem Landis+Gyr knows extremely well. Complementing our expertise, Landis+Gyr would help develop critical infrastructure with leading technology that includes both EV solutions and intelligence at the edge. [indiscernible] flexibility managements and grid orchestration solutions, a sector in which we as [indiscernible] also heavily investing to. Utilities, communities and businesses are empowered to drive the electrification of transportation forward with a balance grid. That's a necessary condition for sure. A combination of its full capabilities is what we need to achieve carbon emission reductions through electrification of transportation. We are excited about the future and the opportunities ahead, also with Landis+Gyr as a partner. Thank you for having me. Have a great day and keep driving forward.

Good afternoon, everyone. Are you caffeinated enough? Yes, this section is extremely important to me for 2 reasons. Number one, all of us in this room collectively, single-handedly can change the game of our carbon footprint. The electrification of transportation is the biggest thing that's about to happen, and the journey has already started. Secondly, companies like Landis+Gyr has extreme business opportunities. And as they say, rising tide lifts all boards. So this opportunity is for all companies in all spaces because it touches every aspect of what we do. I sincerely thank Julien for a couple of reasons. We have an invested partnership with Julien and his company, and they've been extreme supporters of Landis+Gyr and what we do around the grid. First thing. When we started this journey into the [indiscernible], one of the things that we had to understand was we needed a partner, and that's where Allego came into play. Julian mentioned 3 things that's very important for us to understand. First, he talked about electrification of transportation which is accelerating in the EU. Second, large EV charging acceleration is happening also in the EU, and [indiscernible]. And the last thing he mentioned was L&G's critical expertise. We understand electric grids better than anyone else. We've been in this business. We have the expertise. We have a deep understanding of how electricity grids work in this space. Earlier, Werner talked about 2 things that's very important for us to hear one more time. First, he told us our customers and our investors are investing in green energy. Landis+Gyr [indiscernible] is something that he has committed to the business. [indiscernible] Werner announced 2 important acquisitions. One was Etrel, a pure EV charging solutions company. It not only has hardware, but a better software that I'll cover. [indiscernible] true energy mix charging simpler, easier, cleaner. And Eva mentioned flexibility management will be the thing that utilities will have to deal with, and we're ready to do that with True Energy. These 2 opportunities provide us a key area for growth, and we are ready to embrace it. [indiscernible] Bodo spoke about it in depth. There's clear EV target commitment [indiscernible]. If you look at all the government institutions around the world, including utilities, there is a firm commitment to meet these targets that are being established between now and 2035. To give you an example, in the EU, it is anticipated by the time 2030 rolls around, somewhere north of 80% will [indiscernible] EV cars. In the U.S., a very [indiscernible] than EU. The bottom line is governments have stepped it up. They're providing subsidies. Tax, rebates where I come from, has already started. And there is a healthy amount of government spending and involvement in making these commitments happen. I'm not sure if you did the math when Sean presented in that slide around the path to decarbonization by the Biden government. If you add it up, it's north of $400 billion. You can slice it anyway you want, but there's clear big pockets of money for infrastructure, for EVs, for EV charging and all the other network improvements that have to be made, let alone the massive investment that have to happen around the world on distribution grids. We strongly believe we have a good portfolio that I will discuss with. We are very well positioned to handle this change, and Landis+Gyr has the depth and expertise to support the changes about to happen. This market size done by us internally as well as using some information from research reports is rather conservative. Any which way you look at this reporting, we've aligned it to the way our regional CEOs go to market. So if you look at the biggest market, which is Europe, significant commitments have been made in EMEA with a 30% CAGR. This market is about $7 billion. North America is not far behind. The change where I come from has already happened. Big commitments are being made. We see another big market in North America evolving, and this business to be about $5 billion with north of 52% CAGR coming up in the next few years. The numbers in Australia and New Zealand, albeit small, a couple of reasons for it. We've excluded China, and we excluded India. We want to focus on the markets where Steve is from and where he sees profitability and growth. Any which way you look at it, it's still a $600 million business, growing rapidly north of 55%. The key takeaway for Landis+Gyr is these are large addressable markets. If you add them up, it's somewhere north of $13 billion. It's very conservative, but we rather -- much rather start at a conservative base, which is rather big, and take the portfolio, and we're very well positioned to win in this market. We have R&D teams, go-to-market teams, all established very well. And with the portfolio you're about to see, we're very excited about this change. So I keep mentioning portfolio. I'll tell you, I'm very, very excited about what our portfolio is. And I'll tell you why, because we have great results to go with it. So left to right, if you look at our portfolio, it ranges from hardware, software through our ocean platform. We have fantastic apps, and we can actually load manage between chargers how we actually control these charges from a given building or in a parking lot or if you're a CPR operator. Our OCEAN software supports EV charging, monitoring and control. And it enables load management for demand response. I mean going back to EV will be the single biggest load on the grid going forward. Our super friendly app puts everything in the palm of your hand. Everything. Simplicity, ease of use is how we built it. You can find. You can choose. You can book and pay with transparent pricing. I saw a bunch of you huddled around the Etrel demo. I hope you got that feeling from there. They've given you flexibility and choice agnostic into how the platform operates from as well as OCPP-compliant, which is a fancy word for saying, hey, we're interoperable. I am really proud of the way that the research and development teams have built this product. Our solution orchestrates charging management and load management. The key thing is these are already installed. It's reliable. It's scalable. It's user-friendly. And I think we're very well positioned to capitalize on this market. You may say, show me the results, Prasanna. Yes, we have them. You know what I'm really proud about? We've only been in the business for a short period of time. It's really fascinating. Short period of time. What have we done? We've sold it to over 40 countries and to over 100 customers. 100 customers, short period of time. Our cumulative installed base is greater than 50,000 charges all over the world. This supports roaming. We can do various service options for our charge point operators. And hopefully, before you get to go home, spend some time at these booths. You will see that we lot of research and development talent supporting this in all the global centers that the regions operate from. And we are well positioned to capitalize this in further growth. Our customer base falls into 4 broad categories. It could be charge point operators, and you can -- including Allego, you can think about that as a good example. We also support utilities, which is our strong base. We understand utilities better than no one else, and we're actually ready to support them because they are looking to transfer and go into new areas of business. The other areas we see a lot of interest from is oil and gas companies that are coming to us and saying, hey, help us transform our business. We want to get into this change because they clearly see that this wave is about to happen. I think most of you have noticed Shell alone has made so many announcements in this space. It's quite exhausting what they're trying to do. Last, but not the least, we also work with car companies. For example, Toyota Europe, where established EV charging networks from [indiscernible]. Very simply, we're ready for this change. [indiscernible] is next big strategic transformation that's happened