Good morning. Welcome to the quarterly results presentation of Envipco. My name is José Matthijsse. I am the CEO of Envipco. I have with me today Mikael Clement, our Chief Strategy Officer, and Patrick Gierman, our Chief Financial Officer. Today, we will take you through the quarterly review of quarter three and the strategic priorities of 2027 and beyond, as well as the way we will execute on that. In quarter three, we have improved our top line, and we have also started to increase our financial discipline on our spend. Mikael will talk a bit more about the details later on. We have not yet achieved the scale that we would have liked to have had, yet we see very strong commercial traction. In quarter three, we have seen good machine sales in the U.S., and in Europe, we have seen a growing revenue coming from recurring service sales.
At the same time, in those markets where we now see the recurring service revenues coming on, we also see that we still sell machines. An example of that was the Ahold Delhaize deal at Romania that we announced earlier this quarter. Those are, of course, our new markets, but in our brownfield markets, like in the Netherlands, we keep on delivering Quantums at a very solid pace. Next to all of those, we see that the new markets are coming up, and we have, of course, an amazing start in the U.K. Then, yesterday, we had great news that DRS Hellas has been appointed as the operator in Greece, and that seems that there is going to be movement in the Greek market towards rolling out DRS there as well.
On all those opportunities that we have, we have also worked to strengthen our discipline in our execution, and I will talk about that later, what we have done and what we are going to do after Mikael has spoken about the details of the results so far.
Thank you, José. I will start off with a review of the financials for the quarter, and I will continue with a discussion on some of the market developments that we are seeing. We start out as normal with the P&L. Revenues in the third quarter were EUR 26.5 million. That represents a growth of 18% from Q3 last year and an accelerating growth rate from what we posted in Q2. Key drivers, as José mentioned, North America, RVM sales strong, and increasing program services revenues in Europe. The gross margin in the quarter, 33.1%, up sequentially from 32.2% in Q2, down on a year-on-year basis. Our operating expenses, slightly down sequentially to EUR 11.9 million, up on a year-on-year basis on a higher headcount.
EBITDA in the quarter, as José mentioned, we are not yet at scale, -EUR 0.6 million versus an EBITDA of -EUR 0.3 million in Q3 last year. Let's have a look at the European markets. Revenues in Europe were EUR 15.2 million, an increase of 7% year-over-year. RVM sales were down, largely explained by a delivery of France for refillable pilots in Q3 2025. Underlying the other markets, we are delivering on the tail of opportunities in Romania, in Hungary, and of course, those revenues are down on a year-on-year basis. Greece, we are still waiting, as José mentioned, for that market to start going live. This is offset by strength in our revenues in the Netherlands, a fantastic brownfield opportunity for us in Poland, and new revenues in Portugal.
Program services are growing, up 91% year-over-year to EUR 3.4 million, driven by higher service income and growing throughput revenues, both recurring revenue streams. North American revenues were EUR 11.3 million, a record for the company, up 37% year-over-year. Program services are stable, up 2% year-over-year, on stable market activity. RVM sales are up more than 400% to EUR 3.6 million in the quarter, driven by deliveries on upgrades to an existing large retail customer, as well as continued deliveries on the convenience store wins in Connecticut announced earlier this year. The gross margin in Q3, as you see, starting to flatten out over the last couple of quarters, growing from Q2 into Q3, 33.1%. Gross margins continue to reflect low capacity utilization in our assembly operations and building of the field service organization in new markets.
If we look at the year-to-date numbers, adjusting for the under-absorption in production of roughly EUR 2.5 million, that gives an additional 3.5 percentage points. So, an adjusted year-to-date gross margin would be at 36.4%. Operating cost this quarter, EUR 11.9 million, up 13% year-over-year. As you can see, the cost base is stabilizing. There is a sequential decrease reflecting control of discrete spend. We are now getting an organization in place that is built for delivery on the anticipated market opportunities ahead. Over to the balance sheets. The balance sheet total in Q3 is EUR 159.4 million, an increase of EUR 4.5 million from Q2. That increase is largely explained by EUR 4 million increase in our property, plant, and equipment, once again driven by a EUR 3.6 million investment in RVMs for throughput services into new markets.
