Hello, and welcome to the Alfen 2022 Q1 trading update. My name is Jess, and I'll be your coordinator for today's event. For the duration of the call, your lines will be on listen only. However, there will be the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero and you will be connected to an operator. I will now hand over to your host, Marco Roeleveld, CEO, to begin today's call. Thank you. Thank you, Jess. Good morning, and welcome to this webcast regarding the 2022 first quarter trading update of Alfen. We appreciate the fact that you have taken the effort to participate. This webcast and the questions that may come forward are handled by Jeroen van Rossen, CFO, Michelle Lesh, CCO, and myself, Marco Roeleveld, CEO. We are happy how the first quarter has resolved. A very strong revenue growth, mainly driven by EV charging equipment in combination with a strong growth margin and a good EBITDA development. In this webcast, we will start with the highlights of the first quarter of 2022, followed by a short review per business line. Next, we will go in more detail regarding our financials and outlook. We continue on slide 3 with the highlights of the first quarter of 2022. In this quarter, we realized EUR 95.5 million in revenues. This represents a growth of 77% compared to the same period last year. This growth was largely driven by strong growth of EV Charging Equipment and partly by Smart Grid Solutions. The gross margin was 35.7%. This is in line with the average gross margin of last year, but almost 0.8 percentage points lower than the same period of last year. As a percentage of revenue, the adjusted EBITDA improved from 13.3% to 17.9% this year. We are positive about all the drivers for future growth. However, COVID and the Ukraine conflict have had an impact on our markets, and most European governments have expressed their commitments to further facilitate the energy transition. Based on the development in the first quarter and the positive market drivers, we increased our full year revenue outlook to the range of EUR 350 million-EUR 420 million. Jeroen will go in more detail on the financials later on in this presentation. In the coming three slides, we'll go in a little more detail on each of our business line. We start on sheet 4 with EV Charging Equipment, where we have more than tripled our production and almost tripled the revenue compared to the same quarter last year. We benefited from higher EV adoption in all our core markets, leading to a strong demand for EV charge points in all segments: at home, in semi-public places like offices, and in public segments for online or street parking. We continued our internationalization strategy by further strengthening our internationalization, international organization, and in the first quarter, approximately 63% of revenue was generated from outside the Netherlands. To sup port the strong growth of our EV charging business line, we continue to further optimize our production facility, and we will implement the first step of production automation later this year. We now continue on sheet five with Smart Grid Solutions, where the revenue was 23% higher than in the same period last year. In Q1 last year, the revenue was rather low, driven by the impact of COVID and the production ramp-up of a new and innovative substation range of Enexis. We continue to see long-term growth trends in Smart Grid Solutions. This is underpinned by the recent publications of the investment plans for the Dutch grid operators for the years 2022 to 2024. Furthermore, the shift in the product mix to larger and more complex substations continues. We go now to slide six regarding energy storage systems. The revenue did not grow in the first quarter compared to the same period last year. On the other hand, our backlog remains strong due to new contract wins, but the revenue recognition from backlog will be backloaded this year. At the same time, the market momentum for energy storage is growing. The growing number of renewables, such as solar and wind energy, are increasingly driving the need for energy storage to offset the mismatch of electricity supply and demand. In the Netherlands, we have experienced in the past months the first day where more electrical energy was generated by wind and solar than the actual demand for electrical energy. Our CFO, Jeroen van Rossen, will now continue with this webcast. Jeroen, the floor is yours. Thank you, Marco. Let's start the financials with the graph on the top left-hand of the slide regarding the Q1 revenue. Our revenues increased by 77% from EUR 53.8 million in the first quarter of 2021 to EUR 95.5 million in the first quarter of 2022. The growth margin slightly declined from 36.5% last year to 35.7% in the first quarter of this year. Our Adjusted EBITDA more than doubled to EUR 17.1 million, which was 17.9% of our revenues. Compared with EUR 7.2 million, which was 13.3% of revenues in the same quarter last year. The main driver for the increase in our Adjusted EBITDA is the operational leverage. From the financials, we now go to our supply chain update on slide number 8. Let me start by stating that up until today, we have been able to manage the supply chain challenges. At the same time, the supply chain pressures have intensified over the past months. Furthermore, we see that now multiple categories are affected. It's not only the supply of electrical components that is under pressure, but also supply, for instance, of metals such as copper, aluminum and steel. Therefore, we continue our control over the supply chain through our