PORR AG (POS) Earnings Call Transcript & Summary

It is not so easy. There are a couple of construction sites. Some of you might have seen this timber construction site. This is something completely new, a residential building made of timber. So a warm welcome to all of you. You all know our agenda. We will stay here for now. Klemens and myself are going to introduce PORR to you. We're not going to talk so much about what happened already, but we're going to take a look into the future, and we're going to talk about sustained results and how we want to achieve them, and we're going to talk about the track that PORR is on. And I will give you a couple of facts and figures, and then we will have enough time for a Q&A session. Then we will go to the tunnel. You will get some protective equipment, and then we will go to the LeopoldQuartier and we will have time for questions again. And then maybe if you have time, there will be a cocktail or drinks before you go home. So I'm very happy that you are here today. I hope you enjoyed yesterday evening. I think we had enough food. I hope you liked the food. We had beef, very traditional Austrian food. So we are all strong and ready for today. Most of you know what PORR is. I will just briefly go through where we operate. We are a construction company. We will always be a construction company, and we will build as much as we can ourselves. We are a home of construction. Why? Because for us, home is where the best people, the best PORRians have their home, and it is also the home for expertise in construction. We are not a construction company that is just building construction or civil engineering or tunneling or some combinations thereof, but we are one of the very few companies in Europe that from construction engineering, from demolition, geothermal, tunneling, railway construction, bridges, infrastructure, we have facades, we have many different fields that we operate in. Here in yellow, you can see our 7 home markets on the slide. In these markets, we offer everything that we have in our range of services. And we are reinforcing and increasing this in all of our countries. And that's why we have grown sustainably. We started with special civil engineering in Germany. So if you need that at the moment, you have to go to the Keller-Bauer companies. And then we started with our own special civil engineering projects. So I don't have to order it from others, but I can place the contract with my own people. And that's why we are #1 in Germany. In Austria, in special civil engineering, we're the absolute #1. We have a lot of potential in Poland. German and Austrian colleagues are helping out there with expertise, technology in special civil engineering and also in Romania. But I will come back to that in a second. So that's also our approach in other markets. We're not going to change anything about our 7 home markets. And then we also have a couple of project markets, but they only account for 3%. U.K. is a market that we will retain. We have an order for H2 speed (sic) [ High Speed Two ]. Our slab track system from PORR, this is an order for more than EUR 300 million. All High Speed Two lines that other companies are building, will be equipped with our system. So we produce it, we deliver it, we do -- are in charge of the engineering. Installation is done by other companies. They are trying to convince us that we do it, but we are a little bit reluctant. Either they will pay a better price or somebody else will do it. In Norway, we have the Drammen bridge. This is another very interesting steel engineering project. And we're still on the market in Qatar. In Qatar, in this region at the moment, nothing much is happening. There's a tunnel and some smaller projects, but there's no company that still builds in their own country. All our partners are building in Saudi Arabia. Otherwise, they could not survive. Also, the companies from the Emirates are not building in the Emirates, but they all went to Saudi Arabia. And for us, this is not a market. There are so many competitors there already. They are still looking for big companies, but this is not of interest for us. So we are very strong in most of these home markets and in Romania is one of the markets that we also operate in, and we're not going to change this. So what is the essence of PORR? As I already mentioned, it starts at the design stage, planning. So we are -- we do this design. We have in industrial construction, a lot of American companies like Jacobs or Fluor. And this EPC system is only available in plant construction. And PORR has responded to that. So in industrial construction in Germany, we have been using this for quite a while. We set up a division for this EPC, and we make sure that this is used in the healthcare sector, pharmaceuticals, chemical industry, life sciences. So we are taking the best people from other areas, then we construct, of course, we renovate. Revitalization is a buzzword, especially in construction -- building construction. We have to get -- prepare ourselves to climate change, then operations, of course, and also demolition, circular economy, raw materials. These are our most important aspects. Here, you can see the KinderKunstLab (sic) [ KinderKunstLabor ] in St. Polten, Lower Austria. The second picture on the slide, this is the SuedLink of the Elbe crossing in Germany. And the Salzbachtal bridge is -- will be completed in July as announced, so perfectly on time. This was a project in Wiesbaden. Let me talk a little bit about the situation we had there. We were instructed to demolish the bridge and build it up again. During demolition, we find out that there were mistakes in the design. And with the method that we were meant to use, we would be failing. We informed the builder of this and said that we have to do it differently. The first reaction was we will think about it. The second reaction was that PORR probably wants to cheat us. They stopped thinking about this, and they said that they take this out from our scope of services. And another construction company, I think their name is [indiscernible] was awarded this contract. So what happened? This bridge that you can see here came closer to this other bridge. So they thought that they could demolish one and then everything will go through one bridge. And once this has been completed, the other bridge would be demolished. And we said from the very beginning, that is not going to work. And it happened exactly as we predicted because one bridge was leaning over to the other one. So they had to close both bridges, Wiesbaden, Frankfurt in this area, the whole motorway was closed. And they have 5 or 6 lane connections, high-speed Bahn, Frankfurt, Wiesbaden, Cologne, and that had to be closed suddenly. So for 3 to 4 months, nobody was at the station in Wiesbaden. So this shows how we have to handle some suggestions as to how to build. So 1.5 years ago, we completed the first bridge, and the second one will be completed as planned in July. So tunneling, this is what we will see later on. Here, you can see one of our data centers in Poland. Here, you can see the sports arena in Vienna. This is special civil engineering. And here, we have one of our hydro engineering projects in Constanta in Romania. So why do we believe that construction will always be even more important? Construction has always been important. Some people say construction was the first trade. So it has always been part of our human development. We refer to it as the 4 Ds at PORR. So what is happening at the moment? Deglobalization. During the pandemic, we saw that some trade routes were no longer open, new prices, new conditions. We responded quickly. We tried to localize our operations. We have great alternatives in our countries. We opened a logistics port in -- at the Albern port as the first construction company for bulk materials, cement and so on and also a concrete plant via the Danube. We get steel from Turkey through this port. And this is very important in the procurement market because steel was very expensive, and we didn't get any. So we talked to Turkey. This is a different standard, but then the standard industry came up with as new standard. In Austria, steel has to have a density of 55 as compared to 50 in the rest of Europe. But this doesn't matter. You just take the steel and add this factor. It is a little bit more work because you have to do all these calculations, but you can still use it. So when they saw that PORR has a hub that we have these ships and that we ask Turkish steel producers, suddenly, steel was available via the Danube, and it came from Germany. So what we do at PORR is deglobalization by focusing on these markets, having stable partnerships there. We also tried during the pandemic to make sure that we do not completely cut ties with some of our subcontractors. We supported many of them. And now this helps us a lot as a partner company. If you're feeling too hot, please feel free and just open a window. We all need fresh air. Okay, so regionalization, resilience, we're very well prepared for all of this, renovation, housing, storage, logistics, all of these topics. The second D is decarbonization. This is a very important topic. As pure construction, PORR is the most sustainable construction company in Europe together with two French companies and a Spanish company, but they are all mixed companies. So energy transition, we have changed all our construction sites. For the first time, we are measuring and metering everything, electricity and water. We have a separate waste disposal system for every construction site, which is quite easy in Austria because we are the market leader anyway in environmental engineering, but also in Germany, in Czech Republic. So circular economy is important for us. In Austria alone, we have 17 collection points where 2.8 tonnes of concrete, asphalt, steel, timber and so on is collected and re-fed into the circular economy. In Vienna, we also deliver to Lafarge for brick construction. In Stockerau, we have the first gypsum recycling plant. It sounds great. Why didn't we do this earlier? Until the 1st of January '26, it was -- you could just bring the gypsum to collection point, but this is no longer allowed. You have to recycle it and there are special reception places for this. So we invested EUR 7 million, and we will have the first recycling plant, approximately 60,000 tonnes. The recycled gypsum comes to Saint-Gobain, where it is turned into new boards. So decarbonization, ESG, saving water and electricity, we will make sure that more than 60% of our electricity needs will be produced by ourselves by 2026. We have a huge photovoltaics plant. We're equipping all our halls with photovoltaics. We have -- we can send electricity within our group. We can feed in electricity ourselves. So we are highly flexible. And together with VERBUND, we have our landfills that are no longer in use, and we are using these areas to build state-of-the-art modern photovoltaics plants where you can also have agriculture. And another topic of ESG, diversity, inclusion, promotion of women, children, family, how can we combine all of this. Healthcare is important. Care+, for instance, this is an insurance that PORR has for its employees. If something happens within 24 hours, you get EUR 20,000 into your account, which is, of course, great for a worker with an injury. And they only have to pay EUR 5 every month. The other EUR 5 are paid by us. This is an insurance scheme that [ Wiachstettcher ] developed together with us. And governance, we do have our cartel. You all know this. This was important and also very helpful. And there is no gray zone, it's just black and white. Every year, 10,000 to 14,000 colleagues are trained in terms of anticorruption, for instance. So governance is important for us. Sustainability is important, and it is also going to be important in the future. And a lot of contracts have been placed with us because we support our clients, our customers in making their buildings more sustainable. Let me give you an example in Forchheim in Germany. There's a huge lab with storage areas, warehouses. And we were #2 in terms of price, but still the contract was awarded to us because we showed them how they can use their leads and their certificates. We showed them what we are doing in this area, and that's how we convinced them, and the contract was placed with us. So everybody, of course, all of our clients always are afraid that they just talk about sustainability but are not doing anything. And the management of listed companies is always nervous when they have to have a construction project. So designing, planning is very important. And that's why we play a big role because the customers, the clients like our approach. We do know that this whole regulation doesn't really make sense. There are a lot of regulations, and this keeps many people busy. You have all seen our annual report, 2/3 of it is on sustainability. Who of you really reads through that? And Klemens is going to go into detail on that. We used to have how many KPIs? 180. Now we have 1,300. So that doesn't make sense. This is absurd. Who is going to measure all of it? So we have to think about it first, then we have to grout in the field, talk to those working in practice and everything that is more than three pages of explanations on a certain topic, doesn't make sense. If I write 10 pages, complicated wording and nobody understands, it doesn't make sense. Digitalization, of course, is always important at PORR as well. We always have like 3 steps forward and 2 back and sometimes we are at a faster pace, but we are on the right track. We have an internal project opportunity. This is like the spine, so to say, where we have all data and incoming orders. And on this, we have -- on the basis of this, we have calculation. And on the basis of that, we have all the construction execution topics and then also the storage of the date. This is all based on the BIM system and opportunity is used for even the smallest projects. The client, the location, all of this is entered. Logistics is getting more and more important. So you have to imagine this opportunity, it's like a spine and the other programs are the ribs that are connected to it. That's HR, that's procurement, calculation, execution, ordering, up to lean management. And that's how we try. We have, for instance, projects like digital construction [ fine ] or the foreman of the future. It's not as easy as it sounds. Like all other big companies, we use [ I2. ] We all know ET was built by Schneider. It was the most promising thing in the construction industry, but it is a high risk because they promised a lot, but they are still not able to deliver. So we all, Strabag and all other construction companies rely on this system because we decided to use it. It's a great program. However, there are a couple of bugs. So we are completely independent. We will talk about the processes and the transformation that we are planning in a minute. Another challenge of our future, whether we want it or not, is demographic change. Of course, with automation, we can counter many developments, but our own staff is the key for our future success. So targeted migration will be important. We have to differentiate between migration and asylum. That's very important as I keep repeating. So we have to take a look at what we can do. So our response is increased training. PORR Academy is something that we have had for 100 years in Austria. Apprentices, foreman and project managers, both on the commercial and the technical side and also in terms of management with our leadership programs. We also rolled it out to Germany, Romania and Poland. We're trying to keep engineers in Romania so that they do not go to Germany or to other countries. And when we needed trades, for instance, in Darmstadt, we had 50 colleagues from Poland. In Norway, we couldn't even work without our Polish colleagues because we don't have a Norwegian staff that goes to the construction side, but they have a lot of construction managers. But in Norway, you do not find people working at the construction site. Let's talk about our strategy. Most of you who have been with us for quite a long time, have noticed since 2012. We're talking about intelligent growth. So how do we want to do this? We build with lean. I'm going to talk about lean construction in a minute. And of course, green, that means sustainable. So here, you can see our house of strategy. On top, we have intelligent growth. We have 4 pillars, our company. We do not want to be the biggest company, but we want to be the best-in-class. We want to have good sustainable results. We want to have strong equity, and we want to make sure that our customers are satisfied. We want to be best place to work. At the moment, we are 22,000 people at PORR. We try to promote them, to support them and train them. And our 5 principles have proven its worth at PORR. You do not need a lot of rules. You need these 5 principles. So whatever you expect from me, I expect from you and your staff members. And then we have the magic words like, please, thank you, hello, and goodbye. And together with these