Hi, and good morning. Welcome to Vow's First Quarter Trading Update. I'm here to go through Vow's financial performance for the first quarter. This presentation I have divided into four sections. The first section will be sort of a short elevator pitch on who we are, what we do, and the core behind our value proposition. The second will be our financial performance for the first quarter. The third will be the rationale behind the acquisition we did in the first part of the year. The last concluding part of this presentation will be more about the markets, the trends we see in the market.
May I add that also I am supported here by, I have Erik Magelssen, who will, he's the CFO of the company, so in the Q&A session, he will also be supporting me. First, about us. We are a company that provides technology, technologies to eliminate pollution, to enhance circular economy, and to mitigate climate change. We are offering patented, unique technologies that turn waste and biomass into CO₂ neutral energy, decarbonized energy, low carbon fuels, and biocarbon. We have, over the years, delivered technology to many industries, and particularly the cruise industry, where it's a high quality demanding industry. We have proven over the years that we have been able to standardize our system to make them work, of course, and to scale the business accordingly.
We have a strong backlog of orders and a large install base with leading players in some of these industries that provides recurring business for us. On the right side, you see the brands within the Vow group. Scanship is, so to speak, the vehicle towards the cruise industry. C.H. Evensen is that, the latest acquisition we made. ETIA and Asco, the French part of our business. Of course, also the Biogreen, it's an important trademark for some of our technologies. Some are our, let's say, our key points. We are well-established with a proven delivery model. We have now a company with 220 employees, and we are operating out of six countries. We have 45 technology solutions. That is within our IPR, our intellectual property rights.
We have 117 patents on our technologies. We have, over the years, delivered a substantial amount of systems out there. With the acquisition of C.H. Evensen, that installed base is increasing significantly up to more than 4,450 systems in many different industries. If you look at our backlog, we will over the next years deliver 144 systems now. We also reported our ESG numbers and our targets going forward. Just look at last year, we had you know, zero serious incidents. Of course, we are operating in many different industries on board a lot of ships on many different sites.
That's sort of a very just comes across as that we are HSE and quality management is part of our business, and we are making sure that we are taking all necessary security measures in our business. We have a net-zero ambition by 2025, and we are working to increase gender equality. We have a target by 2022 and 2025 to become sort of 25% on that side. We are, you know, coming from a level of 14%. The core behind our value proposition is that, you know, we aspire to deliver excellence over and over again. We are focused, first and foremost, we're focused on our customers, our clients. We are customer-centric.
It's all about knowing how, you know, knowing our customers and understanding their challenges and needs. Secondly is the technology. What can the technology do for our clients? We need to be predictable when we deliver technology and these complex systems, and we are integrating these systems in many different types of applications. We need to deliver on site, on time, and on budget. With the numbers we're providing, it's demonstrating we're saying that we have a strong delivery model, but the delivery model also contains that important aspect of our business. We're always committed and that's sort of rooted in some of our sort of core values of the business that we are responsible.
It's always the focus to deliver and support 100% uptime on our systems. That's sort of the short elevator pitch on, well, who we are. Our first quarter performance, the key takeaways. We deliver, you know, comparing to the first quarter last year on year, we have an increase of 31% on our order backlog. In the first quarter, our firm contract is at NOK 1.271 billion with additionally NOK 838 million optional contracts. And that's a 31% increase. Our revenues is nearly doubled compared to last year, ending at NOK 183 million. And that's supported by a strong backlog in our business.
We are improving our margins, and compared to last year is more than doubled, at sort of NOK 23.6 million of EBITDA for the first quarter. We also, you know, we published our 2021 ESG report together with the annual report earlier this week. We have sort of the ambition to become net zero by 2025 for both Scope 1 and Scope 2. We are further, and I will, you know, go more into the detail of the rationales behind the acquisition of C.H. Evensen. But we're further with that acquisition, we are further strengthening our foothold and capacity in land-based. Looking at sort of graphically how the numbers and the development have been now over the last five quarters.
