Good day, everybody. My name is Claes Westerlind, and I am pleased to welcome you to this webcast presentation, which we will focus on NKT growth opportunities and also the upcoming high voltage investment program. I want to draw your attention before we go into the material on this slide and the fact that this, both the material and the comments that we will add to them contains forward-looking statements. To presenting myself, Claes Westerlind, I'm since about two weeks, the new group CEO and President of NKT. On the side of me, I also have Line Andrea Fandrup, the CFO of this company. We will together take you through the material and presentation in today's meeting. Some reflections about the key messages in today's announcement. Starting with the market.
The market has grown significantly in recent years. The outlook in the high voltage market and in cables in general remains very positive. We will get into this a little bit more as we go through the presentation. We have been fortunate to acquire significant order intake in the recent two years. That together with the fact that there is a strong market outlook, we are today confirming and in a more detailed way, that we are to invest approximately EUR 1 billion in additional high voltage production and also installation capabilities. With this new rosy accretive investment program and also our improved high voltage order backlog, we have also communicated in today's announcement about the upgraded and extended medium-term financial outlook.
Further, we intend to raise around EUR 350 million through a rights issue, and the aim is that this will provide us with the required capital structure to drive, on the one side, our continuous operations, but also on the other side, the high voltage investment program. If we take a step back a little bit and reflect about where we are coming from as a company and as a group, this slide shows a couple of things which we are proud of, also stating that we have managed well in recent years. Starting with the improvement of financial performance, which has been done, as you can see, both from a revenue perspective and also our operational EBITDA, with significant growth on both, these dimensions, measuring from 2019 into 2022.
We have been acting in a growing, attractive high voltage market that is very clearly visible also in our backlog, which at the end of 2019 stood at EUR 1.4 billion and at the end of the quarter this year is up to EUR 7 billion. We have also undertaken in the meantime a number of efficiency measures related to asset utilization, our product portfolio, and also optimizing our cost base. It's important to underline that this is not only in one of the business areas, but basically across all solutions, applications, accessories, as well as service. We have strengthened our balance sheet, lowering the leverage significantly from 2019 into 2022.
Last but not least, of course, during these years we've had a very much focused work on our core power cable business and the execution of our ongoing projects. This is, of course, one of the extremely important ingredients on our pathway to become a pure power cable player with also very strong execution capabilities. The last part here is especially important, taking risk management capabilities into mind, both when it comes to executing our projects, but also our experience in conducting investments, which has been done across the group, but most significantly in both Cologne and also Karlskrona. Having a look at this slide, I think we stand much stronger as a company today versus how we looked in 2019.
In doing that, also taking pride in the fact that we've delivered on our targets and we have strengthened the foundation upon which we are now continuing to build upon. I mentioned the market initially in the presentation, this is a rough picture of how the global annual energy generation is expected to develop. You can see here, dating from 2010 to where we are roughly now in 2020 and up until 2050. This is indeed a radical development where we see the green transition really is taking major steps forward, basically starting now towards 2030, but also continuing up until 2050. There is a strong growth in renewable sector that benefits companies like us across our different business lines.
It's viable in the generation side, transmission side, and also distribution side, areas which NKT as a company, we're all active in. There is also a change in the supply demand pattern as we move away from fossil fuel into offshore wind as an example, that displaces the generations versus the demand and changes the need of our power grids, replicating into even further needs when it comes to, for example, power cables. The personal reflection, if you look into the 2050 target and the 2040 targets, it's still so that 20% to 40% will be non-renewable. I think we as a society and of course we as a company ask ourselves, will this be enough to reach the climate targets that the world is striving for or is there even an upside to what we see on this page?
Again, a little bit on where we are and what we can offer. We are based primarily in Europe with a global reach. As you can see to the left on this picture, looking at the political ambitions when it comes to offshore wind expansions across Europe, you can say that if today you were to expand your capabilities in supporting the green transition, Europe, for sure is not the wrong place to be. That's why we also are very satisfied with us having the main operational base in Europe for the moment, and that this is also the place where we are now continuing to expand for.
If we look to the right and referring to what I said on the trends in general, we are also able, with our technical offerings, both as far as production goals and installation to support across the green expansion and the green transitions, both for offshore cables, be that as it may, AC or DC cable solutions, onshore AC and DC, and also taking this into our turnkey concept in delivering, turnkey-ready transmission systems to our customers. We have been, we are, and we will continue to be active in both the interconnector segments, the offshore wind segments, power from shore, as well as underground. As we can see, and as you just saw on the previous page, the ambitions in Europe are massive when it comes to offshore wind going forward.