principles, this is really useful. And of course, we always work in a lean way and ESG is also very important. So what is happening right now? Talking about digitalization. This is a very important crossroads for us at the moment. We are on our PORR road. This is a very solidly built road. These are safe jobs. So we are on this road. We have the guardrails on both sides. We have tunnels, we have bridges, and that's where PORR is traveling right now. We have this old IMS system with all these rules that we used to have. We have processes in our group. We are trying to become a process-oriented company. We need processes, digitalization, automation and so on in order to do that. And we also need processes that result from the lean introduction at our company. So we always say we pack all of this into our PORR car. The PORR car is steered by the right people from the digitalization department, from IMS and the lean department, and they are coming up with the processes that we need. But we do not want to become a rigid company. The most important topics have to be mapped in processes. We have minimum standards. That's the guardrail on the right-hand side. And we must have -- must make sure that we stay within these guardrails. We always have to meet the standards at PORR. And then we have the maximum standards. And there you can decide on which side you want to drive or if you want to take over. So we take all the old IMS standards, and we come up with new ones based on lean standards. And of course, there are also some legal requirements, ratings, certifications that we have to comply with. And all of this is embedded in our strategy. I already showed you the house. Here, you can see the PORR car on the road again. How do we steer the business units? All countries, all divisions have their own targets. And this is also part of the transformation. At the moment, we're really focused on simplifying things. And that's very difficult, which things can we abandon, what is correct. And there is no right or wrong. We just have to make sure what is accepted by the others. For instance, if I'm working on a sewer, it doesn't matter where we are in [indiscernible] or in Hamburg. It doesn't matter. There are minimum standards that we have to comply with. And of course, there are local rules, local laws in each country. But the minimum standards matter. And at the moment, we're trying to find out how we can sell this to the people and a lot of training is being offered. Let's take a look at our market. So where -- what is the direction that we are going into. In Germany, within the next 12 years, EUR 500 billion. This could be a great atmosphere of renewal in Germany. And we do not know when this will happen, and in which form it will happen. Planning procedures take a long time in Germany. There are a lot of B2 rights, politicians do not really -- they are reluctant to make decisions, and they no longer know how to decide on things and stick to it. But part of the infrastructure in Germany is in a really bad state. So these things will have to be done. In Dresden, there was an accident with an old bridge. There had been warnings for quite a long time, and then it happened or the A55 motorway. The Minister of Transport said we can still use it for 5 years. And a couple of weeks later, both of the bridges had to be closed, and they're still closed. So there will be a lot of projects, and we are well prepared because we can offer all road construction, asphalt mixing plants and so on. We have all of this in Germany. So we have a lot of colleagues from Salzburg and Tyrol in Bavaria. [indiscernible] is now [indiscernible] for traffic route engineering and up to Baden-Wurttemberg, where we acquired the Waggershauser company in 2024, a perfect company from Germany. We have our own mixing plant there, and this really helps us a lot. German railways. They are also trying to get involved in some projects. They are in part well prepared. Let's see whether they will get all the permits that are necessary. We also tried to come up with new models there. For instance, they wanted to close a very short distance track. And then they have 1 year, and they have to make a turnover of EUR 300 billion to EUR 400 billion. I do not think that this will work. That's why we do not participate in this project. The big players are all not participating. I don't think that the result will be a good one. Let's see whether German railways will continue with these models or change to different approaches. Let's see. CEE. As you can see, in Poland alone, EUR 700 million every year just for healthcare infrastructure. At the moment, PORR is building 4 hospitals, one for children, different types of hospitals. Then we have in Poland, EUR 48 billion for railway infrastructure. A lot of highways have already been completed in Poland and now railway infrastructure and terminals and so on will be built. In Romania and Czech Republic. The situation is similar. Romania is a very progressive country. Let me give you an example, while things are getting a bit fast -- done a little bit faster in Romania than in Germany, the Sibiu-Pitesti motorway in Romania tunnels, bridges, and we have a design and build invitation for bids. So the state says, these are the standards. The motorway has to look like this. The bridge has to look like this and so on and the tunnel is specified with the following measures, safety requirements and so on. This is highly regulated all over Europe. In Romania, they say design and build. You have 1 year for the design, then you will get a construction permit if your design is in accordance with the laws and then you have 3 years to build it. So in Romania, 12 kilometers of highway through the mountains will be built in 4 years. In Germany, on the other hand, after almost 20 years, one section of the motorway from Ulm to Stuttgart, if I remember correctly, was finally up for a tender. So this is not a design and build tender, but there are 80 different construction lots, 30 construction lots just for the design. So you do not take the design of one bridge, take the measurements and the experience that you have from this one and transfer it to the other. No. Every design step has different architects, different measures and so on. So it is -- they want to use regional local small companies, which is, of course, okay. But they also split these tenders into so many small parts. And of course, this takes a long time, and it is impossible to manage the interfaces. And I'm sure there will be some problems. So Austria is in the catbird seat. ASFINAG is doing a great job. They have great people. 2/3 of the budget is earmarked for maintenance and repair. And the Lueg bridge is a horror of a construction site in the summer. It's only one lane in each direction. This is a horror for motorists, and it is being completely repaired and maintenance. And it's only -- they're always doing this in 2 lanes. We did this together in a consortium with a partner, and we had a great plan for doing that. ASFINAG is very happy, we're happy, and we can begin with the construction. But it's very difficult to begin that the -- when you read in the newspaper that the mayor -- the local mayor wants to have a sit in on the highway because they want a tunnel and not a bridge repair, but there you have it. So that is one point. The Austrian Federal Railways are also heading in the right direction, excellent planning, for example. They don't always look to the cheapest bidder, for example, the German Federal Railways is trying to do that, but we here are not doing that. And we don't have to deal with these political issues. So we want to have a very high-quality road network. So that's what we're looking at. In Austria, for example, we need EUR 1 billion for residential construction, so that homes will be affordable. We need EUR 3.5 billion for railway infrastructure and EUR 1.2 billion for road infrastructure every year. This is an excellent system. But what is the problem in Austria -- what could be the problem in Austria is that the municipalities that are spending the money, they have the budgets for 2025 and 2026, they're not quite sure. They want to see what the federal government is doing. So there's supposed to be a municipal EUR 1 billion package, but we'll have to see whether or not it is truly in the pipeline. So here, you have PORR in motion. Here, you can see in the map where we are headed and what we're doing here in PORR. This is true for our competitors, but not for all of them. This applies also to competitors that are similarly positioned compared to PORR. Of course, each construction company is a bit different, but you can see here the markets that we want to focus on. Of course, we are on the decline slightly when it comes to building construction in Switzerland, for example, but you can see that Germany will be the market for the next 10 years. Here, you have Ukraine on this side. This will be the next large market in the next 10 to 20 years. PORR will not be involved. Building is people business, and it is local business. We don't have any Russians or any people who speak Russian in the company. We have consulting experience. We have consulted a number of tunnels and consulting companies, for example, but we've never built this ourselves, and we are not planning on doing this. We don't want to buy up a local business because we don't know the language. We don't know the local mentality. We don't know what's going on in that country. And we are hoping, of course, with good reason that many of our international competitors will go there. For example, the Italians, the Spaniards, for example, they are stocking up with Russian-speaking employees. So this means that this is going to give us some breathing room in our current markets. So we're going to be concentrating on these markets and these issues of -- what we are focusing on. I'll come back to that in a minute. But this is a very important slide here. The current business, for example, also permanent business, what we're doing in Austria, what we're doing in Romania to a large extent, and this is what we're doing also in Germany. We're beginning in Germany and in the Czech Republic. This is the business that we see here in Vienna, where you can't see a street without a poor construction site. We have small municipalities or houses where municipalities are writing up tenders. This is permanent business for us. We have excellent relationships, excellent planning, and we are getting in on the ground floor. This is something that we are hoping to build on. And we have project-based business, for example. And I have one project, for example, in order to post the profits. Here, we see this in Switzerland, Germany, Poland, everywhere, in fact. But there's a difference whether or not we are a leader in permanent business from the smallest worker to the construction office with planning. For example, we have to make a key decision on what you want to do in each market. We have analyzed this in PORR very carefully. In Poland, we have large-scale projects, large-scale residential constructions. We had [indiscernible], for example. And there's another one that is currently in construction. So here, we have gone out to the cities, industry, infrastructure, LNG terminals from the coast to military infrastructure, warehouses, et cetera. So we are building up a permanent business there so that we can achieve independence. Projects, of course, can be fantastic, but the government might come along and say we're going to postpone a project, and we don't know what the next government will say, but permanent business is different. We have budgets, for example, which, of course, can grow or shrink. But here, if you have a mixture of both, you have a sustainable business model. This is why we in Austria, we are the absolute #1. And we are posting sizable profits in Austria. We are the absolute #1 when it comes to the power of the regions. In each issue also from our teams, in each province, PORR is the leader in the market, and we have others who are also good, but we are the leaders. We have specialties that we offer, facades, et cetera, and that's who we are, and we cannot be beat. We are very selective when it comes to our projects, and we are absolutely full up in our order book this year. We are very selective in our acquisition. We have looked to hire the right people. And we have thought long and hard about what we want to do in the building industry in the future. We want to have our own staff, and we want to focus on logistics, so that we can ensure procurement. These are the 2 main influential factors. When you have your own staff, you can build. If you don't have your own staff, then you're vulnerable. Then you are dependent on subcontractors. Of course, this affects us in some areas. For example, in building construction in Germany, we don't have our own staff because in Germany, we don't have the same foundations in Austria, where we can, for example, send people home over the winter season. For example, they don't have -- like we have this in Austria, we don't have that in Germany. So you can only send people home if you have short work that has been approved or if you fire them. But if you do that, then you are -- have a lawsuit on your hands. So in Austria, we have an excellent construction industry for that reason. In Germany, we -- they don't really have a very good German construction industry. You're talking about building construction, civil engineering, for example, that's in the hand of the Spaniards. So in Germany, that's a problem. We have SMUs -- SMEs, sorry, in Germany, but we don't really have very large companies in Germany. There's no market in Austria that is as fragmented as you have in Germany. Strabag, for example, is one of the biggest players in Germany. They are in Germany what we are in Austria, for example. They have EUR 89 billion. So the market is EUR 400 billion to EUR 440 billion, for example, so they don't have very much. And we are one of the next leaders with Goldbeck and others. So many of the other markets are very similar. So you have normal business there that can be had, but we've decided we don't want just normal business, but we, of course, want to plan and prepare, we want to design and build. And because we can do that, we can do things that other people can't do. We have data centers. For example, we began with data centers 5 years ago. Five years ago, was the first one we built. This was Microsoft in Austria. In parallel to that, we had in Warsaw 2 data centers for Vantage. These are American providers, private equity companies that specialize in that area. We learned a great deal from our first projects, how to do this. And of course, we received a lot of instruction from our American customers, and we've been able to refine that. We have 8 data centers in Poland. And each data center is ever larger. So the next one is to over EUR 200 million in Frankfurt 30 megawatts, 40 megawatts, it costs about EUR 400 million to build. So this is special know-how. This is a special security issues that are involved. And we only do this when you have this project, this helps shore up our business because we have these references. Many people don't have that. In Kronstorf in Upper Austria, we have Google here. Microsoft has the second data center in Austria. They've closed it down. We started building it. The procurement wasn't prepared, and Microsoft just decided to close it down for some reasons, we don't know exactly why. But data centers, for example, that concern the United States, of course, may be a question mark. We have [ ATT ] from Japan, other French companies, we have a EUR 500 million data center in Germany where we are involved in negotiations for that. So the market is growing here. It's also important that the building of the future for us is without borders because data centers is where our Polish colleagues are in the lead. In Germany, you have -- the project leads are our Polish colleagues. But you have a second data center here. If they were to build that, the second data center, they have their own references and they could build that on their own. They could build that up -- capacities and skills. For example, they could also go to the Czech Republic. There's one plant there, also in Romania. So we have very special data centers being built there. And so you see that this know-how is very important. So our Polish colleagues are going to be leading this, and they will be able to rely on our remaining colleagues as well. We don't need local companies or subcontractors that do that. So we work with PORRians. This is our strength in our data centers. So if you take a look at that, here, you can see the 3 largest data centers. This is what it looks like. These are all emergency generators. The important issue with data centers is energy supply. Three in Berlin -- were built in Berlin, where we built two, and there was another company that built a third, and they built a natural gas plant there to supply energy in an emergency. The city Vienna wants to build one for example, but if we don't have the energy supply from Wien Energie, then we can't build a data center. So you