As you see now for the first quarter in 2022, you see that land-based is now almost as large as the cruise activities. We’ve said that before, that’s the ambition at a certain time to have sort of as large activity as we have had in the cruise. Of course, we see growth opportunities in these markets, but it’s nice to see now that that is picking up. In the middle on the revenue side, you see still the cruise industry is coming out of the pandemic for the fourth quarter last year and the first quarter this year. Still, revenue is well below the levels that would have been if the cruise industry were fully back at these times.
You see a nice development on the margin side, and our EBITDA margin for the first quarter is 12.9% for the total. All business areas are contributing to that. These numbers are all-time high. Of course, also, we are, you know, backed with a strong order backlog that provides sort of very good visibility for our business going forward. Looking at the different business areas, cruise newbuilds, we continue to deliver very strong numbers. Our EBITDA margin in this business area is 24.4%, and that's larger than a higher number than we accumulated had for the full year last year. It just demonstrates our capability to streamline our deliveries to scale, and to deliver on these multiple ship series.
Of course, we have the effect of the replications in this business, on this business side. That's also why when we're moving towards land-based, we're also looking at the same type of client base that can come back over, you know, year after year and buy almost the same type of systems. We have even confirmed new contracts. Last Friday, we confirmed a new newbuild contract. We signed up one plus one. It's we're booking orders as this industry is now resuming going back into operations. The 47% of our top revenue line is cruise newbuild projects. Of course, there are in this is of course some of the retrofit activity as well within the reported in this business area.
The major part of the revenue here is delivered to our cruise newbuilds. This picture is taken. These pictures are taken last week. This was Cruise, you know, Seatrade Cruise Global in Miami. This is a convention. It's my 22nd year I'm attending this convention. It has now been back from, you know, two years of shutdowns. The atmosphere is very good momentum. I spoke with the executives in, for example, Royal Caribbean Group. They have a total of 66 ships. Now they are back with 62 ships, and by the end of June, they will be fully operational with 60 ships, 66 ships.
One of the reasons why they are now not sort of fully back, 100% back, is that they are, you know, struggling to get enough crew on board the ship again, the ships again. You know, 62 out of 66 is a good number and is, you know, truly demonstrating that cruise is back. The same numbers that, you know, Carnival and Norwegian Cruise Line can report. What's also interesting to see that there's even a higher focus on deploying environmental technology in this business.
More and more focused, they're now looking at what we as a company are doing on land-based side and see whether they want us to look at their fleets, to upgrade the fleets also with the more advanced, you know, waste valorization technologies that we are now moving forward on the land side. Because typically, until now, most of our deliveries in the cruise industry has been, you know, advanced wastewater purification, garbage handling. We have started with the development of technology to also convert these type of feedstocks into energy on board ships.
as we have been actually running faster now on the land-based industries with that type of technology, the cruise industries are actually ready now to do feasibility studies and evaluate these new technologies that we can deliver also on the cruise side. That potentially will give us growth on the newbuild side, but also on the retrofit sides. All in all, it was good to be back, good to meet all the industry colleagues and definitely this industry has been able to come through and they are very motivated now to move swiftly forward. This is just how we are performing in the newbuilding space.
These numbers here just to understand the graphics. This is a list of ships that are under construction to be delivered to market until 2027. 58 cruise ships under construction at different yards in Europe and in Asia, having a capacity of more than 600 people on board. We are on the waste management side, we are on 40 of these vessels. On the wastewater purification side, we are on 39 of these vessels. That means that our market share in this picture shows that we are, you know, nearly 70% market share. That's how strong foothold we have in the cruise industry. When it comes to the industry moving towards even more advanced technology, we are in a very good position to also help them with these type of technologies.
On the retrofit side, we earlier said that there are a substantial amount of ships also that will be subject to retrofit with these type of systems. We said earlier, as we're also stating here, that there are approximately 30 ships out there that are considering to upgrade with, you know, advanced wastewater purification within sort of the next two years. That's part of our growth plan going forward. Looking at what we provide to the installed base within the cruise industry space, historically, that has been 1/3 of our business. Naturally down because of the shutdown on the cruise industry over two years. We had in 2019 nearly NOK 130 million of revenues.
