Welcome to this presentation where I will walk you through our first half year financial performance. I will also give you a business update and outlook in the last part of the presentation. But first, who we are. We are a technology provider helping our clients to eliminate pollution, to enhance a circular economy and in a broader picture to mitigate climate change. We have unique patented technology to convert biomass and waste into CO2 neutral energy, decarbonized energy, low carbon fuels and biocarbon.
On the right side, you see the brands in Wow Group and the brands that we are very proud of. So financial and operational highlights. Key takeaways. We deliver revenues in the period Of NOK 201,000,000, we deliver EBITDA at 20.3% and a record high order backlog that, Including options takes us to a level of more than SEK 1,800,000,000. The revenue Year on year is a bit lower, and that is due to the pandemic effect on our after sales business area.
That is year on year SEK 21,000,000 lower. Project crews continues to deliver strongly. And we in the first half year of this year, we delivered sort of an EBITDA margin of 26%. That's very strong. Land based, we continue to invest in our organization, and we are working on a lot Sort of starting off demonstrating new technology, and we're working with new industry partners.
And I have a separate slide to talk more about these things that we're doing within that business area. And then I will also talk about the spin off, the successful spin off listing of our green metals that we now did in July. Looking at our trends over the last years, You see on the left side the revenues, and you see that how the average the latest 3 half years you see sort of the average activity level or the volume of revenues within cruise projects. That's the backbone of our business. And as I said, we delivered sort of a very strong EBITDA margin of 26% in that business area.
You do see the negative impact on the pandemic on their aftersales, SEK 66,000,000 we had on the second half of twenty nineteen compared to SEK 18,000,000 SEK 80,000,000 now in the first half. But most of that revenue was actually now in the Q2 and we see clear signs of the after sales area coming back again and of course also the land based part of our business. EBITDA margins, we are consistent delivering sort of good double digit EBITDA margin for the entire business at 10%. And on the right side, you see a very nice development on our order intake and our growth on the order backlog with options. So overall, it's a very nice development for our business.
Business update and outlook. The cruise industry. Cruise industry rebounds. We have in the last half year, we have been busy delivering projects, but we also have We've avoided very important contracts. We have a total order intake within cruise project of around 200 €1,000,000 year to date with additionally €135,000,000 of optional contracts.
So We're busy as ever within this area. And with, As I said, we see clear signs of cruise industry resuming operations, Putting more ships back into operations, a very interesting illustration here on the left side, the number of ships Reentering service going from 2 20 ships up to 200 ships now the latest months and The total industry fleet is around 350. So this industry is definitely now returning with now sort of a large share of vaccinations in among the population and the cruise industry passengers. So this will also be positive for our aftersales in the coming months. Land based, building we're building land based step by step.
We experienced sort of a strong demand across a wide range of industries and applications. And it just demonstrates the versatility and the relevance of our technology. And I've Sort of highlighted some projects, some contract awards and some industry Partnerships that we have entered into lately on this slide, recent contract awards in U. S. With Wakefield, A contract for more than USD 5,000,000 where we are helping that client to convert biomass into valuable biochar.
It's part of the Wakefield business today, working a lot with the soil enrichment and carbon capture and storage. They again have interesting clients at the table, And we do see a potential for expansion through sort of that the cooperation we have with Wakefield in the U. S. Safe sterile within food safety, we have entered into lately 5 new contracts for our food safety product lines. So that business area is really developing nicely.
Project execution. These three projects are among sort of other projects as well here, but I've highlighted Circular Carbon and NSR and Philip Morris international. Circular Carbon and Philip Morris is sort of clear. These are Industry decarbonization projects where we are actually helping them to utilize waste as a source to produce climate neutral energy in order for them to replace their consumption of fossil gas in their production. In that way, we're helping them with their ambitions to lower our carbon footprint and to become sort of CO2 neutral.
Enazar in Sweden is a project where we are converting green waste into valuable biochar for soil enrichment and carbon capture and storage. So these projects, it It will be important for us. We're demonstrating the robustness of our technology, and we truly believe that this will be important to be attractive also for other clients in these industry segments. Business development within the metal industry, Working with the largest player in this space, Oslo Mittal, we talked about that earlier. We announced the Potential project now in Luxembourg that we are developing together with ArcelorMittal for the Rubansch site where Our Parulosys technology will be utilized to produce climate neutral energy to replace gas at that site.
