Good morning, ladies and gentlemen, and welcome to the PFISTERER Holding SE Publication of Half-Year Report 2025. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Johannes Linden.
Hello, everybody, and good morning from Winterbach, 15 km east of Stuttgart in the southwest of Germany in Europe. We are happy and proud to have you here today with us and to spend the next 60 minutes with you talking about the financial half-year statement in the second webcast after our going public. With this, I would like to start in the presentation, and I want to start with the management team, or to be more precise, on the Executive Board, to explain to you who is present here, available for any questions and explanations. I am the person on the left on this introductory slide here. Linden is my name, and I am a Co-CEO in PFISTERER Holding SE and Speaker of the Executive Board.
From a functional point of view, I am taking care of the functional areas in operations and finance, and I'm doing this based on a background of having 24 years of profit and loss responsibility in different companies, be it listed or be it private companies. I'm happy to be at PFISTERER these days as this is a great company, and I would like to hand over to Konstantin.
Yeah, good morning, everybody. My name is Dr. Konstantin Kurfiss, the gentleman on the right side, besides Johannes on the slide. I'm in the industry more than 20 years, and as you can recognize, I'm within PFISTERER more than 13 years. Below, you see, I have been working for PFISTERER from 2005 to 2013. I joined NKT up to the end of 2019, and I came back to PFISTERER. Now being the Co-CEO, besides Johannes, I'm responsible for sales and technology here in the company, and my background is an engineering background. Looking forward to working now with Johannes together and answering the questions you have. Thank you.
All right, if we move on in the presentation, we have this introductory picture that some of you who we've been talking to before have seen, but it is not clear to us whether there are any participants in the webcast which we have not been talking to so far. I want to spend two minutes on this slide as it is a good example of explaining what PFISTERER is all about, what the business purpose of PFISTERER is all about. You see here a picture of an overhead line, and on the right side in this picture, there is a wire entering the picture, and on the left side, you see a pole. The wire which is coming into the picture is carrying electricity as it is a transmission line, overhead line that we see here.
Now this wire needs to be connected to the pole, mechanically connected, but from an electrical point of view, this mechanical connection needs to be executed in an insulating way. This is what PFISTERER is doing in many different applications, be it for plugs, sockets, be it for terminations, or be it for insulators, as this example is here that you see. This is a silicon-based insulator. We are summarizing this business purpose that we are following in our mission, where PFISTERER states that we are striving to be the preferred partner for innovative, reliable, and mission-critical electrical connections and insulation solutions. These solutions that we are providing are cable-agnostic and they are generation-agnostic.
By this, I want to state that we have solutions that we can bring together with every cable supplier in order to build systems, and with every overhead line and wire solution where overhead technology is needed. By stating that our technologies are generation-agnostic, it means that as long as electricity is being generated, it needs to be connected, and this is where PFISTERER comes into play. We offer the solutions across the entire power value chain and across different voltage levels. Be it so that electricity is being generated in a nuclear power plant, or be it so that that would be the case on an onshore or offshore wind farm, it could be a solar field or a coal-powered plant. As long as it is being generated, it needs to be connected. This is where PFISTERER comes into play.
This is typically the case in a situation where high voltage needs to be connected. You see these examples on the graph. We call this the electrical landscape. In the illustration, dark blue, dark blue for the generation examples, but also dark blue for high voltage, which we call anything above 53,000 volts. The generation electricity needs to be transmitted, as typically it is not being consumed where it is being generated. This is where the transmission systems come into play. On the bottom left illustration, you see the overhead line situation. In the center, you see an underground cable example where PFISTERER is offering insulation and connection solutions for transmission systems. In red, after the transmission, before the electricity is being distributed, or while it is being distributed, again, you see solutions and examples of PFISTERER products. The distribution mostly is taking place in the medium.
This would be green, or in the low or lower voltage areas, this would be illustrated in the purple color here. If we move on, where are we doing this? As PFISTERER, basically, we do it on a global scale. We have ensured quite a good proximity to our diversified customer base through our own company network, but also through collaboration with dealers and experts in this field. Through this, we are able to serve customers in over 90 countries. You see on the top left in the pie chart our revenue split in the half-year one 2025. Namely, in this global situation we are acting at, we are serving with a 54% revenue share customers in Europe and in Africa, really mostly in Europe. We have had Middle East and India with a 22% represented, the Americas at 15%, and Asia-Pacific at 9%.
Later in the presentation, we will illustrate how this has developed in the year of comparison relative to the first half-year 2024. On the bottom left, there is the revenue split to the product segments. We are reporting our financial figures by geographical segments, but also by product technology type of segments. There you see that the larger segment remains to be in the first half of 2025, the area of high-voltage accessories, so cable connecting solutions for high voltage above 53,000 volts. Then we have the overhead lines with the meanwhile 23%. This is also mostly a high voltage situation. We see then the components business with the 24%, which is in the first denomination to be looked upon as a low voltage situation, and then there is medium voltage with 14%. In the center of this slide, we see the world map with PFISTERER locations.