Our working capital is flat sequentially, with inventories marginally up and trade receivables down. The company continues to actively manage inventories. We are seeing positive trends, and we expect this to continue as we move through Q4. Borrowings in the quarter ended at EUR 26.9 million as the company drew on its existing working capital facilities. Current liabilities, EUR 39 million, with trade creditors up by in excess of EUR 2 million to EUR 21.3 million, with cash on balance sheet ending at EUR 18 million at the end of Q3 versus EUR 18.7 million in Q2. Finally, for the financials, the cash flow. We entered the quarter with EUR 18.7 million in cash. Cash flow from operating activities was a -EUR 3.3 million, with working capital explaining EUR 1.7 million of that decline, and payment of interest and taxes, EUR 1 million. Cash flow from investing activities, -EUR 4.7 million.
As mentioned, investments in PP&E were EUR 4 million, of which investments in RVMs for throughput services, EUR 3.6 million, and then we have capitalized R&D of EUR 0.7 million in the quarter. Cash flow from financing activities, +EUR 7.2 million, with the draw on existing working capital facilities being offset by scheduled repayments and also payment on lease liabilities, with net change in cash of -EUR 0.7 million in the quarter. Those are the financials for the quarter, so let's have a look at the markets that we are in and the movements we are seeing ahead. Envipco is facing strong tailwinds in terms of market development. We are seeing a growing market driven forth by regulation and an increasing number of markets starting to plan and in the phases of planning DRS rollout, driving demand for reverse vending machine and automated collection.
On a general note, looking at this chart, which we try to update on a quarterly basis, we are seeing that longer tail opportunities in many markets, such as in Romania, where we recently have announced a new order for delivery through 2027. So we are seeing that the deliveries into existing markets also are increasingly longer. This quarter, we have also added Bulgaria to this chart, which has initiated a draft DRS legislation whose targets are matching the EU PPWR, with current outline timing suggesting a DRS launch late 2028, early 2029. As mentioned, Greece yesterday approved DRS Hellas as the operator of the DRS system, so there are movements in the Greek market. The U.K. has for some time been working towards an October 2027 launch and is on track for that. We will get back to that in the next few slides.
Then we have a number of markets planning to introduce DRS in the years to come. But let's have a look at one of the most important drivers for this industry and for Envipco in the years to come, and that is the U.K. introducing a DRS from October 2027. The U.K., with 26 billion containers under the DRS scheme, is set to become the world's second-largest DRS market. They have targeted October 2027 for some time. That date is commenced also in the legislation, and the entire industry is working towards that date for a launch. The U.K. is estimated, we have estimated that market size for some time to around 35,000 RVMs.
On top of that, what we have seen is the operator introducing a tiered handling fee scheme, as well as a grant program for a nationwide dense network of collection points that could drive an RVM potential beyond and above those 35,000. Envipco has secured a significant share of announced retail market wins to date. Envipco has announced five appointments with major retailers, with volumes of some 7,100 RVMs. On top of that, the company has also announced a preferred supplier agreement with a U.K. wholesaler, offering potential above that. So from the announced agreements that we have seen in the market, Envipco has secured a significant share of that. But there is also a large undecided market potential remaining for the U.K. market. So with that, let's look at some of the existing greenfield markets that we are operating in.
Portugal introduced and started their DRS in April this year, and volumes have been growing month by month. After a slow startup, we are now seeing volumes starting to get to the levels where they should be on a monthly basis. Envipco is building into a number two market position in Portugal. We are installing a network across Portugal with the operator of our bulk-feed Quantum technology, and we are delivering on our agreements with several of the major retailers in the market. Poland has recently turned the one-year mark on its October 2025 launch of the DRS. Envipco continues to deliver on the Netto throughput agreement. That was a strong driver, as you saw in our CapEx and also in our recurring revenues in Q3, and will continue to be a force as we move ahead.