rigid operational processes, as we do expect that the supply chain pressures remain in 2022 as well as in 2023. Finally, we go to our outlook on the next slide. As said, we expect supply chain pressures to continue to have an impact on our markets in 2022 and 2023. At the same time, the transition to a carbon-free energy system that is not dependent on fossil fuels is building ever more momentum across Europe. Therefore, we continue to anticipate long-term positive market developments for all of our business lines, and thus also continue to invest in our organization, production facilities and in innovations. For 2022, based upon our Q1 performance, we increase our full year revenue outlook, which was a range of EUR 330 million-EUR 370 million, to a new range of EUR 350 million-EUR 420 million. We apply a larger bandwidth in this range as a result of more uncertainty due to macroeconomic circumstances. 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. If you would like to ask a question, please press star one on your telephone keypads. Please ensure your line is unmuted locally as you will be advised when to ask your question. The first question comes from the line of David Kerstens from Jefferies. Please go ahead. Hi. Good morning, everybody. Thank you for taking my question. I was wondering if you could please provide a bit more color on the very strong momentum in EV charging, where the number of charge points, I think more than tripled in the first quarter. I think in a market where we're seeing increasing lead times for electric vehicles, I think of 12 months- 18 months. I think Volkswagen said that they are sold out of electric vehicles. How do you see that impacting the growth in the market? I also saw that the RVO figures in the Netherlands pointed at relatively sluggish momentum in the first quarter. I was wondering if you could please perhaps comment on market share developments in the Netherlands and also outside the Netherlands. I think we saw the articles around the EVBox. Does that imply that you have gained substantial share in the Dutch market? Thank you very much. Yeah. Q1 was definitely a strong quarter for us, and what we're seeing is there is continued acceleration of the EV adoptions. Yes, we see some challenges with the vehicle makers and the EVs being rolled out, but there's still some infrastructure catch up that needs to happen. We're really benefiting from our early presence in some of these key markets and being able to take advantage of the acceleration that we're now seeing. We've been able to ramp our supply chain and production to support that, and we've got the operational processes and planning with our customers to make sure that we can take advantage of those market developments that we're currently seeing. In the Netherlands as well, we're still seeing development and acceleration here as we continue to build out the infrastructure. Thank you. Do you see an impact going forward with these lead times increasing to up to 18 months, I think, for ordering new spec electric vehicle? There's always, of course, an element that as a supplier of equipment that is related to electric cars, that if there are limited cars coming to the market, it would have an impact also on our revenue. On the other hand, what you see here is that the transition to electric driving is huge that the step up in manufacturing capacity at all the different manufacturers cannot almost not cope with the demand of electric cars. Still, even though the for Volkswagen, that might be that the market pool is bigger than they could cope at this moment, it still means that the market is growing strongly related to the number of electric vehicles coming to the market. Maybe to relay a little question, do we see then all markets are identical? No. We see individual countries with individual say paces of transition to electrical driving. That's also the reason why we not only benefit in one country and then also benefiting negatively if for whatever reason a market is stalling. We benefit from say more as our position across the whole of Europe, and that we can balance out say the quick increase in a certain country also maybe with a setback in another country. Due to our wide presence is throughout Europe, we are damping out say positive or negative effect in a certain country. We see overall the transition to electrical driving is without debate, and therefore we benefit from this transition strongly. Okay, understood. Thank you very much. The next question comes from the line of Emmanuel Carlier from Kempen. Please go ahead. Yes. Hi, good morning and congrats with the impressive results. I have three questions, a few small ones on EV charging. First, could you say anything if you're benefiting from the operational issues EVBox is having? Secondly, the excellent sales numbers in EV charging, is that also partly driven by the fact that you are adding new countries? And thirdly, it's a bit related. Could you say anything on how your market share is evolving according to you? That is the first one on EV charging, but let's take maybe this one first. Yeah. You know, relative to other players on the market, we really focus on what we need to do to be successful. That's really where we put our energy is in what we as Alfen need to do to be successful in all of these markets. In terms of being in new countries, what we're really seeing is the ramping of growth in the countries that we've already been in for many years. We've got our products in over 30 European countries. We've got feet on the ground in almost half of