Ladies and gentlemen, welcome to the PNE AG Q3 2025 results conference call. I'm Lorenzo, the course co-operator. I would like to remind you that all participants will be in listen-only mode. The conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Heiko Wuttke, CEO. Please go ahead, sir.
Good morning, everyone. Also from my side, thank you for joining us today in this conference call regarding the results of the first nine months of 2025. My name is Heiko Wuttke, CEO of PNE AG, and I'm accompanied by Harald Wilbert, CFO. Let me first give you an overview of the presentation and the course of today's webcast on slide three of the presentation. As usual, I will begin with a summary of the first nine months of 2025, followed by an update regarding the operating business. Then I will pass over to Harald for an update on the financials. After that, I will conclude the presentation with the outlook for the remainder of 2025. We will then open the line for questions. As always, our slides can be found on our Investor Relations website.
Having said this, I would now like to draw your attention to slide five. Ladies and gentlemen, we are pleased to share that we had a successful operational development in the first nine months and that we are well on our way to achieve our targets for 2025. As expected, we successfully sold several projects in the third quarter. These sales included the wind farm Sundern Allendorf in Germany with 34 MW, Clermont in France with 14.4 MW, and three projects in Panama with 103 MW wind onshore and 140 MW peak PV. In October, we closed the sale of another French project, Genoier, with 11.3 MW. In total, since the beginning of the year, we have sold projects with a capacity of around 302 MW. In addition, several other sales processes are currently ongoing, and we are optimistic to successfully close some of them in the near future.
The first nine months were also characterized by very good progress in our development and construction activities, especially in Germany and France, where we completed five projects with a total capacity of 76 MW. At the end of September 2025, 10 owned wind farms with 169 MW plus two wind farms for third parties with 43 MW were under construction. We have already received permits for wind onshore and photovoltaic projects with a total capacity of 510 MW in the first nine months of 2025. This is a remarkable figure and reflection of the steady flow of valuable projects progressing through our pipeline. The expansion of our own IPP portfolio continued to 502 MW. As we added, the five projects we completed in Germany and France with a total capacity of 76 MW in the first nine months of 2025.
I would like to point out that the total IPP figure will change somewhat by the end of the year, as one project with 11.3 MW, which was included temporarily, has successfully been sold in October, and another project with around 25 MW could also be sold in the remainder of the year. Power generation after the first nine months was still burdened by the very weak wind yields in Q1. Even though the wind performance has improved since the second quarter, it was unable to compensate for the very weak first three months. According to BDEW, the German onshore wind market declined by 12% in the first nine months of 2025 compared to the previous year. Our service business continued to develop well. I will comment on the developments in more detail later in the presentation.
Driven mainly by the project sales completed in Q3, the financials improved significantly compared to H1 and also compared to the previous year. Total output grew to EUR 263.7 million, and EBITDA increased significantly to EUR 26.6 million. With this, let's move on to the project pipeline on slide seven. As you can see in the chart on the right-hand side of the slide, the project pipeline of 18.6 GW in the first nine months of 2025 was below the 18.9 GW from the year-end, but increased compared to the previous year with 17.8 GW. The pipeline in our markets, Germany, France, Poland, and Italy, grew by 21% year over year to 8.6 GW. Having a look at the subdivisions, wind onshore increased by 5% or 0.4 GW- 9.6 GW.
PV increased by 7% or 0.4 GW peak to 6.5 GW peak, and wind offshore was stable at 2.5 GW. The total project pipeline, wind onshore, which is the basis for our IPP portfolio, grew to 9.6 GWs, coming from 9.2 GW at the end of Q3 2024. Our home market, Germany, which accounts for 33% of our project pipeline, increased by a strong 20% to 3.1 GW. The wind farms Stubenborn 6 MW, Herbstleben 11 MW, Bokel 25 MW, and Knuts West 22 MW were completed and put into operation for our own IPP portfolio, plus two wind farms for third parties with 88 MW. In addition, 10 wind farms with 169 MW were under construction in Germany, plus two wind farms with 43 MW for third parties. We received permits here for another 167 MW in the first nine months of 2024.
With respect to France, we sold the wind farm Clermont with 14 MW to JPEE and have completed the wind onshore project Genoier with 11 MW. As mentioned before, the latter was temporarily put into operation for our own IPP portfolio, but has meanwhile been sold to SOREGIE in October 2025. In Panama, we have made good progress with the planned market exit by successfully selling two wind farms with 103 MW and one PV project with 140 MWp, where respective milestone payments are possible. Further companies are to be sold in the fourth quarter so that the exit from Panama can be completed as planned in 2025. Moving on to slide nine, we see that the PV pipeline grew nicely to 6.5 GW peak compared to 6.1 GW in the previous year, and development activity is picking up.