We're working with the energy company Repsol to help them decarbonize their operations. And now also you see The cement industry being interesting in our technology, helping them to electrify sort of a high temperature heating process in the calcination part of their business to produce cement and where our technology is relevant. So A lot of exciting things within land based. And not only are we starting up new exciting projects, but we are also signing up new contracts. And That's we're very happy with that nice development.
As said, we're also very happy with the demerger and the listing of Walgreen Metals that we did in July, the first The day of trading of Walgreen Metals when it was demerged out from Wow was 12th July. Cecilia Our new CEO for Walgreen Metals, she bought it last week. She comes in with vast experience from the Forrester Industry and pulp and paper industry. That is important for the sort of development of the infrastructure around Laugren Metals in their sort of industrial plan in the coming years. We are now working with Walgreens Metals for the Fulham site.
The Forum site will be the Europe's largest biocarbon production going live during the fall of next year, where we in Val will deliver a substantial amount of process equipment to that facility, and we expect now Val Green Metals to execute the order where we will start producing equipment for the Folding project, And this will be a significant sort of share of our land based revenue in the coming months and And clearly have a very positive impact on our land based activities and the revenue streams in that segment during the second half of this year. Another important effect we do see in our business, Everybody is talking about EU Green Deal and the EU taxonomy now kicking in. We have demonstrated our relevance In relation to this, we did a successful private placement in March where we raised proceeds of SEK 230,000,000 From new investors coming in, clearly investing towards these greenish initiatives and renewables Fauna is relevant in that sense. The bank is finding us relevant in terms of the taxonomy that They are to be compliant with and DNB secured sort of SEK320,000,000 of long term green financing for us. And lastly, but not least, sort of the NOA that confirms sort of the state grant of up to SEK 80,700,000 for the fallen project.
We are getting access to Green Capital to fuel our growth going forward. So as concluding remarks, still COVID-nineteen impact on our aftersales part of our business that explains Our top revenue line for the period, we see the cruise industry recovering. But in this period, we have been busy delivering strongly within cruise newbuilds and retrofits, and we now see aftersales gradually returning. Robust order backlog, SEK 1,500,000,000, SEK 1,100,000,000 of firm orders. Additionally, with the optional contracts, We're now before we are receiving the order for Walgreens Metals, we're already at SEK1.8 billion.
So very nice and strong part of our business, the way we are increasing our order book and providing a very good visibility for our business going forward. The demerger and listing of all green metals will be very important. And sort of the industrial development of Wow Green Metals will be very important for Wow in the coming years where we will deliver a lot of technology to that venture. High activity in land based, and we see so many clients that now is really targeting industry decarbonization where Wow! Has relevant technology.
So I really look Forward to present our numbers also going forward. But with these concluding remarks, I thank you so much for the attention.
Thank you, Henrik. Thank you for another very interesting presentation, and thank you for joining Cecilia and I here in studio. And to you, our online audience, welcome So you're free to ask questions in the chat on your screen. We'll try to answer as many of those as we can. Some questions have already been logged, and you may continue to log during the entire session.
We will get back to you, Henrik, in a little while, but I'd like to ask some questions to you first, Cecilia, new CEO in Powerd Materials.
And we're testing again. Do we have sound? Apparently, we now have sound. If someone in the audience can give us a nod in the chat that you now can hear us, that would be nice. I get a note here, we can still hear you.
So that's, I guess, a good sign. Okay. Where were we guys? I think I asked you, Cecilia, you just started in your new job in Valgrind Metals. How has the 1st week been?
It's been great. I come from Noskoeskog. So I've been working with Biomass and Renewable Resources for a long time. And now I'm going to be a part of And new industry. So we're building a new industry based also on new renewable resources and biomass and making biocarbon For the metallurgical industry and helping them decarbonize.
So what exactly is this product, the biocarbonate you're producing? What does it do?
Bio carbon is what you get when you simplify it. You heat up biomass And you end up getting a product which has a high carbon content. And this bicarbonate can then replace fossil coal in The production of metals. So it will be as a reduction agent in the metallurgical industry. Was that good enough?
That's good enough. But who would you say are the typical customers for this kind of product?
The typical customers like Elkhem, which is producing silicones and also manganese producers, So those are our typical customers.