Envipco has installed the first Quantums, and we are building a pipeline with a number of retailers that will continue to develop as we move into 2027. We have Greece, which yesterday appointed DRS Hellas as the DMO operator, with plans to establish a national collection network and very ambitious targets of reaching 80% collection by January 2028, rising to 90% in 2029. Envipco has an established market position in Greece with 500 Quantums delivered over the last 10 years, and we are prepared to deliver on the Greek opportunity when it arises. We have the Netherlands, a market which has been a great success for Envipco, a brownfield opportunity where our Quantum bulk-feed technologies has helped the system increase collection rates. We have had a frame agreement with the operator for some time. That has now been extended through 2027.
With a strong momentum in the last few quarters, including Q3, we continue to see significant potential in the Dutch market. We have installed our first Quantum Solars in the Dutch market, building on green energy, lowering the bar for bulk-feed installations, and also reducing operating costs. That is also a very strong and exciting development for us. Summing that up, Envipco is delivering on its strategy. We are on track for a 30% market share across new DRS markets. Our commercial traction is strong, witnessed by the strong win rate in the U.K., long tail wins in established markets, and a building of our market position in Poland and Portugal. We have a better visibility, and with a delivery pipeline stacking up, it will provide growth ahead.
José will now tell you a little bit on how she will lead Envipco into this next phase of growth.
Thank you, Mikael. In the past six months, I have worked with my team, and we've taken on board the learnings of the past years. On those learnings, we've built together a framework on how we want to capture the next wave of growth, because that next wave of growth is coming, and our strategy remains to capture our fair share of that. How will we do that? We will do that with strengthened commercial focus by one global commercial organization. We will do that with sharpened operational execution. We've looked at where our resources are and put them there where we expect growth. We have also looked at clarifying the roles and responsibilities so that we can work in a more seamless way. Very importantly, we will work to increase our financial discipline.
We have reinforced our reporting discipline, we have reinforced our capital discipline, and we spend better. That is the foundation on which we will deliver. Our strategy remains the same. It exists of four pillars. We have, first and foremost, our existing business, both in the U.S. as well as in Europe right now, where we have recurring revenues from the service. At the same time, as you have heard from Mikael and me before, we also have still opportunities in those existing markets to sell more machines. Our second pillar are the greenfield markets. The new markets that are rolling out the deposit return schemes now in Europe are, of course, very exciting opportunities for Envipco to grow their business. As you have seen in Mikael's presentation, we do very well in capturing our positions in those new markets.
The third pillar are the brownfield markets, those markets that have had deposit return schemes for many years already, where Envipco wasn't present from the start, but where we see with our technology that we can build our position. We do that selectively, but where we start, we are pretty successful. The fourth pillar is always acquisitions. We continuously talk to potential partners that can either bring us geographic access, so access to markets where we're not present yet, or that can give us a technology step change. Some companies have technology that we would still have to develop, and it could be interesting to work together. Those four strategic pillars underpin our long-term ambition of achieving an average of 30% market share across the markets, 40% gross margin, and 20% EBITDA margin. To achieve this ambition, we need to execute.
To execute, we have developed four axes to convert these market opportunities into profitable growth. The first one, we have set up one global commercial organization that has streamlined our activities towards the markets and towards our customers, and it grows our ability to win. Secondly, we have scaled and are scaling our European assembly. As we are about to double our installed base in Europe, we will have more capacity close to the markets in Europe. This consolidation of our production assembly facilities will lower our cost to serve. We have looked at our operating model and our organization, and we have moved resources from countries, from some places to countries that are growing so that they are staffed to grow.
