Welcome to the Alfen 2022 Full Year Results Conference Call. My name is Priscilla, and I'll be your coordinator for today's event. Please note this call is being recorded and your lines will be on listen only. However, you'll have the opportunity to ask questions at the end during the Q&A session. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Mr. Marco Roeleveld, the CEO, to begin today's conference. Thank you. Thank you, Priscilla. Good morning, welcome to this Alfen full year 2022 webcast. Let me firstly introduce the participants on our side. This webcast and the questions that may come forward will be handled by the management board of Alfen, being Jeroen van Rossen, CFO, Michelle Lesh, CCO, and myself, Marco Roeleveld, CEO. 2022 was again a good year to be proud of, both in revenue and results, and we are positive on our future growth potential for the coming years. Assuming you've noted the usual disclaimer, we can now start with the presentation. First, I will start with the highlights of 2022. Michelle Lesh will continue with setting the stage for future growth. In the last section of this webcast, Jeroen van Rossen will go in more detail on the financials and the outlook for 2023. We can go to sheet four with the highlights. Our revenue in 2022 has risen to EUR 439.9 million. This represents a growth of 76% compared to last year, where the revenue was EUR 249.7 million. The adjusted EBITDA in 2022 came out on EUR 79.4 million. This is a growth of 115% compared to 2021. Our projected revenue outlook range for 2023 is EUR 540 million-EUR 600 million. This revenue growth is driven by the growing momentum of the energy transition. As it is now almost five years after our IPO in 2018, we have concluded that the Capital Markets Day is a relevant choice. We have planned it in London on May 10, 2023, where we shall share an update on our business strategy and financial objectives. We now can go to sheet 5 with the revenue split. As already mentioned in the highlights, our overall revenue has grown in 2022 with 76%. For Energy Storage, the revenue in 2022 ended up at EUR 45.5 million, and that represents a revenue growth of 157% compared to 2021. The battery energy storage market picked up momentum after COVID-19 headwinds. The backlog that we communicated at the start of 2022 came through in our revenue figures from both TheBattery Elements and TheBattery Mobile. We are convinced of the future growth potential of Energy Storage revenue due to the positive market development, our strong market position and good order book. The Smart Grid solution revenue grew in 2022 with 11% to EUR 142.6 million. Grid operators continue to expand and reinforce the distribution grid. Towards 2050, in the Netherlands alone, around EUR 100 billion have to be invested or to make the grid future-proof. The private network business did not show as much growth in 2022. Project execution took longer due to supply chain conditions. For EV Charging, we benefited from increased volumes on the framework agreements as well as from new clients, and the revenue more than doubled to EUR 251.8 million. The easing of COVID-19 restrictions boosted revenue, especially in the first half of 2022. Across Europe, positive market development for electric cars took place, where approximately 20% more battery electrical vehicles were registered in 2022 compared to 2021. Now we continue on sheet 6 with a strong EBITDA increase. Based on our operational leverage strategy in 2022, the adjusted EBITDA increased from EUR 36.8 million to EUR 79.4 million. This represents an 115% increase. As a percentage of revenue, the EBITDA grew from 40.8% in 2021 to 18% in 2022. We continue to drive forward our strategy of leveraging our fixed cost base to further improve our profitability. On sheet seven, we've summarized the progress on our CSR strategy. Corporate social responsibility is a key focus point of Alfen. Our business model directly contributes to a sustainable economy and society. We are at the heart of the energy transition by enabling generation, distribution, and consumption of emission-free electricity with our Smart Grids, EV Charging equipment, and Energy Storage solution. In 2019, we formulated our CSR strategy. Based on a stakeholder survey, we focused on our CSR strategy on four elements that were also aligned with the relevant United Nations Sustainable Development Goals. The progress of our CSR strategy is therefore presented based on those four focus elements. I will not go in detail on the complete summary on this slide, but limit it to the top left regarding the number seven UN Sustainable Development Goal that stands for affordable and clean energy. Looking at our progress on this element, we can conclude that we have helped to avoid emissions of about 3.8 million tons of CO2 with our installed charging stations for electrical vehicles. We have helped to avoid harmless emissions with our Smart Grids projects, where we have been able to make solar energy available for about 283,000 households. For all aspects of the progress on our CSR strategy, I would like to refer to the relevant section in our annual report of 2022 that's available on our website. What you can also read in our annual report is that we have a very high revenue alignment with EU taxonomy regulation. It's over 99%. We are committed to continue to further improve our sustainability program as we transition to a truly sustainable society for future generations. In 2023, we will work out our material, environmental, social, and governance topics. This involves, among others, setting KPIs and data requirements, collecting data, setting targets, and