I got a question right from the audience right up front here And I ask you're not presenting numbers this time. When will you present your first quarterly or half year report?
That will be next year. So We are we have the plan for next year already. So that's on our web page. So
Yes. So the financial calendar is on your website. But first half will be the Q4 next year, right? Yes. Okay.
Cool. What other sort of short term priorities do you have?
It's a follow-up of the Falun project, getting that up and running and see how we could Speed up the project, but also, of course, as Wow is delivering the technology, they're not only delivering the Technology with the biograin, the biocarbon production, but they're really actually building An entire concept for us. So we're building a factory concept, which means that we can scale up. So we're going to use quite some time on that In addition to actually starting to build that volume.
Maybe Henrik, you can explain a little bit more about this because this is really The core of the competence of Vow as far as I have understood, understanding technology and also delivering the technology as you've been doing in the cruise industry for so many years. So this is the same sort of role that you now have with Walgreens Metals as your customer. Is that right?
Yes, exactly. Of course, we're delivering process technology here, combining technology that we have, Jahir, combining technology that we have deployed on other types of applications. But when it comes to Walgreen Metals and the metallurgic industry, we're talking about large capacities. We need to scale up On an industrial scale to meet the demand we see in that industry space. So as Cecile is clearly saying is that Now it's a matter of getting sort of that system up and running To meet sort of the demand of the industry, high carbon content, as you said, on the biocarbon, but also the high capacities.
We have a long experience in deploying technology, developing technology together with clients. And so I think that is sort of A good, let's say, experience, confidence we have within the group that Borb Green Metals really will leverage on.
And of course, on the long term, that means that we are going to make Biocarbon and we'll also produce Zinc gas to Varda Varme at Folem. But in addition to that, on long term, we will So with Wow developed other products, so that's on the longer term, of course. But now in short term, Folum is the focus.
Yes, because that's an important part of this. It's so easy to think about Vaugr Green Metals as sort of a project type company with just one plant up Volum, that's not the case, right? You see a much wider sort of horizon than just Volum.
Yes. And We have that Stage 1 at Fulham, but of course, there are several stages. So it can be tenfold of what we Actually start up, which is 10,000 tonnes at Fulham. In addition to that, when we are building this factory concept Together with Wow, that means that we can easily scale up on other sides.
And other industries as well? Okay.
What do
you think about that?
Yes. We will be I mean, when you see what we do at Folema, we are utilizing the existing infrastructure, which is I mean, that's quite financial. We get in there and we take that the raw material that Vadervalme is using now for the district heating. We take that material and we're actually adding more value to it And supplying the energy to Vadawarma. So we are getting into that cycle and increasing the value.
If I may comment also, Wahlgren Metals will definitely sort of work towards The metallurgic industry helping that in the industry to replace fossil based coal with biocarbon. But of course, the production conversion of biomass into bio carbon will Provide also climate neutral energy that, for example, in this particular case, it will be Used for at Varzejal for the district heating, but there will also be other types of products coming out. So this is basically sort of A business model where you can produce specific products that The metallurgic energy needs, but also other industries will utilize the energy coming out of that plant and This valuable commodities that could be used for other industrial processes.
Interesting. Henrik, we've got a few questions to your presentation, so I'd like to Turn to that. But first, listening to your presentation, I sort of hear 3 things. 1st, the world cruise projects, Very strong, stable business, very strong margins. Cruise after sales, very much hit by the pandemic.
And then thirdly, Land based, strong potential, a growth company of its own more or less. Would you sort of Agree with that simplification?
Yes, that pretty much nails it nicely down.
Okay, thank you. I've been listening to you then. A question to on aftersales. We're now sort of well into the Q3. I think you Indicated in the presentation that the second quarter was better than the first.
Is this a trend that you now see continuing in the 3rd quarter? And when Should we expect sort of positive numbers?
The aftersays for us is supplying consumables service Operational assistance to the installed base basically. We have now more than 130 cruise ships with our technology on board. So once these ships are getting back into operations, of course, revenue streams will return. And In the presentation, you saw that on the second half of twenty nineteen, we had SEK 66,000,000 of revenues. This In this period, we only have SEK 18,000,000 and of course, that is because ships haven't been in operations.
There have been some kind of service preparing for start up, But now ships are moving into operations and of course that will turn into revenue for us going forward.
So you see that in Q3?