have to find somebody who is going to rent it. Of course, we have people to operate but not to rent it. So data centers are important here with very special know-how, and this is growing and being developed constantly. There's a question with your microphone. Unfortunately, we cannot hear the question. So this goes up to about EUR 6 billion. The total market is EUR 30 billion and EUR 6 billion is the next step, so if these forecasts, of course, come true. If it's going to be happening as quickly as we think because right now, this is in -- so we don't know exactly if this will materialize in the future, but the first shock has happened with data centers, but I think we've recovered. So DeepSeek, for example, most people said we only need 20% of the energies in the American data centers for operating this AI technology. So you have a -- of course, it's important to calculate the time to whether or not the plans -- if somebody comes to you with plans that they're actually serious with that. The second reason now is Trump, of course. And many -- he told many companies so that you have to stay in America. So about half of the players are American private equity companies like Vantage or in Europe, we have Mercury and in France, there are a couple. So there's a number of entities here. But it's possible the market will be weaker than we forecast, but we are well positioned to do well. So healthcare is the next issue. So why did we take over VAMED? This was an important partner for us. We said we wanted to do this together with this partner in Austria, but we have actually gone beyond that -- those initial steps. We have 8 rehab clinics, we have children hospital. We have another clinic that we build up in -- leasing in Vienna. This is all PORR. And 7 of the clinics we operate with Haselsteiner. Peter Haselsteiner is our partner there. So we operate it, we manage it, and we head that up. So this comes in all of our countries. In all of these countries, we are active in these countries, and they want to sell their insurance companies. For example, in the Slovakia and Poland, we have 200,000 versus much -- a much higher figure than Austria. So you see what potential there. And we have a corporation, every insurance company has their own strategy. They have free capacities. Other people are investing in infrastructure. Our infrastructure in healthcare is going to be undergoing a transformation. We have -- we are purchasing a project in Brussels perhaps. This may be -- the decision may be made in the summer and then you have other decisions being made in Austria. We'll have to see whether or not that's actually in the pipeline. So we have many people from VAMED, particularly those who were released under this knowledge, going from Germany to Poland. So you have this transfer. This is an enormous potential here. You have data center for healthcare, full service provider. This is something that we are capable of. So VAMED as a player is gone. They were developing this project. You have the medical clinic here that was postponed, but VAMED was purchased by Dr. [indiscernible] and he wants to use it for something completely different. And the rest of it is gone. So healthcare is an important issue. There are many publicly listed healthcare operators. There's Turkish. There's one in Singapore, Health Service, I think they're called. So they have 150 hospitals. They operate these hospitals, and they're looking to gain a foothold in Europe as well. They come and say they want a hospital to look at this -- put this in this place. And this is something we can do. This is our know-how. We can do this in Austria. We can do this in Poland now. we're beginning to be able to do this in Germany, and we're looking toward Romania to build on our expertise there. So the next issue is modular construction, affordable housing, affordable residential construction. This is very important. So April, May, June will be a very key issue for us, at the top of our agenda. Here, we're looking at this project. We meet all of the standards, but we have to test this. This is based on this INSTA-BLOC that we recently acquired. And this is a new modular system that we're developing. Some of the materials are very sustainable, some not, but some are very sustainable. So we have to look at costs. We're looking at [indiscernible] we have great flexibility. It's not just a box, a square box, for example, that you put somewhere, you can build up to 6 floors, we are developing this. We have a sample house that is finished, and we have tested it, and we are going to be sending that information out when it's ready. Of course, we're going to be informing our customers and our property developers, for example. The cost below EUR 2,000 a square meter. And this is turnkey, of course, not furnished. Questions being asked, there's a microphone. So I'm saying up to 3,600. This is affordable residential construction. And if we can build a larger, we come under EUR 2,000 per square meter. There is -- a lot of this, this is not just 1 alone. There is one decisive advantage, and this is what we developed. We have this based on our INSTA-BLOC acquisition. We have a system where very small issues, for example, are clarified from the very beginning. And there, of course, there are certain variations available for the user. More questions without a microphone, unfortunately. The answer: Well, we don't know exactly, but these will be very small units. So it would be a ground floor plus 2 floors above. So about 20 to 25 apartments. This is going to be the base plan, of course, then you can scale that. You could do 10 apartments, for example, maybe it will be EUR 2,300 approximately per square meter. But this is something that we can advertise with. This is something we want to stress. This is affordable housing. And these are not boxes or shoe boxes like you see in Holland, for example, that you want to tear down after 20 years, but this is Viennese quality. In Vienna housing is very high quality. Of course, this is a problem with the pricing. But of course, there have been distortions in the market due to other reasons. But normal housing, for example, here is going to be sustainable and we, as PORR, are very active in that market. We have industrial construction here. This is a key issue. Of course, we have that in Austria. But we have a very special subsidiary in Germany for this. We have semiconductor, life science, pharma, food, for example, these are all important areas. We have EPC, engineering to construction, et cetera. There are not many that can do this, engineering, procurement, construction, EPC. So there is a -- there was a German company, for example, that did clean rooms, and this is what we can plan now. So in [indiscernible], we're doing this, we have a project there, but in Germany, we have other projects as well. So we've actually decided to venture into that project, but we have to look at how that market is going to develop. So the market is going to be important. And this is important here in the industrial construction. It is not going to be an interface where I'm going to say we're going to build something where the Executive Board is going to break out a sweat if they have to build a new company, but we're going to have a one-stop shop that we offer. So there will be no problems. We're doing this in Austria, we're doing -- we're expanding this considerably in Germany for Boehringer, for [ Bayer, ] for Helios [indiscernible], for example, [indiscernible]. We are doing this as a turnkey operation to the clean room. For example, everything that they need is included in that project. Energy, works, energy transformation, whether this is photovoltaics or natural gas plants and hydroelectric plants, et cetera. PORR has its finger in every pie here. In Limberg, for example, we're building the third project for VERBUND. We're about over 50 meters. We have a tunneling machine that we developed for the first project and this machine is -- was able to tunnel 50 meters a day for Limberg III. So 50 meters a day because the engineering is -- work because the team is a well-oiled machine. So waste to energy plants. These are very important. This is in Poland. This is a niche that we have gained a foothold in, and there are multipliers there. We have Italian partners that we are able to rely on. [indiscernible], for example, they are a leader in Europe, and we are working together with them with engineering in this field. So then we also have road construction. I don't think I need to mention that in great detail, whether it's bridges. For example, here you see a bridge in Upper Austria. Of course, it's always an issue to make sure that the traffic is not impeded too extensively. Of course, ASFINAG, for example, in Romania, for example. We have to service and maintain the roads. So we have to expand the roads, build new roads, et cetera. These are all projects that are in the pipeline for us. Railway construction. We have slab track. Here you see this with an asphalt foundation and the rails are placed in this foundation. So you can hear -- the supports indicated here. So you can see this very carefully here that every slab is placed exactly. And then the concrete -- vehicle travels on top of it and fill it up with concrete. So this is an invention together with the Austrian Federal Railways system. So this is something that we are doing this across the world. This is a completely new invention and very innovative. So we're doing this also with Indian high-speed rail. So you have 160 kilometers per hour. This is the highest speed, but starting from 80, this is a doubling. So we are providing engineering for our systems, tunnels and bridges of course. Here, you have maintenance in Germany. Over 4,000 bridges in Germany. Of course, this is also true for all of the companies -- countries that we are active in. Robotics, are very important and many people ask us about that. But we are using this for collecting data, for scanning, for drilling and marking robots. This is a typical marking robot for building construction, for our streets. For example, we have marking robots for civil engineering. We also have shortcrete robots. This is great. They work very cleanly. We have concrete removal robots. So we have healthy robots, construction robots and the healthy robots drill and you only need somebody to come along behind and put the lines up. So this is something that we're doing. This is a very important innovation issue, and this is on track. So we have special surveying and modeling. This as a special opportunity for us. Everything that is being planned is planned in 3D. Even if we have 2D plans, then we convert them to 3D, sometimes 5D, this is the BIM standard. We take the 3D model, and then we put costs and time on top of that, and that's how we can scale that up to 5D. So we do this with marking with automatic scanners and readers and drones, for example. So you have a 3D house. We were able to calculate that to a finished product. We did this in Vienna for a department store, for example. These were 3 houses that were all the same sizes, and we developed this 3D model. And it was already -- the project was already started, we took it over and how could we improve it. So we played with it. We optimize it, for example. And we had a shield placed on top for all the logos where everything was protected. So we had a new segment with 4 floors. And I said we have guaranteed the finalization date, and we haven't said exactly when we're going to begin. But still, we are working here on the windshield. We have the tunnel of course, with vertical elements as well. So what we're doing today is a smart project management, and this is something that we are a specialist in. So here, we have 21,000 employees. Ladies and gentlemen, we had 263 babies, of course. This is our contribution. Here you see our areas of focus. We are unique. We cannot be really compared with any other construction company because we are so broad based. If you look at the map of Europe, of course, you look at our data centers, you look at our projects, we are building without borders. Poland are building in Austria. We're building data centers in Austria. We are supporting the Poles in building construction near Warsaw. We have specialized civil engineering in Germany that we take to Romania. So we are generating revenues without competition because we have the -- we don't give the contract to Romanian construction companies. We keep that in our back pocket. So we're able to cut costs with this. These are all of our main issues. So the issue is, of course, how we plan to build in the future. How are we going to tackle this issue? Lean is very important. This is where we've decided how we want to build in the future lean administration in construction, for example. Lean in building construction is exactly what you see here. You have lean meetings once a week. And we plan that 6 to 12 weeks in advance. And everyone in the construction site knows exactly when they have to do what. And they know exactly when somebody else can't take that on, and they raise their hand and say, "I can't do that." For example, next week, we have to deliver the transformers. We have to do this, that and the other. And if somebody says, I'm sorry, we can't install the transformers, then everybody knows that in the lean meeting. That information is passed on. And they say, okay, I have to deliver that a week later. So everybody that is planned there, they don't have to wait for that to happen. They can do other things. And so this is a very streamlined system. Everybody has the information. Everything is transparent. It seems very simple, and it is actually very simple. This is our model, as I said. Lean is our main guiding light. We've decided to apply this to the construction business. We are able to speed up construction by about 25%, even within budget because the property develops -- developers are able to have their project finished on time and on budget. We don't have too many or too few staff on the site and our logistics are planned exactly. We know when it's going to -- something is going to be delivered, and we know how that is to be done. We know that the crane can place that where it needs to be placed. So it seems a bit theoretical. If you think about it, perhaps, we sometimes have to chuckle to ourselves as well. But you see how this works and what advantages it has. What enormous task this is so that we can draw and tap the potential that we have. All the building engineers that have 30 years of experience, for example, they have lean on their fingertips. They know exactly how to do this. But this is something that has to be multiplied with everybody else. And everybody, even the electrician in the back has to know what to do. So you have a large table, you have all of the people at the table. You have the electrician, the facade people. You have lean managers, for example, and the construction engineers, et cetera, and everybody is informed, everybody knows exactly what to do. They know exactly what to do. And when subcontractors are asking us if we want to participate in Vienna Museum. We asked them if you do lean and they say no, and then they know that we are able to take that on. We have 126 six weeks and 12 weeks programs. And next 5 to 6 years, we will have to deal with this intensely. Communication has to be different. We need training for that. We need to be open, transparent and not just hide away from problems. So of course, we cannot apply this to everything. Sometimes it doesn't make sense because it's too much. But 2/3 of all construction sites are eligible for this lean. And construction will change. We will no longer have silos. We will be cross-border cooperation with a special civil engineering, facade construction and so on. They will start working together in the calculation process already. So this will bring us closer together as PORRians based on our 5 principles. And this is like a safeguard for our future. We can continue to grow. We can build things up because we have PORR Academy that takes care of many aspects. So logistics is becoming more and more important, and we have to find out how we can use this strategically. In cities the construction sites are in very dense space. So it is very difficult to find storage areas. A lot of things have to done on site here. Here you can see a data center in the picture. So that's what I wanted to say about construction and the next steps. It's quite a lot. But believe me that this is the way we will build in the future and our clients are reacting to this in a very positive manner, because they have the same problems. It's hard for them to find qualified skilled labor. So they do not want to have so many interfaces. The chambers for the architects and engineers, of course, they do not want that because for them, the architect is the big master on the construction site, but we can only be successful if we do it together and not with one party dominating. We cannot do everything on our own. We do need partners, but we can do a lot of things on our own. Next item -- the next thing I'd like to talk about is sustainability and Klemens, the floor is yours.