developing action plans to achieve the targets. With respect to the environmental topic of greenhouse gas emissions, we have committed to set our targets for Scope 1, 2, and 3 emissions in line with the global warming limitation targets based on science-based targeting process. Michelle will now continue with setting the stage for future growth. Thanks, Marco. Now I'd like to talk through how we're setting the stage for continued growth in 2023 and beyond. First on slide 9, 2022 was the year of achieving our medium-term objective for international revenue by achieving 51% from outside of the Netherlands and resulting in a CAGR of 83% since 2017. This was driven primarily by our EV Charging business line and had two key factors. First, we focused on strengthening our position in our markets by building depth within our team. Second, our customers continued to internationalize, taking us to new markets. As we move to slide 10, we'd like to share a sample of our commercial successes that reinforce our growth story across all three of our business lines. In EV Charging, we continue to build depth with key customers in Germany and France, supporting WAAT and ChargeMaker in the deployment of their EV infrastructure projects. We also maintained our public charging install base in Amsterdam, securing a win with Equans to continue to support the City of Amsterdam's EV charging needs into the future. In Smart Grids, we are able to benefit from the EV fast charging infrastructure rollout, winning a contract with BAM Shell to roll out their fast chargers at over 100 DIY stores in the Netherlands and Belgium. We also continue to see the solar market grow with continued wins from existing customers, Scholt and Pfalzs olar. In Energy Storage, we saw wins from new customers, including a framework agreement with Katoen Natie to build battery systems at their facilities. We also won 2 additional projects with Ellevio at the end of 2022 for a total of 30 megawatt-hours. Also, in early 2023, we closed another 40 MWh with Ellevio for a total of 70 MWh in recent Ellevio wins. In addition, we continue to secure wins for TheBattery Mobile, signing a framework agreement with Aggreko, an international emergency power rental company, looking to strengthen their green rental fleet using our technology. In addition to these selected wins, as we move to the next slide, we'd like to share some of the investments we continue to make in our solution portfolio to serve the market. In EV charging, we implemented ISO 15118, which we communicated in the fall. ISO 15118 is a communication protocol that allows self-identification of the vehicle and will enable vehicle-to-grid applications in the future. We also continue to mature our platform for implementation of future capabilities for our customers, such as additional communications options for smart meters. In Smart Grids, we had two safety innovations. First, the Kano. This is an accessory that's used on the high voltage side of the substation to protect and cover the high voltage connection point. We also built a special substation for the DC fast charger market, implementing communication protocols to maximize safety for the user and the site operator. In Energy Storage, we further developed our energy and power management software capabilities to provide end user enhancements for how the system is operated, and we can also now support both 50 Hz and 60 Hz applications, which opens offshore and maritime applications for our Energy Storage solutions for Alfen. As we continue to slide 12, we'd like to share that addition to the market growth and investment in technology, we also continue to invest in other areas. We've expanded our personnel to just under 900 FTEs at year-end, up from 683 at the end of 2021. We continue to invest in productivity and operational improvements in our manufacturing lines to support the growth in EV Charging. We've also begun construction on our new facility in Almere, which will be three times larger than our current largest facility. As previously communicated, this is to support further expansion of our manufacturing, production, and office requirements. Now I'd like to hand it to Jeroen to walk through our financials. Thank you, Michelle. Before we go into the details, let me first address that we are very proud on the financial result of 2022, which was a record year for Alfen. Let's now have a somewhat closer look at our financials, starting with our profit and loss account. Our revenue and other income increased from EUR 249.7 million last year to EUR 439.9 million this year. An increase of 76% driven by growth across all our business lines. The growth margin declined from 36% last year to 34.9% this year. We leveraged our growing scale and stronger market position to dampen the effect of the challenges in the global supply chain. Personnel costs increased from EUR 40.1 million last year to EUR 53.7 million this year, an increase of 34% showing further operational leverage. The average FTEs increased from 636 in 2021 to 787 in 2022. Also worthwhile noting here is that due to the fast-rising electricity pricing in the Netherlands for domestic households last year, we decided to grant all of our employees a one-off compensation of EUR 1,000 in November. That had roughly an impact of 1% on our EBITDA margin percentage in the fourth quarter. Other operating costs increased from EUR 13.5 million last year to EUR 21.9 million this year, also showing operational leverage. We exclude special items and one-off costs, we arrive at our adjusted EBITDA, which more than doubled from EUR 36.8 million last year, which was 14.8% of revenue, to EUR 79.4 