Yes. And this business area It has been growing month by month because more and more ships are coming out in operations delivered from as newbuild from shipyards. So if you look at the numbers 2 years back, we had a small installed base. Now You also have to take into consideration that we have delivered equipment and more cruise ships have been delivered now over the last 2 years. So the potential To grow the aftersales is larger.
It means that we're not getting only back to The 2019 numbers, we have a larger installed base to grow even faster.
Okay. So going forward, we can think about after sales is an even bigger area than it used to be pre pandemic.
Yes, with an increasing With increasing fleet. Increasing fleet with our systems on board.
Cruise project seems to have been relatively stable even during this pandemic situation about 300 to 320.
It has. As We communicated before, no major postponement. We're delivering on a planned schedule. This is a huge area for us. If Look at our order backlog of nearly SEK1 1,000,000,000 of revenues.
That's to a scheduled delivery in the coming years. So it's when we get a contract in the cruise industry space as we did now during the first half year, we signed up €200,000,000 of cruise contracts. Those are the new build projects, they are main deliveries 2 years from now. So when we The revenue we have this year, next year and in 2023, Those are our revenues from contracts we have signed up earlier. So it's a very sort of very good visibility for us.
We can plan, we're scaling and that Friedemarche explains also the high margins we are delivering in that segment.
So going we should expect about the same level in the cruise Project segment going forward more or less, is that what you're saying?
Yes. It's if on an annual basis, Around SEK 300,000,000 is what we have delivered in the past. And what will make a variation to that is If there are able to get some more slots a year, meaning that there will be more cruises coming out And of course, the size of the contracts, but it's the backbone of our business. It's a stable revenue. We are it's a high margin part of our business.
So it's a yes, it's a very good part of our business.
Got a couple of questions on land based as well. I guess more to Waugh about other industry verticals. How Do you think in a sense, Vow has acted as an accelerator in the metallurgical industry with the launch of Vow Green Metals. Do you see the same approach being applied in other verticals? I mean you're working with end of life tires.
You're now you've said you're working in the cement industry. Is this sort of a concept where you will see going forward?
It is. It's all these industry verticals. We deliver technology based on not only on environmental sustainability, it's we're delivering on economical sustainability. It's a business model. So It means that when you invest in our technologies because you can turn waste into profits or you can produce renewables From biomass, in some of these industries, there are not necessarily anybody to take that sort of first mover position.
We have and we show that, we've demonstrated that within all green metals in that spin off that we're taking our 1st mover position. It's attractive for the capital market. We can raise capital for it. So it's and To really speed up the green transition, having the capital market with us, the banks with The funding that we can get from the governmental funding, it makes sense to move fast and that's what we do towards the metallurgic industry. We will definitely do that Towards other industry segments.
But of course, we will also look at partnerships, and we will continue on our And delivery models as well delivering technology. But in some spaces, in some verticals, it makes sense to move fast on our own or in partnership with others.
So Cecilia and Wagwin Nattels is a 1st mover, fast mover. Interesting question in that regard from the audience is, is there enough biomass to actually Fuel or sort of drive this transition?
Of course, there is. We are based on Volum. We're based on Waste materials, those are streams that it's not used today because I mean They're used only as energy. So what we are going to do is give value to those waste streams. So there are quite a lot of material available for us.
Just to make a comment from our side as well. If you look at Let's say we've been working with that business case for a long time. And definitely, the 1,000,000 tonne of fossil based Reducing agents, fossil coke, there are enough there are enough biomass in Norway combining Some of the forestry residues and the demolition wood to fully replace. So but of course, On the world consumption of fossil based reducing agents, and that's the metallurgic industry Uses a 1,000,000,000 ton annually, of course. This There will be restrictions on the available biomass, that type of biomass, but of course, we're looking at other types of organic Way streams that could be converted towards this application.
So that's a very interesting development.
But of course, I mean, we are focusing on the industry And the producers that does not have other alternatives to decarbonize. So that needs coal in the process, that needs the carbon in the process. So that will be our focus area.
Because there is no real alternative at present.
At present, but also I mean in Some years there I mean, you have the fossil coal, but really not something that can, on an industrial scale, deliver On the short term, short term being in a couple of years.