those. Really having that early presence, making sure that we can take advantage of the market development and opportunities that we see there. As Marco mentioned, you know, we're able to continue to see the growth in all of those countries. Maybe. I think in the Netherlands. Yeah, sorry. The US, the same market share. Related to that, sometimes we would like to give figures because that can reflect more or less as a position in real markets, but there is no public data available on which we can more or less have a realistic assumption on what will be the market share. If you look at the past year, we have favored more or less deliveries to our existing customer base, not only to have revenue, but also to strengthen the partnership because we are supplying not to consumers, but to business partners. We want them in the partnership, not only this year, but also in the coming years. We have used the existing year also to strengthen the partnership with all our customers to be able also to leverage that to the future growth when we think the margins and the markets will pick up further. Yeah. Are there big gaps according to you in your market share in, let's say, the Netherlands versus some other countries? No, not that we see. I guess so. No? Okay. Yeah. All right. No, that's a helpful comment. The second question is on profitability. Do you believe that the run rate we have seen in Q1 is kind of sustainable for the rest of 2022? What are the pluses and the minuses? I hope you appreciate that we never give an outlook on profitability, but only on revenue. I think we said in the past that our fastest-growing business lines are up for the most operational leverage. In our model, the contribution to the bottom line is based on growing the top line, gradually increasing the growth margins, and then adding the operational leverage in. At the annual report, we said that we do not feel that we are at the end of operational leverage yet, and that's still the case today. Having said so, sometimes from a quarter to a quarter, that's a bit more difficult to precisely predict that because there might be a quarter with some less operational leverage due to the fact that we invest up front. Later on, you will see that operational leverage kicking in again. We more tend to look at it from a year basis, and that's giving us a positive feeling. The final question might be difficult to comment on, but anyway. At the IPO, you have given targets of 40% sales CAGR. I think you were a bit below that last couple of years, mainly due to the corona period. To achieve that, you need to have growth of around 47%, I think, from 2022 onwards. Which, yeah, which personally I believe is doable, but yeah, the fact that the energy transition is accelerating, Europe wants to be less and less dependent from Russia, et cetera. Is there any comments you can make with respect to this IPO target? Well, not as a future outlook, but I can comment to some extent on it. I think in 2018, at the time of the IPO, we set medium-term objectives for revenue, for Adjusted EBITDA and for other parameters. At that time, we said, what is medium-term objective? Well, in our definition, it was a 5-7 year timeframe, and we're now in year five. That's why we reiterated those medium-term objectives also at the issuance of the annual report of last year in February. That remains to be seen, of course, what the outcome of this year will be. For now, we do restate those medium-term objectives. Then, later on, if we see new market circumstances or whatsoever, yeah, then at a certain point, you probably will also come with new target setting. If we will do that, then we will do it through a capital markets day. Yeah. Is it realistic to expect that, this year or next year? Because, yeah, there's only two years left. I think for a kind of high-growth company like Alfen, preferably you prefer to have an outlook a little bit further, I think, than just two years. Might be, but that also depends upon the market circumstances. If we feel that the timing is there, then we will inform the market accordingly. Yeah. Okay. Thank you. The next question comes from the line of Axel Stasse from Berenberg. Please go ahead. Yeah. Good morning, everyone. Thanks for taking up my questions and congratulations on the results. I have a few questions on my side. Can you please elaborate on what has changed between Q4 2021 and Q1 2022 in terms of supply chain on your side? Because the A djusted EBITDA margins have been hitting Q4, if I may say, coming from 16% in Q3 to 13.9% in Q4. I understand from your press release and from the former questions we had that operating leverage basically is definitely playing here. Could you please, yeah, give us a bit more flavor on how you have been able to deliver these record high profitability levels, especially since Q4 2021 was quite strong for EV charging as well in terms of top line performance. Yeah, any flavor will be highly appreciated. Yeah. It's always difficult to precisely give an answer on that because there are a lot of elements which are influencing the growth margins as well as the Adjusted EBITDA as a percentage level. We more tend to look on a yearly basis and increase it there. Because from time to time, as I explained earlier on, we do continue to invest and if you invest in future growth, then operational leverage in a certain quarter might be a bit more under pressure, and then the next quarter it kicks in. At the same time, if you do see a slight postponement in a larger project, for example, you also can see that revenue is transferred from