At the same time, we've looked at those countries that are more mature, where the business is more recurring, that they become profitable and they have a headcount that they can be profitable. The fourth pillar, we have and we will continue to invest in our finance function to ensure that our control keeps pace with the growth of our organization. As we looked at the learnings over the past years, we've actually seen that our markets develop every time in the same manner, and we've distinguished four phases that we can act upon in the same way. In the first phase, we see that a market is shaping. This is, for example, where Spain is right now. The government is talking to potential operators, the government is talking to suppliers like ours, the laws are in the making, and the operator is still to be defined.
Then we move into the next phase as the operator is known, and the customers are wanting to buy, and suppliers like us have the opportunity to secure our appointments. This is, of course, a very exciting phase, and the example currently is where the U.K. is in. Once we have secured our appointments, another very hectic phase comes for us because we need to deliver upon the promises that we've given. We need to install our machine base and make sure our service apparatus gets up to speed to serve our customers. This is where Poland and Portugal are currently in. Then when we've gone through those first three phases, the markets mature, we have an installed base, and we need to work towards profitability of those markets. There's a large number of markets already in there.
You know, in Europe, we need to get through the warranty period, but we're getting there right now, and this is where we are really growing the base of the company. We have proven that we can do that, and we will replicate this throughout the other markets that are coming. In order to manage this consistently, we have created one commercial organization that heads into one global Chief Commercial Officer, and Sjoerd Boer has been appointed in the last quarter to manage that part. Then we have created one go-to-market playbook. We've taken on board all the learnings we've had in the markets over the past years. We now have a clear playbook, and we know who has to do what. That way, we work in a more efficient way.
The same time, we have created one way of working with the support functions, and again, that standardizes our way of working, streamlines our organization, and delivers us seamless execution. Then we have the demand side, but we also have the supply side, and as we are to double our installed base in Europe, we have, of course, looked at our supply network. In that network, we have made the decision to grow our base in Romania, and to expand the capacity so that it is able to serve all single-feed RVMs for Europe close to the customers, but also benefiting from the scale of a larger organization. In Germany, we will focus on producing our Quantums, and then the facilities in Naugatuck and Athens will focus on serving their home markets.
This altogether also delivers us a supply organization that can breathe with the demand, which is also needed, because we know from our experience that sometimes we have to run, but there are also times that we have to slow down. This all should deliver an improved utilization of our manufacturing capability, and it should reduce under-absorption. We have had a good look at our organization and our operating model. As we have moved over the past years our headquarters to Europe, we found that we had some legacy roles left in the United States. We have taken those out, and at the same time, we have looked at all markets that are more on the mature side, like the United States, and we focused their organization so that they can deliver profitability.
We have looked into our European organization that had some regional structures, and we have clarified that, and we have clarified which global roles we have and what their responsibilities are, and what we do locally and what their responsibilities are. That altogether has enabled us to double down on investing in our commercial activities in the markets, those markets that are still upcoming, and to double down on our engineering presence in Europe, close to our customers, which increases our customer engagement. We have moved resources to there where the growth is. At the same time, we have simplified how we work. We have streamlined our organization. This reorganization comes with some restructuring costs that we will take in quarter four, and then we see the benefits, of course, in the next year.
As we have streamlined the organization, we have also streamlined our control, our data, and our reporting, and Patrick Gierman, our CFO, is here to give some clarity or color on that.
Thank you, José. All right. Envipco has seen rapid growth over the past years, and with that, the company became a more complex international organization. Our objective is to rightsize the finance organization and strengthen it to match the scale, complexity, and growth of the organization. To that, we committed ourselves last year to a roadmap, and we delivered on it. We organized the finance organization, we realigned resources to the business functions, and added key capabilities to the finance team. We see the progress and the results already today. We close faster, and our reporting improved. We see that the quality and oversight strengthened, and we can see that both the FP&A, the controller function, and the reporting functions strengthened over the last six months. Now we are on also to the next milestones, which are heavily focused on automation, centralization, and standardization.