Of course, in the fourth quarter and in the first quarter, we are, you know, stable around NOK 20 million. You know, if I take into account how we have increased installed base during the pandemic, because ships have been delivered, we have delivered technologies that more the more ships have been entering service, but of course not in operation, it means that our after-sales revenue in a non-pandemic would have been sort of NOK 35 million-NOK 40 million in a normal quarter. This is sort of it just demonstrates that the numbers are reflected by low activities on that side of the industry. It's returning, definitely.
We are at least profitable, covering sort of our fixed expenses within that part of our business. We have maintained our people through the period. This is the graph on the right side showing the number of ships that are back in service. You see that the dramatic change from the third quarter last year now until the first of May. You see that the industry is now reporting that 347 ships are back in operation. Out of these 347, 13 ships are with us. You know, that means ships are equipped with Scanship technology on board, coming from 70 ships in operation in the fourth quarter.
That increase demonstrates that, you know, more ships are coming out and we will grow this business back to where we were, but also take into account that we have delivered more ships in the period. Land-based. Good to see, now land-based is 41% of our top revenue line. It's almost as large as cruise, as I said. NOK 75.7 million. We have an EBITDA of 11.2%. Of course, the Follum plant is a substantial part of that revenue. We're doing what we said last year. We have created an accelerator for technology deployment for Vow. That's what we're doing now. We have full activity to deliver our technology to that project. That's one of the things that drives the revenue within this land-based side.
Of course, we are, we're also having revenue from other land-based project, but not, to make that clear, not any revenue yet from the C.H. Evensen acquisition because those numbers will be consolidated from the second quarter. What we do see is that it's more and more focus on pyrolysis as a technology on land. Of course, I would say that we are working on a relatively extensive prospect list, a pipeline, a project, where we see that the market is reacting to pyrolysis as a solution, not only to valorize waste, but to produce energy in the energy situation we have now in the markets.
I will come back to that side. If I would say sort of some you know keys around our strategy at the moment is to be the one, Vow, to be the one that really industrializes this type of technology and to make it relevant for large industries. Given our financial you know all-time high record of performance that we are sort of very satisfied with. It's of course according to our plan. Looking forward, we acquired C.H. Evensen. This is all about increasing our technology portfolio and bringing more people on board to execute. Evensen has 40 employees. We really feel that culturally, you know, we share the same type of DNA. We are working towards blue-chip companies in many different industries.
They have a very strong track record. This is a company that has a substantial competence within high-temperature processes. High-temperature industrial processes are key because they consume a lot of energy, and they are in the market to optimize that and to replace, you know, type of fossil-based energy to electrify, etc. That this is where we are coming in to help them. The company delivered sort of a pre-audit numbers NOK 57 million with an EBITDA margin of 10.4%. This company is growing. You see lately in media in Fredrikstad, where the company is located, it's picked up that this company is really growing.
We purchased, you know, the acquisition cost was NOK 50 million, settled in cash and in a seller's, you know, a vendor note, where the sellers can elect after 14 months whether they will take this in cash or in shares. These are the blue-chip companies that this business is working with. Elkem, REC Silicon, Norsk Hydro, BMW, thyssenkrupp, you know, large companies in different industries that needs, you know, heat processes, high-temperature processes, helping them to optimize these processes and to electrify them and to, you know, and basically help them decarbonize their operations. They have been, you know, this company has a long-term history, even, you know, started back in 1937.
In some of these industry fields, for example, you know, within the hot-dip galvanizing part of their business, they are sort of a leader within that section, so that there's growth opportunities in the core side of that business. Of course, other parts of that business are more, you know, a better fit for us. Of course, this company has sort of a strong foothold, as I said. They have a large installed base that is also interesting for us to speed up our lifecycle services part of the business. In the latest few days, they have signed up two new contracts, and they now have a backlog of NOK 100 million. That's for them actually an all-time high.
It was a really good time to buy them. Of course, they are 40, and it brings us up to a total of 220 people. It's a very good cooperation. Of course, there's a lot of synergies between the companies. We are very excited about some of these technology solutions they have, the access to the markets.