We are entertaining five factories, with one in the United States, in Rochester, in New York located, three factories in Germany, and last but very important to us, the largest facility and factory of PFISTERER, which is situated in Kladno in the Czech Republic. Other than that, we have our subsidiaries in the individual continents, be it in South America, in Argentina and Brazil, be it in the U.S., of course, where the factory is located. In Europe, we are present in the U.K., France, Spain, Italy, but also in Switzerland and in Poland. In the Middle East, in the Emirates, and since last year also, and I would also say quite successfully already in Saudi Arabia. In the Asia-Pacific region, we are located with two companies in China and one in South Korea.
If we want to look now to the specifics of the first half-year 2025, we believe it's fair to say that the business we are serving, mission-critical connection solutions for the electrical infrastructure, that this business environment has proven to be continued very positive. If, for instance, we look at the electricity demand, we can derive more and more that the demand is structurally increasing due to the trend of AI and digitalization. There is a lot of data available on this. We have here pulled one from the International Energy Agency, which is stating that by the year 2030, the additional electricity demand from AI only will be the electricity demand of Germany, but the one of Germany for three years.
If we look to the grids, the modernization of grids, again in Europe, we have pulled a second example here where the European Union developed or forecasted the investment necessities for the grid investments in order to fulfill the net zero target by the year 2050. Despite that, we have already known that this is an area of significant investment. Only in April, it was so that the European Union announced their newest study on the subject matter, and they found out that it needs to be even higher. The investments need to be even higher than before. If before, the prediction was EUR 1.9 trillion, meanwhile, it is EUR 2-EUR 2.3 trillion that is required. We see as a third example here describing our business environment that there is a rising global power demand, not only on AI, obviously, but also in many other application areas.
We have taken here one example of a company that is also with us in this market. We have chosen Nexans. Nexans was illustrated that they are growing by 7.8% on the power transmission segment that they are reporting. We believe we are very well positioned in this area as well. We could have pulled other examples, for instance, Siemens Energy on grid technologies. You can study or you can see that they were reporting a book-to-build ratio of 1.5. The message here is it's not only studies that are telling us that there will be a growing demand for grid investment, but it's really shown in business of companies that are accompanying us in the market. You will see later that this is also seen in the business development of PFISTERER quite obviously.
As a very last point, we want to strive also the United States because opposite to some impressions that you could get listening to the latest Twitter message from the President of the United States, it is also in the U.S. so that there are massive U.S. investments ongoing, in particular for the high voltage technology. Again, this is the largest business application of PFISTERER, HVA and OHL, as OHL is also typically a high voltage situation. There are many examples. Again, Siemens Energy, they have almost doubled their revenues in the U.S. lately. Also, GE Vernova is an example that we have pulled here, who is investing $100 million in a facility in Pennsylvania to expand certain production capacities for highly requested parts where also PFISTERER is providing product into. With this, we can now move to the business development of PFISTERER.
We have already announced earlier this morning that PFISTERER has seen a quite positive business development, be it for order intake, be it for revenues, and even more, be it for margin and profits. You see on this slide on the right side where we are comparing our financials in a profit and loss statement type, comparing half-year one 2025 to the half-year one of 2024. On the right, you see the column where the changes in percentage in between these two half-years are illustrated. I want to go through the table very quickly, and then after that, I would go through the key comments on the left. We're starting with the table, and they're looking at the order book. We have managed to increase our order intake, maybe starting with that second line, from EUR 200 million-EUR 290 million.
PFISTERER has increased the order intake in these first six months of this year relative to the first six months of last year by, yeah, I would say an impressive 44.7%. We have managed to grow our revenues as well. This is the third line that you see here. We've had EUR 213.5 million in the first half of 2025, and this is an increase of 9.5% relative to the first half-year 2024. Subsequently, the delta of these two lines, order intake and revenue, you see the order book has increased also massively. We have grown this number by 57.3%. It's fair to assume that this is a very good basis for the coming period as we will be turning these order book information or data or orders into revenue step by step.
Coming back to the first half-year, with this increase of revenues by 9.5%, we have managed to achieve a gross margin of 42.1%. This is also a relevant improvement compared to last year where we had already, I think, quite a good result with 39%. Of course, 42.1% is even stronger than that. This then relates into an EBITDA of EUR 36.7 million, which is an increase of 12.2% relative to last year. We see an overproportional increase of EBITDA. 12.2% is higher than our revenue increase. This is, of course, related to the gross margin, but there is also more effect to that. We come to this and explain this in a minute or two a little bit more in detail. EBITDA went up by 13.7% and the result of the period by 33.1%, ending with EUR 21.8 million of, yeah, period results.