In the fourth quarter, we will implement our new reporting tool and further automate our group consolidation. This will further simplify and streamline our year-end closing process and drive quality. In the next phase, we are also in the transition phase of moving our European entities to a common ERP platform and also in the process of centralizing key finance tasks to a central location. What is important to highlight is that we really committed to a disciplined improvement plan, with clear owners and clear deadlines. As we continue with this process, we are also going to add more things that we identify to further strengthen our reporting, our processes, and our closing, so that we really can drive continuous improvement.
Overall, we have a clear roadmap, which gives us a really scalable finance platform that really gives us confidence in the future to support the growth trajectory that the company is on. As we heard José and Mikael talk about, we really are on the brink of the next growth wave for the company. In order to fund that growth, the company has access to different sources of financing and funding, and we can utilize those to anticipate quickly as new opportunities arise. For sure, first priority is to actively manage our working capital internally, which means converting our inventory that we have available, to really collect on our receivables in a timely manner, and really to strengthen our vendor management.
For sure, we also have working capital facilities in place with our lenders, and we are continuously assessing how to optimize those facilities and to really anticipate the scale and timing of the next growth wave. At the same time, we also have a growing installed base. This growing installed base will increasingly generate really recurring service revenues, and with that, create a more stable and predictable service and cash inflow for the coming years. Finally, we also have asset financing as an extra lever. We heard already, we have asset financing now getting into place for RVMs and the throughput and lease contracts, which will help us to free up cash flows for the next investment. In general, we continuously assess our overall funding needs and optimize the finance mix as the business develops.
As we prepare financially for that next phase of growth, we are equally focused on ensuring that governance and oversight continue to develop with the scale and complexity of the business. Given our dual listing, we do want to assure that we both comply with the Dutch standards as well as the Norwegian standards. Two key things to highlight of recent developments. One, higher shareholder engagement. We have been talking with the shareholders and got their feedback and established recently a shareholder advisory group. This advisory group will advise the nomination selection committee on upcoming and future board members. Two, a stronger board. Over the last months, we have increased the financial and audit expertise within the board with a new appointment. In addition, we also reset the board committees in order to leverage better the expertise of the individual board members.
We are evolving the governance alongside the company, with stronger shareholder dialogue, enhanced board capabilities, and clear accountability as Envipco enters its next phase of growth. With that, I will give it back to José.
Thank you, Patrick. Thank you on that perspective on how we are set up to deliver on the growth ahead. Envipco has a significant opportunity ahead of her. We have now gone through this 150 million people that live in countries where deposit return schemes have been launched, and we have delivered our market share. We are now taking on the developing markets, larger markets that will drive scale in 2027 and beyond. These other markets are to follow, and we are ready to execute on our playbook. We are ready to unlock the potential of Envipco. The market is coming, we know how to win it, and we have built the platform to win at scale. Thank you very much for your attention. There is room for questions now. You will probably want to stand in the middle, Mikael.
Sure, I can stand in the middle. We are getting some questions in here already. Let me just sort some of them out. Okay, I think there is a question for you first, José. Congratulations on a fantastic order flow in the U.K. How many of the approximately 7,000 U.K. RVMs in the order book represent signed binding contracts versus preferred supplier agreements?
Well, all these 7,000 machines are binding agreements, and we are working out the contract details as we speak. Some of these contracts are completely signed, and some are there, the details are still being talked about. You can imagine that a number of those details are very much about the logistics, because there is a large wave of work ahead in the U.K. At the same time, we also have a preferred supplier agreement with an important wholesaler where we believe that there is growth going to come from as well, on top of the 7,000 machines.
Good. Let's see. How much of the current margin pressure, I guess that's gross margin pressure, is temporary and linked to underutilized capacity and front-loaded investments versus structural factors in the business model? Well, I guess, as we mentioned in the presentation, underutilization in our assembly operations year to date, roughly EUR 2.5 million, which represents roughly 3.5 percentage points. So the adjusted margin would be around 36.4%. Another U.K. question. How do you see phasing of deliveries in the U.K. through 2027?
Yeah. I can take that one.