Good morning also from me. Green is a topic that is also part of our slogan and our strategy. And we are really top in this field. We have certified sustainable construction sites. This is a trend that we can see in Germany and in Austria now, especially industrial clients and large-scale clients and also public clients like ASFINAG or UBB ask for this. So we have to take this topic seriously, and we have to advance it even further. In 2024, we prepared a decarbonization plan. This is more or less the core of every sustainability strategy. The science-based targets, of course, we are committed to them, and we want to save our Scope 1 and Scope 2 emissions by 43% and in scope 3, 25% by 2030. And we are on a good track when it comes to achieving these targets. As I already said, a minus of 43% of our own emissions. We are the market leader when it comes to recycling. We have a very high internal recycling share of 50%, which we want to increase to 70%. Our staff is very important to us. We have a very high engagement index, but we want to expand it even further because our staff is also the key to our future growth. And in construction, of course, occupational health and safety is extremely important. Accidents, we use, of course, this international KPI of accidents that leads to lost work. And we have mission zero project in order to reduce these accident rates. And data center operators take a very close look at these measures. You have to report and approve all these data, and you have to show that we have 0 accidents in our construction sites. And only if we will be able to show this in the future, we will be able to build. Karl-Heinz Strauss already said that we have top ratings. In January, we got the EcoVadis gold medal, which only 5% of all companies are able to achieve. In construction, it's only 3%. We have AA rating in MSCI, which is an outstanding achievement. So this equips us for the future. So what does that mean in figures? We had a capital increase in 2021. And with PORR 2025, we set ourselves targets. Now we have almost reached the end of this period. So what is our status quo? Between '21 and '24, our output in our revenue was increased by approximately 20% or EUR 1 billion. But what is even more important is that we improved our earnings, the EBIT or the EBT were increased by approximately 70% in this area. Our net profit was increased by 77% and our earnings per share by 100%. The share price for a very long time was on the same level. We had a capital increase at a price of EUR 12 and then there was a very long period where we were in a band of EUR 12 to EUR 14. Then we had EUR 13 at the end, and this was flat we had price earnings of EUR 5, so quite low. And then we realize what the -- the market realized that we can deliver sustainable products, and this was also reflected in the share price development since in the last half year, we have an increase in share price by 93%. Is there still some potential for further growth? I do believe so. What you can see here, not only did we do some work on the earnings side, but also regarding capital. We had very high inflation in recent years. Still from '21 to '24, we have only an increase of 3.4% in our balance sheet total because we were extremely successful in working capital. And that's why we have cash flows from operating activities at a very high level. So we're talking about an increase to almost EUR 300 million in cash flows. And in 2021, we reduced our capital even by EUR 180 million and this year by EUR 80 million. So we took a lot out of this working capital. And what did we use these funds for? Of course, we also want to invest. So the capital hardly grew, but at the same time, we invested. So EUR 275 million, this is the annual investment, 4% of our output. And because we have this great cash flow in 2024, more than EUR 300 million were invested. We still have some room for M&A, small M&A. Last year, we had two transactions, one that secured us raw materials in Austria and the other one expanded our successful traffic route engineering in Germany. And that's also the path -- the approach for the future, increasing cash flow to make sure that we cannot only operate in normal CapEx transaction but also M&As. We have a net debt of 0. However, we have to take into account the EUR 240 million of IFRS 16 debt from leases of office buildings are in our books. So we have a very solid, stable position and we would like to continue like that. So we have a lot of successful work on the capital side, which prepares us well. So the basis for our growth and also for the growth in earnings, of course, is our construction output. In the last 3 years, from -- we increased by EUR 1 billion in output. Approximately EUR 600 million thereof came from Austria, which is really pleasing. So Austria is our most important market, not only in terms of size, but also because we're really successful in our operations, and we have the best margins in Austria. This is already this area that we want to achieve in the future. So in the entire segment, together with Switzerland, we have an EBIT margin of 3.6%. And in Austria, we have approximately 4%. So the order backlog also includes EUR 3.2 billion from Austria. So this is exactly the development in margins that we want to see. So where else do we have growth, especially in the east, in CE area, in Poland, for instance, from '21, where we had an output of EUR 720 million, we have now EUR 960 million. We already had EUR 1 billion in between. So we grew by 1/3. If we take a long-term view of this, we -- in the last 7 years, we tripled our output in Poland. And that's exactly the area where we are going to continue to grow based on the EU funding available there. For instance, there's a railway construction program with EUR 46 billion that will be on the market there for -- in the next couple of years. And I think we have proven in this area that we are able to grow with a lot of profits. And also in Romania, where from 2021, where we had EUR 160 million, we grew to EUR 425 million in 2024. Meaning we almost tripled our output. How did we achieve that? Again, EU funding plays a very important role, especially the highway network is being promoted at the moment. At the moment, there are approximately 1,000 kilometers in Romania and 2,500 kilometers is the target. And we know that we need, of course, people, staff for our services, and we have in order to be able to grow organically. In Romania, we have 3x more staff members in Romania than in 2021. And in addition to our other HR tools like the Academy training, for instance, we also focused on the topic of migration. 200 to 300 Indian colleagues are working there, they used to work in the Middle East for us. So they are now in Romania, and they were integrated there, and they are also an important component of our growth. We can see moderate growth in -- at the moment at 3%, plus/minus 3%. And in the future, if the opportunities that we can see in the market should realize, we will continue to grow. As I said, we increased our earnings, the EBIT margin was also increased from 1.8% in '21 to 2.6% in '24. So we're on the right track. So we will probably achieve the 3% that we have set ourselves as a target. So how did we do it? Our capital capacity utilization, of course, is important and efficiency. We already talked about lean and cost management. We do have a cost management program. A new one is being launched right now in order to make sure that the overhead costs, the fixed costs are -- will be reduced. And then we have, of course, also risk management. This is also something that we will rely on in the future. Let's talk about our basis for financing. We have approximately EUR 340 million, EUR 350 million in financial debt, but we have good refinancing for this. The majority of -- the biggest part of it is from a promissory note. So in the next couple of years, we will have not any major financial challenges. We have some hybrid bonds that you can see here in yellow. And on the basis of our cash flow and earnings development, we will be able to service and pay back these bonds. Let's take a look at our order book. We have increased our order backlog on -- quite consistently. It is very remarkable that last year, we increased our orders even more because we had a couple of large projects in tunneling, for instance, the Brenner base tunnel. And we have a pump storage power station in Ebensee, so altogether, EUR 1 billion incoming orders in tunneling. So that's why we were working at full capacity, so we didn't have any new projects this year, and we won't have any next year. That's, of course, resulted in a decline, but we overcompensated this. How did we do it? First of all, Austria, an increase in order backlog and incoming orders by 10% to EUR 3.6 billion. So if we take a look at -- and as I said, we have margins of approximately 4%, and this is also our target for the future. Where else did we manage to grow? Poland. As I said, infrastructure. There's a high demand for infrastructure in Poland. We had a plus of 30% in incoming orders and 20% in order backlog in Poland and EUR 1.7 million come up -- sorry, EUR 1.7 billion comes from Poland and another EUR 1 billion from the other CE markets, in particular, Romania and Czech Republic, where a lot of investments were made into infrastructure. And we have good margins in these markets as well. In the CE segment, we are talking about margins between 3% and 3.5%. In Poland, there was only one project that did not perform that well, and that's why we did not achieve this margin yet. But still, we are really progressing well also in Poland. As I said, the margins will be between 3% and 4%. Let's take a look into our future after 2025. Karl-Heinz Strauss already talked about our opportunities. Infrastructure is very important. Railway, as I said, in Poland, EUR 46 billion on the market. At the moment, we have tenders for EUR 3 billion. Last year, we had a plus of 20% in orders, so from 2017 to 2024, from EUR 350 million, we increased to EUR 1 billion. And by 2030, we will definitely make sure that our -- that a couple of hundred millions plus will be recorded in terms of output. The German market, as we already heard is also important. Now money will be made available for infrastructure, and this is definitely a big growth market. And in the past, especially 2024, this was our weakest market. So we also had to record declines in output. And now then we also have Romania, Czech Republic, road construction, infrastructure is important there. We had a project of EUR 300 million that we acquired recently. So infrastructure is a very important potential in all of our markets. Austrian railways and ASFINAG in Austria have a large framework budget for the next year. The Austrian rail is more than EUR 20 billion and ASFINAG EUR 7 billion. Building construction, there we have a lot of products that are opportunities for us. Health care, for instance, in Vienna alone in the next couple of years, 10 hospitals need to be renovated or built. So we're talking about EUR 6 billion investments into hospitals in Vienna and as Karl-Heinz Strauss already said, building a hospital is quite complex. This is nothing that a small company can achieve. There are only a couple of companies that are qualified for that. And in healthcare, it is similar like in the case of data centers. If you are able to build complex buildings at good quality in a certain time frame, then you can earn higher margins. We also noticed from the data centers for their operators, time is extremely important and quality matters as well. So that's where, with our good work, we do earn quite good money. We got a certificate and award for the best data center, as we just heard in Berlin. And we are really in the right spot. Energy is also important. The cities where construction projects will take place are Berlin, Warsaw, Frankfurt. And these are exactly the places where we were building with a good stuff. So how can we earn this extra bonus, so to say. I think that modular construction is also going to be an important -- affordable housing, if we can deliver that, I'm sure there will be a high demand for that. And therefore, it's a lot of potential. And the last thing I'd like to mention is industrial construction and EPC. We total [Audio Gap] we have to achieve growth between [Audio Gap] and in most of our markets, we already achieved really good margins. So I do believe that as niches or special product [Audio Gap] will also contribute to our increase uptake. We are reduced to the builder [Audio Gap] list in this topic, [Audio Gap]. Money and we are convinced that this will also have a positive [Audio Gap] program 2020 in order to send and high inflation [ 11.5x ] but of course, increased earnings in the future, [Audio Gap] launched a new program [Audio Gap].