within Landis+Gyr. And Werner has well positioned us and the other teams to go in this direction, and we're ready to go. So that was a lot, but we're not done. We strongly believe that as we keep adding EV loads, becomes a problem for all of us. Are the network is ready to handle such a traffic? Are the different operators, especially our utilities, ready to this change? So in order to match all this huge growth, the government targets, the investments that are coming into the space, I showed a portfolio, we're ready for this change. But one other critical thing has to happen with this. Integrating renewables and a dramatic increase in EV loads is something that all of us have been worried about. In April, as I mentioned, Werner talked about together [indiscernible]. True will help us drive demand flexibility management such as loads are managed and delivered to our customers in the appropriate way. You might be asking, what is demand flexibility management? Demand flexibility management is simply put as supply and demand balanced by either shifting, pausing or, in some cases, stopping the demand that's coming from the system to balance the load. So think about it, the utilities cannot keep building clients anymore. So they have to manage with the resources that they already have. Why is this important to utilities? Werner comes from power plant, and he constantly reminds us. It costs a -- I'll drop the adjective that he uses. It costs a lot of money to build a power plant. So it is absolutely imperative for us to keep this in balance. And we need to manage this load going forward. In order to do that, we see this as an opportunity for Landis+Gyr. Under the name of grid services, very simply put, managing supply and demand in a very controlled fashion is what flexibility management is. And Landis+Gyr sees an opportunity here as well. Conservatively, we see at least $5 billion to $10 billion going forward. Very, very small numbers that we estimated using the portfolio that we have. Where do we see this? We see this in 3 areas. Number one, it's managing the energy itself. So if you want to manage load, one of the things that the system has to do is a concept called demand/response, the ability to aggregate loads and manage it. We've been doing this in a different way called load control through our existing portfolio. So we know how to do this business in a different way under the new acquisition. The second thing is energy design and modeling. So when Sean presented, there was a slide where he orchestrates all the Revelo meter and the points it touches and the fact that it's all real time, disaggregated. We strongly feel with what Revelo sees, and with the platform that we have with True, we can bring these together and add more value with our utility customers. That's an example of how to put that. The third one is, even today, True provides ancillary services in Denmark. So what is ancillary services? It's very much the same concept. You work with utilities and customers, and I'll walk you through an example. You enroll customers. You work with utilities, and you get -- you tell them that you will manage and provide a fixed load of relief to utilities. And that service is already being provided today and making money for us. We strongly believe that these 3 areas, and utilities need a trusted partner to do this, and that's where Landis comes into play. So how does the portfolio look for us? The way we look at demand flexibility management, we're building it into 2 broad categories. On the left is the concept of utility solutions and use cases that we're building. Here, we're going to continue to work with our customers and make sure that we provide the services in terms of smart grid and AMI that they already have. And then we'll further provide services around grid to vehicle charging, charging as a service that the team will explain to you that we already do and a lot of fleet electrification services. If you really think about where the future is going, you put aside passenger cars. The next biggest loads that utilities are worried about is these pockets of load, including their own fleet that gets electrified. And you heard in the Allego presentation about electrification of buses and transportation. Those are massive loads. You might wonder why is that important to utilities? Just imagine, in a given day, you need 20 megawatts to balance the grid. One quick area to go and get the 20 megawatts is the fleet electrification. And Landis+Gyr is looking at all the use cases to do that. On the consumer side, people talked about consumers getting more complex. Why? Because we not only consume electricity, but we also produce it now going forward. I conceivably think in 5 years, better than 90% of this room will have an EV. I conceivably also think that in 10 years' time, conservatively that we'll be producing electricity in our homes. I do today. Small amount, but I do. What do you need to do to survive that? You need to store it. So all of these gives increasing complexity in buildings and getting consumers engaged going forward. We see a whole bunch of use cases in smart EV charging, which we already do today. For example, True will actually tell you when to charge it. You set a bunch of profiles, and I'll walk you through it. You can do smart charging today with Landis+Gyr. Fleet charging is something that users will also participate in, and we can engage them. And we see also in the building side of business there will also be fleet electrification services. We're really well positioned. We've got a whole bunch of use cases that we're already putting in our system today and writing and developing the system for the future. The next 2 examples, one of them, I think, you probably -- you have already been to the Manchester demo. If I can quickly talk about it. So how does the utility operator work today? So the day in the life of a utility operator is they wake up in the morning. Everybody starts firing up their stuff. The load keeps creeping up. And what happens today is that load is supported by the grid, either through conventional generation. But considerably going forward, you'll have also renewables supporting the load going forward. But what does happen in a given system, if you just focus on the drop in consumption going forward, in the evenings, the sun doesn't shine. The wind stops blowing. Renewals drops. Where do they go forward to find this load? That's why they go find the batteries around the city that they have deployed, find the large-scale batteries that's been stored with electricity to supply the peak demand that happens when people get back into the homes at 5 p.m. and start firing up everything again. And that's what you see going forward. The future will be supported by all these renewables that are stored across the city and not necessarily, as Werner would put it, building peaker plants to support it. That's exactly what we have built at our Manchester facility. Think of it as a very small implementation of what goes on in a big city, but we've actually put that in the building. So when Tom is presenting to you, you probably heard that the facility is outfitted with solar. It's got storage, and it's got inverters. The parking lot is Etrel chargers that we've provided for our employees as well as visitors. We're building this ecosystem for 2 reasons. Why? Because as we build out the use cases that I talked about, we need our own test facility. We strongly believe, as we do in our AMI business today, the best way to test and deliver to our customers is actually eat our own dog food, and that's what we're doing. So this gives us a good opportunity for us to develop products in the future, but it also gives us a good platform to test other things as we build. Very similarly, this is another use case in the Nordics. We've implemented a profile for about 14 different partners of ours, working with 14 different partners in the Nordics. Nordics has a very high penetration of electricity, and we strongly believe that True Energy supports the same kind of theories that we talked about by working with our utilities and our partners and reducing what's needed going forward. So this is the shark tank moment. You can all see it palpably. I'm very excited about this. I truly am. In fiscal year '21, we actually delivered $20 million of profitable growth to Landis+Gyr. I actually would say we probably belong in a very small cluster of people doing this business that actually makes money in this space. The second thing is by 2025, we will grow this business fivefold to $100 million, profitable again. We're scaling this business remaining global. Globally, we're developing teams, putting teams in place. And we're offering solutions to provide grid reliability and support our customers through their journey. And our commitment is always to manage energy better together with them. Thank you.