million which was 80% of revenues this year. This adjusted margin improvement is a result of our operational leverage strategy. Also our adjusted net profit more than doubled from EUR 22.1 million last year to EUR 54.4 million this year. From the profit and loss account, we now go to the balance sheet on the next slide. Let me start with the non-current assets. They increased from EUR 43.1 million at the end of 2021 to EUR 58.7 million at the end of 2022. Our capital expenditures amounted to EUR 21 million, which was 4.8% of revenues, compared to EUR 11.7 million, which was 4.7% of revenues last year. As also announced in the Q3 webcast, the CapEx investments includes investments in new molds, in product line automation, investments in the IT infrastructure and data security, as well as additional solar panels for our buildings. Included in the EUR 21 million are EUR 9.6 million of capitalized development costs, demonstrating our continued efforts to invest in innovations for the future. Our working capital increased from EUR 23.8 million at year-end 2021 to EUR 87.6 million at year-end 2022. This increase is mainly related to our successful measures to mitigate supply chain pressures with higher inventory levels. We also did strategic stock down payments for batteries, inverters, containers, and electrical components. As announced in the Q3 webcast, we increased our working capital facility from EUR 30 million to EUR 100 million and our bank guarantee facility from EUR 10 million to EUR 40 million. As you can see in the balance sheet, the cash and cash equivalents number is EUR 22.8 million at year-end 2022, meaning we did not use our working capital facility. The next slide addresses the fact that we will organize a Capital Markets Day. That will be held on May 10th, 2023, in London in the Sofitel St. James. The aim of that Capital Markets Day will be to provide an update on our business strategy as well as an update on our financial objectives. We go to the outlook on the next slide, where we anticipate that our markets will continue to develop favorably driven by the energy transition. We also anticipate supply chain pressures to continue into 23 and therefore also continue to deploy our mitigating actions against these supply chain pressures like we have been doing for quite some while now and is business as usual. As Michelle explained, we anticipate further growth in 23. Therefore, we will also further invest in our organization, people, facilities, production, and in innovations. We conclude with our revenue outlook for 2023, which will be in the range of EUR 540 million-EUR 600 million. We are now at the end of the presentation, where I will hand over to the moderator for any questions. Moderator, could you please take over? Thank you. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. We'll now take our first question from Emmanuel Carlier from Van Lanschot Kempen. Please go ahead. Your line is open. Yes. Hi, good morning. Thanks for taking my questions. I have two, and I will do them one by one. First of all, on EV Charging. You mentioned that there will be some destocking in H1, but could you provide a bit more disclosure on how you look at 2023 in terms of volumes, pricing, but also in terms of seasonality? Like with the destocking, do you mean that the level in Q1, Q2 could be lower than Q4? Yeah, Emmanuel, I think that's a reasonable assumption. What we're seeing is our channels have excess inventory. We saw that in Q4. We see that throughout first half of 2023. It's primarily in the home segment. In the semi-public and public, such as with WAAT and ChargeMaker, some of these wins we've announced in Equans for the city of Amsterdam. You know, we still see momentum in the EV Charging market, but our channels need to work through their inventory. We do expect the back half of 2023 to pick back up. Fundamentally, the EV Charging market is robust. We expect it to continue to grow. We're seeing cars continue to be delivered, so we're really j ust working through this channel stocking situation for the first half. Yeah, would they be in line with what you had generated in Q4? If you would take that, you would really require a very strong second half of the year in order to make the guidance, I guess. Well, as you know, Emmanuel, we never give a specific guidance on the business line. I think we always take into account upwards and possible headwinds that we face. If we looked at that from a market perspective from all of our segments, we arrive at the bandwidth that we gave for our revenue outlook for 2023. Yeah. Is there any guidance or a range of guidance that you could give on what you expect from volumes and pricing into 2022? Because pricing must be supportive as well last year, driven by the, yeah. Yeah. We'll maintain our pricing. You know, that's not going to change. I think what you're also seeing is Energy Storage having some significant momentum into 2023. That will contribute to achieving our guidance for the year. Maybe my second question is a bit related between the mix of EV Charging and Energy Storage. If you look at 2022, the EBITDA margin was at 350 basis points despite the fact that the share of Energy Storage has grown from something like, I think it was 8% to 16% during 2022. It is positive to see that even then you could still improve profitability. On the other hand, that was partly driven by EV Charging, that was also very strong. The question I have is, how do you look at profitability in 2023, taking into account that there will be a mix shift, i.e. more Energy Storage sales, maybe a little bit less EV Charging sales? Well, I think, first of all, it's