It is quite simple. We do not have them at the headquarters [Audio Gap] normal healthy dimensions and what [Audio Gap] another question without a microphone. [Audio Gap] controlling and this is what we saved. So we're talking about approximately 10% to implement our next [Audio Gap] can see our contracts. You can see we all order volume, approximately 90% of our [Audio Gap] foundation execution process. When you set up the construction site of the 20%, 50% and 80% of the performance, they have to be included. And this then management tells you at an early stage that this is not a way. So we have long-term contracts. So this is something here, and we are convinced that we can use this gauge. The contracts were implemented and the court's opinion was not, [Audio Gap] didn't have successful projects in the end. That's why we stopped I mean. What is our target [Audio Gap] years, [ 0.4% ], why are we talking 3.5% to [Audio Gap] We can, of course, increase [Audio Gap] talking about potential that will be even higher than [Audio Gap] ambitious targets. We want to stay realistic. Just in terms of our results, but also in other areas, we are taking [Audio Gap] realistic. 2024, we have equity [Audio Gap] million and we reduced the 20% equity percent. So results in [Audio Gap] with EUR 135 million. Here, this is our target for equity capital. We're looking at a target of EUR 300 million. Of course, this [Audio Gap] here and [Audio Gap] balance sheet total. We're looking at about up to EUR 5 billion approximately [Audio Gap] earnings projecting up until 2038, [Audio Gap] EUR 100 million in order to provide [Audio Gap] so we're looking at EUR 250 million of investment needs. So this gives us margin of maneuvering our operating cash flow of about EUR 400 million [ and ] achieve our payout ratio for continuous [Audio Gap] we don't want to increase [Audio Gap] where we stand in about 2025, but achieve an EBIT margin of 3.5% to 4% [Audio Gap] more or less, so far.