Thank you, PV. That was great. And I'm also very excited personally about the opportunities that we see with our e-business. Now we don't stop there. We do go one step further, and we are empowering cloud-based insights. So who would be better to talk about that than Daniel Holz. And again, thank you for having me, very excited to be here in this beautiful facility. And it's now my pleasure to introduce Daniel Holz , Head of Google Europe and our very own Chief Executive Officer, Werner Lieberherr, to talk a little more about the partnership between Landis+Gyr and Google. Welcome, Daniel. Thank you for joining us.

Very good.

All right. So about 2 years ago, we announced that we have signed a 7-year strategic partnership with Google, and a lot has happened since then. We've achieved intangible results. We have this huge pipeline of opportunities. And the first customers are live. So Werner, can you give us an update and let us know on where we are in this journey?

Definitely. I think as you already heard, very excited about the partnership, 7-year partnership. I think the part, which probably excites us the most is the co-innovation we are doing together with Google, and we are developing analytic grid platforms. You have seen, now you understand much better why it's so important that we actually are doing that together [indiscernible] and so on. The second pillar we have [indiscernible] cloud. It's not necessarily less expensive, but it's much more secure. So when you think about the head-end system where you collect all these very relevant information, we do it in 4 steps. We already done the first step actually of pushing this head-end into the cloud. We already have the first customers where we test it and so on. And so we will see that in '23 and '24 the next steps. So I think that [indiscernible] last but not least, also that we are pushing IT, OT into the cloud. Because also there, it's efficiency. It's safety, security, more than cost.

Thank you. So I mean we're really excited about the journey and the collaboration like [indiscernible] the co-innovation with Google is a crucial part of that journey. Google is an innovation powerhouse. You're a leader in data analytics and very excited to have that part and being able to tap into that. Daniel, you have a bunch of strategic partnership. And can you tell us a little bit more about how you approach this, but also maybe speak about why energy and why the partnership with Landis+Gyr?