This results in good progress from projects to the later project phases, resulting in 100% growth of phase three projects to 777 MW peak, coming from 389 MW peak in the first nine months of 2024. Especially in our core markets, Germany and Italy, we see a favorable increase of our PV project pipeline with 30% to 946 MW peak and 83% to 834 MW peak. We are also happy that we received new permits in our core markets, Germany and Poland, with 124 MW peak and 112 MW peak in the first nine months of 2025. Finally, as already mentioned above, we sold one PV project with 140 MW peak in Panama. If you look at the expansion of our own generation portfolio in the first nine months of 2025 on slide 10, you see that we made good progress here as well.
We added 76 MW to the IPP portfolio in the first nine months and with that temporarily increased the total megawatt in operation to 502 MW at the end of the first nine months of 2025. 475 MW are coming from wind onshore Germany, 22 MW coming from wind onshore France, and 6 MW coming from the woodfired combined heat and power plant Zillbitz. As already mentioned, one project with 11.3 MW has meanwhile been sold in October, and another project with around 25 MW could also be sold in the remainder of the year so that the total IPP figure might still change somewhat. Further, 169 MW in Germany were under construction at the end of the first nine months 2025, partially intended for the IPP portfolio.
Despite the low wind yields, we produced 527 GW hours of green energy in the first nine months of 2025 and saved 400 kilotons CO2 equivalents. The hidden reserves accumulated in our portfolio increased to EUR 199.6 million compared to EUR 195.3 million by the end of 2024. As mentioned earlier, our services agreement is developing very well. I would therefore like to take this opportunity to give you an overview of our services portfolio and some highlights on slide 11. As illustrated in the diagram on the left, the portfolio extends across the full lifecycle of wind and PV projects, from planning to financing, construction and commissioning, operation, dismantling, continued operation, and repowering. In addition to the PNE brand, we offer our services under our other service brands. Energy Consult is a provider of O&M management and technical services and inspections.
It also supports with repowering, with connection, on-demand nighttime marking, and construction management and financing. BitBloom covers the operational data analysis, meaning performance monitoring, condition monitoring, and regulatory compliance. Pavana is responsible for planning and execution of wind measurements, including the evaluation of recorded data, wind assessments, and expert opinions, as well as LIDAR verification. Last but not least, Wuttmate offers intermediary services for power marketing and sales, as well as different marketing concepts with optional access to EEG subsidy support. As you can see in these services segments, we offer not only state-of-the-art but also innovative services, an area where demand is continuously growing. In addition, through the services segment, we benefit from cross-selling effects in project development, such as repowering. With this, I would now like to hand over to Harald for the financials.
Yeah, thank you, Heiko. First of all, I also would like to welcome everyone here in this call. Looking at slide 13, the financials in the first nine months 2025 reflect the first project sales in the third quarter, our high development and construction activities, the addition of further projects to our IPP, as well as the impact from the weak wind yields in Q1. Overall, total output significantly increased by 25% to EUR 263.7 million compared to EUR 210.9 million in the previous year. Cost of materials increased while the cost of materials ratio improved. Personnel expenses rose due to an increase in the average number of employees of 47. We saw now for many years an increase of the number of employees, which peaked in Q2 this year. For the near future, we do not see any further growth of our headcount.
In the context of our transformation program, we want, among other aspects, optimized cost-inclusive personnel cost through many measures. The increase of other operating expenses can be explained by the higher business volume, expenses from exchange rate differences, and consulting costs from the transformation program. Our EBITDA strongly increased to EUR 26.6 million compared to EUR 6.2 million in the previous year, despite the lower wind yields due to the project sales and proceeds from the third-party projects. Depreciation increased due to the continued IPP build-up. Financial result improved due to valuation effects caused by subsequent measurements of the interest rate swaps and KfW loan liabilities. The increase of expenses for taxes in 2025 compared to 2024 is based approximately by 50% in deferred taxes. The remaining 50% derives from corporate and trade tax expenses.
Looking at the segments on slide 14, we see growth in project development and services after the first nine months 2025. Total output of the segment project development increased to EUR 215.1 million compared to EUR 170.8 million in the previous year due to project sales and high construction and development activities. Total output of the segment power generation slightly decreased to EUR 54.4 million compared to EUR 55.3 million in the previous year due to the lower wind yields mentioned before. Total output of the segment services increased to EUR 28.0 million compared to EUR 26.5 million in the previous year, driven by a strong order book. EBITDA-wise, the segment power generation had the highest contribution in the first nine months of 2025 with EUR 33.8 million, even if it decreased due to the weaker wind yields.
