Good morning, everyone, and Welcome to Cavendish Hydrogen's Q3 presentation. My name is Robert Borin, and I am the CEO of Cavendish Hydrogen. With me here today, I have our CFO, Marcus Halland. The presentation will last for approximately 20 minutes, and there will be a live Q&A session after the presentation. Most of you know us pretty well by now, but for those of you who are new to our company, I will start out with introducing our company briefly before we move on to the Q3 business update. In Cavendish Hydrogen, we are in the business of ending emissions from mobility, and we do this through reliable hydrogen fueling solutions across the world. This is really the simplest way I can put it, and it's the thread that runs through literally everything that we do on a daily basis.
In Cavendish Hydrogen, we have sold more than 150 individual fueling station modules since we started. These modules have been distributed over more than 80 fueling locations around the world, where 57 of those stations are currently in operation and under service. We are currently developing new stations in Germany, Italy, and Luxembourg. In the last quarter, equipment supplied by Cavendish dispensed more than 330,000 kg of hydrogen, and our newest generation stations accounted for more than 90% of that volume, which tells you two things. These newly installed stations are commercial stations. They are not for test or pilot use, and there's a real good demand behind these stations, with real fleets of vehicles being fueled, like proper bus stations. All of this is backed by technology that has improved across successive station generations, built on more than 20 years of field experience.
Finally, quality and reliability remain our absolute focus. Looking at our product offering, what we offer is the full value chain, from hydrogen source through hydrogen storage to the fueling station itself, and finally the dispenser. The dispenser is what serves the truck or the bus. This is what the consumer sees. But we don't stop at equipment. We offer the full scope of services, ranging from design, manufacturing, and project management to installation, commissioning, and operational support services. This full-service model is part of what differentiates us and what keeps our stations running reliably once they have been installed and taken into operation. Why is it that we focus on hydrogen for heavy-duty mobility and not on other low-carbon solutions like electricity or biofuel, for instance? Hydrogen mobility have strong advantages compared to vehicles powered by either batteries or combustion engines.
First, a hydrogen vehicle has absolutely no carbon emissions, which is the obvious advantage compared to a traditional combustion engine powered by biogas or HVO diesel, for instance. Second, looking at the driving range, a modern hydrogen fuel cell truck is currently reaching driving ranges well above 1,000 km, and this is something that battery electric trucks just cannot compete with today. Third, looking at the charging and refueling time, a hydrogen vehicle can refuel in the same time as a diesel truck. Here, the battery electric vehicle just cannot follow, with a typical charging time for a truck, a heavy-duty truck, of several hours at least. Last but absolutely not least, comparing a supercharger for heavy-duty vehicle charging, a battery electric vehicle charging, if you compare that with a hydrogen fueling station, a battery electric charging station requires up to 10x more grid connection.
And that is a really meaningful difference when you think about what our already overloaded grid can actually support. Now let me narrow that down to why we in Cavendish specifically focus on heavy duty. Well, heavy-duty transport isn't a niche corner of the transport sector. More than 25% of the European transport emissions come from heavy-duty vehicles. Trucks and buses make up only around 2% of vehicles on European roads, yet they account for more than a quarter of the emissions. This is an outsized problem that demands an outsized solution. Hydrogen can cut this significantly, and it does so without overloading the electrical grid. This is really key, because even if we disregard the significantly longer charging times for a battery electric truck, the massive requirement for grid connection still remains.
In today's fierce competition for grid connection, where data centers are storming forward, it can take between 5- 10 years to get your supercharger connected to the grid. That's why heavy duty is where hydrogen mobility has its most clear, most immediate, and most consequential case. Now you know why hydrogen and why heavy duty. Now let's spend two minutes on why Cavendish. Well, our case rests on four pillars. First, proven execution. We have stations built, commissioned, and generating recurring service revenue across Europe, Asia, and the U.S. This isn't a paper pipeline. This is real operating infrastructure. Second, proprietary technology. More than 20 years of hydrogen fueling know-how built into a scalable platform, and I will talk more about that platform a little bit later. Third, strategic partnerships.
We continue to build strong alliances with market leaders, where our latest alliance with BHDT, who joined us in the spring as a strategic investor and industrial partner, gives us both financial backing and a technical collaboration that we have just started to explore. Finally, the policy tailwinds. National funding programs for fueling stations in Germany and the Netherlands, which I will come back to shortly. Together, these four pillars are what we believe make Cavendish both an attractive supplier and an interesting investment case. On that note, I will now take you through the latest business updates and events for the third quarter. Taking a look at the highlights for the third quarter, we are now operating at a significantly leaner cost base, something that Marcus will be talking more about a little bit later.
We launched our new product line, the H2Station Plus, which is tailored to meet the AFIR funding requirements, specifically as the starting point in Germany and Holland right now. Finally, in the quarter, we saw some really positive movements in the market, with Germany and Holland putting EUR 220 million and EUR 45 million respectively in funding for award in 2026 for hydrogen mobility. Really positive news. Coming back to the market, where the situation still is a bit mixed, but trending towards the positive. We see generally increased activity supported by funding, but the customer decision cycles are still longer than expected. Regulatory landscape is taking shape, but project timing remains a bit volatile, mainly caused by local regulations that are not yet fully in place, but it's getting there.