I'm happy to do so. So actually, climate change and the energy transition are now moving the market and is at the forefront of the discussion and right in politics and also in society. And -- but for Google, this has been a topic for a long, long time. So in fact, already in 2007, Google was the first major company, which became climate-neutral. Climate-neutral, not by purchasing certificates, but by purchasing carbon-free energy to matching our own consumption. And we didn't stop here. We continue. We have a clear and demanding agenda to be carbon-free by 2030. With all of our campuses, with all of our data centers, we are going to become carbon-free. And if we achieve this, not only by -- I mean, if you look today into a data center, it is twice as efficient as we would be looking into a data center on average. And as today, we have 5x the compute power that we used to have 5 years ago consuming same energy. So with the same energy, we are doing 5x the computation. And this is not only possible with improvements of hardware, but also very much with the power of technology, with the power of AI and the algorithms. And this is exactly what we're offering to our customers out there in the market. One example, which I could share to you -- with you right now is Swiss. So we have been working with Swiss only on the pilot, giving them our algorithms and using their data to optimize an advanced fleet routing system to make sure that the planes are being routed always in the most effective way. And already out of this short pilot, we have tremendous success, which led into Swiss saving CHF 105 million from the pilot and which is maybe even more important, 7,500 tonnes of carbon dioxide, which have been saved. So it is a nice example how we can help customers with our technology to improve energy efficiency. And this is exactly why we are so much interested in working together with Landis+Gyr because we would like to share this and enable our Landis+Gyr's mission statement to decarbonize the grid with our solutions. Specifically, we are working with Landis+Gyr on software solutions, which are going to enable the customers on Landis+Gyr to better predict both the consumption, but all the supply of balance grid, which is going to be powered with as much green energy as possible. And that's what we are working and striving for.

No, for sure. So that's a good point, right? I mean we are all about decarbonizing the grid, but that's just one part of it. Werner, can you maybe tell us a little bit more about how Landis+Gyr has evolved throughout this journey?

I think, look, for us, it's extremely refreshing. I think there are 2 corporate cargoes actually coming together. And obviously, Google thinks very differently. Google is all about software. And for us, I think it's a very healthy path for what you know I think it starts at the top. How you and I, Daniel, how we work together and you go through the organization, and we are really transforming in terms of corporate culture, skill sets, working into the cloud. We have a large data innovation teams actually from Google side, from our side, which we are driving together. We have employees who are now certified as Google Cloud practitioners. I think that's super cool for our people. So I really think Google and also, you in particular, Daniel, tremendously helped us in our journey to become a cloud-based company.

Okay. Very good, Daniel. Would you agree with that? And how do you see some of those next steps?

Of course, it's such a great question. Well, I would say now seriously, I would say the release of the head-end system together with the data analytics platform, which you can also see outside that the growth have been quite good starting points, and they are going to build the foundation of what's going to come next and what's going to be next is that we continue to develop the solutions which Landis+Gyr is offering to customers. And in a strategic partnership like the one that we are having here, we are combining the engineering teams from Landis+Gyr with the experts from Google. They are coming from the Industrial Solutions teams. We are bringing colleagues from Google X, which bring in the 10x thinking and disruptive innovation part. And we are also leveraging the whole of Alphabet Group. In this case, we are also looking at a partnership with the Nest Home Appliances, which are nicely expanding and extending the reach of the Landis+Gyr solutions. So net-net, we are working together with the experts to leverage digital solutions and technology to solve real-world problems for the future of energy efficiency.

That's a really good point. It's really about real world problems, right? In the heart of all of this, at the heart of this are our customers. So can you tell us a little bit more about how those solutions and ideas benefit our customers?

Look, you heard throughout this presentation, obviously, the utility customers, but also end consumer realize that we need to change. As I said before, we didn't think that in Europe -- middle of Europe, we would think about energy crisis and all that and that demands a different thinking, that demands how can we use this data much better. And also our customers to think about machine learning, artificial intelligence, and I think Google is in that sense, perfect power. It doesn't have to be always Google, if you have a customer who says, "Hey, I want to have, for example, a private cloud or I want to have a hybrid cloud or a public cloud." Obviously, all these are fine solutions, I think that's really important. But from my perspective, as you know, it's a regulated industry, but the tremendous shift in thinking that actually the utilities, but not only the utilities, also the end consumers are thinking very different. Who would had actually interest actually in energy cost and energy data a few years ago, it was just not costly enough actually to drive a lot of interest that changed a lot. When you see the energy pricing and trust me when we think the energy crisis is over in the winter of '22, '23, I don't think so. I think we have a relatively mild winter, but who knows how the next winter looks like. And we will have similar challenges. And therefore, that we need this machine learning, artificial intelligence capabilities to get the data in the best form possible.

All right. So now we know what we can do for our customers. But can you tell us a little bit more about how we're doing it and talk about the underlying technology?