one quarter to another quarter, which doesn't say anything about operational leverage as such. So we tend to look to those parameters a bit more on a year by year basis. That's where we said that we definitely have the potential to increase our operational leverage further, because we do feel that our fastest-growing business lines have the most opportunity for operational leverage. I think that's also what you see happening today. A bit reflecting on your how can you do that? How is that possible? I think we really look forward way ahead in time, then not only from a supply chain perspective that we already plan in 2023 and sometimes even in 2024, but also from a production capacity perspective or an organizational perspective, where we say, well, we need to further increase the number of people and start doing that already in an early stage to avoid that these kind of elements might hamper us in the growth. Because, yes, we saw COVID and, yes, there is, of course, a war going on. At the same time, the energy transition is only accelerating and further supported even by the fact that, due to the war, we also see that there will There's even more pressure to go from fossil fuels to renewables, which of course is favorable for all of our business lines. In the long run, we definitely see a lot of positive elements, and we want to make sure that we are able to also accelerate on our level and thus by investing already in an early stage. Okay. Clear. My second question is more, you know, I understand that you don't provide any profitability guidance for 2022. Is it fair to assume that gross margins this year will be, you know, at least as high as 2021, despite all the supply chain issues? Or do you think it's too early to, you know, speak on this right now? I think it's very difficult to give a precise answer on that one. There might be some pressure on the growth margins due to the macroeconomic circumstances here, because logistical costs are not decreasing that fast. If China closes down Shanghai, you see logistical costs increasing again. It's very difficult to give a precise answer on that. We do our utmost to safeguard the margins as much as we can. Yes, we favor a continuous delivery, so sometimes we take decisions to accept slightly higher pricing or accept higher logistical costs to have the components in by, for example, by plane instead of by boat. At the same time, we also have pricing strategies in place in the market area, so we try to optimize that as much as possible. Having said so, we favor a continuous delivery to our customers and safeguard the supply chain. You might see some pressure on the margins going forward. But at the same time, we also have counterarguments there, because the purchasing power is also increasing and the effectiveness and efficiency in our production is also increasing. It's a balanced way of looking at it. That's how we tend to see it. To be honest, we did not foresee a war between Russia and Ukraine in January or early February. Now we're in a different situation. Based on those uncertainties which we cannot control, we have to be a bit prudent. Okay. Thank you very much. The next question comes from the line of Thijs Berkelder from ABN AMRO - ODDO BHF. Please go ahead. Yeah. Good morning, all. Congratulations, that's a beautiful performance. First three questions on EV charging. Can you tell me whether you know whether your clients or part of your clients have been building extra charger inventories in light of potential their supply chain issues? Then on the client base in EV charging, can you maybe roughly a ballpark number give a mix of infrastructure clients such as Vattenfall and E.ON versus EV car order clients, such as LeasePlan, which might be more driven by EV sales, while the first type of clients technically build a network up to 2030 in anticipation of overall demand coming in. Third question, maybe can you give a short summary of what happened in EV charging in April? Yeah, sure. To start from a client building inventory, you know, we don't see that or have line of sight to it right now. You know, we continue to get orders. We continue to partner with customers to plan. We have line of sight to, we don't believe that to be the case. In terms of mix, can't give the exact mix, but we can say that, you know, things continue to develop positively in all of our segments. It really does depend on country and market, but we do see growth in all of the different areas. Obviously, there will be some challenges if EV continues to be big, but we see infrastructure still being rolled out to support the already adopted EVs that are on the road. In terms of April, you know, we continue to see things move in the right direction. Okay, good to hear. Second question is coming back on EBITDA margin guidance. You always used to say on the medium term, you were targeting, let's say, high end in the t eens EBITDA margins, while you're now at, let's say 18%, so already at the high end of that medium-term range. That's still before the optimization of your production is to kick in somewhere end of this year or next year. Maybe coming back on the question by Emmanuel, it seems time for a new higher medium margin target of, let's say, 20%-25%. Why wouldn't you be able to reach 20%+ margins in the coming 3-5 years? Well, I think that I appreciate the question, but I think we first focus on this year and on executing the strategy. If the time is there, we will come with a capital markets day and do an update on our strategic plan for further ahead in time. It's true, we always said