good to express that we aim for profitable growth. In that profitable growth story, we always said it is about maintaining and gradually increasing the growth margins, and the major contributor will be operational leverage. We also expressed at the time that the fastest-growing business lines have the most opportunities for operational leverage. Please note, operational leverage is not a linear line. Would make my life very easy, but in reality, it can be a bit faster accelerating, and then it can be a bit slower the quarter after because we are preparing ourselves for the next growth rate, for example. I think what we also said in the Q3 webcast is that if you see larger Energy Storage projects, and the battery component in such a project is bigger, then it's difficult to put a 40% or 50% growth margin on top of the batteries. There we said in those larger projects, the growth margin might be a little lower than for smaller projects in Energy Storage. On the other side, the operational leverage possibilities on a bigger project are also bigger because a project manager could handle, for example, two large projects, which have quite a high revenue number. On the opposite, could handle, let's say, 10 smaller projects who don't contribute that much to the revenue stream but also need a 1 project manager. That's how you should look at it. We always look at the total balance. Looking at the total balance, we still feel that with our position that we have in the market area, with the purchasing programs which are continuing, with our pricing positioning that we do in the market area, that there are further opportunities for us to also have further operational leverage. Hopefully, it will be a linear line. In reality, it will probably be a bit more bumpy than that. Having said so, we are still looking at positive outlooks for all of our business lines. That's what we are aiming for. Yeah. Maybe follow up on that point. You have some listed peers who also do energy storage, but I think it's a little bit different than what you offer. They have kind of profitability levels on an EBITDA margin level, rather around, I think it is 10%. Although if I hear your comment well, it looks like you believe that the margin you make on energy storage is higher. Could you maybe explain a little bit if that is true, and if so, why that is? Yeah. I think, you know, we don't really comment on the competition, but I think every business has its own go-to-market strategy. Every business focuses on the customers where they can add the most value, and we focus on customers where we can help deliver and solve their grid challenges in addition to implementing the battery storage system. For us, the business may look a little bit different from some of those listed peers. Okay. Thank you. Thank you. We'll move on to Ruben Devos from Kepler Cheuvreux. Please go ahead. Your line is open. Good morning. Just one question on the supply chain, basically. Last year, obviously, some of your competitors have been struggling from shortages in vital components and supply chain issues overall. You've navigated through these challenges quite effectively. Just thinking about the sort of unconstrained supply last year, would you have been able to produce even higher sales than what you reported? Actually for this year, if you think about, yeah, the situation that occurred last year, would you see a similar sort of trend compared to peers? That's the first question. I think to answer the first part of the question, we did not have production stops at all in relationship to the supply chain. I think that answers the first part. The second part is that we do see some relief in certain areas in the supply chain. But we also see areas where yes, there is a shortening of delivery times, but then you talk in certain areas about the delivery time, which was above a year earlier, and it's now going back to 36 or 30 weeks, which is still quite a long time. That's why we say there are still some challenges in the supply chain. It's not normalized yet. In the logistical area, you do see a huge reduction of container pricing and also more availability of ships, for example. That is getting easier. I would say in essence, we stay focused on that whole supply chain. As I said also in the webcast, yeah, we do it now for nearly 3 years. For us, it's a more daily routine and daily business. Nevertheless, we will continue all the actions that we already have deployed.n the past. Okay. Just another question on EV Charging. I think you mentioned the press release that EV registrations could be up about 20%. That's obviously, you know, much less than it was maybe in the last 3 years. If you think about your group sales guidance, which is up 23%-36%, you know, based upon the low and high end, it sort of reflects continued market share gains or at least growing in line with the market. Could you maybe talk a bit about how you could see your competitive positioning there, and what, you know, what justifies basically the sales outlook and the EV Charging segment within the group? Yeah. Well, we've always talked about outperforming the market, so I think that is consistent. While things have changed somewhat heading into 2023, the fundamental long-term trend is still there. We've always talked about how we can add value to our customers, and where we're really seeing strength is in the public and semi-public space. We shared the three examples today. Those projects continue to move forward and, you know, there's probably an infrastructure catch-up that's needed in that public and semi-public space. If you look at some of the Bloomberg data and other sources