Sure. Let's take a little view peak under the hood of the partnership. And so what we are doing is basically on 3 pillars. We call them the data cloud. We have the open infrastructure cloud, and we have the trusted cloud. We have the 3 pillars on which we are building our partnership. And let me quickly -- very quickly double-click on each of those 3. So first of all, the data cloud. Data cloud by Google is providing everything the Landis+Gyr needs to analyze data, to connect first of all, data sources, which are disparate across the company, external and internal structured, unstructured data and put it all together into 1 powerful array of information that Landis+Gyr can base solutions on. The next thing is the open infrastructure cloud, which is providing an open standards-based, high-performance and highly scalable solution to make sure that we have global support for the Landis+Gyr solutions, but is also catering for what Werner just mentioned, it is based on open standards. Google has a multi-cloud policy, which means that customers have the freedom to choose, right? So if for some reason, they need to -- they can decide where the data should reside in, they can decide where the cloud [indiscernible] should run on. It is all of the choice of the customer and choice of Landis+Gyr. So that's the beauty of the multi-cloud strategy of Google. And then finally, we have the trusted cloud. Security has been an ongoing theme during the presentations we heard today. Well, Google is one of the key targets of cyber attacks. So everything that we are doing at Google is centered around security, security for data, security for the applications and security for the systems. And we make -- the concepts which we invented, for example, like Zero Trust, which is one of the more famous ones in the market. This and many more are at the core of every solution which we are building. And we are offering these solutions to our clients to make sure that they can use the same level or experience the same level of security when working within their markets and with their customers. So we also -- not forgetting to mention we have just been augmenting our portfolio by the acquisition of a company called [ Manian ], which are experts in cybercrime incidents and also incident response and also in prevention systems, so jumping up our portfolio of what we can offer to support our clients and to ensure that our customers can really experience the most secure environment that you can have possibly today.

And I think that's a really good point. We touched upon this earlier a little bit already that we are critical infrastructure providers and keeping that critical infrastructure safe and secure and reliable is one of our key action points and having Google as a partner is definitely a huge asset to make sure that we can also fulfill our promise to our customers and that commitment in the future. Switching gears here for a little bit, Werner, for you personally, what's the most special or important thing about the partnership with Google?

I think Google is a very refreshing company in many ways. The way you think, the way you drive things, I visited the headquarter more recently, Mountainview in the U.S, and just when you see the people, how they work, how they think and the values they drive, I think it's very exciting. It's very impressive. And I think there's a lot of cross fertilization in which we have together, and my view is that will lead to great results. There's no question. I think 2 great leaders are coming together. I think you are a very strong leader in cloud management. And then we are a strong leader in energy management. I think it's a perfect fit.

No, I couldn't agree more. And just let me just say thank you. We are very proud to be able to work with Landis+Gyr and jointly work on your mission to decarbonize the grid.

Very good.

Well, thank you very much both of you. I think that probably says it all. I think we have a good path forward. We have tangible results that we can show you already today that our customers are benefiting from today is customers' life in the cloud. And we've already heard from you guys and we'll hear that from Amith in a second as well of what the pipeline looks like when it comes to co-innovation. So we really are co-innovating the future. And I thank both of you for your time and your insights today, sharing that with the group. Thank you very much.

Thank you and thank you very much.

Thank you very much. Thanks a lot.

All right. So now it is time to introduce our Chief Technology Officer, like it's [ teas ] already. Amith Kota, who will tell us a little bit more about how we are empowering cloud-based insights and how we are driving a cloud-based innovation forward. Over to you, Amith.