More hydrogen vehicle producers are entering the market, and we saw that clearly at the Hydrogen Fair a couple of weeks ago, with, for instance, the Chinese producer Dongfeng launching its 1,700 km range fuel cell truck at the Hannover Messe. That was actually really cool to see. However, the overall vehicle availability is still lower than expected, but it's moving in the right direction, and we really start to see the signs now. At the same time, the positive developments are really becoming clear now. Germany and the Netherlands are moving forward with their funding rounds, which I will come back to on the next slide. Vehicle manufacturers and energy companies have more or less committed to Germany as the launch market for hydrogen trucks, and that is then, of course, directly addressing the vehicle availability challenge that I just mentioned.
The joint venture between TotalEnergies and Air Liquide, TEAL, announced in October that they commit to sell hydrogen at EUR 9.95 per kilo, starting more or less now, which at the current diesel prices is to be considered to be diesel fuel cost parity. This is also really cool, I think. Project timing remains a bit volatile, but the underlying drivers in our core markets are moving in the right direction. Taking then a closer look at the funding landscape. Germany and the Netherlands are our two nearest catalyst markets. In Germany, the funding program has a budget of EUR 220 million, which is enough for up to 40 stations. The funding call drew 526 applications requesting EUR 455 million, which is more than twice the available budget. This really shows that the developers are now really ready to build and move forward.
The EUR 220 million funding is to be awarded in just one week on the award ceremony on November 19th in Berlin. Also really, really cool that this is happening now. After the funding award in Berlin, we expect tendering to start in the first half of 2027, followed by investment decisions and supplier awards in the second and third quarters. This is when these programs turn into bidding opportunities for Cavendish. In the Netherlands, the 2026 funding rounds has already been awarded, the EUR 45 million that I talked about earlier. So far, funding four new stations and around 200 heavy-duty trucks. Apparently, quite heavy focus on trucks in this funding round. The next funding window in the Netherlands opens on March 31st, 2027, and the budgets are already set all the way until 2029.
EUR 45 million in 2027, EUR 48 million in 2028, and again, EUR 48 million in 2029. Really positive again there, as you see that the Netherlands is going all in on hydrogen mobility. Next, I would like to highlight a development in our own home market, Denmark. Denmark is sort of the connection between continental Europe and the Nordic countries along the so-called Scandinavian-Mediterranean Corridor, one of EU's main north-south transport axes. For hydrogen trucks to operate between continental Europe and the Nordic markets, there has to be fueling infrastructure in Denmark. On November 4th, the Danish Minister of Transport answered a question from the Danish Parliament's Transport Committee in writing. The answer states that the government expects to implement the measures needed for Denmark to meet EU's AFIR requirements for public hydrogen stations by the end of 2030.
Under AFIR, that means that it needs to be at least one station per every 200 km along the core network. This is an official government answer, not just a market forecast. Cavendish has worked actively with policymakers both in Denmark and on European Union level to put hydrogen infrastructure for heavy-duty transport on the agenda, and it really now starts to show some results. I mean, we are headquartered in Denmark, and we have more than 20 years of hydrogen fueling experience, so we are well-placed as this moves ahead. In October, we introduced the H2Station Plus in Hamburg at the Hydrogen Fair. This is a new addition to our hydrogen fueling offering. We kept the H2Station name deliberately. It is a name that our customers already know, and the new system builds on more than 20 years of experience of operating stations in the field.
The plus stands for sort of the next step with focus on higher capacity, improved serviceability, and more flexibility. It also gives us one clear system identity across applications, which is configured to fit each project both as a starting point when demand is a little bit lower, and over time to scale as demand grows. With H2Station Plus, we enter the next phase of market development with a proven foundation and a platform that is really built for scale and the future. If we are going more onto the operational side of things, and if we are looking into the details of this quarter's dispensed hydrogen volumes, we continue to see a trend that the 32 latest installations are continuing with the largest numbers, where some stations are still dispensing at full capacity.
Again, this is reemphasizing the trend that newly built stations are no longer demo stations, but commercially backed stations installed to fill real volumes of hydrogen to real fleets of vehicles. This is obviously, again, a very positive trend indicating that hydrogen mobility is now finally starting to make a move into the group of financially sound and bankable projects, especially on the Dutch and German markets where the funding is really good. Finally, looking at our order backlog and how that backlog is converting into physical stations on the ground. We have seven station modules already operational at Chevron sites in the U.S., where the last two sites were commissioned across second quarter 2025 through first quarter 2026. Alperia in Italy was commissioned in the third quarter last year, and Mesure Process in France in the fourth quarter.