Your growth markets, you said that Germany, so what is your best guess with regard to your income [Audio Gap] very important in the future. So when you're looking at your exposure [Audio Gap]

For example, we see more of an emphasis of railway construction in Poland. This is going to probably be on the decline, be able to shift from Poland to Germany or where we purchase, there will under [Audio Gap] that we have purchased access to the [Audio Gap] to gain access. So we have a lot of machines there. So [Audio Gap] now at our fingertips. So in Bavaria it is much more strongly present -- will be strongly present in terms of road construction than Austria. So from Upper Austria to [indiscernible], we'll be able to expand into Bavaria. We'll be able to with construction roadways in the North and the West with [Audio Gap] or [indiscernible] will be able to do that in Waggershauser, and that's why we had a purchase in Stuttgart. And here, only PORR is present. So this is excellent. So we have our own staff. We have other countries where we're active in building and truck construction, it probably won't make that much more sense. But in civil engineering, and infrastructure engineering, this will be important in 2 to 3 years. We'll see a continued increase. I think Germany will probably see a small dip, probably because there are not enough projects out there. But until the projects are developed for motorways, et cetera, they are lagging a little bit. So we have some procedural issues here, but we have the capacities for that. Particularly when you're talking about other projects, I have an excellent picture on my phone here, if I could show that to you. I don't know if you could see this on my phone. Here you see yellow and blue, that's the most important thing. This is a train or is a grinding train, if you will. And this is what we have taken on for [indiscernible]. And we've been able to rent that out to the German Federal Railway for the next many years. So we're able to do that. And this is an excellent project that we've had. So rails are an important issue. So we have access to this pool, and this is exactly what we're looking at, particularly when other markets are on the wane. So we have some trends that are on the decline, railways will be growing. And here, we are in a very good position with that. We'll be able to purchase small companies like [indiscernible]. These are very small SMEs that would be very useful to us. So we don't want to grow for growth's sake. We want to, of course, to make sure we can make the most profit. [ Stefan ], please.

Karl-Heinz, I think you've answered my question, at least partially with the issue of where M&A projects might be of interest when you're talking about your margin.

Allow me to add, Mr. Strauss we're not going to be doing major M&A acquisitions. Here, we really just want to expand where we see empty spots on the map like in [indiscernible]. There was nothing there. And now we are present, or we see a niche. Where you have issues, for example, energy transformation or in Austria, for example, you have Allianz. And again, for example, all this cabling that is being made. This is what PORR does. So we have a EUR 50 million that we're doing in [indiscernible] where we lay cable. This is great, and we have a fantastic expertise that we can bring to the table. And of course, affordable housing is very important. We're trying to open up niches. So that when we are in charge of that niche, then we can purchase and acquire as needed. So with regard to the margin, so in Austria, you have a margin of considerably over 30%, and you see that increasing in Germany, but it's still under the 3% mark. Poland is improved, but it's still under the 3% mark as well. So if I take a look at Germany and Poland, for example, with the growth opportunities that are arising there, particularly with regard to infrastructure, and how can you expand margin here, then I think that you are in the catbird seat, you are headed in the right direction. Is that your impression when you look at Germany and Poland, so these are 2 markets that occupy about 40% of output.

Allow me to add, Klemens, if you will. So as Klemens said in Poland that we would be over 3% if we had not had a flop site with this LNG terminal. But the LNG terminal is the first large-scale project for EPC construction in Poland. But why did we post the loss there? Despite the warnings from myself and from others, we looked at the calculations, however. The issue was that EPC stands for engineering, procurement and construction. All of the other providers that are on the market, the Americans, for example, [indiscernible], for example, which the semiconductor infrastructures, they can't build themselves. But we build from our capacities. We have EPCM construction management. We have validation, for example, that's very important. So you are able to turn that over to the client. So we do EPC for LNG terminals. There's a lot of technology there. So you have to plan for 6 months. And I said, no, nothing below 12, 18 months. And Heinz said, okay, we'll do 12 months. So would it mean we need 18 months. So that was the validate. So we have experience. We paid all of that. We completed it, but what does that mean? We have an experienced team for LNG terminal construction. And there's a second one being built in Poland. We have another one in the works in Germany. So in our margin in Germany, Poland and Austria. These are the 3 markets where we have increased know-how in EPC. So we have planning groups that are on the market from healthcare, from others and from other projects that are already in the works in Europe. We have BDE in Austria and Germany. We are expanding our planning capacity in design and engineering. And we're doing that on a massive scale. And we're doing that with people that work together with the Americans. The Poles know that they can come to us. We have excellent people flocking to us. So this provides us with very different access in a stage of the project where we wouldn't have access before because the -- of course, the tender wouldn't be finished. So we have the capacity of developing business cases and testing these. So this is how we are able to tap into the market. So when you look at these industrial construction issues, these are the projects that will deliver us margins in Poland and Germany.

And then a question. We have a number of old office buildings in Germany where realization and refurbishment measures are needed. And you also have to find tenants here. So what about refurbishment of properties or office buildings in Germany? What about recycling of materials? Would you be refurbishing them or tearing them down and creating new space for new projects? Are there any plans like that underway?

Well, I have cities -- in cities like Vienna, where we have refurbishment and new building. And of course, office space growth is very limited. I think the office space market will probably not return to previous levels. The trend to home office will, as I said -- I think, will be on the decline. But we still need, for that reason, high-quality office space in a good location. But there will probably be nothing in the middle of the market or below that, aside from what we already have in the market. Those things might be torn down, but we'd have to refurbish them if they are protected by monument protection. So we have other aspects. We don't want to have long-term leasing agreements. We have project management offices planning. For example, today, we're 20, tomorrow we're 40. And the next year, we're only 10. So we have to allow for a lot of flexibility. This is how I see the market. What do you think?

I think so. I think that's probably correct. So it's not just about office space. We're looking at demolition and refurbishment, for example. Here we are, by far, the #1 in Austria. Germany, here, the market is different. Here, you have a large joint ventures. There's no company that's leading the market. You have large consortium or joint ventures at [indiscernible], for example, they are creating office space, and we are gaining important. PORR [indiscernible] is one of the largest companies there because we work together with a family from Cologne, two brothers who have said, we're not going to do this on our own. We want to do this in partnership with another company, and we said great. So there's a coal-fired power plant here in the [indiscernible], I believe, is what is called. We tore that down. We demolished that, and we are collecting the material. We have one collection depot in Germany, that we purchased for other reasons. But today, it is perfectly suitable for these purposes. This is a Mosel Valley. It's not wine, but we have the mine shafts there that we've purchased. And we're able to use this and sell this on to other industries. But the cornerstone for these investments is that the mine is 24 kilometers in length. So you have plaster remains there from England and Holland that can be stored there. Germany doesn't have these issues with regard to depots, and you have other -- as best as other materials that can be stored there. These are other materials from ships from the Rhine and the Mosel. This can be conveyed from there, of course, protected from the rains so that it won't be washed away. So this was actually a very fortuitous acquisition, but I'm sure that Germany will be on the rise in the near future.