Thank you, Eva. Good afternoon, everyone, here as well as on the call. I'm pleased to be here and present to you about what we're doing with the Google partnership. Earlier today, you heard from Werner about energy and utility industries at [ Huawei ]. What does that mean, right? I want to take you through that journey. I think you heard a lot of the terms which you see on the screen here. But I want to really help you understand why we are positioned to take that journey. It actually drive revenue for our company and growth for our company. Historically, utilities' always worried about generating energy, transmitting and then distributing in a reliable way and making sure customers have affordability, but that has changed. That equation has changed. You heard from Prasanna, you heard from Werner, supply-and-demand balance and the equation around supply and demand is completely different. What does that mean, right? So today, we help utilities every step of the way to manage their grid, provide reliable and resilient services from a grid perspective and ensure customers' consumability of energy. But if supply and demand changes, how would we position ourselves to help utilities? Over the last few years, what we have seen is that equation, the way it has transpired is, number one, there is rapid transportation electrification. You heard that. What that means is each one of us is going to start consuming more energy. Probably double, if not more, energy we consume today in our houses. Number two, we're going to start putting solar panels on our roof, I think batteries if I [indiscernible], I probably will do large scale. Number three, we are sort of [ the natives ]. We are adopted into a lot of digital capabilities. So our expectations also from utilities is going to be different. We want them to engage to ensure that we can charge our cars, whenever we want. We can switch between the grid and battery or solar, whenever we want. So it's quite a few things, behavioral changes which have happened that utilities will find very difficult and challenging problems. And for them, it's going to require a lot of new thinking, new skill sets and new solutions. Now where do they start? Right? I think you heard from Werner about data. Data powers everything. What does that mean? What that means is, number one, as assets are coming into the grid, you're going to see a lot more data being generated. Everything you touch with respect to an EV has data. The EV electric car generates a lot of telematics data. There's going to be charging data. There's going to be different types of data being created. Number two, all this data is going to be created a lot faster. I think you heard about [Technical Difficulty] talked about. [Technical Difficulty]. They don't know what to make of it and they don't know value they can get out of it. So we repeatedly see one of our customers ask us, "Hey, listen here, you understand that you are giving us capabilities to generate a lot of this data and get more insights. Can you help us through this journey and -- moving forward? And just 1 hearing from our customers. Number two, we've been hearing the same thing from a lot of technology analysts who cover utility industry that there's a wave coming with respect to digital capabilities needed to really process this data and understand it. So we see this market to be about $1.5 billion by 2025, with a healthy CAGR from 2021 to 2025 about 15%. So we see the value. We have confirmation that customers are asking for it. We know analysts who cover the industry have said there is growth and there is a need for digital capabilities. And what does that mean for us? We are really positioned well to attack this market because we play in the AMI market. We generate data at the edge. We process the data on -- we have the utilities with our major data management solutions. We create bills for consumers. So we know how consumer needs to be engaged. Now you heard from Prasanna about EV and load management. We have these solutions which are going to generate even more data. So we understand that. And I think it positions us very well to partner with utility customers to really optimize their grid operations as well as how they can integrate distributed energy resources. Number two, we also are starting to hear a lot of utilities are thinking about consuming these digital solutions in a Software-as-a-Service model or a cloud delivery model. This is a big shift. Utilities have been historically thinking they would like on-premise solutions as well as a mix of hybrid cloud solutions. This paradigm shift is good for us. And you heard about Werner and [ Dr. Holmes ] talk about cloud and our ability to deliver solutions in different delivery models, this also positions us very well with respect to tackling this market. Now you heard what the problem is we're going after. You heard what the market is. Now how do we approach this? What we have figured out is this, these are tough challenges and tough problems to solve. No single company can try to take and solve this at a scale, at a global scale or try to deliver to customers locally. Number two, focus on security. Number three, be innovative about it. So one of the things we have done is we have partnered with best in the world across every area, starting with Google. They have the best technology, best AI and ML capabilities and cloud capabilities. Connectivity Solutions, you heard from Steve, you heard from Bodo about enabling connectivity for grid edge assets coming into the cloud. So we partner with Vodafone, which gives us coverage globally, and we also partner with Cisco and Americas to drive a lot of field network. So this really sets us up perfect to help utilities address these challenges. Now okay, we understood how we will address these challenges, how were we set up. You heard a lot of where we are positioned. Our portfolio is strong. What does this portfolio mean from a grid-edge perspective, smart infrastructure perspective? I want to kind of walk you through a journey of what this means for us, right? Number one, when you start bringing all the things you heard from my peers this morning or this afternoon, what we have transformed our portfolio is truly into an edge to cloud ecosystem. You can put any type of devices at the edge and those devices could have intelligence and generates a lot of capabilities with respect to making decisions at the edge or generating data. How do you transform and transfer tremendous amount of data through various communication channels because every country and every region that is unique with respect to how they would like to and every utility is, and then how do you bring that to 1 place at scale, and how do you get value out of it? And that's where we have created digital solutions. So a lot of the things you heard today fitted to these ecosystems where we are creating edge intelligence as part of our edge intelligence [ Bridge ] Intelligence pillar, smart infrastructure, where we're creating new digital solutions to support new type of edge sensors, but foundational smart metering as well as connectivity services. We see this as a powerful platform for us going into the market because this platform builds on cloud for scalability, built on the ability to integrate any type of sensors, gives us ability to expand in any market with different type of solutions. And that's why we're excited about the EV and flexibility solutions Prasanna has talked about. Let me deep dive a little bit more on a couple of solutions, right? I think you said, okay, you have a platform. How are you making it happen? And where are you with this platform? So you heard from Werner and [ Holmes ] about the 2 different solutions we have enabled as part of our partnership. One being Emerge, Emerge is a unified head-end system truly built on a cloud IoT platform. What this gives us is this has the ability to scale unlimited. We have the ability to scale to the largest utility globally, if not more. Number two, it gives us a deployment choice. They want to deploy in their premise, at a hybrid cloud, in a public cloud of their choice or continue as a SaaS from us, which is hosted on Google Cloud. Number three, we have designed it security-wise from ground up. The security is embedded into every component, what we have built as part of this. And it meets every regulatory standard and international security standards so we can tackle any market we go into. Number four, there is flexibility innovation. Here what we have done is this has the ability to start processing data from any type of edge device. We are starting with our Americas customers with Americas leaders. Next, we will integrate EMEA meters. Next, we will do Asia Pacific. And we can also start integrating other sensors. So the way the platform flexibility has been built is it's easy to extend to different type of edge devices. And for -- finally, we believe this platform and this type of edge to cloud ecosystems such as [indiscernible] future as well. So this is a very critical application for us. We have a lot of existing customers. We are planning to move. I'll give you an update on how many customers are already in this platform. And we will also enable this platform for all the new customers will sign up across different regions. The next one is analytics. There's a lot of things you heard. Before I even start, I would ask if you have a chance, please stop by the analytics booth we have outside. You will see some phenomenal information. One thing what we have done is, I think we heard, EV will be the biggest load you will see in the grid at a residential level or a commercial level. What we have done is without having any insight whether EV is in the grid or not. We took an AMI data partnered with some customers and Google, and we can determine at 98.5% to 99.5% accuracy if the EV is behind a meter, if an EV got connected to a grid. That is the power of AI, with the partnership, Werner and [ Dr. Holmes ] were talking about. So what we have done is we have created a platform, which has the ability to integrate, learn from the data it gets access to and define some patterns and the technique and solve real use cases for utilities. Lot of things you see is there's more technology capabilities of the platform. But truly, our focus is how do we give utilities ability, like I said earlier, ability to take that data, store it in a secure way, process it, access if they want. And then from a value proposition, we have started to build use cases. Some of the use cases we built is power quality, EV detection, voltage performance and AMI-based [indiscernible] learning engine, so you can build a lot of use cases on top of that. These 4 are foundational things we have built and I'll talk to you more about what we're going to do going forward with respect to analytics. And we see this as a platform which every utility and every -- even a retailer who may not be in utilities is looking for because they want to get value out of the data and understand where they're going. Now how did this journey transpire, you heard. We signed Google partnership December 2020. So it took a lot of effort for us to -- like Werner said, we had to become 1 culture. They imported different culture than us, and we had to bring up our people from a skill set perspective. So it took us a little bit of time to establish that foundation for future and I think we're ready. And some of the milestones we'll talk about what we have done is that has led to fruition. In third quarter of last year, we released our Emerge, the IoT head-end system platform, first release of 4 releases. It's a big milestone for us. Our customers are excited. They see a lot of the value building on top of it. Number two, we have released our analytics first release in December of 2022. So that's a big milestone for us. And number three, we actually have moved all our internal business, core business operations on the Google Cloud. So we run our core business in the cloud. For us, these 3 were vital foundational steps because you have to get a product out now as an organization, we keep more like a cloud company, and we are using cloud. So we are a cloud-based company as Werner says. This sets us a future course of actually enabling a lot more exciting things. Number one, we will continue to evolve the IoT platform. Number two, as you are seeing some of the use cases, we have tremendous amount of use cases we're going to solve for our utility customers. And one beautiful thing is this is 1 platform which helps support globally. So for us, you build once, you are helping utilities across the globe. And every region has the ability to change to their regional needs. But I think we are positioned to be very fast to market in delivering some of these use cases. And that is exciting for us because that we see as a big growth ahead. Now some of the biggest accomplishments we have had, I think I talked about core business. So what have we done since the release, we have migrated actual real customers. We migrated 6 customers to date, and we're learning a lot how customers need the system and how they would actually also use the system. There's 2 things. One, this also helps us how do we optimize to drive better profitability on these products for us. Number two, how do we also scale and potentially even drive more revenues for us to offer additional services on top of what we do today. So that is one thing we're very excited about. [Technical Difficulty] We actually have done pilots with customers, and we have demonstrated the capabilities of our analytics, and we just have confirmation that we're working with the customer on the revenue generation, and we will continue to build on that. Finally, bringing all this together, right, what does this mean? What is a takeaway for you today? Number one, we are very strongly positioned to grow our software and services business by 25% by 2025. And how would we do that? We have the partnerships as a foundation. We have the portfolio ecosystem foundation we have set up, and we have the digital solutions we have built on top of it. And we have a clear path of building additional digital solutions like demand flexibility, EV-based solutions. And then everything in cloud is a Software-as-a-Service. So it drives a better annual recurring revenue model as Elodie called this morning. So it has a lot more predictability in our growth. And we will start thinking an active [Technical Difficulty] more software company by doing so. So thank you, and thanks, Eva. Over to you.