We have continued to invest the relevant monies into R&D. As we at PFISTERER, we are considered to be the technology leader in our specific industry. It's our clear ambition to keep that position and to even extend it in the period to come. We spent 5.5% in R&D, and our operating cash flow is at half a million euros in the first half of the year. If you look to the report, it is evident that this is going back to an increase in inventories. Please refer to the order book situation that has went up significantly. We are, of course, working on this, and that means we need to organize materials. Next to that, also the growth in revenues is related to an increase in our receivables simply due to the timing effect of this.
Yeah, if we have 90 days or 120 days payment terms with our customers, we will see the operating cash flow effects from the increase of revenue respectively later than showing the revenue and the results in the profit and loss statement. Our adjusted EBITDA is illustrating the impact of our virtual stock option program that PFISTERER has developed in order to incentivize efforts of relevant numbers in the management team. Correcting these virtual stock options, which are IPO event-related, in that sense, they will be disappearing at some point as we do not intend to do a second IPO anytime soon. Therefore, we are correcting this, and therefore we show that the adjusted EBITDA would, from a business point of view, be really the truth, the core of the business strength.
There you see that we have booked EUR 39.5 million of adjusted EBITDA in the first half of the year, which is representing then 18.5% adjusted EBITDA margin. This is again, as it was already, the non-adjusted EBITDA and improvements of the first half of the year of 2024. The balance sheet figures at the bottom of this slide show our net debt, which went down dramatically from EUR 63 million-EUR 8 million. This is, of course, related to the IPO as we have generated cash in the IPO of approximately EUR 90 million, and this went into the reduction of net debt. The net working capital went slightly up. 25.8% was last year, and now we are standing at 30%. This is related also to the reasons I was referring to talking about the operating cash flow.
This has to do with our increase in revenues and therefore receivables, and at the same time also with the increase in inventories as a preparation for dealing with our increased order book. We have grown the company from an employee point of view by 6%. If I may summarize this page very briefly and starting from the bottom, PFISTERER has managed to increase the business by 9.5%. However, we did this with 6.2% more people. At the same token, we have grown our net profits by 33%. With an increase of an order book by 57%, we believe there are good times ahead of us. With this, I want to comment on the left, the bullets that we see here, the significant increase in order intake I have covered.
If you look through the regions and the product segments, we think it's worthwhile to mention that all product segments and all regions have shown this increase in order intake. Across the board, we are participating in the growth investments into the electrical grid. If you want to pick out the most impressive development, this would have to be allocated to the region Middle East, where we have managed to increase our order intake by almost 180%. I believe this is worth to mention. The Middle East is booming when it comes to investments in electrical infrastructure. I was referring to this earlier. We started with our own company in Saudi Arabia last year. We have continued to show a good gross result, over proportionally as the gross margin went up.
From a revenue point of view, we had the largest contribution when it comes to the share of the growth of the revenue in HVA and MVA. However, it's also here worthwhile to mention that OHL has, next to this booming income, also managed to increase the gross margin in this business segment. I think it's fair to say that OHL is at this moment really making us very happy. We have, as you know, relocated our production from the fire incident in the German facility of Wunsiedel to Kladno. This relocation is accomplished and finished. We have meanwhile started up that production. Obviously, our manufacturing costs in the Czech Republic are much more attractive than they used to be in Germany and Wunsiedel. This is also slightly contributing to our gross margin. I believe the operating cash flow, networking capital, and net debt I have covered before.
We can have a closer look now maybe at quarter two only as a continuation of our reporting of quarter one result at the end of May. We see now the development of the quarter two figures, 2025 relative to 2024. Again, the same scheme of table is here. I want to go also to the data here, order book and order intake. Order book is the same. Order intake, we see EUR 146 million relative to 94%. We grew it in quarter two even more than in the half year, 55.2%. That means the order intake is progressively increasing. Our revenues at EUR 113 million were up 21% relative to last year. Our gross results are even more, namely 28.7%. Our EBITDA at EUR 17 million is increased by 23%. The result of the period by 73.9%. The operating cash flow stands at 6% in quarter two.
We see that the larger portion of the deviation compared to last year, in reality, took place in quarter one. In quarter two, we are reducing the delta. We think there is a good chance that this will also be continuing in the coming weeks and reporting periods. If you look to the EBITDA margin, we see that the adjusted EBITDA margin in the second quarter was at 16.3%, which is an improvement relative to 15.9%. It should be stated here that quarter two was the quarter in which we went public. In quarter two, there was a lot of additional money that we, from a financial point of view, it shouldn't, it's not really an investment, right? From an emotional point of view, it is an investment that we have done.