that operational leverage is the flywheel of our profitability, and that's still the case today. Can you tell me where your staff base is now in terms of numbers? No, not precisely. We don't give these numbers today, but I can tell you that we do increase the number of staff, but not at the same pace as we increase our top line. No. That's high operational leverage. Okay. Additional questions on EV storage. Can you somehow quantify the growth in the backlog of EV storage and on smart grids? Can you somehow split the growth of the whole division between, let's say, growth in the Nordics and growth in the Netherlands? First, on energy storage backlog, we're not commenting on the specific backlog, but we've continued to add to the deal backlog, and it still exceeds the revenue from last year, as we previously communicated, and we've been able to maintain that. In terms of SGS, you know, we continue to see orders flow, continue to see growth in all of our relevant markets, really not abating from the Nordics versus Netherlands, but we just continue to see growth as expected in SGS. Yeah. Do you see any impact from in the Netherlands from your, you know, how important is it with your greenhouse sector and the effects there from gas prices affecting their businesses? You know, we still see projects continuing to move ahead. I think there's still a lot of things that are happening in the market from a macro perspective, but we still see customers partnering us, working with us and delivering on projects. Great. Thank you. The next question comes from the line of Emmanuel Papadakis from Montanaro Asset Management. Please go ahead. Hi. Thank you for taking my question. Just a quick one on energy storage. Can you just elaborate on why the segment didn't grow despite the strong backlog you mentioned? Also just any update on the internationalization strategy, in energy storage? Maybe first on the, say, the revenue recognition aspect of storage, like maybe you already explained on previous webcasts, is that our revenue of energy storage being done by more or less progress of projects, and then we take revenue up, depending a little bit on the progress of the project. What we have seen in the execution phase of the projects now on hand is there have been some delays on, say, more or less being able to transfer equipment to site because of, say, specific site conditions. There's also a reason why we also in this presentation today indicated that the revenue for this year will be more backloaded to the second half of the year due to the fact that we know where. When we can expect more or less the site works to be finished. As indicated already by Michelle, is that there is no element of, say, distress on our side related to, say, the relevant amount of backlog to be able to go for more or less the ambition of revenue for us for this year. That is more or less that with energy storage, because of the fact that the projects are bigger, the impact of certain, say, revenue recognition on certain sites is bigger than, say, with EV charging equipment, where the number of supplied units is more as a day-to-day business, where it is a different revenue profile than with energy storage. When we look at the future of energy storage, we're quite optimistic, as also indicated in this webcast. We've seen also now in the Netherlands the first day where the renewable energy sources were generating more energy on a day than at the same moment being used. That will drive more or less also the need for energy storage in all the different countries within Europe. Then also we take the Netherlands as an example that we expect more relevant business for us to be done in the coming years. Thank you. And the second line of quest- Yeah. You take that one, Michelle? Yeah. Just from an energy storage point of view for internationalization, we continue to see pipeline developments outside of the Netherlands, so it is going to be a relevant part of our internationalization strategy going forward. Yeah. Sometimes we would like to see also to show which countries we do what, but not all customers are that happy that we publish their name so that we can also publish more or less the reference use in each individual countries. But we are, as a company, quite happy with the spread in the different countries. Yeah. as what's happening now. Yeah. Thank you. The next question then comes from the line of, Quentin Duquesne from Candriam. Please go ahead. Yeah. Hello, good morning, and congratulations for this amazing results. First, some of my questions have already been asked, so I'll focus on the other one. Could you provide a bit more colors on the, let's say, volume and price mix in your EV charging division, especially you mentioned, so the growth in terms of charge points have been 200%, both 200%, while revenue have been around slightly below. Just was wondering if there had been any price volume effect there, and what has been there. As well, your growth margin, despite the supply chain issues, have slightly increased quarter-over-quarter. I was just wondering how much of a price increase you were able to pass on to your customers. The two last questions, that will be four in total. Like, you mentioned the automation of your product lines. I was just wondering what was the timeframe and would you be able to provide any margin impact or some color on it? Then the last one is, in your press release, you mentioned you might still have to invest in your organization, production lines and innovation. Can we expect some CapEx spend going forward above what has been