Of course, they really see that we have a strong IP within Scanship. We have a very strong delivery model that we could make sure that we can even make Evensen much more efficient going forward as well. One of the main rationales was also to get hold of technologies around pyrolysis. We have spoken a lot about pyrolysis. You know, we started pyrolysis many years back. We were, you know, encouraged by the cruise industry to develop technology on board ships to convert, you know, residues from the wastewater, from the garbage, and from the food waste, and see whether we could use that as an energy production on board to replace marine gas oil in the heat production on board ships, as an example.
We developed the microwave-assisted pyrolysis technology that we are now deploying. Two of the world's largest cruise ships under construction will have that technology. It gave us ambitions, of course, and we saw that our technology was relevant for land-based markets. That was one of the reasons why we, in 2019, acquired a French company, ETIA, that had another type of pyrolysis technology based on a fully electrified process. It had larger capacities, and the mix of those gave us sort of a good flexibility in our offering. As you have seen that, you know, our focus has been to meet high industry demand, high-capacity systems, and it's demonstrated by the Vow volume or the Vow Green Metals ambitions to play a major role in producing biocarbon towards the metallurgic industry.
That needs you know, we need large capacities to do that. This is one of the reasons why we saw Evensen. They had a very interesting technology. We met with them actually, a year ago, and we looked at the company, and we gave them a challenge. "What if you design a system for us that would be five, six, seven times larger than capacities that we're working on today? Take that challenge." They took it. They came back to us. That was sort of the reasons why we today have that company in our group.
With the Evensen reactor combined with the Biogreen from ETIA and also the pyrolysis, we have a very large technology portfolio to approach many different types of applications with many different types of feedstocks to produce advanced biocarbon materials all the way from biochar to the, you know, the typical carbon that we are now offering towards the metallurgic industry and in many different types of industries. You know, it's a matter of, again, the focus on the customer's needs. That's the first and foremost, and then we have sort of the toolbox to figure out on what application would be the best technology.
I don't see any other players out there with this broad technology portfolio within, you know, high temperature processing and, you know, basically pyrolysis as a main type of technology. What we did, we announced earlier that we have now we gave Evensen the order to produce a large-scale pyrolysis reactor that will be now delivered this year. This is a real milestone event for us. We have received a lot of attention in the market when we announced that we are now moving towards even larger systems.
This is picked up by a lot of the players in the market, and that's we truly believe that even though we're billing it on our own book, we sure have interest on it. You know, we need to move forward. We need to, as a company, demonstrate that you know we are the ones that are industrializing these systems on large scales. This is our ambition. This is what we are doing and we are moving fast. We went fast with Vow Green Metals. Now we're moving fast on large-scale pyrolysis reactors.
This reactor alone can, you know, process around 5 tons an hour or 25 cubics of feedstock an hour and produce, you know, it can produce gas around 100 GWh if you're looking at forestry residues and 10,000 tons of biocarbon. Only on the biocarbon side, if we would use the biocarbon as, you know, taking it out of the CO₂ cycle, we are basically taking out, you know, 25,000-30,000 tons of CO₂ avoidance. This technology is very relevant when it comes to the need for biocarbon, the need to have industrial scale on gas production, you know, this is renewable gas, and also relevant in the aspect of taking carbon out of the CO₂ cycle.
Concluding on the market, and I've spoken about this slide many times, and this is you know the trends we definitely see, and we also see the change. Circular economy is still high on the agenda for many types of industry that wants to turn waste into value. It's industry push for decarbonization. They need to reduce their emissions. They need to find replacement for their consumption of fossil-based energy. It's not an easy task, but we can help them. We have the backing of the governmental policies and regulations. European Green Deal has played a very important part. EU is a first mover actually pushing to decarbonize. They have an ambition to become carbon neutral by 2050.
We know how much, you know, fossil-based energy there is in the mix in Europe. These are, you know, will require a huge transition. We as a company, we wanna be part of that. That's why we are scaling up our technology. There's a new world order, you know. In just over few months, we see that, you know, it's all about energy security and being self-sufficient on energy side as a result of what's going on now with the Russian gas that's and the Russian energy that they're now trying to stop us importing to EU. The industry needs to move on this, you know. How can they be sort of self-sufficient on energy side?