Yeah, I think that's—
It's of course an exciting time ahead of us. I said already, our U.K. team is currently working closely with our customers in the U.K. to work out how their schedule should look like. We're all working towards a launch of the DRS in the U.K. of 1st of October of next year, of course. That comes with a delivery schedule. Then obviously there's a supply schedule on our side, and then we look at our assembly operations, and there we are making a planning that is relating to that. So, the plannings are in the making. They're not final yet, but we know pretty well what we need to do.
Yeah. Inventories. How confident is management that this inventory will convert into revenues and cash? Would you like to take that, Patrick?
As what we mentioned, right, earlier, a key objective for us is really to convert our inventory into the next sales opportunity, right? To really manage that closely. So we are expecting an improvement there for the fourth quarter, as we have seen over the last two months.
Good. Have you started investing in inventory for the U.K. market, and when should we start to see this showing?
Yeah, let me take that one as well. For sure, if you look at the U.K., there is a combination. One, for sure, we have the orders coming in, which is great. But if you look at the inventory buildup, we do see that, also with long lead items and the factory loading, right, that indeed sometimes you buy in front, but where possible, we are also waiting for the final orders to come in before we start buying and producing.
Good. Will you deliver your annual report in time next year? I guess it's a timely question.
Any preference? No. Let me take that one. Yes. Simple answer, yes. We built already a great team. I think that's very key. We added the right capabilities. Second, we really implemented good tools and strengthened our processes, which is going to be critical to deliver on time. I think the third element is we strongly increased our oversight to really to monitor progress, also in conjunction with our auditors. Yes, we are on the good track to deliver on time.
Yeah. Out of the 7,100 U.K. machines, how many are signed contracts?
W e just answered that one.
Sure, absolutely.
No, we just answered that one.
Yeah, I guess we can. That's already covered. Let's see, we have here, please provide some details on the further delays in Greece. We have some news about this.
Yeah, of course, the good news yesterday was that the DRS operator, DRS Hellas, has now been officially appointed by the Greek recycling authority, the Greek government. I've seen yesterday the document coming in that Mikael referred to, where deadlines are being put of creating 80% collection on the 1st of January 2028. That now gives us the expectation that things will start moving in Greece. It has, of course, been slower than we had expected at the beginning of the year, and we all, I think, need to learn to sometimes deal with that. It's run and stop and run again. But we are positive and optimistic that things in Greece will move now.
Yes. Let's see here. We have covered many U.K. questions. I think we have covered some of those here.
I see a question on Quantum in the U.K.
Yes.
Indeed, very well spotted that Quantum will also become certified for the U.K. That is in the making.
Yeah. Yeah, and other questions on both funding, and I think we've addressed some of that together with comments on our covenants.
Yeah.
Yep. Is that something?
Yeah, so, what is the question exactly?
Can you address covenant comments in the report and how that aligns with your comments and sufficient funding?
Yeah, if you think about covenants, we are in close contact with our lenders about covenants and how we progress also financially throughout the year. So we have a very open discussion with both lenders on that. So I think that's a very good, solid process. For sure, the moment we might get into a breach situation, for sure we will seek the right time on the waivers, et cetera. But yeah, I think that close dialogue on a regular basis is important. And also with that, how we further optimize our funding in the near future.
Assuming Q1 2027 Greek go live, will this result in Greek revenues in Q4?
That's hard to tell, because I don't know today how this will work out. I cannot really answer that question right now today. We had very good news yesterday, but there's no details to that yet, how this will now develop into the next steps, and we are, of course, closely watching that.
Yeah. Yeah. Is the current balance sheet sufficient to fund growth until the business? I think we've touched upon that. I mean, Envipco's capital intensity is driven by working capital. We have a toolbox, as Patrick went through, of sources that we have and are working on actively. What revenue opportunity do the signed U.K. contracts represent? That's a question. We've announced the volumes on the appointments and contracts for the U.K. market, and we have not announced the values, but we have previously indicated average selling prices. I think that's how far we will go with that. Yeah. Where else do we have here? Can you walk us through the expected cash conversion cycle in the U.K.? For how long ahead of deliveries will Envipco have to carry inventory? You touched upon that before, Patrick.