We spend a lot of money on consultants, legal advice, and marketing activities, and so on and so forth in order to become a public company. All of these costs were booked in the second quarter. Obviously, they have put some gravity on our EBITDA. The good news is due to the high revenue that we have shown in quarter two and the even better improved gross margin, we were able to overcompensate these IPO-related one-off costs. Therefore, you see an even improved, despite these additional burden, you see an even improved EBITDA and EBITDA margin in the second quarter. If I go to the comments on the left, I think also here I have covered most of the points in my previous descriptions.
With this in mind, I would maybe move on to the next page in the presentation where we want to share with you the development over five quarters on our order book and our revenues. If I start with the order book, which are the columns in red, and we go back to the second quarter 2024, as this has been the comparison period also on the previous table, we saw there that at the time we had an order book of EUR 198 million. This number has continuously increased over the quarters of the past year, standing meanwhile at EUR 312.5 million. At the same time, also our revenues have developed in a positive way. I believe it's important to note that the order book didn't go up because we couldn't get the business out the door. We are working full throttle. The order book goes up.
You may remember that we have also in our IPO continuously stated that PFISTERER is going to use the fund to increase its production capacities, its R&D capacities, and to participate in the growing business that is ahead of us. If we look to the comments on the left, we see that the order book from a segment point of view in particular went up in Europe and in the Middle East. We spoke about the order intake in the Middle East previously. If we take average data for the revenues in the recent years, it is so that in the calendar year 2023, PFISTERER was showing average quarterly revenues of EUR 83.5 million. We managed to grow that number in the calendar year 2024 to an average of EUR 95.8 million.
In the first half year, with a growing tendency in the second quarter, obviously, we managed to grow this again to EUR 106.8 million. We are quite happy with the development. As we are growing capacities, the team is growing. We think there is more to come in the coming reporting period. If we take also this five-quarter view on the development of the gross margin, we see that we have consecutively realized high margins. Based on our recent order book developments, we are also confident relative to the margins in our order book. The year-over-year improvement in the gross margin at 2.5% that we see has been stable now for three consecutive quarters. We think that in conjunction with the order book and with the stability we have seen here, there's a good chance that we will see this continuation also in the coming periods.
With this, I would like to move to the last slide of this financial section. To illustrate here our EPS, earnings per share development, again in these five-quarter views, we have done here in the quarter two, and no, we have done here in all of these quarters an adjustment just to illustrate the strengths of the business. We have adjusted the VISOP program that we are in the other financial data only adjusting on the EBITDA. For the purpose of this particular illustration, we have now on this slide adjusted the VISOP, the same VISOP data on the earnings per share.
In quarter 2 2025, we have then furthermore adjusted the specific IPO-related profit and loss effects, meaning EUR 1.4 million of specific consulting expenses that we have seen, and also EUR 0.9 million of an employee share program where PFISTERER has subsidized the purchase of shares to PFISTERER employees in order to strengthen the individual commitment and involvement into the company. If we adjust these specific elements, meaning the VISOP on all of these quarters, because the VISOP was in place for all of these quarters, EUR 1.4 million as specific consulting expenses in the profit and loss of quarter two due to the IPO, and the EUR 0.9 million of the employee share program, again, specifically allocated in quarter 2025, we see that also our EPS is very stable and going up.
This is even more relevant if we look at quarter 2025, as in that quarter, the denominator of this number went up. We had a capital increase. We became a public company, and obviously, the number of shares increased, but due to the fact that the net profit increased as well, we can see that the earnings per share have been stable despite our growth. Now we come to the revenue split in half-year one compared to 2024, compared to half-year one 2025. We see on the right side the breakdown of the revenues as on the previous slide. In relative terms, comparing our regional revenue split to the previous half-year 2024, we do see, first of all, that the Middle East went up from 16% to 21%.
This is the root cause for the relative decrease in Europe from 58% to 54%, despite the fact that the revenues in Europe went up. They went even more up in the Middle East, and therefore, this proportional decrease of Europe and Africa is illustrated here. Asia-Pacific went down by 1%, and the Americas by less than 1%, so more or less stable. If we go to the preceding page, we see the same breakdown of the revenues on our product segment, where I want to start with the HV components. There we see an increase of 37% to 40%. This is, of course, as illustrated earlier, good for us as the HV segment typically has a good and solid margin. This has also been the case for the first half of the year in 2025.
We see also an increase on the medium voltage accessories, whereas we see a proportional decrease in OHL. The business revenues as such have been stable, as it is the case for components as well. Due to the growth of revenues overall, the proportional share goes slightly down. Based on the order intake we have communicated earlier in OHL, this number will be going up very soon. Due to the fact that we have seen tremendous increases in the gross margin in OHL, this is good news. This was it. When it comes to the presentation, maybe we can give a very brief outlook, and I hope then there is still sufficient time for questions and answers. A very brief outlook about significant and strategic events that we have seen after the reporting date.