around how things will deploy over the next, you know, five to 10 years, there's significant volume still to be had, especially in those spaces, in addition to the home market. Okay. Lastly, just, if you, following up on this, if you think about the semi-public charging ASPs, you know, compared to private chargers, how will that differentiate? Or how will that differ in 2023 compared to maybe the last, yeah, 2 years as well? You know, obviously last year you had a very high share of residential chargers. I guess that's changing a bit more structural investment in semi-public, but very curious to hear a bit, you know, on pricing the product mix, how that would impact your sales. Yeah. Well, for every segment we serve, we've got a different set of features and capabilities to best serve that market. What you see that's more common in the public and semi-public space, things like ISO 15118 capabilities to further enable vehicle-to-grid applications in the future. You see the need for payment options. You see the need for smart meter communication protocols at the higher end in some of these segments. What you see is a different mix of capabilities in that charger that helps support kind of additional value versus some of the really low-end home business, which doesn't have the communication, doesn't have some of the load balancing or smart charging capabilities. That's really where we play is in that smart charging area, which is more prevalent in high-end home, semi-public, and public installations. All right. Very clear. Thank you. All right. Thank you. We'll move on to our next participant, Thijs Berkelder from ABN AMRO – ODDO BHF. Please go ahead. Your line is open. Good morning, all. Congratulations with the performance and the outlook. First question on the new expansion plans. Can you give us an update on the, on the timing of the delivery of the new plans and how we should look at the timing of FTEs coming in year-end? FTE number is already quite a lot higher than, let's say the average of the year. Are you heading for 1,000, 1,100 employees before year-end 2023? A question on the Smart Grids segments. Can you maybe shortly explain what you see happening in this market in this year in the Netherlands, given the stress on the grid, the budget issues with the DSOs, et cetera? Okay, thanks. Marco, I will take the first part that was related to building. Say, the initial phase was of course a permitting phase, and there's always a little bit of an area of, yeah, when does it really come through, because there are all kind of aspects to be taken account. Luckily after summer last year, we had the final permits, and in January, we had what we call then our first activity pole, where we started putting, say, the foundations up in to be able to build the building. Because of the fact that we are here in Almere, and we need about almost 3,000 poles to support the building, it will take 2 months in order to be able to make the foundation ready. We are quite positive that to say whether it is at the end of this year or the first months of next year that the building will be fully operational. We have no reason to doubt that that process is going to manage that. You look outside more or less, the weather is such that we don't expect any further delays due to all kind of weather conditions. Therefore, we are confident that the planning to have the building available at the end of this year is will be really forthcoming. Also we expect then that may be related to a little bit to the next line of question. We are in constant contact with our customers being also the grid operators in Netherlands, and they are part of the more or less the overall picture that they see also the constraints on the grid and are busy with not only planning expansions but also executing those expansions. We expect that in the coming years, we need the facility, rather badly in order to be able to cope with also the growth that we think the grid operators are required to be installing to cope with the energy transition as what we see in many publications in especially the Netherlands. Yeah. Especially what the grid operators have communicated is an investment of over EUR 30 billion by 2030, EUR 90 billion by 2050. You know, as Marco said, we're in constant communication with them. We, you know, Liander has communicated the need to double the number of substations, there's going to be significant market available with the current Dutch operators. In the private networks business, we're continuing to see, you know, in the greenhouse segment, transitions to e-boilers, which means new grid connections. We're seeing fast charging infrastructure rollout, which needs grid connections. We're able to follow all of those trends, not only with the distribution operators, but also in the private networks business as renewables, solar projects, China, all solar as we shared. We're going to see continued market development in Smart Grids. Okay. The FTEs? Yeah. Your question on the FTEs, Thijs, is, we will continue to invest in the organization, and investing in the organization also means that we will hire new people. That will always be in a balance. Also there, that is not a linear line. That's how we look at it. We said it before, the energy transition is not a trend which is there for a year and then it's gone. We are looking at years of growth and of energy transition ahead of us. We will also make sure that we are ready for that growth. Yeah. My final question on working capital. Should we assume working capital to further rise in the coming year, more or less in line with revenues? Are you now expecting working capital to, in