Thank you, Amith. So we are actually moving nicely along our 5 chapter road map here, and we are coming to the end. Before we start with the Q&A in just a little bit, I would like to hand over the stage back to [Technical Difficulty] quick, and then we'll give you some instructions on the Q&A.

Exactly. Thank you, Eva. Just to sum up, and then we would go into Q&A sessions so we actually have here the leadership. I look forward to answering your question. Delivering on commitments, I think that remains for us as [Technical Difficulty] We really want to focus on that. I think we have the right strategy in place, but really now doing what we say and saying what we do [Technical Difficulty] term guidance. I hope we were able to show you a [Technical Difficulty] profitably going forward. For FY '25, we see solid growth and healthy margin improvements. I think there's quite some work involved, but we feel [Technical Difficulty] continue to do that. And we are clearly proud of being able to share exclusively that and also I thank you for your continued trust and support. [Technical Difficulty] But I hope we were able to give you a pretty comprehensive [Technical Difficulty] strategy about our product road maps, also software road maps where we are and where we are going. I think, as I said before, I feel we are very strongly positioned in order to [Technical Difficulty] for our customers and also the energy transition, and we are actually really positioned in the sweet spot. I hope we came through that we are very excited about our future and would now actually then really look forward to do your question. So in a nutshell, it's just, I think, nicely summarized here. We are recession-resilient energy efficiency company positioned right in the sweet spot of the energy transition, further amplified by the current energy crisis while playing an active role in decarbonizing the grid. So thank you already for joining us today. And then again, I give now back to Eva and then we would go into the Q&A session. Eva?