For the ones of you, who were part of our broadcast a couple of weeks back in conjunction with the Q1 release, this is a slide that is easy to recognize. It starts a little bit with us looking backwards on where we have been now in 2020 and 2022 and the projects we are executing for the moment. You can see a list of the projects we are currently in execution of. What I want you to note here is the fact that there is a broadness in what we are doing. We have projects across all the different segments that I mentioned on the previous page. We have projects across both HVDC and also HVAC, these segments. We also can note that we are expanding our geography when it comes to executing large power projects.
For example, towards the Med region in 2020 with Attica-Crete, and also across the North Atlantic in 2022 with the award of both Champlain Hudson Power Express and also the Hertel project. I'm also very satisfied to see that we have a number of returning customers coming back to us again and again, which in itself is a good testament, not only to our ability to win a project, but also execute it in a good manner so that the customer returns. Reflecting on the market, going forward and where we have been increasing from the years of 2016 to 2019 from around EUR 2 billion and upwards. We stand now at around with projections around EUR 8 billion. This, we can see could go even higher, both from 2022 to 2024, but especially also in the future.
It's a positive outlook following the trends on the preceding slides. Last but not least, on the historic market share where we have been around 25%, a couple of years ago, and we have steadily increased that since as well, which shows our ability to actually win orders on the market. That both the preceding years are a testament of, but not also the least, the first quarter of this year. That in itself, of course, shows in our backlog, where, as we also discussed earlier in the presentation, from 2019 there has been a rapid increase in the backlog. We have multiplied our backlog with basically 5x to how we closed Q1 2023 compared to 2019, which is the important foundation for us now taking a proven decision to expand even further upon.
It's not built on speculation or anticipation. It's built on us actually acquiring major orders to an extent that is now a necessity for us to expand further in order to serve both our existing backlog but also our future backlog to come and customers. There were some key order wins post the Q1 results being announced, and those included the Bay of Biscay interconnector and also the TenneT frame agreement. Those two in itself is further an evidence to what I just said. Bay of Biscay is another entrance for us. We're recognition in the Med region with the customers of REE and also RTE. The TenneT framework is a returning customer and basically a paradigm shift in how cable volumes are awarded into the market.
Rather than as individual projects, now customers take the approach of awarding a bunch of projects with the ability to keep secure even further volumes. This good story, and I think it is really a good growth story, or even a sunshine story, has been bringing us into the EUR 1 billion investment program, which is aiming at further, even further strengthening NKT's leading position and our ability to support our customers. Looking into the next page to be a little bit more articulate around where we are and where we are now heading. We have two factories for the moment, for high voltage cable production. That is in Karlskrona and also Cologne, as everybody well aware. We also have a cable lay vessel, our NKT Victoria.
Both these sites have been developed, and I will come back to Karlskrona, nurtured, and partly also invested in across the last couple of years to be state-of-the-art sites, each with their own focus. Cologne is a leading center for onshore production, with the capability to also do offshore cables. The Karlskrona plant, which is a world-leading site for offshore cable production, AC and DC, also capable to produce land cables. After the investment that we are now deciding on, we will have then three factories, which will be one in Cologne and then two factories in Karlskrona, what we call the Karlskrona North factory and also Karlskrona South factory. This new factory will be built and also operated in the immediate vicinity of the existing factory.
We are also announcing today that we are building and investing in a second cable lay vessel. A vessel which you will see a picture of later, with record high both capability and capacity if you compare to existing vessels which are on the market today. This is a large investment program, which is starting now and already has started, and the target is that these new assets will come into operation in 2027. It's both a prerequisite for delivering upon the orders we have to date, but even further so will allow NKT to continues to grow with the growing market as well. Reflecting on the site of Karlskrona and our operations there, which I know a fair bit about having been there since 2014.
This is an operation just like the rest of NKT with a wealth of experience and knowledge. The history is more than 100 years, not on this very geographic location, but taking Stockholm and the Karlskrona site into combination. For example, it was on this site that HVDC MI cables were first invented and deployed in the 1960s. It was also in this site by this organization that HVDC XLPE cables were invented and first commercially deployed in the end of the 1990s. I think that in itself tells that we have a wealth of and long-standing experience in addressing both investments but also, the delivery of projects. There has been a gradual expansion, as I mentioned, on this site.
As you can see on the pictures here, in different, in different phases, and different phases also in different sizes. There was a major expansion project back in 2010 to 2015. Some modest or more modest expansions between 2015 and 2017. Another major expansion just conducted from 2020 to 2023. These gradual expansions and also major expansions at times not only have been planned and talked about, but we have proven that we are able as a company to do them. We are able to do that while also delivering on our promises to our customers. This is investments and at the same time, flying the plane. Doing investments and also running operations, of course, that comes into several different topics, technology, production, installations, risk management and product management.
They go hand in hand, and they're all very important for both executing our products to our customers, but also to be able to do our investments in a proven, timely, and in a cost-careful manner. Thirdly, it's important to say that another thing has been proving on this journey, and that's our ability to attract competence. This site, when it was established in Karlskrona, there were 118 people moving down from Stockholm into the Karlskrona plant. That has grown since immensely, and in the last years with the last three years with 300 people alone, manifesting our ability to actually attract and get the competence we need, both to expand but also to deliver on our promises.
This leads into the big boom, and here you can see a geographic illustration, by far not capturing all of this investment, but at least the most visual aspect of it, which is the third tower. You can see the Karlskrona plant as she looks today with the two towers and the significant factory area. I'm able to use the cursor in this picture, but I talked about the Karlskrona North factory and the Karlskrona South factory. What you see here, if you disregard the new tower, is the Karlskrona North factory. This picture is taken from the north in Karlskrona. The southern factory will basically be starting with the tower and then proceeding south towards the water.
It will be a new end-to-end factory, starting with material handling, logistics, conductor stranding, going into extrusion, heat treatment, lead extrusion, armoring, and final storage. This entire value chain will be covered by this investment. Obviously, drawing on the upsides and the fact that we are in the absolute vicinity of one of the world's sea cable production sites for the moment. Drawing upon the fact that we have material laboratories, we have testing laboratories for electrical high voltage testing, et cetera, which gives us a benefit when investing and also will grant us a benefit as we take these assets into operation. I also wanna comment on the size of the investment.
The EUR 1 billion covers both the factory and also the vessel. It is a sizable investment, but it is also sizable when you look at the profitability that this will generate as we take these assets into operation, and Line will come back to that. We will not invest with the mind of the current existing market. This is an investment that also aims to be able to capture the development to come with respect to long length. Projects are getting larger and larger, and of course, our customers are expecting us to be more and more competitive also in the competition with our fellow cable producers. Therefore, long length concepts, aspects like large conductors is absolutely fundamental, and this factory will be invested and built exactly with those sharpened capabilities in mind.
It will generate more than 500 new jobs in Solutions and in Karlskrona, out of which a large part of that is obviously blue collars and the rest is white collars. Again, I want to refer back to what I just said on the previous page with our proven ability to attract 300 people in the last three years. We feel confident that we are able to also deal with the forthcoming topic on attracting further competence. If you go to the next page, you don't build an onshore factory without an offshore factory. Here's also illustration of the vessel. In this investment and in the ReNew BOOST strategy that NKT has laid out and is following suit on, we are keeping the turnkey concept in very high regard.
This investment here also stays true to not only that strategy, but also this very concept. By that, with us gradually having expanded, we have now grown out of the capacity that NKT Victoria is able to provide us with. This is now also a decision where we will design and build and operate yet another vessel. This vessel will be more capable and grant us further capacity than any other existing vessel on the market. To my comments on the factory and about the future-proofing of the factory, referring to long length, large conductor, et cetera, the same goes for the vessel. This vessel is built for whatever is there today and what we expect to come on the market in the next coming years.
She will complement Victoria in a very good manner as she will be a more sizable vessel, and as such, grant us also good flexibility in serving our customers and serving the factories of both Cologne and Karlskrona. Last but not least, staying true to the turnkey concept, both for our customers, but also internally for us as a risk management perspective, to be in control, to be part of designing the vessel and also being in full control of the vessel as we execute our projects. We have many years back learned the hard way that that is the absolute right way to conduct cable business. With those words, ladies and gentlemen, I wish to hand over with a warm hand to Line for some deep dive on the financials.
Thank you very much, Claes. With a very strong market and this choice of investment in the future, we also make a step change in our financial ambitions going forward. Quickly highlighting here and then let's dwell into the detail on the coming slides. NKT will continue to grow beyond 25, above 12%. We will increase the operational EBITDA for 25, we are now communicating above EUR 300 million, and for 2028, above EUR 550 million. We will improve the returns on the company in 25, now expected above 15%, and in 28, expected above 28%.
For the comparison base and a little bit more dwelling, going to the next slide, the latest ambitions we introduced to you in September 2022 when we hosted our Capital Markets Day. As you can see from the period since then, many things have changed. Markets are definitely favorable. They're strong in terms of demand and also e-enabling therefore a very sound pricing. We will continue to grow, and three years behind us now of 15% growth. Now we see a trajectory of years ahead of us, where we on average will grow 12%, of course, depending on, let's say, investments coming online during the duration of that time horizon.
On the operational EBITDA, we communicated back in September last year that we expected an EBITDA margin of 12%-16%. We are now changing our communication to be above EUR 300 million. This corresponds to more or less the upper half of the earlier communicated range, meaning a 14%-16% ratio. In 2028, we will be above EUR 550 million. Basically, the increase between the years is driven out of the investment here in a third factory and a second vessel. Moving into the RoCE here, we expect to deliver above the previously communicated 2025 RoCE ambition. We have looked into different definitions of RoCE also, based on good dialogue with our shareholders and analysts.
We will stay with the current RoCE definition of operational EBIT for continuing operations as a percentage of average of the last five quarters of capital employed for continuing operations. This is more or less comparable to how the industry is also measuring RoCE, but this doesn't change the fact that we of course have oversight on the different return metrics in general. We have evaluated and looked into most of those. We can communicate that this investment is expected to be fully accretive once in operation from 2027 to a large degree, and also all the different shared metrics you can think about. When we go to the next slide, of course, communicating over longer horizons that demand some assumptions.
The most critical we list here, it is that the market demand is continuing to be favorable in terms of the sum-supply-demand balance as we see it today. That we will ensure further high voltage project awards to enable high utilization of our production, our assets, in general. That we would see a stable development of the global economy, and that we will continue to have satisfactory execution of our high voltage investment, with the program ahead of us, and also on our projects to deliver on the expected profitability margins. We have the assumption also of a stable supply chain with limited disruption and access to the required labor, materials, and services. Also we are adding here the assumption of a stable development in metal prices, which is an assumption behind the RoCE number.
If we go into the next slide to talk more into the capital structure of NKT and also later coming back to the capital raise that we will do. Going just some months back, we communicated that it was important for NKT to secure that we could be part of tendering on these frame agreements, where the TenneT frame agreement was the first one. That demanded that we could secure and commit to our customers that we would be able to expand our factories to deliver the cable, but also that we could secure we have a robust capital structure for the company we are becoming.
This is very much about being ready for the future in a larger project business, that will continue to grow, and where the project business is considered also one where we have to mitigate and act on risk. The stronger balance sheet will very much we will look into the leverage level, and here we are having a stronger ambition of securing a leverage ratio below 0, which is compared to the earlier communicated of up to 1. This will secure a low debt level. In general, we will of course be very aware of cash generation and management of net working capital, where we do see large swings in our current operations.
Further, we need to secure that we can at all times secure the needed project guarantees for winning the project and when we execute. Also we need to have a liquidity to cater for any kind of collaterals related to hedging of commodities and currency exposures. Turning to the next slide to say more about the planned capital raise. Again, we asked for the authorization of up to 50% rights issue at the annual general meeting. This was to secure we could tender on the projects ahead of us. It was a necessity. What has happened then since then, is that we have gone into a strong collaboration with the Swedish government about also securing the site and the location in Sweden.
This has further enabling a collaboration with the Swedish Export Credit Agency, which are coming in supporting NKT with a significant amount of guarantee capacity. What we are also seeing in our negotiations with customer is that since the demand supply curve is strong in favor of the cable supplier, this of course enables also discussions about cash profiles of the projects while being executed. Here we are also to a large extent enabling the investment program over the coming years. There are different elements into the sizing we here commit, communicate today of the EUR 350 million, which you note is not, at least with the current share price, close to a 50% capital increase.
It is much low and of course, eventually, percentage sizing will be subject to market conditions, but it's out of a very strong position as current. This will give us flexibility to act on growth opportunities, which are very good ahead of us. It will enable us to front the value enhancing investment solutions, and it will secure we have the right balance sheet and capital structure for NKT's future and taking on the growth. Changing to the next slide. Not so much of an update on Photonics as we could probably all wish for. More or less this is the same statement that we shared in the Q1 after the Q1 results.
So far we are awaiting the purchasers further actions in response to the decision of the Danish authority, and we are evaluating our options considering this decision's consequences. We are well protected against this situation. What we just want to underline again is that the board of directors still intends to invest in NKT Photonics, and we will have to come to that process on the other side of the purchasers' actions and decision ahead of us. As we have spoken with some about the change around NKT Photonics that current doesn't change anything for the investment in the cables division, neither does it change anything on the funding or the capital raise we're doing here.
On the short term, we have sufficient funds to actually initiate and execute on the investment program. Over the medium long term, when the investment steps up, we expect to have more clarity on NKT Photonics. Going to the next slide and repeating the key message that Claes started out with, the high voltage power cable market has grown significantly in recent years. It's a structural change, and the outcome is very positive, driven by the transition to the renewable energy and the general electrification of societies. To deliver on the significant order intake we already have, we will invest approximately EUR 1 billion in additional high voltage production installations, capabilities, and capacity.
We have communicated a new set of medium-term financial ambitions, and they are reconfirming the strong output on continued growth for NKT, improved earnings level, and a higher RoCE level for the company as a totality. We intend to raise around EUR 350 million through a rights issue in due course. With that, we will turn over to questions and answers.
Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now go to your first question. One moment, please. Your first question comes from the line of Moyo Adebayo, Goldman Sachs. Please go ahead.
Afternoon, all, thank you very much for taking my question. I was just wondering if you could provide more color on the upgrade of the 2025 RoCE, given the stated new ax will only be fully ramped up by 2027. Despite being ahead on your organic growth target and in line with the margin target, or be ahead on EBITDA absolute guidance, we can only sort of see a RoCE towards 12% in 2025. Wondering if you could sort of provide more color on that so we can understand the working capital assumptions and particularly advances considered inside the new targets. Thank you.
Thank you for the question, Moyo. If I understand, it's the right here, it's a little bit more color on the 25 upgrade to the ambition on the RoCE level. Well, of course, when we came out in 2022 in September with the ambition at that point, we still had a lot of uncertainties. I can say that the last nine months has proven also very strong in understanding the whole market demand. What we see now is a strong demand for our cable solution, and that actually goes across our medium voltage and high voltage space. We will definitely see a good earning level, and also meanwhile executing on our investment program.
We will build a backlog for a larger NKT and full utilization of the new factory also. When we have, when we are awarded more orders for a bigger capacity, that also means more cash in from awards and prepayments and execution. This is also contributing to the RoCE development.
Thank you.
Thank you. Once again, if you would like to ask a question, please press star one and one on your telephone keypad. We will now go to our next question. Your next question comes from the line of Kristian Johansen from SEB. Please go ahead.
Yes. Thank you. I have three questions, I'll do them one by one. You mentioned your authority to issue up to 50% new shares, but you also have an authority to issue 10% new shares without preemptive rights. Considering that your equity need is not larger than it is and how the stock market is reacting to today's news, have you at all considered to instead just do the 10% without preemptive rights?
I think many considerations have been on the way. Of course, what we have sized the capital raise from is also the investment, the size of the investment and the strength of the capital structure that we see is a necessity. Therefore, we have decided to go for a rights issue of this sizing at current. And also to secure we actually favor our existing shareholders in these issues.
Understood. My second question goes to the initial utilization of the new vessel. From what I understand, you are going to be building the new vessel alongside the new factory, meaning that those investments will be done by 2026. Obviously, I mean, you need to produce a cable before you can install it with the vessel. How do you secure the utilization of the vessel from day one or in the first year? 'Cause I would assume that it takes a while until your new factory is ramped up and you have a full load on the vessel.
Yeah. Claes here. I think that's a very good and relevant question and one that also, of course, we are considering. We have not yet decided exactly when to take delivery of the new vessel. That of course will be done in conjunction with ensuring also the load for the same. I can also say that, NKT Victoria was taken delivery of in 2017 when we had one tower in Karlskrona and when we had the Cologne factory. Since then, we have built another tower. The actual need of more cable and capacity has grown ahead of us now actually deciding to acquire a new vessel. It's not a given one that the new vessel will only install cables from the newly built factory. I hope, that is, an answer enough to your question.
It definitely is. That does make sense. Thank you. Then my last question just goes to expected level of depreciations. How much depreciation and amortization do you expect that this new investments will add by 2027?
Thank you, Kristian. That was a detailed question. We just had to look up. We expect around EUR 50 million of depreciation from that deal.
Understood. Thank you so much.
Thank you.
Thank you. Once again, if you would like to ask a question, please press star one and one on your telephone keypad. That is star one and one if you would like to ask a question. There are currently no further. Oh, we've just had one more question come in. One moment, please. Your question comes from the line of Akash Gupta from JP Morgan. Please go ahead.
Yes. Hi, good afternoon, everybody, and thanks for your time. My question was, in your 2028 medium-term guidance, what assumptions have you assumed for applications and service and accessories business? Can you provide some color on your assumptions for these two parts? Thank you.
Akash, I didn't pick up fully what particular year you were asking, but I can just say that the 25 guidance for the totality is for application and accessories. You know, we don't communicate, we don't guide on business line, but what we said at the capital market day, there wasn't any kind of investment decision already done. We're planning to that. There we said that the totality, the combo will be around 12%-16% EBITDA margin. Solutions, accessories, and services will typically be on par or higher. The applications is in particularly low than this. Now we are upgrading our expectations for 25 even to the upper half of that.
That is, as I said before, a strong market, especially across the medium and high voltage space, and for the good execution here. 2028, how you should think about it is that what we have, we are adding from 2025 to 2028 is primarily the investment here in Karlskrona and the second vessel. Meaning also that the remaining business lines improved business in those years will be an upside to the current communicated.
Thank you. My follow-up question is on cash conversion. I'm sorry if you have addressed this before, but can you comment on what this EUR 550 million of EBITDA can translate in terms of free cash for the company by 2028? Thank you.
I think you can probably do that, some of that modeling, directly. I think you need to make some assumptions around the CapEx level we will have in an ongoing business. Now this program will run until 2026, 2027. Then you should expect that we are a larger company than current. Currently say that the CapEx levels will be around EUR 80 million-EUR 90 million. Expect something more to that simply out of being having more maintenance. Then I think you should look at the net working capital as of the current, and maybe you take a revenue to net working capital, and then look especially on our solutions business since that is the growing part into those years.
Then I think you get closer to a cash flow simulation you can use for that purpose.
Thank you.
Thank you. We have one follow-up question. One moment, please. Your next question comes from the line of Moyo Adebayo from Goldman Sachs. Please go ahead.
Hi. Thanks for the follow-up. I was just wondering if you're still accounting for some of the Photonics proceeds before the investment plan of EUR 1 billion is fully completed. If, a potential listing of the business is something that's in consideration in the event that the sale is not doable due to antitrust issues?
I think how I would answer to your question here, Moyo, would be that so to say, Photonics as a business, had it been divested then it had been around EUR 200 million, right? In sale price and that. Instead it remains an asset to us in our as a company with a certain value. Let's see where the future takes us in terms of actually finding a better location for Photonics. Then your other question. Sorry, can you just repeat that?
No, that was it. Thank you.
Okay.
Thank you. We will now go to your next question. One moment, please. Your next question comes from the line of Lars Topholm from Carnegie. Please go ahead.
Yeah, a couple of questions from me. Thank you. The first one, if you can give some details on the phasing of the EUR 1 billion in investment. The second question goes to what happens to free cash flow in 2027, because given this investment, by then you will still be in a situation where your book-to-bill will be significantly higher than 1, if you are correct that potential orders are EUR 8 billion-EUR 10 billion a year. Do you foresee a situation where by 2027 you will need to undergo another big investment program which will be long-term earnings enhancing but probably short-term dilutive? Do you see a risk that the time where you generate a free cash flow that's positive will be pushed further out than 2028? Thank you.
Thank you, Lars, for the question. In terms of the phasing of the EUR 1 billion, it will be, let's say 2-4 years program. These kind of investments are bell-shaped, I would say. The ramping up, and we secure the equipment and the cash out for that in the beginning, and then we should expect a high level of investment in the middle years, 2024, 2025, and then let's say a decreasing level thereafter. That's kind of how it will look. In terms of the future, you know, what we want to do now is we're going to focus on the investment here in Karlskrona. It's an extensive undertaking from us.
Getting to our medium-term financial target and an EBITDA in 2028 above EUR 550 is a very nice cash generation element. Then you're fully right, where would market take us? Right now we are focusing on this, and there's still a lot of question marks to the exactly pan out of this whole market space. You're right, we see strong momentum, great outlooks, and then we'll have to look into other these elements later on.
Fantastic. Thank you, Line.
Thank you. There are currently no further questions. I will hand the call back to you.
Yep. Thank you. Thank you, everybody, for participating in what we are feeling is a very big day for NKT, but not only for us, also for the green transition, where we have taken you through the growth opportunities that we see up ahead and especially then of course, the upcoming H3 investment program. I think with those words, thanks everybody for calling in, showing the attention, and thanks for your continued support.