EBITDA from the segment project development increased to EUR 1.9 million, and the services segment contributed EUR 1.5 million. However, I would like to mention in this context that a new allocation formula for the distribution of overhead costs led to personal and other expenses by segment not being comparable with the previous year. As always, consolidation was driven by the elimination of project development for our IPP portfolio. Balance sheet. On the asset side, we see on slide 15 that most is allocated to property, plant, and equipment, as well as inventories, what we see as investment in stable values and recurring cash flows. Our cash position fell to EUR 62.1 million, as did our equity, which amounted to EUR 160.2 million. The equity ratio was 12.4%.
The decline of our cash position, equity, and equity ratio can be explained by the construction projects during the year and the sale of projects at the end of the year. These KPIs will recover at the end of the year. However, we continue to aim for a target equity ratio of 20% or more. Adjusted for hidden reserves, the equity ratio was at a comfortable 24.1%. In the second quarter 2025, we increased our existing bond tap by a EUR 10 million tap, and also liabilities to banks further increased as the build-up of our IPP portfolio continued. It is worth mentioning that the majority of these bank liabilities are non-recourse project financing. With that, I would like to hand back to Heiko for the outlook.
Thank you, Harald. Ladies and gentlemen, this leads me to the outlook on slide 17. First of all, let me assure you that we confirm our guidance for the full year 2025 with a group EBITDA in the range of EUR 70 million-EUR 110 million. Our high development activity in the first nine months of 2025 is a prerequisite for the additional project sales in the remainder of the year and the years to come. We are currently working on several other sales processes, for example, in Germany and Poland, which we expect to close in the near future. According to our stronger focus on selected core markets, we expect the finalization of the targeted market exit for Panama before the end of this year. In expectation of a changing and increasingly challenging market environment, we have introduced a comprehensive efficiency transformation program already in the beginning of the year as a key tool to support and improve profitability.
We have identified and defined more than 100 measures which are to be finalized by the end of 2027. So far, the implementation is progressing according to plan. Be assured that we take this program very seriously because in a dynamic market and competitive environment, we want to and must be well prepared. Therefore, let me emphasize once again, we are committed to sustainable growth and value creation. With this, I would like to conclude our presentation and open the call for questions.
We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. You will hear a tone to confirm that you have entered in the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only headset while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Wido Oiman from Metzler. Please go ahead, sir.
Yeah, good morning, Jörg Klowat. Two questions, please. First one is one of your competitors has reported recently margin pressure on ready-to-build projects in Germany and also mentioned higher equity requirements from banks for project financing. Have you noticed this too? Would be one question. And is that a problem for you, i.e., more rigid investment or financing requirements from banks? The second one, again, on your cost-cutting or cost-reduction plans, can you provide maybe a little more details on that? For example, the targeted cost savings or any other details if possible. Thank you very much for your question. Coming to the first one, the competitiveness market and effects on margin or equity requirement.
Actually, currently, we do not see that so far. I think this is always in conjunction with how I would call it, the quality of projects. I think we have been able to provide to the banks and especially then to the market very competitive projects. Up to now, we do not see that. Of course, we are monitoring this very closely. Coming to your second question, I would like to emphasize it is a transformation program. It is not just a cost-cutting program. It refers to efficiencies and many more things to be organized much more efficiently. At this moment, we are not disclosing any figures of the outcome, but I can assure you we will follow this very thoroughly and expect, of course, quite some benefits of that.
Thank you very much.
Okay, thank you.
The next question comes from the line of Holger Steffen from SMC Research. Please go ahead, sir.
Good morning, everybody. I have some additional questions. First of all, about Panama. The company sold the rights of two wind farm projects and one PV project. That was more than we previously saw in the pipeline. How did that happen?
Thanks for your question. Actually, the Panamanian sale, when we decided to exit the market, we looked into, let's say, everything on projects available that might be of interest for the market. And since we don't report, let's say, very early-stage projects always, we have included all those projects. Therefore, the difference might come from that. At the end of the day, we are happy that we found a buyer who thinks who can develop those projects further.
Okay. Final one, one follow-up about these. Can you tell us anything about the terms and conditions, including for the planned further sale in Q4? Are there any write-ons?
Actually, this is not referring to Panama now, but in general, is that the question?
No, only Panama. If you have any write-ons in connection with the sold projects or with the coming projects which you will sell in Q4.
Yeah. I can, first of all, say, okay, we are on the finalizing not just only on the projects, but of course, company levels that are to be exited and sold. For the, let's say, financial impact on that, I'll hand over to Harald in this case.
Yes, we have to liquidate some legal entities there, and then we will deconsolidate Panama and will have a smaller impact, maybe EUR 2 million, EUR -3 million, minus EUR -2, EUR -3 million. We do not have the exact numbers now, but it's not a big impact what we see now.
Okay. That's perfect. Okay. One question about your PV pipeline. You revised your pipeline for Spain and South Africa downwards slightly in the third quarter. Can you tell us a few words about the background to this?