So you were talking about the railway construction in Germany in the area near Frankfurt. And I think this is where the route is closed down. So I'm not sure if I believe that there's going to be a success. Maybe it sounds like these will be great conditions for construction there. There's no traffic there. So what about the opportunities for further projects?

So we are observing that very closely. And we are trying to learn from the mistakes of others and build on our successes. So we see the following problem: It doesn't really have to do with what other people are doing, but we see is if you take a look at that. This is worth EUR 300 million. And they have to do -- complete this in 11 months. This is a EUR 10 million a month. That's a [ month ]. These are people that are out and about that are working all in parallel. So [ to them ] this is the first project of this kind, and we can perhaps hope that everything will turn out well at the end. And so we, of course, are crossing our fingers that this project will be a success. But I'm not sure whether or not this makes economic sense. You have an extended -- expanding I think -- Klemens, I think showed a picture. So you see what it is. You see the tunnel construction site, where it's a small hole in the middle where the train is running through. This is an investment [Audio Gap]. But here, you have 1 track on 1 side where you can finish the tunnel and then you can finish the tunnel on the other side and put up a new track. So it takes about 2.5x the project's duration as opposed to the way we're doing it now.

So question is, you're talking about Norway and Qatar. It sounds like you want to withdraw from those markets because it didn't meet your expectations. Are you -- what do you think the future will look like?

Well, Norway, we're almost finished. We now have 1 more project, but it's going rather well. In Qatar, we have been withdrawing for quite some time now. And I think we are almost finished there.

Yes, from me, thank you very much for your presentation. particularly with regard to digitalization and AI. I'm convinced that the entire industry and the construction sites will be fully digitized and there's a great potential in that. And I'm also convinced that this potential will have a massive impact on your KPIs on the financials, also on the management of project risk. So my question is, what about the competitors and the dynamic momentum you see there? What about runners up? And how would you position PORR in that respect? Because this will be a decisive criteria to determine the success of winners and losers in the industry.

Well, basically, I have to say, well, when you're talking about commercial processes, the industry is much further along than the construction industry. Why? Because the construction industry wanted to wait and see if they could develop a customized system. There is not an effect and maybe aware of it. [indiscernible], et cetera, in Austria, we purchased a program for avoiding wage dumping and social dumping, it is called [indiscernible]. There is no other program that is capable of what we can do together with other program developers, and this was 6 years ago. And so we actually purchased that for peanuts, but we left 30% to 50% in that project, and we said, okay, fine. If we want to develop that further, we have the team, and we're going to provide our lobbying. If we want to sell that off and then we will be able to benefit. Why did we do that? Well, PORR was the owner of that. So a number of construction companies decided they were going to do their own -- have their own system. So -- and then they realized that they were not able to do that. So they realized that our program was the best. So Strabag and [indiscernible] decided to purchase our programs. We just said that PORR was actually the standard for the industry. So just so you understand what people think. So we're going to have that for the construction industry. So they wanted us to provide that to them for free. And I said, no, PORR shouldn't -- make a profit on this. And then there's the other program called the construction card, and it can't -- it doesn't hold water. It's not as good as our program by far. So we have been able to sell that on to a major fund. That is now further developing [indiscernible] on a European scale. That's not our market. So this is the construction industry. So our idea here was that we have many owners for asphalt mixing systems. We have concrete, for example, how are we going to make sure that everything runs very smoothly. So we developed a platform [ Sequela. ] And it worked really nicely. So what about our customers, so German customers are beating down our door, and they -- [Foreign Language ] yes, they say this is a great idea. The Austrians are saying, "Wow, I don't know, PORR developed it. Maybe we don't need that after all. It's really a pity, for example, there's ADI in the automotive industry, and that's what you have to use. That's the interface that you have to use, and that's the end of the story. It is difficult because we have a very fragmented market. 2/3 of our clients are not that advanced in their IT system, so you cannot network with them. They have different priorities. And that makes it difficult to find a system. But a lot is happening. In building construction, we have BIM standards, passing on-off data and so on. It's more difficult in civil engineering. And there are other companies that are in the lead. In building construction PORR is #1. In civil engineering, others have already progressed more than PORR, but we are watching them closely. In Romania, of course, our colleagues have really progressed a lot. At the construction site, you have the foreman in a container like here. And then you have the CSI desk. It's all made of glass, and you have the drone cameras and fixed cameras installed and you just have to control them by touch of your finger. And if you see that, that the digger is stationary, then they are taking action to [indiscernible]. This is used for the mechanics, and we really tried to roll this out to us as well. But local standards and sometimes the preparedness to accept other standards or not accept them because it comes from a competitor makes things difficult. That's why at PORR, we have opportunity. We have SAP. We were the first construction company in Europe. And we're still just one of a few. And we were the first to make sure that all of our vehicles were completely electronic. We have predictive maintenance. The others pretend that they're doing this, but they are so far behind. We have developed the program on the basis of SAP. And SAP, what did they do? They are closing the program they did for the other players in the automotive industry. Fiori, this is the solution for the vehicles. This is not in line with the margins of SAP. So they discontinued it. We have SAP HANA, so the last 1.5 years, we used to take all the data and migrate it to the new system. So SAP discontinued product then there were 2 competitors, and they said, "I heard that your system is great. Can we take a look at it. Maybe this is something that we could use." And then there's one group in Austria that has to take a new decision regarding IT because they used [ I2 ] ERP system, and they're looking for new solutions, probably they have to migrate to SAP, let's see. And this would be a great tool for them. So we showed them everything and they are really impressed and then they want to use our system, and we say, "Well, of course, you can do this. Why should we keep it to ourselves, but it costs a couple of million." And then they say, "Well, we cannot pay that because it's from PORR." So once again, we wouldn't mind sharing it. But it is extremely difficult in our industry. Digitalization, no problem for us. And we have to make sure that our commercial processes from ordering to paying, work in the same way as in the real industry. We no longer need delivery notes, for instance. And the job profile has changed completely in the last 5 years. A lot of things are changing. And of course, it takes a couple of time to make sure that each and every PORRian is aware of that and understands it. It always takes a risk to do something new. And if you have this new system, then it is running smoothly and quickly and some staff member say no, I have to really touch a physical delivery note and I asked him why. You can see it on the screen and a lot of staff members say, no, I have to have a delivery note and then I can talk to the supplier and say there's a tiny mistake. And even if it's not their job, and there are also some -- yes, there are different problems. So it's always difficult to work with people. So as I said, we're taking a couple of steps forward and then maybe one back, but basically, we're going in the right direction. We don't only have a large building construction, we have a lot of subcontractors, small companies. And it's not quite easy to digitalize the entire chain because you need the players for that. We are one of the oldest industries or trades there is. And we have different habits, so to say. Invoices are still written by hand and corrected by hand, and this is difficult to digitalize all of that. And that's why it takes a little bit longer than in the rest of the industries. But I believe that we are the leaders in digitalization. And in addition to digitalization, there's also a lot of potential in robotics. We have a lot of working steps and if we can use robots, we can save the human labor. So this is also something that we should focus on, not only digitalization. When we think about this in the connection with construction, we also think about real estate and the management, and I think there's much more potential. You mentioned contracts and risks, well, you can do all of this in a digitalized manner. And in the end, I see that our engineers and those who do the calculations have a lot of expertise. We have topics like Monte Carlo, for instance. And in the end of today -- at the end of the day, there are some restrictions on the market. So we always have to take a close look before we take a decision. And we really also rely on traditional measures when it comes to responsibility decisions management. And I think this is as important as the results of Monte Carlo. I have to be able to submit a bid at competitive conditions and Monte Carlo can support us, but the decision on the price is still taken by management.

[ Ralf Marinoni ] from [ Privatbank. ] You just mentioned entrepreneurship. I have a question. Can you give us a figure on outside services? So the background is you want to increase your margin. So reducing the services provided by others is also one component. If you do not have to rent that much equipment so much for example, that would be one good measure. And I have a second question as well regarding geothermics. In Germany, EUR 100 billion were invested or can be invested into geothermics. And you have a lot of expertise in civil engineering. Is geothermic something that you would like to focus on in the future?

Let me answer the second question first. In Austria, geothermic has a completely different importance than in Germany. In Austria, we don't have that many bands, heat pumps, for instance, have a huge future. We have small heat pumps for warm water and large heat pumps for energy. And for heating, there are some tests with the city of Vienna together with [ Oxnard ] where try to do this in the buildings. So what geothermic using probes. This is definitely something that will be important in the future. And if you use photovoltaics for the electricity, this increases efficiency considerably. I do not know why they are that hesitant in Germany. They want to have more heat pumps. But still, for instance, in Berlin, it is strictly prohibited to add water. It's completely different in Austria. In Austria, at least, it is different. I do not really know about Poland and the other countries. I do not really know what the trend will be. What I think that, especially in Germany, in Munich, for instance, there are a couple of companies that will focus on this. Yes. And in Austria, we are the largest geothermic company. We also involved quite intensively in the construction of power stations. And when it comes to the energy transition, we can, yes, provide all of these services. And the value creation that, this is something that is that PORR is known for. And in civil engineering infrastructure, 78% to 80% of the services are provided by ourselves. In building construction, this percentage is a little bit lower, of course, but still, we have our own facade building departments. We have a lot of things that are also important for hospitals and data centers. The [indiscernible] company, for instance, operates in Germany, Poland and Austria and the countries that -- where we are also strong and has -- is a great partner with a lot of expertise, and we have a great collaboration.