percentage of revenues, to come down a bit again? Yeah. It's always difficult to give a precise answer on that because there's always a timing element included in there. What I can say about working capital is that the inventory level for EV Charging is higher than you would expect in a normal, fully, not jeopardized supply chain situation. Because if you have a normal supply chain, which we saw in the past of a, let's say, the longest delivery time of the most critical component was 6 weeks, you can imagine that then your safety stock looks totally different than the safety stock we have today. That's if that normalizes again, you could see that inventory levels could come down in that particular element. From a battery perspective, that is really also a timing element. I think we also stretched that out after summer and in the Q3 webcast. There you need to buy bigger chunks of batteries at the same time. That means that you will need structurally a bit more working capital to put that in. On the other hand, you also know that we work with milestones and payment milestones and advanced payments from our customers. We try to level it out as much as possible. If you look at the specific timing, specific date, it can give a totally different look than a week later in time. There's always a bit of a timing effect in that one. Okay. Thank you. Thank you. We'll move on to our next participant, Paul de Froment from Bryan, Garnier & Co. Please go ahead, sir. Your line is open. Yes. Thank you for my taking my question. Three questions from me. First, regarding storage. You mentioned profitable large-scale projects. Is there some cross-selling opportunities with the EV Charging and grid connection? Then, regarding Smart Grids solutions, how do you see the private networks sub-segment evolve over the next quarter? Could we observe a catch-up compared to 2022? Finally, you stated that CapEx will increase mentally with the new fab. This is due primarily to increase the storage production, or is it related to the production of all your business line? Thank you. Yeah. I'll go ahead and take the first two. From an integrated solutions perspective, we do continue to see customers curious about what's possible. For example, just last week in France, they passed a law to implement rooftop solar for all of their parking facilities. One of the business cases can be to install charge points in connection with rooftop solar and maybe partner with battery storage. You know, that's just an example of what's happening in the marketplace. EV Charging plazas that are fully integrated solutions. We've done projects like at The Hague, where we've done the integrated solar charging plaza battery, something we certainly can do and we'll continue to look at opportunities to do more of in the future. From a private networks perspective, we've got strong backlogs. We're seeing market growth in all of the different segments. You know, we're still going to be faced with each of these substations is unique, so you've got to order some of the key pieces of equipment project-specific. As Jeroen said, we're seeing supply chain pressures ease, but they're still not back to normal. Yes, there could be some catch up, but still all in balance relative to the supply chain, but we do see the market there. Yeah. I'm not 100% sure if I understood the CapEx question correctly, because the new building will be a lease construction when the building is finalized. We will continue, of course, with investments in the organization and also in molds to support the growth of our business. please note, and we said it before, we're asset light, so don't expect us to build a EUR 300 million factory for production purposes. That's not needed. we also don't run large machinery lines, which are very costly. yes, we will continue to invest, but the majority of the investments will be in innovations. Okay. Thank you. Thank you. We'll move on to our next participant, Axel Stasse from Berenberg. Please go ahead. Your line is open. Yeah. Good morning. Thanks for taking my questions. I have three. The first one is related to the opportunity in the Smart Grids division, and your market-leading position in the Netherlands. How easily is it for you to basically improve profitability in this division? Especially during negotiations, how powerful is Alfen in the negotiations with the Dutch DSOs? From a Smart Grids perspective, you know, we continue to deliver and support all of the DSOs. Those are longer-term contracts. From a negotiation perspective, obviously, you know, it needs to be a good partnership for the long term. We do have price indexation built in. We're also able to help them solve specific challenges as the contract progresses, which might create new opportunities. Fundamentally, we negotiate the contract. We've got indexation built in, and we do focus on making sure it's a good, viable long-term partnership. Okay. Would you say that the private networks is more profitable for Alfen compared to the DSOs or not really? Yeah. Every solution has its value, so really hard to comment. We don't give guidance on specific profitability. You know, we focus on maximizing value for each of our customers. Okay. thanks. Second question, how far the room do you have in terms of operating leverage? I understood that, for example, in the Energy Storage, you have some room here to improve profitability. what about the EV Charging division and in the Smart Grids division? Well, again, I think what we expressed always is, it is about profitable growth, and it's about gradually increasing the growth margins. The major contribution will come from operational leverage. We