This is the economic realities for industry as we have seen it over many a long period. This is the CO₂ allowance price that has gone up. Means that the cost of emitting CO₂ is increasing, and you have to pay for these allowances. You're trading on these allowances. If you're continuing using the fossil energy, whether it's the carbon, because carbon is used in many types of industries, not only as energy but as a reducing agent, the cost of that is increasing. Here you see actually the cost for the product itself, but also the cost of emissions related to using it on the green part of it.
You see, you know, everybody's now talking about the energy, how the energy prices have skyrocketed. Look at the gas side. We as a company were in discussions with important clients two years back. We talked about Philip Morris International. We talked with them because they wanted to replace natural gas with gas produced from our pyrolysis systems. We established the cooperation with Circular Carbon in Hamburg that is providing gas to Barry Callebaut Everybody was talking about gas because they wanted to replace natural gas. These were in periods where the natural gas was below EUR 20 per MWh . Look how what the development. This is a picture that definitely is changing and creates demand for our technology going forward.
This is the natural gas used by large industries in Europe, and you see some of the clients that we are working with to develop concepts and projects with. All in all, 1,000 TWh. Gas, renewable gas is high on the agenda. To even further illustrate this is the announcement we did with GRTgaz in the first quarter. This is something even more exciting because what we're looking at here is to. What GRTgaz is not a small player. It's the second-largest gas distributor in Europe. What they're trying to do here, they have been running projects in France to demonstrate pyrogas, whether it's gas from pyrolysis or gas from gasification, to convert that into renewable methane for direct gas injection.
We announced progress on our cooperation with GRTgaz to demonstrate, you know, pyrolysis gas, converting that into renewable methane for direct injection. This is very interesting for us because what this does is that it allows our clients buying our technology to be less dependent on specific clients on their offtake of the gas because they could build large factories to produce. For example, if you look at Vow Green Metals, it means that they could be more independent of, you know, having specific clients on the gas because they can produce gas directly to the grid. This is an enabler for build own operators such as Vow Green Metals and enables for our clients that, you know. Making pyrolysis even more relevant going forward. We're also excited about it.
Another trend we see is industry asking for larger and larger systems. When we announced the Vow Green Metals Follum plant, 10,000-12,000 tons of biocarbon a year, another large player in the metallurgical, you know, non-ferrous metal producer came and said, "You know, we see what you do in Norway at Follum, but, you know, we want. Can you deliver a five times larger plant?" We have the ambition by 2025 to source 50,000 tons of biocarbon as a reducing agent. We have even ambitions to go even further because this player is consuming much more. They said by 2025. That's what our teams now are working on to develop that project.
Of course, this is a huge project for us, and it just demonstrates what I'm trying to convey with this is that industry here now is reacting and are really considering pyrolysis as a solution going forward. We wanna take that position. That's why we're scaling up. That's why we are now so focused on designing optimal larger factories for utilizing this type of technology. Let me conclude this presentation, the summary of the quarter. All-time high financial results. Of all these years, we have never delivered as strong as we delivered in the first quarter. Pyrolysis emerging as preferred solution as we see it in many different industries. We are further strengthening the business, bringing more technology into our portfolio, more people to execute.
Good to see that the cruise industry is returning. It's an important part of our business. We're gonna maintain that, and we're gonna grow within the cruise industry space. Ships are back in operation. By June, it's predicted that all ships will be back in operation, and that is important for our lifecycle services. We will be back on that side. But it's also important that these companies now are getting back, becoming profitable again because it has been costly for the big cruise liners during these two years. But most of them came through, and are really now set to start up fully. Carnival or Royal Caribbean Group, as an example of that, already 62 ships in operation out of 66.
The total order backlog remained robust, and it's, you know, provides a very good visibility for us going forward. Of course, we know what we need to do. We know what we need to accomplish this year, so we're working on a large pipeline of potential projects and for, you know, to build to grow this business going forward. Thank you so much for the attention and we will open up for some questions. Turner Holm, Clarksons.