Actually, the revision of the pipeline in Spain, of course, we always look into or, let's say, try to validate the project's value, so to speak. In Spain, since there are some tenders open, we decided that certain projects will not be followed up closely. Actually, for South Africa, I'm not aware and would like to take that question back if there is a real change because we have been successfully closing a deal in summer. Something might have gone out. Maybe we can come back to that directly if you allow.
Okay. That's no problem. My last question, you have stated that you are already preparing for the foreseeable regulatory changes in the German market. What conditions do you expect in the future, and what adjustments are you making right now?
It is a fair question. Thank you. On the other hand, it is not very well foreseeable. Yes, we expect a change in regulations because one has to come, which is in 2027, a change of the EEG in the auction scheme. The other is more the direction of the government. Since there are no clear criteria right now, no concrete parameters and figures, it is very difficult to really look into the future there. However, in general, I think it will be more competitive. As I explained earlier, if you have good projects, we feel prepared to face that pretty well. C oncrete figures and concrete measures can only be done if the information coming from especially the Ministry of Economic Affairs and Energy are much more clear, which we expect early next year. We will have a better view, I guess.
Okay. Thank you very much for taking my questions.
You're welcome. Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Karsten von Blumenthal from First Berlin Equity Research. Please go ahead.
Good morning, Heiko. Good morning, Harald. And thanks for taking my questions. We have seen a lot of negative news flow in the offshore wind business, and I would like to know whether your projects have so far been developing as planned.
Yeah, thank you, Karsten, for asking that question. Offshore, I think the main point is in which region you are looking at. We have seen a downside on the German side because the auction system does not seem to be attractive. We are not active there. Since we have decided to look into what I would call more a niche market at a very early stage development, we are still confident to proceed, especially looking to Asia where we have managed to that our project is now part of the national product development program. It is at this stage too early to say if there are real big obstacles in those markets where we have seen no bids, etc., we have not been active and will not be active. Therefore, at this stage, no change for us.
However, as always, and we are focusing Vietnam and Latvia, if regulatory frameworks are not developing in the right direction, which will enable a profitable development and later on operation, of course, things will not move. Therefore, we are working on that this will happen in those countries where we are active.
All right. Thanks for that. Further question regarding your onshore wind business. Have you perceived a more difficult bargaining environment? I mean, you have successfully sold some projects in the first nine months. You plan to sell more projects in Q4 and will be quite significant because that's the basis for reaching your guidance. As my colleague already said, other market players say that it is getting more difficult. In your recent negotiations, what was your feeling? It's still running well, or is it changing towards tougher conditions for you? Yeah, perhaps you could shed some light on this.
I think we have made two major comments. One is we stick to our guidance, which of course includes that we are very confident, and that's the other point, confident in succeeding with the sales still to come in this quarter. Therefore, I will simply stick to that. Is it harder, or is the negotiation tougher? Somewhat yes. On the other hand, I again bring the point, if you are able to deliver projects in the right quality, then it's of course less demanding, I would say. Therefore, for this year, we do not see an impact on that and are very confident to close this without any turmoil. However, it's not all done yet. That's for sure. The confidence is very high on our side.
Okay. Thanks for that. One question perhaps for Harald. When I look into your quarterly figures on the segment level, I perceive that in the power production segment, you had similar sales Q3 and Q2, but a much higher EBITDA in Q3 than in the previous quarter. Could you shed some light on this?
Yeah. For the power generation, we have the total output here is 55.3 in the previous year to 54 in this year. So it's more or less on the same level despite we have the weak first quarter, Q1, coming from the wind yields. This explains why the EBITDA decreased a little bit. Another reason why it decreased is that in 2024, we had PPAs with high or high-price PPAs, which expired now from the old times. So this normalized now a little bit.
If you put into account a normal Q1, a normalized Q1 in this year, EBITDA had been much higher, EUR 8 million, EUR 9 million. Higher. This was the impact here from the wind yields in Q1. All right. Thanks for that. I perceive that your Q3 service sales were very strong. Has there anything happened in Q3? Yeah. Total output-wise or revenue-wise, it is strong. It is stronger than the year before. EBITDA-wise, it decreased. This is what we explained, that it is coming from the new allocation formula. We allocate no more overhead costs to services compared to the past. If you adjust this, then the EBITDA of the service business had been higher by EUR 5 million or so. Maybe to be added, yes, the demand on the services side has simply increased.
All right. Great. Thank you very much for taking my questions.
Thank you.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Heiko Wuttke for any closing remarks.
If there are no further questions, we'd like to thank you for your participation in today's webcast. We look forward to welcoming you next time, maybe at our next webcast on the publication of our annual report 2025, which is scheduled for the 26th of March, 2026. Have a great day.
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