No, I would also like to say something about that, because I can understand the wish for mathematical preciseness. But I think one of the learnings we've seen, not only from Greece, but from many other markets, is that it goes, and it goes sometimes a bit slower and sometimes faster. I'm very confident about the launch date of the 1st of October in the U.K. Still, it is a massive rollout. Installing a DRS scheme in a country is really a big exercise. So that at some point it slows down a bit is almost to be expected. That also has to do, for example, with customers not being ready, sites not being ready, little glitches, but it paves the way. So we will invest and be ready, so we will have to build stock because we need to be ready.
At some point, we might see that that cash conversion is not as efficient as we would like it to have. However, we have really worked on our sales and operations cycle. We are much more closer contact. We also need to be, given the scale of the U.K. That works very closely together. We will really invest on confirmed orders, and then the conversion cycle or the payment terms in the U.K. are really good. It should be a very tight cycle. There is, of course, always that little story of what we see in other markets as well, that the delay into the installments is there for a certain period.
There is a question on service revenue. Service revenues had a strong growth for the quarter. How will those revenues continue to grow during the next years as a ratio of full revenues? I think, given, as we mentioned, the growth ahead will largely be driven by RVMs. RVMs into new markets as they prepare to go live. Next year, the U.K. is the largest driver of that. As a share of revenues in Europe, program services will come down because RVM sales is growing so much. We are seeing a growth in underlying program services revenues driven, as we mentioned, by, one, service revenues, and two, throughput revenues. Many questions on Greece and the timing, so I think we've covered this one here as well.
Are there still ongoing discussions with tier one players in the U.K. that haven't selected an RVM supplier, or are they now moving to smaller groups? I think there have been a number of appointments in the markets. Usually, in many of these markets, we see the large retail chains move first, and then there's a next wave of other, sometimes large, as in the case of the U.K., but more franchise-type players. I think we're moving into more that phase of the market as well, with a number of wholesalers and franchise players as potential customers. Greek media this morning is stating that Greek DRS is expected to launch in the first half of 2027. Given that, is it reasonable to expect shipments to start very soon? I think you've answered it.
I have not had the time to read Greek news this morning yet, so I think we've answered the question. Another service question. Your strategic direction stands, including the gross margins ambitions. When should we expect 40% to be met?
That 40% gross margin is, of course, very much driven by scale. Now scale is coming, so that is good for us, but we need to look at that with a longer-term horizon. We really need scale and a proper mix to deliver that 40% gross margin. Currently, given the mix of the equipment, that 40% gross margin is a bit under pressure, but it is our absolute focus and ambition to get there.
There is a question on Italy. What launch dates are you seeing, and do you have a local team or partner in place? Would you like to take that?
We are starting to build a local team, so we have had engagements with Envipco staff with the local government already. There are talks ongoing. I am not aware of a fixed date yet, but we are absolutely starting to engage in Italy.
Can you provide further color on the throughput financing facility, and when do you see receiving the funds?
Yeah, let me take that one. We just got agreement with additional throughput financing that will effectuate in the fourth quarter, so we will see that cash flow freeing up in this quarter already. For sure, the moment we get more into these kind of deals, we are definitely looking, working with a partner that can help us further as well in that respect.
Good. I think we will have a question on the U.S. Can you elaborate on greenfield/brownfield opportunities in the U.S. market?
I think that's probably a great question to answer this, to end this session with, because I think the U.S. is a great opportunity. There are talks ongoing with various states. As you know, we've put a Quantum in place in California. That is functioning very well. We are excited about those opportunities. They will take time, so can't give a date to it, but I think there is good traction in the U.S. to further develop. With that I think we bring this session to an end. I would like to thank you all for listening in, and look forward to engage with you again when the numbers of Q4 are ready.