Hey, thanks for the presentation. Turner Holm from Clarksons is here. Just to follow up on the point that you were talking about in the cruise industry, Henrik, in terms of the appetite for further new builds, very, very strong performance in terms of market share, but how do you see the major cruise companies, your main clients, coming back from the pandemic? Clearly, there's more ships in operation, that's positive, but yeah, as you mentioned, they may need to return to profitability. Is there an expectation that we could see more new builds later or as we move through 2022? Or do you think that we might need a little while before we see a new wave?
We signed up a new build on Friday. We see that there's, you know, there's some project now on the expedition side of the new building. We also see the large players looking at it. We have there are activities now, plans to further build ships. You know, the new building side is a longer perspective. If you look at what we are doing now, we are delivering now to ships that will enter service, you know, 2023, 2024, 2025. What you're looking at is the cruise industry's capable of placing order to fill up the slots in, you know, 2026, 2027. I think they are doing it. They are planning for that.
We don't expect actually a slowdown on the new building activity.
On the-
What we have seen is that they have phased out some of the older vessels, and they have used that opportunity. For example, Carnival have taken some ships out of service. That's also because they wanna renew their fleet. Again, it's all about how fast they can become profitable again. We know that the industry itself has over the years shown a very robustness and they have been able to finance ships. That was a short.
Sure
...answer.
Yeah, yeah. Sure. I guess you have a nice order book for the foreseeable future there anyways. On the after-sales, I guess that's a faster cycle business. You mentioned NOK 130 million in revenues in after sales in 2019. When do you think we can kind of expect that the after-sales business gets back to a pre-pandemic level? Should we just look at the number of ships in operation? How should that progress through the year?
That's the easiest way to see now how many ships are now back in operations, for sure. The first quarter stayed slow. We see that we are very busy now in the second quarter. The third and the fourth we expect will be fully back. It means that in the longer run, meaning that, you know, this year we are behind on the first quarter.
Do you expect an improvement in the second half of the year?
Yeah.
Ships come in operation?
Yeah, definitely. What we see already now that things are picking up already in the second quarter.
Sure. Switching over to the pyrolysis side. The large-scale order that you made at C.H. Evensen delivers towards the end of this year. How is it going with regards to identifying a client for that unit? What can we expect there?
We really think that we will have a client on that before that is done. There are projects we're working on that will be a nice fit for that reactor.
Okay. Just on your dialogues with clients, I mean, I think you showed a nice slide on some of the economic drivers for biocarbon and syngas. The costs have really increased quite a lot just in the last few months. Have you noticed any? Have you had more dialogues because of that, or is it you having more incoming requests? Or kind of how are you sensing, you know, customer demand for the solutions that you have, given that, you know, increasing costs of polluting and input costs from fossil gas?
We definitely see an increased interest on it. We have much more RFQ now than we had a year ago. We're working on a pretty extensive pipeline of prospects. I think it's important that you know we previously announced some LOI and MOU on potential you know partnerships or potential clients. I think it's important that it's not that all the let's say, all the clients we have in the pipeline is something that we are announcing on a LOI level. It means that you shouldn't sort of wait for us to announce LOI. It's you know you should wait for us to announce contracts.
Sure.
That's what we're working on and it's, I would say, a huge interest now.
Yeah.
with those dynamics you see in the market.
At a high level, I guess you have aftersales that's starting to come back. You're executing at a high level on the cruise aftersales business. In the land-based, we saw obviously better margins, nicely positive margins. You're executing on Follum. You know, what do you see as the total margin development? How is that looking as we move through 2022?
We have maintained strong margins in the cruise even though you see the market, how it develops on, let's say. We have been able to manage the supply chain. If you look at our margins in land-based, it's affected by also, the, let's say, the fixed cost of that business segment. You will see the same on the aftersales, you know. When we have low revenues, you have low margins. But once you come up to a certain level, you know, your EBITDA margins are, you know, we are capable of delivering such strong numbers as we do within the cruise projects.
Because, you know, the cruise project side of our business is much more aligned with the activity level, meaning that we have put on, you know, forces to put on more people to develop the land-based side. Of course, now we are at 11%, but it's. It means that, you know, it's still the more we grow the top revenue line, the more margins we are capable of picking up.
Thank you.