historically done? Yeah. Let me start with the price increases and the volume price mix. I think just in general, you know, we're holding our prices where depending on the business line, depending on the contract, we do have opportunities to pass on the increased cost that we're seeing. For example, in smart grids, we've got indexation in those contracts on an annual basis. We modify things. If we need to do something in between, in some occasions we can, if we're seeing the market conditions such as they are now. In our battery business, we price it in, we partner with customers, we limit our bid validity to make sure that we've got the most relevant information in the proposal, in front of our customers. In the EV charging business, what we focused on is continuing to deliver for our customers. By doing that, we've been able to hold prices, you know, not looking at massive increases, nor do we do volume discounts, and really looking at creative ways to, you know, expedite shipments or look at surcharges or a value added way to add price to again ensure that we're delivering for our customers. That's how we've been able to handle some of the pricing challenges. We also have pricing strategy meetings. As a board, we review pricing, make sure that we're taking everything into account to support the customers and our business. Okay. Thank you. Related to your question on automation, it is for us more or less an indication that we not only have, say, price pressure from the market, but we do also other things to balance out, say, maybe price pressure in the markets, towards, say, cost price elements. It is not so that we will have an enormous impact by automation, but it's first a balancing process where each individual moment we have to do everything step by step. We will try to optimize also our production costs, whether it is on, say, leveraging our purchasing capabilities on the component prices or in improving efficiency or in adding step-by-step automation that are, say, a small step to contribute each, say, more or less time that we have to balance out more or less, say, cost price increases towards, say, automation and to balance out, say, cost price elements towards sales prices all the way around. It is a continuous process, and we are trying to manage all those different elements in such a way that we can benefit from our increased volumes, that can be on purchasing side, but also when in production side. We try to also optimize our production in a way that we can leverage the growth also by starting, say, the first steps in automation. It doesn't mean that we have, say, from one day to the other, a fully automated assembly, but we do it step by step so that we can not only improve ourselves, but we can also continue deliveries. Because we've all seen with any company, if you do one big step in trying to do automation, it will also increase a lot of hurdles that have to be overcome. By doing step by step, we are gaining more or less knowledge about how to optimize those individual steps, but also incorporate already step-by-step those advantages into our cost price or within our step-up in production capacity. As a whole, I think the summary is that we do all kinds of things to improve our profitability or cope with the market circumstances. It is not that one single driver will cause a fundamental aspect. I think maybe, as an answer on your last question on the CapEx, we are asset light, so don't expect us to build a EUR 200 million factory to increase production capacity. We don't need it. We always said we will keep on investing in the business to support further growth. That's what we always did and will continue doing so. From an absolute point of view, the CapEx as a total might go up. The aim is, as percentage of revenues, to drive it a bit down, and the majority of the CapEx will still be, and also in the future, will be on the development costs that we capitalize and amortize over a five-year period. Because if you look at our PP&E part of the CapEx, that's very asset light. We don't have huge machinery parks, etc. That's not needed. It's more in molds, furniture and fittings, and from time to time, some new product lines with automation. Okay. Okay. Very clear. Thank you very much. We currently have no questions in the queue. As a reminder, please press star one if you would like to ask a question. The next question comes from the line of Maarten Verbeek from The IDEA!. Please go ahead. Good morning. It's Maarten of The IDEA!. Question on EV charging and particularly on the price and the cost. When I look at the average selling price, it has come down, and maybe that's a consequence of a business mix. At the same time, you also have higher cost for electro components, metals, logistics, et cetera. Has your operational leverage been pressured by this cost? If more or less prices would have been stable, your operational leverage would have been, and your profitability would have been much higher. Yes. What you're seeing is you are seeing kind of the effect of mix. In general, the pricing is not decreasing. We've been able to manage things and from a supply chain perspective, you know, things offset. While we do see some challenges on certain electrical components, we also have volume where we're able to see, you know, positive effect. In that regard, you know, we're not seeing massive changes. Now, with respect to operational leverage, for us, that parameter is related to OpEx and not to growth margin. Okay, thank you very much. The next question comes from the line of Axel Stasse from Berenberg. