R esults. After the presentation, we will move on to a Q&A session in which you will be allowed to place your questions directly to the management. We are looking forward to the presentation, and with this, I hand over to you, Mr. Kleinfeldt.
Thank you very much for the introduction, and also from my side, a very warm welcome to the Earnings Call for the 2024 Figures of the Friedrich Vorwerk Group. My name is Torben Kleinfeldt, CEO of the group, active within Friedrich Vorwerk for more than 20 years by now, and I'm really proud to run you through parts of the presentation at least before I hand over to Tim for the financials of the year 2024. For everybody who's not 100% familiar with Friedrich Vorwerk, just one slide as an introduction. Friedrich Vorwerk is a very experienced contractor and service provider in the field of energy transportation and energy grids. We are founded in 1962, so we have today on board more than 60 years of industrial experience in the field of energy infrastructure. Today, roughly shortly above 2,000 employees.
We are operating from 11 locations, mainly in the north part of Germany, but in the end covering a good portion of Europe, from the Alps all the way up north to Denmark, Norway, and also the Benelux States. We have managed an annual growth of more than 20% over the last four years. I think we can be very proud of this, and this is, of course, feasible due to our very highly attractive markets in which we are operating in. First market, and up till 2023, also our biggest market was the market of natural gas transportation, so natural gas grids. Today, one of our major activities is, of course, the electrical grid, especially here in Germany due to the energy transition and moving forward electrification.
A big chunk of our revenue is located in this electricity market, but we already see and also have some very interesting projects on board today in the area of clean hydrogen. Not only clean hydrogen production in terms of hydrogen grids, but also the production of clean hydrogen by means of setting up electrolyzers. Also very interesting and also upcoming, especially in the big cities here of Germany, is our adjacent opportunities where we cover mainly district heating projects, but also biomethane upgrade plants and also CO2 capture and liquefaction plants, which we can deliver to our customers. In the end, we have a decade-long customer relationship to the main TSOs, but also clients from the chemical and petrochemical industry where we can deliver engineering and also construction services.
With this as a major driver, we have increased our order backlog to roughly EUR 1.2 billion as of today. Short market update from my side, the German government has already decided last year to set up what we call in Germany a hydrogen core grid within Germany. This hydrogen core grid will be operated on 100% hydrogen to be transported. The total grid in the first stage comprises more than 9,000 km of partly large diameter pipelines. 44% of this grid will be comprised of new build pipelines and 56% of converted pipelines. Today they are being used for the transport of natural gas, and later on we will convert them so that they are ready for use with hydrogen. Total investment here, roughly EUR 20 billion, which need to be spent from 2024 on and then up to 2032.
To our knowledge, this might always take one or more years, but in the end, we are very sure that we will have in the mid-2030s a hydrogen grid being available here in Germany. Actually, Friedrich Vorwerk has already started on the first conversion project in 2024, so we have already seen some revenues from the conversion of natural gas to hydrogen pipeline in the last year. A very new field coming up probably also over the next years is the installation of what could be called as a CO2 start grid. We see on the left-hand side the first sketch of the CO2 start grid, which has been published by Open Grid Europe, which is one of our main customers.
Today we are especially looking in just one project, which will transport CO2 from a cement factory in northern Germany to the Port of Brunsbüttel, where the CO2 is then shipped to Norway and will there be stored for a long period of time. In addition to this, and this is also a big market maybe coming available to Friedrich Vorwerk over the next years, the German government has just decided on a massive investment package, and this investment will for a majority be spent on existing infrastructure and renewing the infrastructure here in Germany. As we know already today that also the wastewater and also the drinking water grid needs huge investments over the next 15 years. First estimates are roughly EUR 800 billion in this period of time, which would mean a yearly investment of roughly EUR 40 billion into the wastewater and drinking water lines.
Since we have been active in these markets as well, I think these are very good views in the future and big investments coming up, which are all addressable for our services. That is it from my side for the beginning. I will come back later with some details on current projects and an outlook on our project pipeline, but now I would like to hand over to Tim for some financial figures.
Yeah, thanks a lot, Torben, and also a warm welcome everyone from my side to today's earnings call. Overall, 2024 has been a very, very successful year for us. We made it through the transition year 2023 with tremendous speed and achieved record values for many of our KPIs in the 2024 financial year. As some of you may remember, I already opened the Q3 call with the headline "We Delivered," and now following an exceptionally strong fourth quarter, we have once again significantly improved all figures in terms of growth, profitability, cash flow, and also headcount. Let's have a look at the figures in more detail. In terms of revenue, we've steadily increased over the course of the financial year and delivered a fantastic final quarter, which was by far the most successful in Vorwerk's history.