Thank you. Martin Vangstein from DNB. More a question on the margin side. You delivered a solid margin this quarter, but could you elaborate how to think of the margin going forward when you are progressing on the Follum plant and particular what we see in the inflation on the other industries? And on the second question, on the C.H. Evensen, could you comment on the lead time of the contract? Is that a typical under one year contract? And how much of the backlog is expected to be executed this year?
Let me see if I recall the first question. Regarding land-based margins. We are—I would say all the projects we're looking at working on in the cruise, in the land-based side are projects that for our clients is an investment, and you need to have a return on that capital. We're not sort of moving into low-margin segments of the market. I see that in many situations, we are actually working closely with clients to develop projects together. We're not sort of in a situation where it's a huge competition. It's all about delivering a strong business model. Within that frame, we truly believe that we will have good margins.
What do you want to say a good margin is or in brutto gross margin?
We can benchmark what we're delivering on the cruise side. We don't see why we should not be able to deliver such strong on land-based. We don't see any limitations on that side that we should be capable of that. When we're positioning the company as relevant on the concept of producing renewable energy to replace fossil, and we see development on that side. I think that as we see it, you know, going forward, our business cases or the business cases we are developing with our clients is, you know, the numbers are getting better and better because of increased cost of the fossil alternative.
That allows us to plan for good margins within this business area as well. We need to have growth. You know, as we have been building up resources to deliver on the growth opportunities, you know, we need a certain top revenue line before we can demonstrate those margin levels. We are demonstrating that in the cruise industry space because we are much more streamlined according to the activity level on the cruise projects. On the other question that you had was more on the C.H. Evensen. That's a much shorter delivery of the projects. You know, when we deliver to a cruise new building site, it's a cycle of two to three years.
In many of these projects, they could deliver that within, you know, one to 1.5 years. I think it's a fair statement. It means that from book to revenue is much shorter.
Thank you.
Yeah, just an additional comment, Martin, on the land-based side. You know, for instance, the food safety, there's a much shorter production cycle than the large Biogreen project. That will be like a year from we get the contract until it's finished. It will be a mix between the land-based and the Biogreen, the large pyrolysis project will also be a shorter cycle than the cruise newbuilds project.
We have a couple of questions from the online audience. First from Leo Sanders, general question on the GRTgaz and the 50,000 ton project. When is an end of the confirmation process expected?
If you look at the GRTgaz, that is sort of a project to demonstrate, and we have reached a certain milestone there. It means that that's more sort of to demonstrate technology, you know, the relevance of pyrolysis as a production of renewable gas. On the, as I said, with these unannounced, you know, non-ferrous metal producer, five times larger, that's the ambition was to, in 2025, and still is the ambition to replace, you know, to source 50,000 tons. This means that we are now working on the specification. We're doing a lot of testing now on the product itself.
That the product itself, meaning that the composition of the biocarbon is, let's say, fully replaceable or fully replacing the fossil coke they're using today. It means that that's what we're doing these days. To have a full production in 2025, that means that such a factory needs to be up and running in 2023, by the end of 2023, beginning of 2024. That's sort of the timeframe. I hope that we could be able to announce some more progress now, as we go forward through the next months.
There's a follow-up from Mr. Sanders. Is there any kind of after-sales expected also for the land-based segment?
Yes. That's what we're definitely working on. Strategically, we are building up our activities on that side because we are truly seeing the positive effect on working on that. You know, we have such a strong foothold in the marine side because of it. We need to do the same on the land-based side.
There is a final question from the online audience. Mr. Ole Petter Skonnord is asking, do you have enough feedstock for your plants when you're going to make all this gas?
On these projects we're working on, there are. Of course, if we would use pyrolysis to replace 1,000 TWh of gas, I guess in some areas it will be a question. Of course, these projects. This is on all the projects we're now developing with clients. There, you know, that is the feedstock is always what. Very often it's why the customers are coming to us because they have that type of feedstock they want to convert. It's a valuable point. If you're gonna use one technology to decarbonize fully the European gas grid, you know, pyrolysis would, I guess, have some challenges to get enough feedstock. But it's a combination.
I think still pyrolysis as a technology is a relevant alternative in many cases.
Thank you.
Thank you so much for your attention and for listening to us today.