Thank you. And also, you're welcome for that very special [indiscernible] that we built in the guidance slide that you may might or might have not noticed just a moment ago. So that has something to do with being able to share information with Google and not being able to share other information in advance. So it's all in your booklet and on the website and obviously, in the beginning of the presentation. So now we very much look forward to engaging with you. We will do this the Google way. I have a microphone cube over here. So I hope you're all very good at throwing things and catching things because that's going to be vital to pose questions today. We will now, in a moment, know if I'm good at throwing things and see who catches the cube first. For all of our remote joiners today, I have a laptop sitting up here. So if you have a question, please raise your hand and then we will ask you to unmute yourself after I announce your name, and then you can ask your questions as well. So now that the leadership team is lining up here to prepare for your questions, does anybody already have an arm raised and I hope it's not too -- thank you. I thought it would be like all the way up there that I would have ended in a complete disaster. Thank you.

I have 2 questions, if that's okay. The first one would be -- just I have 2 on the guidance. So the base is 10% at the midpoint, as you showed on the slide. We will add another percentage point from the R&D normalization, there's still plenty of supply chain costs to normalize, right? Even if we add in some remnant structural costs that will add 1, 2 percentage points easily. And then we're already in the range. But today, before all these great things going on, right, software recurring, so revenues are growing, shifting towards grid edge, smart infrastructure, you're taking out costs, you're generating leverage by growing high to -- I'm going on and on. So I'm just wondering, what's not going that well, right? What's offsetting these benefits? Is it wage inflation? Is it maybe structural pressure in the classical smart electricity meter business? I'm just trying to understand the moving parts?

Patrick, I think it's a very fair question. We clearly see a runway, as you said, to this '25 guidance. But as in everything, I think there are some headwinds. I'm sure it could be some of the competition. It could be what we experienced actually since I'm in charge of Landis+Gyr if someone would have told me at the beginning that all of us sit at home for months because of COVID or what we experience in the supply chain. I mean, just to give you a glimpse, in '21, we have 30 million more costs and then in '22, where we are present in, we have another 6 on top of it. So I think that will clearly come down. I think a lot of chip production capacity will be added. But nevertheless, I think there will be one or the other things, which probably doesn't go perfect, Patrick. But I do believe, I strongly believe that the 2025 guidance is doable. Absolutely.

Okay. And the other question is on -- we had the testimonial from National Grid, I think, and it was interesting to hear that they're developing their use cases in-house. And then you showed the slide with the app platform, the grid edge platform. I'm just wondering what's the typical go-to-market? Is it more use cases you are pushing? Is it more in-house use cases? Or is it actually [Technical Difficulty]

Maybe Sean if you take that?

Yes. It's a company by [Technical Difficulty] the customer, we understand their requirements and their roles [Technical Difficulty] coming from our internal resources and capabilities. So typically, it's a balance that those 6 applications that are up, that we have developed are in conjunction with National Grid. So normally, it's with the customer determine their individual and also generic use cases that we can then bring to other customers where we see a real [indiscernible] capability.

And just to give you an idea, these are not simply use cases only. For example, National Grid, we had around 60 use cases, which we developed together with the utility and then actually make the case to the regulator because the regulator needs to see does it not only make sense for the utility, but also does it make sense for the end consumer. If we bought -- Fluvius is a good example in terms of use cases, if you want to talk, say a few sentences to that.

Yes, we are developing use cases with them in a few years. But what you see also outside on the power quality and grid flex control solutions. These are also solutions we can sell stand-alone to customers, and we do that across Europe, predominantly here in Switzerland, also in Austria, Germany, U.K. These are markets which are very [Technical Difficulty] you see outside.

So my question is more on Google actually. I mean I see the effectiveness of it. Just to understand a little bit what -- just to understand a little bit what exactly is Google getting out of it?

Good. Why don't I give this question to Amith? Perfect. Yes. And then by the way, we also have Google representatives here. Feel free to also chime in.

So you heard from Werner and [ Holmes ], right? Part of it is we are taking a decarbonization journey, and they want to do as well. So there are synergies at a high level and strategic viewpoints where we're claiming. Number one, our partnership as we build solutions on Google Cloud, you asked the question, "Hey, what is Google getting and what are we getting?" We are solving real problems for our utilities and rightfully so, we're going to monetize that, and that's our revenue, number one. Number two, also doing at scale, drive some efficiency. So it will help us over a period of time to be accretive on margin side. From a Google perspective, we are consuming their cloud. So for them, that's revenue. So that's one of the things were drivers for them. For us, we're getting a platform which gives us the scale, flexibility and [indiscernible] to market.

And it's really probably the biggest risk consumption. There's Amazon. There is Microsoft. There's Google. Google is rapidly actually gaining momentum, gaining speed and it has a risk consumption to a large degree. But maybe Marin, if you would like to add something? Sasha? No. Did you answer it on point? Very good.

So is that, for example, what would tie in with the customer feedback, I guess, what is the customer feedback like on Google, so to speak? I mean, are they expecting that your customers will tag on to that and go to Google?