In the last quarter alone, we increased revenue by 62% compared to the previous year. A large part of this revenue growth is attributable to our flagship project A-Nord, so roughly EUR 15 million. However, many plant construction projects also contributed to this growth. These mainly include transformer stations, biomethane feed-in and upgrading plants, as well as gas pressure regulating and metering stations. In the full year 2024, we generated revenue of almost EUR 500 million or EUR 498.4 million to be precise. This corresponds to a growth of 33% compared to the previous years. The trend in the distribution of revenue by segment was already clearly evident in the last few quarters. In 2024, however, the electricity segment has now surpassed the natural gas segment for the first time, making a significant contribution to revenue growth.
In view of the first-order intakes and other upcoming contracts, we expect our clean hydrogen segment to see significant growth from 2026 at the latest. The development of profitability was particularly impressive in the fourth quarter, with an EBITDA margin of 19% and EBIT margin of almost 16%, already returning to the pre-2023 levels, even taking into account the dilutive effect of the cost-plus-fee contract in the major A-Nord project. The financial year 2023 was characterized by several temporary negative influences on the profitability of our group, in particular unexpectedly high price increases as a result of the one in Ukraine, which could not be fully passed on to our clients. However, after all of the projects affected by these price increases were completed by the first quarter 2024, we were then able to gradually focus on newer projects, which is directly reflected in the higher margin profile.
In addition, we have, of course, taken a number of measures, such as the regular use of price escalator clauses, to avoid such impacts in the future. Accordingly, we also concluded the 2024 financial year as a whole, thanks to our high-quality order backlog, very successful. We increased the EBITDA margin from 8.6%- 16.2% and quadrupled EBIT from EUR 14 million to around EUR 60 million. Despite the record revenue in the past financial year, the order backlog as of the balance sheet date increased further to EUR 1.2 billion. 75% of this backlog is attributable to our electricity segment. Although the order intake is now below the level of previous year, which was largely influenced by the special effect of the flagship project A-Nord, the book-to-bill ratio is still 1.4.
The main drivers of this order intake were the land cable connections, BalWin 3 and LanWin 4, two major pipeline projects, EWA and WAT, various projects in the biomethane area, transformer stations, and as recently announced, a 10 MW EPC electrolyzer project. The outlook for the project pipeline is also highly promising. We expect several major projects to be awarded this year, which Torben will present in more detail later during this call. In addition to the rapid recovery in profitability, the development of net cash is particularly impressive. Compared to previous year, we have increased net cash by EUR 112 million- EUR 154 million and thereby creating an excellent basis for further organic and acquisition-driven growth.
The main reasons for this significant increase are, firstly, the significantly higher profitability levels, secondly, an improved negotiation position with regards to payment terms, and thirdly, also improved work and capital management with regards to our internal processes. Based on our well-filled order book, we expect revenue growth to between EUR 540 million and EUR 570 million in the 2025 financial year. This already takes into account existing uncertainties regarding the construction clearance of individual projects, and in terms of profitability, we expect an EBITDA margin of 16%-17%, taking into account the dilutive A-Nord effect. At the upper end of this range, this would result in an EBITDA of almost EUR 100 million. Yeah, and with that, back to Torben for the business update.
And thank you very much. Yeah, I first want to touch on some current projects which are going on. The first is from the actual natural gas market, but the pipeline we are constructing is called the EWA, so it's a pipeline running from the caverns of Etzel in northern Germany to a compressor station operated by Open Grid Europe in Wartenburg. This pipeline is roughly 24 km long and has a diameter of 4 in, so 1.2 m in diameter. We've already started to work on this project with preliminary works in 2024, and this year all major activities on site have started. Main activity here run by Friedrich Vorwerk is the front-end welding system, which is a newly developed welding system, fully automatic, so we are not in need of specialized welders to operate this system.
Normal machine operators are only necessary to do the welding activities on this project. So far, we have reached a very, very good result in terms of welding quality. So far, we did not have a 100% error-free front-end welding on this project, which has never been done by any other contractor in pipeline business here in Germany, at least where the qualifications for the welding and the welding standards are very high. Once we have finished the EWA project, we have been awarded the first lot of the so-called WAT project, which runs from Wartenburg to Drone. It is a 40 in pipeline, so 1 m in diameter. Both projects together can more or less be considered one project. The WAT project will immediately start once we have delivered the EWA project, so activities on the WAT will also commence probably in the third quarter of 2025.
As Tim already elaborated, we have won an EPC contract to set up a 10 MW electrolyzer at the Emden location of Statkraft Markets GmbH. Statkraft Markets GmbH is operating a power station, a gas-driven power station at that location, and in the first step, they want to erect a 10 MW electrolyzer system based on PEM technology to use the electricity which is delivered by windmills off the North Sea Coast and then transferred into purely green hydrogen. In the first stage, this hydrogen will be picked up by trucks and delivered to the customer, so we, as Friedrich Vorwerk, not only provide the electrolyzers but also the storage and compression facilities in the Emden location. Very interesting project, and it is one of the first major medium-sized electrolyzer projects here in Germany.
We are very proud that we are the selected project partner for Statkraft Markets here in this location. Also, other even larger hydrogen projects are being kicked off, for example, the Hamburg Wind Project, which comprises an industrial hydrogen grid serving all main demands in the harbor area of Hamburg. The grid will be fed by imports of ammonia and regasification of the ammonia and feeding it into the hydrogen grid. Hamburg is trying to set up an electrolyzer with a capacity of 100 MW here in this location, supplying purely green hydrogen to all industrial consumers here in the harbor area of Hamburg. For example, aluminum plants, steel-producing plants, but also other industries like, for example, Airbus, the airplane industry will be one of the first customers being connected to this hydrogen grid here. Friedrich Vorwerk is already active in the Hamburg Project.
We've already delivered two lots of the future hydrogen grid and have just lately been awarded the third lot to erect the first strings of the hydrogen grid here in the harbor area. Besides that, we are still active in our estimation department, tackling new projects, mainly for the natural gas and the electricity market. Of course, we are showing on this map only the very large projects. On the natural gas market at the moment, another natural gas pipeline, which will be later on being transferred to hydrogen use, is the ETL 182 project driven by customer Gasunie. Also, the ETL 179 tendering for those two projects is still ongoing. Total length is more than 100 km. Execution will be here in Lower Saxony, so very close to our headquarters in Tostedt, and therefore these two projects are definitely in the main interest of the company's group.
We already touched on the BAC project, which has already been awarded. At least one lot has been awarded to Friedrich Vorwerk, so we are quite happy, especially in conjunction with the EWA project, which will deliver work in this area for two years here in our company's group. Other projects still ongoing are for terranets bw, which is the main TSO in the federal country of Baden-Württemberg. The SEL project is still being extended to Lot 3, and further on, Friedrich Vorwerk together with other partners has already won the Lot 1 and the Lot 2 of the pipeline, and Lot 3 is at the moment still in tender procedure, but we are expecting an order decision in Q2 this year. Spessart Odenwald Leitung, also a very big project, roughly 120 km, also for terranets bw. Tendering is still going on.
We do not expect a tender decision made by the customer here before Q3 this year. On the electricity side, of course, we still have Südlink and Südostlink. There are still numerous lots to be tendered out. At the moment, we are still working on Lot 1, 3, 5, and 6 for the Südlink and numerous lots on the Südostlink, and also some offshore connections, for example, with the project LanWin 2, which is a relatively small onshore portion with 12 km offshore, but a very long stretch to be constructed offshore, which is, of course, not the scope of Friedrich Vorwerk. As we can see, still a lot of projects in the pipeline. That is why we are still looking desperately for more personnel in terms of blue-collar personnel and also engineering capacity to tackle these projects.
For the last year, I think we have done a very good job. We grew organically by 15% in headcount. With a bit of help, I would say, from the building industry, which went down in Germany, which set free a lot of blue-collar workers and also engineering capacities. We made some efforts to expand the recruiting. We opened up a department for recruiting in countries outside Germany. This department has a clear focus on Eastern European countries and also countries from South America and Turkey importing employees and making it available to Friedrich Vorwerk. We have also introduced numerous employee benefits, which I think also did help to grow the employees to the size we have at the moment. As it looks today, I think we can continue on this track record and hopefully reach a double-digit growth in headcount also in 2025.
That is it from my side from new projects and from the market, and I think we have plenty of time to tackle all your questions.