First of all, we are very proud to share with you also the announcement we have given about three weeks ago about the building permits we have received for the HVDC, High Voltage Laboratory. We are going to build here in Winterbach. This is a relevant investment, about EUR 30 million. With a working permit now in our pocket, we have immediately started with the groundworks. We are targeting to be ready with the laboratory by the end of 2026, maybe beginning of 2027. This is also the moment in time when we want to see the first revenues in our HVDC cable accessory business. We are working with quite a number of international cable manufacturers. Through this, we believe that our market introduction is to be looked upon with a very high probability.
If we have the time to share one additional slide with you, we believe it's also relevant to inform you that we have acquired a relevant plot in Kladno in the Czech Republic, 50,000 square meters, where we are also going to start building soon in order to be able to continue to grow our production facility in Kladno. It's maybe also interesting to note that this plot is in direct proximity to the existing plant. We will see a lot of synergies there. Next to that, we have also rented additional warehouse space adjacent to our existing facility, which we can use immediately as we are talking, as we are growing the business.
As a very last element here, due to the growth of the business, we have also had the need to extend our guarantee bank lines in order to secure down payments, to guarantee down payments we receive from customers. We have increased this number or this credit line in the second quarter by EUR 30 million. We believe for the time being, this then will be giving us the chance to receive these down payments and guarantees as requested by customers. On the final slide for the moment, we want to share the financial calendar with you. Next webcast will be quarter three, which will be on the 19th of November. If there is a chance to see or meet any one of you on these other conferences where we are going to be present and where we are presenting, it would be our pleasure to meet you in person.
Thank you for your attention at this moment. We will be ready for any questions, and we'll be working hard to give you the best possible answer.
Thank you very much. I'm taking over for now. Dear ladies and gentlemen, please dial in if you have any questions for our speakers. Questions are only possible verbally within the conference call. If you're dialed in, please press nine and the star key now to enter the queue and state your question. I repeat, the combination is nine star. We would really appreciate if you state your questions one by one for a better overview. One question has just arrived. The first question is from Adrian Pe of Oddo BHF. Please, Adrian, over to you.
Yes, hi everyone. Good morning, gentlemen. Congrats to the strong order intake again. I start with two housekeeping ones, pretty quick ones actually, on the insurance payments that you got in Q1. Was there another payment in the second quarter that supported the overhead lines margin? The second one is again a clarification on the one-offs. Should we assume that Q3 or as of Q3, one-offs are basically gone? I.e., we shouldn't see any additional one-offs here or how should we think of it? Let's start with these two. Probably I have another one or two follow-ups then.
All right. Hello there, Perl.
Good morning.
Good morning. Starting with the insurance payment, yes, there was another insurance payment in the second quarter. It was at a lower level. I believe in the second quarter, it was EUR 1.5 million that we received, which is shown in the other income. Yeah. It needs to be considered that we also have the cost that justifies the insurance payment, and the cost is not shown in the other income or expenses, but the cost that we have is shown in the gross margin. If we wouldn't have had these additional costs, you would have seen a better gross margin in OHL. This is being corrected by the insurance payment in the other income. Yeah. I need to correct myself. It was not EUR 1.5 million in the second quarter, but it was EUR 1.0 million in the insurance payment that we received.
We would actually, we would expect that there will be another payment for the last two months of the second quarter that we expect to receive in the third quarter. It has not been received so far, and we have not considered this in the profit and loss statement yet. That would be a small, yeah, a small tiny upside for the third quarter.
Okay, so smaller than the EUR 1 million I noticed.
Yeah, it's hard to say what the insurance thinks about it, but it's not going to be the one that we spoke about in the first quarter.
Yeah, okay.
The second question on the adjustment, yes, you're totally right. The only adjustment that we made, we made a little, let's say, a trip into the adjustment room when we looked at the EPS. On all the other adjustments that we show in our data, we only talk about the VISOP program, okay?
Yeah.
The VISOP program is not finished in the third quarter. There will be two more tranches out of the VISOP virtual stock option program. One will be applying in the second quarter next year, 2026, and another one in the second quarter of 2027, at the end of the second quarter.
Right. Actually, overhead lines.
The amount.
The amount.
Yes, please.
Maybe I can.
The amount will be slightly lower as now there is a longer period ahead of us. The two remaining tranches, they are 25% each of the virtual stock option volume. The first one was 50%. The amount should be lower.
Yeah. Okay, got it. Thanks for that. The overhead line brings me to the question actually on overall gross profit margin. I mean, obviously, OHL is a business considered to be lower margin, probably also lower gross margin. Looking at your last year's reports, that's pretty much confirmed. I guess the support, or I guess the third-party input is higher than in other business lines. It looks like that even net of the insurance, in fact, you could improve the margins. I was curious to hear your thoughts on the relocation to Kladno. What does it mean in terms of incremental margin benefit in this segment from this very move? If you could put a figure to it, just roughly would help actually.