I have just a short question regarding sustainability. You mentioned that you used to be the best bidder and not the cheapest one. I think this was when you talked about a data center project. So my question is maybe this would be a way to improve the EBIT margin if you are -- position yourself as a consultant?

Yes. Definitely because our clients don't have this knowledge. We have a separate department for all the certifications at PORR. So we know how to do this. So we always include this in our office. And if the customer is interested in that, that's great. So this will definitely be something important. It's not only the price that matters. When we talk about data centers, the price is not the decisive factor. The price is clear. There's a certain price per megawatt hour, but it is not that important. What counts is quality, no discussion about that. And the second one is time and availability. So if you complete the project 14 days earlier, you get EUR 2 million cash because if they can put the center into operation 2 weeks earlier, that's a lot of money for them. And if you do not meet your deadlines, then they will no longer work with you. So it's like here we have containers, and you cannot just open a door. It's fenced in. You need a fingerprint to verify that it's you. Even we cannot enter the construction site. There's a lot of screening. You have to wear special protective clothing then you are trained and then there are some pathways marked in yellow. So they have high safety standards like in America or Great Britain. And that's exactly what counts. They are -- of course, we're talking about completely different margin, and that's why we want to focus on this. I showed you a lot of projects on the map. And all of these are products and projects where the margins are or maybe higher than in our daily operations. And the fewer people you have on the market, like, for instance, data centers or pump storage, power stations. For stance, in Ebensee, we only had 3 companies that were submitting a bid or there was, for instance, a railway project with slab track, where we were the only bidder. Or in industrial construction, we have, for instance, excited to do quite a lot of things, but they are just the 2 of us. And what is important is to take our people on board, train them in lean, so take one step back, sit down, think about it once again, use modeling, make sure that you did the calculations right, that the price's right, where can you purchase something in a cheap way for strategic persons -- that strategic reasons. That's what I refer to as smart construction. Next question, please.

I'd like to come back to Germany. Not this EUR 500 billion program, but there's also the German traffic route engineering with EUR 270 billion. So what is your experience? I think the big concern is that capacity is at the level of the public authorities might not be sufficiently large to implement this project. So the German association of the building construction industry, I think that's what they are called, has already been contacted. I do not want to mention lobbying. No, they're officially talking to each other. So what is your perception regarding capacity bottlenecks at public authorities? Is this something that the government is also tackling?

Well, the government will do that because the deadlines of these proceedings has to be reduced. This was already done the '90s with the expansion towards the East. And I was always asked, you have a crisis in your country and you're not shortening deadlines. I mean, in 1990, this worked, and the crisis now is even bigger, and they're not doing it. But forget about this EUR 270 million, this will be eaten up by the EUR 500 million, so to say. I already said that in 2025, there will be like a small decline in Germany in railways because they do not have enough capacity in the planning offices. Decisions have been delayed for way too long. They spend too much time just discussing or objecting to plans. So in Germany, it was clear that they needed electricity from the East and the North to the South. Everybody was aware of that. It took 15 years for this plan approval process, 15 years. Unbelievable. But in the end, that's a political question. And the most important requirement is that we have financing available for that. That's a first step. And if there is political intention to do this, then we will try to speed up these processes. I think it's just a question of willingness and the infrastructure is more or less broken and there is need for action and an accelerated process and proceedings. This is something that is being discussed at the political level. So this will be step two. And of course, we will need more staff if all of these things are realized, and then we have to discuss how we can do this, whether we need staff from outside like we did. And the question is always what will be given priority. But we can make sure that we create the conditions for that. And as I said, we do see some willingness on the political level, and it is a fact that infrastructure needs to be renovated or renewed because it's really broken. And as we saw in Dresden, in Germany, there are only 2 options. If there are 14,000 bridges on highways and railway tracks, you can have a close down these routes and come up with some buses or you wait until it is really broken. And politically, both of these measures are probably not easy ones to take. Or in our project Salzburg for 3 quarters of the year, next to Wiesbaden, both the highway and the railway track were closed or there's another -- there was also a subcommittee on bridges the local parliament. So this is a political topic. We're not doing this because we feel like doing it. It is also quite difficult. There will -- of course, there were immediate reactions on the capital markets, but there's no alternative. We have to tackle this. And that's -- yes, I do hope for all shareholders of PORR that this will be the case. Yes, this applies to all industries. We do not really depend on that. As I said, we have grown, and Germany was the weakest market. So this is just additional potential. In Poland, however, or in Romania, investments are being made. They really used the EU subsidies for that or in Austria, we do build. We have an increase in incoming orders. We achieved great margins. And yes, no worries in Austria, and data centers will be built whether their number will double or triple, we will not be able to build all of them, but the ones that we build, we will build at a high quality and in due time. And if every year, we can build another one adding to our volume, having higher margins, we will also increase our earnings.

I'd like to come back to the margins later, but another question regarding slab track. Is every railway construction project eligible for slab track? And how much can you speed up the construction period and how can you save costs?

Well, it makes projects faster, but not cheaper because all traditional railway constructions have like a natural life, and they need a maintenance on a regular basis. Everything that has a life -- useful life of more than 40 years, we are cheaper with different methods. But we have some test tracks in Singapore, and they are testing this right now. So this high-speed road they will have to need this system, Munich, Berlin, for instance, they are using our system. And every tunnel we have in Austria, we just finished the [ Koralm ] tunnel, and now we have this Ceneri base tunnel with our equipment. And the advantage of slab track is that we can take this with us. And we also take with us the mechanical and electrical equipment of the tunnel. And companies that can only do this mechanical or this technical equipment, we will not work with them.

Another question. By 2030, what is your top line growth that you want to achieve? Let's not talk about Germany now, but are we talking about 3%, 4% or 5%?

Well, in 2021 -- between '21 and '24, we grew by EUR 1 billion. Now we are currently at approximately EUR 7 billion. So if we assume growth of 3%, this would be EUR 1.2 billion, 4% would be EUR 2 billion. This is quite substantial. And of course, this will depend on the actual reduction. So we cannot give you like a definite guidance regarding our output, but this is -- these are the dimensions that we are thinking it. And we do think that these are realistic expectations.

And the final question from me regarding the margins. So your order books are full. Cherry picking has been mentioned again and again. You have great projects. And also your competitors confirm that you are leading in technology. So we're talking about 10 to 20 basis points growth in margins every year, assuming that we have no flop projects or legacy projects. So you compare yourself to 3.7% average margin. This is not the guidance of the company to be achieved by 2030. So what I wanted to say is the following: If 3.5% to 4%, is this the lower end? Or is it's possible to achieve this even at an earlier stage because the order intake will turnaround after 1.5, 2 years, so there will always be new high-margin projects then on top of that, we have cost cutting, lean management, BIM, risk management?

Well, basically, our large-scale projects have a project duration of 3 to 4 years. So it takes a little bit longer. The 2,000 orders of up to EUR 1 million, we always have them, but we have a very -- don't have a high percentage of flops in this area. This refers more to the large-scale orders where we have a longer turnaround period. Karl-Heinz Strauss has turned a national construction company into an international player. We have recorded strong growth. And now the margins are catching up as well. And this is exactly what happened with our competitors. They had a long growth phase, and then it took some years for results to consolidate. So that's just normal way it works. We want to have a reasonable target, 3.5% to 4%. And we also want to make sure that we can achieve this target. We do not want to discuss later on whether we were too bullish or -- I think we have sufficient potential and sufficient growth and it's quite realistic that we will achieve this. There's another question.

I also would like to talk about the medium-term margins. So how will you achieve this? By reducing costs further? Or will it be a mix? What are the main drivers? And another question, do you expect a constant increase in margins until 2030? Or will most of this increase be achieved in 2030 or shortly before that?

Well, basically, we have 4,000 to 5,000 construction orders. There are positive ones and negative ones. And in total, our efforts to improve these are quite continuous. This is something that we witnessed in recent years. And that's also our expectation for the future. Of course, there might be some outliers. If there are positive outliers or special effects, one-off effects occur in particular, regarding the building construction potentials with our products, then, of course, it might be -- happen a bit quicker. But our expectation is that this will be a continuous development, and all different measures contribute to that. If we will be able to realize all of them at 100%, maybe we will have a different result. But experience has shown that you never achieve all of your targets fully. And I think we do have a good mix of measures.

And maybe we could come back to the overhead costs that increased in recent years. You mentioned that you would like to reduce them again. So how will you do that? What are the drivers? Wage inflation is still an important topic.

Well, this is just efficiency. We have 50 units in our group. At headquarters, we have a 1/4 to 1/3 of the cost that is cost at the headquarters, and the rest of the cost is generated in our branches. So we have a very strict benchmarking, and the best model has done -- to be implemented in the other regions. This is something that we cannot do in -- at the very beginning. This is something that needs a diligent analysis and then you have to implement various measures throughout the group. And we used to have higher costs and then we cut costs, but we also want to grow. And that's why we will not have any cost-cutting program because this would not also create the atmosphere that we need, but we will try to improve efficiency all over our group. No microphone is being used here. The answer is definitely. In my calculations, if we have the results and the payout ratio that we have at the moment, we will still have a dividend that will be as customary in our industry. So another question is being asked without a microphone, unfortunately. The answer is absolutely. Unfortunately, I have to interrupt you. We will still be available for more questions, but now you have 10 minutes for a coffee break. And then later on, we will go to the construction site. We will already give you your safety equipment, and then we will -- you will have a safety training. So please stay with us for this safety training. This is very important. [Statements in English on this transcript were spoken by an interpreter present on the live call.]