Yes, thank you for the presentation, and we now move on to the Q&A session. For a dynamic conversation, we kindly ask you to place your question via the audio line. To do so, please click the raise your hand button. If you are dialed in by phone, please use the key combination star nine followed by star six. If you are not able to speak freely, you can place your questions in our chat box. We already received a question. Mr. Kemper, you should be able to speak now.
Hello, I hope you can hear me. Thanks for taking my question and congratulations for the successful year. My question is, with the federal network agency's approval of the EUR 19 billion hydrogen core network, and Vorwerk already involved in initial conversion projects, could you elaborate on how you're positioned to scale execution capacity and how you plan to maybe mitigate potential bottlenecks in skilled labor or regulatory approvals as the pipeline moves beyond just the first wave? Yeah, thank you.
Yeah, I think we already touched on this issue for numerous times. Of course, since we are active in main construction activities, both on natural gas, hydrogen, and also on electricity grid, the headcount and growth in headcount is vital for the total growth of the company. We do have a policy as a company that we will execute the major and the quality-driven parts of the project with own personnel and own equipment, so growing in headcount is therefore vital for the company. I already elaborated what measures we have taken to grow the size of employees organically, but also, of course, we are still looking at some M&A targets, not only very specialized smaller companies, but also larger companies which could supply good engineers and probably good workforce to our projects.
The companies we are looking at are mainly from the distribution grid, so basically the employees know how to handle the work or executing similar work as we are doing, so these employees can be relatively easily implemented in our projects. I think we will continue on both ways, M&A activities plus organic growth in efforts to gain more employees.
Great, thank you. Very helpful. Yes, thank you for your question, and we have another one. Mr. Stüben, you should be able to speak now and place your question.
Just two questions, please. Just looking at the guidance for this year, are you assuming double-digit headcount growth to achieve that revenue guidance, or is this possible with the current workforce? The second question is just on the annual revenue contribution. Was that roughly in line with your expectations that you gave, I think, in previous earnings calls? The third one would be, can you talk a bit about the cash flow, especially in Q4? I know you mentioned it briefly in the statement, but just some more color on sort of advanced payments, I guess, from annual and other projects that would be helpful.
Yeah, sure. I'm glad you're joining today. Maybe starting with your first question, all the projects we have currently in the backlog, and which are basis for the guidance for 2025, we are able to finish with the existing workforce we have on board. As I said, we've already baked in here some uncertainties. If we are able to further accelerate the success in recruiting, we may adjust also the guidance during the year. Regarding A-Nord, we have roughly finished 20% of the total projects. The project contributed a bit more than EUR 100 million in revenue to the group in 2024, which is in line with our expectation. However, the revenue contribution in 2025 will be much higher from A-Nord.
Yeah, as you know, generally, the fourth quarter in the course of the year is the strongest with regards to the cash flow statement due to all the final invoices handed out to the customers. Also this year, we had, to be fair, an unusually high level of prepayments, which were not only driven by annual, but also by a lot of other projects since we are now able to negotiate prepayments even in pipeline projects, which was just not possible or just not industry standard the last years, which has now changed. Mainly all of our large-scale projects, be it land cable connections, pipelines, plant construction, we are able to have prepayments in a range of 10%-30% of the total contract volume.
Okay, sorry, and just to follow up on that, I mean, your working capital was, as a result, very low in the fourth quarter. Is this something you mentioned being able to get prepayments more so than you used to in the past? Do you think is that structural, or how should we think about working capital in the future?
I mean, we will still have the working capital swings within the course of the year, but I expect that there's also a structural effect with regards to the overall level in working capital, yes. I expect that we should see a more sustainable and lower working capital than the years before, yeah.
Okay, thanks very much.
Thanks for placing your question. To all the participants, feel free to place your question by raising the hand, and I will get to you so you'll be able to place your question. I'll wait a few seconds. Also, in the chat box, there are no questions by now. In the meantime, we have received no further questions, and we therefore come to the end of today's earnings call. Thank you for joining and listening to the questions. A big thank you to the gentlemen for the presentation and the time to take the answers. Should further questions arise at a later time, please feel free to contact Investor Relations. I wish you all a lovely remaining day and week, and hand over to Mr. Kleinfeldt for some final remarks.
Yeah, thank you very much for listening. Stay with us for this year. I think it will be a very interesting year. We are having great projects to execute, and the view in the future is, I think, excellent. I'm in this business for almost 30 years by now, and I've not seen such a good market ahead of us. Stay with us, and if you have any further queries or questions, please feel free and drop us an email and contact Investor Relations. Thank you very much, and wish you all a good week.