On the Kladno move, OHL is not only Kladno production. There is also a certain trading element to the OHL business.
Yes.
That needs to be known first. Now the Kladno move, if you would approximately say that the labor cost in insulator is 30%, yeah, you should assume that the labor cost in Kladno is less than 50% of Germany. Okay?
Yeah.
This is a kind of a rule of thumb. However, we have moved production. As I said, we have started the production in Kladno meanwhile, but we are ramping up that production. We don't expect to have, let's say, the high point of efficiency in production from day one. There will be a ramp-up curve, and that ramp-up curve will, of course, then have again a certain influence on this relative cost position.
Right.
Yeah, maybe coming back to the observation, yes, the gross margin in OHL has developed extremely well, extremely good.
Exactly.
I think this is the result of hard work of our sales teams. This is also a situation that we incur at this moment, and we relate at this moment to a very good market when it comes to overhead line transmission systems. It's very strong, more than anything in Saudi Arabia, but not only. It's also very strong in other regions in the world, and we are going to benefit from that.
I have two final ones, actually, just probably quickly, I hope. On the revenue trajectory, obviously, given the strong order intake that you had in the first half, first of all, could you give us an idea on what's the portion of orders from that being realized in 2026? I recall last time you mentioned sequentially, you believe revenues are going up. I guess this is probably still for the next couple of quarters, the assumption on the back of the order book, I presume. I just want to hear some kind of confirmation of that. Last question from my side. Obviously, you have this successful IPO. Orders are coming in quite nicely.
I was just curious to hear your thoughts if the IPO and the attention that came with it has also helped you, plus the financial security in the balance sheet, probably, on winning new clients with that growth that you have shown, that you win market share from the order book, and how should we think of it? Thank you. That's it.
If I start with the second half of the question, I think I would believe so, yes. Of course, that is hard to quantify, to say which customer now fell more in love with PFISTERER and at which money amount, due to the fact that we are now a public company. I believe that is hard to discriminate and to be precise and exact upon.
Did you get more quoting activity from clients you didn't have before, for example?
I think PFISTERER is in the market since 104 years. It is certainly the case that we find out there is a new customer we never heard about. I would believe this is not a dominant effect. As customers came to us before, when we were in the phase of thinking about becoming a public company, customers came to us and they already told us at that moment in time, "Listen, we have these growth plans. We want to double our business in the coming five years, but we need you to double your business in the coming five years as well if we want to continue with you. Are you able to grow with us?" That was always the question.
We said, "Okay, if we become a public company, it will be indisputable that we have the fund, the capability, but also the obligation to grow with these customers." In that respect, I believe this is positively recognized by customers, and I believe this is also supporting us. That was the second part of the question, Perl, and the first one I would need to ask again, sorry.
No worries. That was rather on the phasing or, let's say, timing of revenues, order backlog shifting into 2026. What do you have already in hand?
Yeah.
Just the idea of yeah.
Our statement on the forecast section is that we are looking very positive to a continued development, yeah, be it on the revenues, but also on the order intake for even continued growth. We have not given a quantitative guideline there, but I believe the analyst's projection has been in the area of a second half revenue in the magnitude of the first one, right? The analyst's revenue is about EUR 430 million. First half of the year was EUR 213 million. I think with the other situation that we have in hand, we are not shy of this number. If the coming period will be developing well, maybe we have some good news to share with you. At this moment, it's too early.
All fine.
All right. Thank you.
Thank you very much, Mr. Pierre. At the moment, there are no questions in the conference call queue. Please, dear ladies and gentlemen, last call, please press nine and star now if you would like to ask a question. There seem no more questions to be incoming so far. Let's wait a couple more moments. A follow-up from Adrian Perl of Oddo BHF. Please, over to you again.
Yes, then I used the time to have more management time. Very good. Actually, maybe could you give us an idea in the IPO process? We have been speaking about, you know, how prices influenced your growth in the past two years as a component of your sales increase. Obviously, I was curious to hear now given that, I mean, it looks like projections for revenues were rather in the ballpark range where utility CapEx is like 12%, 13% or something. Going forward, now you're printing order intakes that are in the vicinity of 40% up year- over- year, which means maybe this is a reflection not only of the market share discussion that we just had, but the overall strength of the market.
The second question that comes out of it is, obviously, did you have the chance to increase your prices on that strong demand, or how should we think of it? I think so far, analysts' expectations have been this is rather volume than price, but I mean, things are obviously moving and changing. Any additional thoughts on this would be helpful.