said it also last year, we don't feel we are at the end of operational leverage yet. Also fair to say that our fastest growing business lines have the most opportunities for operational leverage. Okay. Speaking about the EV Charging division, maybe can you please provide us an update on the tenders you see, you know, in semi-public and public end markets? Have you seen a ramp-up in the tenders over the last few weeks that should support your growth in 2023 and maybe, you know, offset the weakness that we can see in the private end market in the first half of 2023? Yeah. We continually see tender volume, we've not seen any changes in terms of interest in deploying the infrastructure. We had the Equans win at the end of 2022 to support the City of Amsterdam. We see tenders coming in from other cities and businesses, which then obviously supports the long-term kind of revenue growth of the business. We've not seen any shift in momentum in a negative way. If anything, it continues to progress just like the market continues to progress, which supports our view of the future. Okay. Very clear. Do you have, like, identified, for example, some cities, municipalities, governments, where you see a huge opportunity in the coming, I would say, 2-3 years, such as, for example, Italy, I think you mentioned in the past. Is this still the case? You know, I think we have so much opportunity across all of Europe. That's one of the reasons we do focus on having international players that can help us internationalize across Europe. We've got people in 13 countries, our products are in over 30 countries. You know, working with some of these large Pan-European players will continue to help kind of build that depth. We're focused on the largest car markets, you know. If you think about Germany, U.K., France, but every country in Europe is going to have to achieve the carbon reduction goals and getting ICE vehicles off the road. There's tremendous opportunity here in Europe for the long term. Okay. Thank you very much for answering my questions. Thank you. Thank you. We'll move on to Mr. David Kerstens from Jefferies. Please go ahead. Your line is open. Hi. Good morning, everybody, and thank you for taking my question. Let's start with first question on EV Charging. With the very strong growth you had in 2022, partly driven by pent-up demand, and your indication earlier in the Q&A session that Q1 volumes could be lower than Q4, do you still expect positive volume growth for all of 2023 in EV Charging? The same question for revenue growth, with ASPs likely to further normalize this year. Yeah. I think first, we did not say that Q1 volume would be lower. We said we would see the trends from Q4 continue into first half, but didn't specifically guide on exactly what that revenue would look like. We still see our channels with stock, and so they do need to liquidate that stock. You know, if the ASPs normalize, that's a difficult one because if you look at the public and semi-public, you look at the feature functions and capabilities that we're delivering, Some of that price was not necessarily driven by being able to continue to deliver for our customers. You know, that's because of the value we're providing for our customers. You're not going to see any sort of premium come down in 2023. You're gonna see consistency. Maybe following up on that, can you give an indication what the mix has been in all of 2022 residential versus public, and what are the ASPs we see in those two different segments, and what explains the difference in ASP in those segments? That would be very helpful to get a better understanding of the revenue development in EV Charging. No, we know it would. You know, we don't guide specifically, but I think it's... You know, we do see mix effects, and as the ASPs trend up on a charge point perspective, you know, that is indicative of more public and semi-public volume. Again, it depends on the feature set, it depends on even within the home market, our different chargers and, you know, the licenses that come with those chargers. All of those things drive the ASP. It really depends on which channel, which market, and where we're headed. There's too many factors to really give a clear answer, and we don't provide that level of detail for our charging business. Based on the RVO data, I think the mix is 70% residential, 30% public. Is it fair to assume that it's the same mix for Alfen? Not necessarily. I think, you know, we focus on where we can add value. For us, that's in areas where smart charging is valued. For us, that tends to be in the high-end home market, semi-public and public, and we've got offerings to support all three of those businesses. You know, that's one country. If you look across all of Europe, those mixes might be a little bit different. Okay. Understood. Maybe moving on to the next question regarding profitability. Your EBITDA margin in Q4 came down to the lower end of your guidance range of 15%, and I understand that's partly explained by this one-off payment of EUR 1,000, 1 percentage point. That is down from close to 20% in Q3. I appreciate the difference in mix in EV Charging, probably lower, relatively lower ASP than in Q3, but also more Energy Storage in the mix in Q4. With that mix shift continuing in 2023, do you expect still to be able to be within the 15%-20% EBITDA margin guidance range next year, although you come out below it? I think the medium-term objective that we gave before has not been withdrawn yet. That says it all. We are still aiming for that mid to high teens. Yeah. Do you expect profitability, if you have a glass ball right now, would you expect