We have just finalized commissioning for PAK-PCE, the last station here in Poland. For two stations with Hydroalp in Italy, we expect commissioning to be finalized by first quarter 2027. Finally, we have two projects under construction where Mesure Process in Luxembourg and two station modules with OVAG in Germany expect to be commissioned in the first and second half of 2027. This is, I think, the best illustration of what I mean when I say that we execute. Backlog doesn't really sit static. It converts into stations that generate revenue and long-term revenue over time. With that, I would like to hand over to our CFO for a quick walkthrough of the financials. Please, Marcus, go ahead.
Thank you, Robert. The revenues this quarter ended at EUR 2.4 million. That is a decrease from previous quarters due to zero equipment deliveries this period. There is an increase in revenue from installation and commissioning projects and service, and that is due to a strong revenue from our service business this period. Additional sales from repair jobs and spare part sales outside the regular service and maintenance contracts are at a high level. Revenue from service business alone amounts to close to EUR 2 million in this quarter. The gross margin from the service segment is also strong and is a contributing factor to the improved EBITDA. Despite the low revenue level, the EBITDA of a -EUR 1.5 million is a significant improvement from previous quarters.
As stated already, the improved margin from our service business affects positively, but the largest contributor to the underlying profit improvement is the reduced indirect cost base, resulting from earlier restructuring efforts and a more European-centric focus. Unfortunately, this was a quarter with no new station sales, but we see an improved pipeline of potential orders, and there are mature negotiations with several customers. Closing actual orders in some cases take longer than expected, but Cavendish are more optimistic on the market sentiment in Europe, both in the short and the long term. At the end of the third quarter, Cavendish had a cash balance of EUR 12.3 million, a decrease of EUR 4 million from the previous quarter, and that is mainly due to the legal case settlement payment of EUR 2.6 million.
With the legal case and the settlement payment now behind us, and with the much improved indirect cost base, the cash usage will be lower going forward. If we look ahead, based on the current order backlog, it is expected that revenue levels are at a similar level in the final quarter of 2026, but we expect some pickup in the first half of 2027. This is due to delivery equipment of the Luxembourg and the German bus project. The revenue from our ongoing installation projects and service is expected to perform according to the current level. As always, there will be some volatility between the quarters due to the timing of project deliveries might shift. With an improved cost base, a reduced cash usage, and an improved market outlook, we are optimistic about the upcoming periods for Hydrogen and for Cavendish. Robert, I will leave it back to you.
Great. Thanks, Marcus. To summarize a bit, in the third quarter 2026, you saw a much leaner, more focused Cavendish with improving results. We launched a new product line, positioning Cavendish for the next phase of market development, specifically in Germany and Holland as a starting point. We saw significant positive developments in our core markets, again, Germany and Holland. Strong signals from both markets, where there is a funding award already in next week, November 19th, where the EUR 220 million that I mentioned before will be awarded to the projects. This is, of course, something that creates a more transparent basis for customer investments already in 2027. Cavendish is now well-positioned to take on the future and the future growth in the European markets. We have a proven track record of execution. We have proprietary technology.
We are just entering, or we have been entering new and strong strategic partnerships, and we are supported by very positive policy tailwinds. With that, we are entering the last part of our presentation, and we are looking forward to seeing you at our Q4 report in February, and we will now go over to the Q&A session. Before we start, I would like to repeat some of the practicalities. Please raise your hand and remember to unmute on your side before you start to speak, and then start out, please, by telling us who you are and who you represent, and then, of course, after you have unmuted. Thank you, everyone, for listening in, and now, please, let's open up for some questions. I can see that there is one question already. Who is that? I do not see the name. Rosenlund, Is that Anders? Anders Rosenlund, yeah.
Hello. It is Anders Rosenlund from SEB.
Yeah.
I may have asked this question before, but I would like to ask it again. What is your market share for fueling stations, hydrogen fueling stations?
Well, our current market share, it is actually quite hard to estimate. There has been, during 2026, we were actually, if you look at the stations that were installed in 2025 and 2026, we installed, I think, close to 50% of the stations in that period. That was, I would say, an artificially low market period. We were quite successful, even though there were few projects in the market in this period. We were successful in getting the products that were actually up for installation. We are targeting a market share of somewhere between 15%-25% going forward, and especially looking at the German and Dutch markets here, where we are extremely well-positioned with our new product range, the H2Station Plus.
Okay. The second question, what is your annual revenue capacity with the production base that you have today?
Currently, we are running on a very low utilization of our resources. To say exactly what our capacity is on revenue is a bit tricky, but that we are running on perhaps 10%-15% of the max capacity, that would be the best guess, I would say.
Yeah, I would say we are approximately a factor 10.
Yeah.
Yeah.
I mean, I think we also said last time that if we reach around EUR 30 million in revenue, then we will be close to break-even on EBITDA. That we can do without increasing capacity in any sense, and we could probably also do quite a bit more than that.
We are well-invested on the CapEx side, so no major investments needed to grow.
Okay, thank you.
Are there any other questions? Let's give it another 30 seconds. I can see that there are no more questions, and also not in the chat, right? No, no one is raising their hands, and no more questions in the chat. Thank you, everyone, for listening in this morning. Again, remember to register for the Q4, the February 4th, and we look forward to seeing you then again. Have a great Thursday, and see you next time. Bye-bye.