If I start on the pricing, we have in the course of the year, as an average number, our target is to grow our prices by 3%. This is not a flat number. That is the right figure for each and every situation and case, but this is about the average that we are looking at, what we have been successful in doing in the past years. I wouldn't be shy to say that it will be our continued ambition. This will be one element. Second, the order intake situation, there's a number of reasons for this, and my colleague can also comment on that maybe later. Of course, it is so that we have a positive overall market development. Nevertheless, what you see is not everybody is participating in this positive market development at the same rate.
I think with the more than 50% of increase in order intake in the second quarter and also the order backlog, it is at this moment in time, it's proof of the situation that we have a very close relation to a number of global customers and that we have the right product and the right approach to work with these customers. Maybe with this, I hand over to Konstantin, who can also add additional information.
Maybe a bit on the background of the technology, what means that, you know, for the pricing. I think first, overall, I think delivery times are still the key in the market to execute a project. This is one that gives you a robust pricing even on the products we have at the moment. What we see, you know, with the investments in the transmission lines, be it overhead lines and be it underground lines, we see also a definite increase in the voltage level. What we see in those lines, that means also, I would say, the technology which is needed there is a high-end technology. For those robust undergrounds and overhead lines, you know, even the customers are investing more money to have a, I would say, a really robust system. I think what we also see, Johannes was talking about our customers.
We have global customers like the OEMs. They are preparing, and I don't want to mention any names, but if you look into the OEMs, you know, for transformers or high-voltage transformers and switch fields, how they are investing in the different countries and hemispheres. Even in China, for markets in the Middle East, for transformers and switch fields, and the application goes higher and higher from the voltage level. That also gives us with our product and the innovation we are trying to bring into the market a good access there, even for the pricing and the expectation. There was also a little bit our prediction, you know, in the product mix. High-voltage accessory, what Johannes was describing. I think this is a trend, definitely. I think with our investments, this is the way we want to go forward.
All right.
Very good. Another question on phasing of CapEx, basically. You mentioned the EUR 30 million you're spending for HVDC. I was just wondering, now with a building permit, how should we think of it being distributed over the next couple of quarters, please? By the way, if you talk about that on your overall CapEx budget, what are the expectations that you are having for additional spending?
The data we shared in the IPO presentation then precedes was an investment of roughly EUR 50 million for the coming three years. For this, not the coming, for this year, and then the following two years. This CapEx is related to building expansions. It's related to production equipment additions. It's also related to a number of R&D projects, which also are investments and need tooling and specific apparatus in order to prove the functionality of the systems that we are developing. This being said, the investments, we are pushing them very hard. The investment as such, they are, of course, this is not, it's not the ultimate target. For us as management, it's not the target to invest, but the target is to accomplish what we have wished to achieve through the investments.
With this, I want to say, if we have planned for this year, I'll give you an example, EUR 10 million of machine expansion for silicon production because of the increase of volume that we are looking for. If we find out we only need seven because the other EUR 3 million capacity work we can accomplish through tool improvements or more efficient procedures in production or a new material type we have qualified, which is curing faster than the older one, then of course, we don't stick to the 10, but then we go for the 7. As we are, you know, people which try to run the business in a profitable way. This being said, the HVDC project you were asking for, this is, I think the major portion of that will be next year in 2026.
I don't have the precise number on the top of my mind, and I couldn't tell you as we talk now what it is in quarters. If that is of value, of course, we can share that with you later, how that would be splitting over the time period. Next to the HVDC, we have a relevant expansion project scheduled to start at the end of 2026 in Kladno, as we want to expand the factory. We have already acquired the plot I was talking about earlier. We are expanding our facilities in Gussenstaedt, where we are having the metal fabrication, as we, you know, have a very good order intake also on the components business. We are going to build a new administrative building in Winterbach, as this is the headquarter relative to R&D.
This is the center of gravity for our R&D team, and we are growing these teams as we want to grow the R&D investments proportionally to our growth in revenue. We have to have attractive offices in order to be attractive for newcomers joining the company and so on. I believe, Perl, the EUR 150 million of investment that we have announced is sufficient to grow the business even slightly more than what we have anticipated in our IPO presentation.
Yeah, that was my feeling about this number being quite sufficient or even a little bit, you know, leaving some margin.
Maybe there is some cushion in it. Yeah.
Okay. Perfect. That's it from my side. Thank you.
Thank you very much. Next question is from Yasmin Steilen of Berenberg. Please, over to you.
Good morning, and many thanks for taking my questions. Unfortunately, I have not received the telephone dial-in details in the first place, so apologies for late joining. I have three questions, and I will take them also one by one. The first one on HBA. The segment has seen a strong sales development year over year, but also sequentially. However, looking at the EBITDA margin, it was down year over year and sequentially. Could you elaborate on the reasons and what we should expect for the second half? That's my first question.