profitability to be higher this year or lower than last year? Yeah. I hope you notice that we don't give a profit outlook, but only a revenue outlook. The only thing we can say is this, we have profitable growth. We have a couple of elements contributing to that profitable growth. We will act on all these individual elements, and we will continue pursuing our operational leverage strategy. That's what we can tell about it at this point in time. Yeah, maybe to later element of, say, the increased sales price is that we don't see fundamental changes in our gross margin within each individual product line. It is not so that we see a fundamental drop in our gross margin on our EV Charging business. Of course, when the revenue is of course linked also then to the leverage on a fixed cost base, if there is, you know, a bit lower in say, the first quarter, then our leverage on the fixed cost base is influenced directly. Although even our gross margin is not influenced for the product line itself. Y es, on the other hand, what we see with what we also indicated with the battery storage, that the margin we can a chieve on the set of, say, high price components like batteries is a little bit lower in the battery storage than the average margin that we have on other products. Also what Jeroen has explained also previously that also to the leverage capability are then higher. The balancing of those elements together to come to a final conclusion about then what will be the overall EBITDA is a quite complicated one. On the end, we see also that we see that we are able or are convinced that we will be able to grow revenue also in 2023. By definition, that gives also us the opportunity to have, say, further leverage capabilities in our growth potential also because we will not grow our organization in the same pace as we'll grow our revenue. Yeah. Yeah. Thank you. Maybe a final question on the on the cash flow. I think you said operating cash flow for all of 2022 was close to zero. Was that because you had more investment in working capital and Energy Storage than you had anticipated in the third quarter? What does that imply for operating cash flow and more importantly, free cash flow going into 2023? Well, I think it was a deliberate choice. No, I don't think it was a deliberate choice. It is a deliberate choice of us. It was not a surprise after Q3 or whatsoever. I think we already expressed for quite some time now that the working capital needed in the Energy Storage segment will rise. We deliberately took the opportunity with our strong financial position to safeguard the batteries because it would be very awkward if we have a very good solid pipeline and a good conversion of orders, but we lack the materials. That's why we put the extra working capital in. Having said before, please note there are timing elements included in that working capital. Okay, great. Thank you very much. Thank you. We'll take another question from Thijs Berkelder from ABN AMRO – ODDO BHF. Please go ahead. Your line is open. Okay. Thank you. Two questions on EV Charging. You're now operating from 13 countries, servicing 30 European countries. Can we expect any expansion outside Europe in the coming 1, 2 years? Where? Second question. Go ahead. Sorry? I was gonna answer, but if you want to do your second one, go ahead. Okay. Okay. The second question is on how the Equans contract in Amsterdam is a very large contract, and I would say, at least for us, the first large EV charger replacement contract we're seeing. Are you seeing similar, let's say, replacement market effects coming in the Netherlands, probably especially because that's your first market, where you started, but also in other markets, are you seeing the replacement markets kicking in? Yes. On the first question, I think we've shared this before. You know, we will always look at market viability. We want to make sure that we're in markets where we can add value. Right now, with the growth potential in Europe, with the way that EV Charging is deployed in Europe, this is the best market fit for us right now. We will always stay open and aware for, you know, where else we could potentially grow into. From an Equans perspective, yes, you're right. This is one of the first contracts where you're starting to see some replacement volume. Those chargers were installed, what, 10 years ago, so it is a 8-10-year cycle. We will start to see that effect, but probably not for another couple of years. If you think about the installations in other countries that are much newer, this is really a phenomenon that'll be 5+ years from now. I think this will be a good leading indicator of what that volume and replacement rate might look like for the future. Okay. Thank you very much. Thank you. It appears there is no further questions at this time. I'd like to turn the conference back to Mr. Marco Roeleveld for any additional or closing remarks. Thank you. Thank you, Priscilla. I just would like to thank everybody for participating and also for the many good questions. That gave us also then the opportunity to further elaborate, say, on our story. I would say, see you or hear you next time for our next webcast in the coming months. Then I hope also you will be willing to be to participate in the Capital Markets Day because we will think not that we will have fundamental new elements, but basically an update on our strategy and an update on our things we are thriving for. I think it would be good in that way to further align on, say, the business we are. How we see it. Again, thank you for participating, and speak to you next time. Thank you for joining today's call. You may now disconnect.