That's a very good point that the focus is The industry that processes needs carbon. And here, we're producing the carbon by Reusing the carbon that is already in the CO2 cycle from biomass, from waste. And we're Moving into industries that today are high temperature industries and dependent on coal or and Processes that cannot be electrified. So I think that from the political point of view, You see that there's very the politicians, the regulations are positive, utilizing this type of biomass Towards industries that cannot be electrified or it can sort of there's sort of other today, there are These type of waste streams or biomass streams could go towards processes that there's another solution. You can electrify the process, etcetera.
So I think that the right to use the biomass, the right to use waste In this direction, I think it's a good political center on that.
It's political, but I would say it's also economical or in terms of Finance, as you pointed out in the presentation, with the tax and everything sort of moving.
And those incentives are now in place. Access to capital and taxonomy is really pushing this giving this a nice push for us.
It also makes it makes sense to use materials where you can't really substitute them with other things than Barkal, you need those materials there, as you said. I mean, when you can't electrify the process, Then you need to put your material and use that in the correct industry and in the correct way.
And of course, there are, let's say, looking at just the metallurgy. Again, there are several options. But of course, if you look at Heidricken as a way To reduce the oxygen from the melting processes, it also needs to be combined with carbon. So it means that bio carbon It's relevant for a lot of these new ways to decarbonize the metallurgy industry. So it sort of sets the ground Very well for Walgreens Metals going forward.
I think we should round off soon. We'll take a couple of more questions From the audience actually on the same topic. And for raw Green Metals, question about The high carbon prices this year and high coal prices, how do you see that impacting the clients' interest in your solutions? Is that something you've seen? Definitely.
It's the carbon, the COVID, the cost
to emit, the cost To pollute the cost of carbon fossil based carbon is really sort of making the financial models better And the appetite to invest for our clients, it's a you have to look at that as a Risk for the industry not to move in this direction. It's I think to use the saying of the license to operate, A lot of industries sees now that they need to find ways to decarbonize, to produce energy from renewables And to produce sort of carbon from renewables because the cost of not doing it will skyrocket In the coming. And it has skyrocketed when you look at the allowance price in the EU. It's not that many years ago it was down At €15 per ton, now it's €60. The Norwegian government is predicting that to Costs come up to €200 a tonne.
So and this just makes our financial models, our clients' financial models even better and create sort of a demand for our technology going forward. So this is definitely good news for the green shift and companies working here in this space.
One final question. Sorry,
go ahead. Just a comment. I would say that our customers are sharing for us because they We are doing what they also are doing. We have a letter of intent with Elkem, and They are also looking into producing bar carbon. They have a pilot that they're building in Canada.
And They are supporting us and think that there is a need for make it a relevant product. So They mean more than 10,000 tonnes. And I think that that's with the increase in carbon prices that They see that they need a solution and they need it fast.
And it's a large only in Norway, it's a large opportunities To really scale up with a lot of production capacity, and that's good for Huawei Metals business plan. And definitely, We really look forward to work closely with Huawei Metals to deliver our technology to your factories going forward.
There's one question I need to ask, which I think is to the engineering part of you, Cecilia. It's what is the what do you consider the most Challenging or difficult part of building your industry or building the business?
Oh, you shouldn't ask an engineer about that. We would probably say that it's A lot of challenges, but it is also, I'd say, getting everything to fit together and getting The perfect yield out and delivering what the customer needs. So getting the process as flexible as possible. That means that we can adjust and especially at Fulham, Where we are starting up making industrial scale production, that means that we need to be able To change the output and that's making that and Still keeping the business model at top, I would say. That was partly not only the engineer, but also the CEO of I think so.
Well, I think
it's sort of I think in a way it also describes why you guys are a perfect partnership in that Because this is what you've been doing, isn't it, for many years in the different industries you have been working, especially in cruise. I mean, this delivering complex technology, Flexible Solutions. So Sounds like this is going to be a great partnership going forward.
Yes, we're really looking forward to that voyage, and we have a huge opportunity here to deliver on.
Excellent. Thank you so much. I think it's time to round off. I think we have actually answered So most of the questions that have come in during the session, if you want to follow-up directly with the company, please Don't hesitate to send an e mail or call. Contact details are on the web and on the press release that was sent out earlier today.
The press release, the half year report presentation material is available on the company's website, and a recording of this session will be available later today. Thank you for listening. Thank you for all the good questions. And thank you, Cecilia and Henrik.
Thank you.
Thank you.