Yeah, okay. You are right. If you look to the EBITDA margin in HBA and compare it to a previous period, you would see that there is a certain decline. When we talk about managing the company here from a PFISTERER management point of view, we are focusing more on the gross margin. You know, below the gross margin, we have a certain key how we distribute our sales and admin costs. This key is, I wouldn't say artificial, but it is, you know, it's been when we do the budget, we develop the key how we distribute the cost. All right. If you have a change as you go into the year on the cost development, the key remains the same. This distribution of cost is then somehow diluting or it's not, you know, it does not give you the true information on the nature of the business.
The better information is the gross margin, as that is really true, you know, what we get in the market, what the costs of the product are. We look at the gross margin. If you look to this, to the gross margin data, it was 44.4% in the first half of this year. It was 45.1% in the first half of last year. I would say this is more or less the same. The delta of 0.7% does not put any sweat on our foreheads. This is a normal fluctuation that we see. We believe the margin is very stable in HB. Okay,
Basically, the H1 margin is something I should also expect in the second half of the year.
Absolutely, yeah. I wouldn't see a reason why not. Let me answer like this, okay?
Mm-hmm.
I cannot confirm, but I don't know anything that would be standing against the statement.
Okay, just to clarify, there's nothing structural behind it. It's just allocation of cost, and that's according to your budget. Okay.
Yes. For instance, HV is the biggest segment, so in the second quarter, it would receive overproportional the increase in the admin cost that we have seen due to the IPO, okay? As we run continuously through the year, this would be coming lower.
Okay, yeah, this does not explain kind of the swing in the second quarter. Anyway, maybe moving on to the working capital. Working capital stood at 30% of sales in Q2, and that's basically attributable to the trade receivables. You mentioned already the regional mix. Is this the only reason, or is there also a change in the payment pattern? Are there any countermeasures planned to manage the days of receivables outstanding? That's my second question.
If we talk about the receivables, we need to distinguish between overdue and not overdue, yeah?
Mm-hmm.
We do not see any negative development on the overdues, yeah? Overdues are very low, and they are stably low. The fact that receivables go up has nothing to do with the outstanding payments that customers are late or, you know, are hesitant or whatever. As a start, the overdues, I'm sorry, the receivables, they are simply linked to the regions, yes? If you sell a product into Germany, yeah, and you have an FOB, let's say, as an incoterm, yeah, the period in between yourself shipping the product or leaving the warehouse and being at the customer is one day. If you have the same with a customer in Saudi Arabia, and it's a container transport, then, you know, the difference between one and the second is eight weeks. Even the payment term as such is the same, yeah? This is one factor.
You have seen the revenues in the Middle East have gone up, yeah, but transportation distance is longer. This is an element that you see. Second, what we also see is that in the region of the Middle East, yes, payment terms are basically 30 days longer than they are in Germany.
Just to follow up on this, as you also expect significant growth to continue in the Middle East, you still stick to your midterm working capital target of 27%- 28%?
Yeah.
Okay. Perfect. The last question on HVDC. You mentioned in your intro the collaboration with the international cable manufacturers that are currently qualifying the complete solutions. Could you share more details on the rough numbers of customers you're now currently qualifying? Are we talking about a low or mid-single amount of customers? When do you expect the qualification process to be finalized? That's my last question.
My colleague would be answering this question.
Okay, so it's me again. Thank you, Johannes, just to answer your question. We are working on all regions with different cable manufacturers to qualify our system. We are planning the type testing now. I recently was even in China visiting cable manufacturers. As you know, China is not only working in the Chinese market, they're also coming to Europe. They're investing in Europe, they're investing in the Middle East, they go all the way down to Australia, even to the U.S. We have partners there. We work together. We have partners in India, cable manufacturers. We are going into the type testing. We have them in Europe. We also have cable manufacturers, but not that much in the U.S. We are working together.
We are talking about, and I think this is very important, to work with 20 or 30 doesn't make any sense. Having two handfuls of qualified cable manufacturers worldwide, this is a bit our strategy. I think not saying too much, at least. I think there was a beginning this month, we had the first finalized type test now for 320 kV, yeah? This will be then, I would say, communicated also together with the cable manufacturer when the time is there. I think we are on a good way, and we are going into type tests now in 2025, in 2026 to execute the first projects. As Johannes said, when we have the laboratory ready, when we have the production ready in the end of 2026 or latest beginning of 2027.
Okay, perfect.
If that answers your question a bit.
Yeah, that's very clear. Thanks very much. I'll step back into the line.
Thank you very much also from my side. As there are no more questions in the queue, thank you very much for participating. If you have more questions, further questions, please contact the investor relations team. With that, I'm handing over back to Mr. Linden.
Yeah, also from PFISTERER's side, we appreciate your time and your attention to our webcast here today. We would be happy to see you on one of the investor conferences. We were looking at your earlier or to talk or to present to you again on November 19th when we are going to present the quarter three webcast. Thank you very much. Keep us in good memory. Bye-bye from Germany.
Bye-bye.
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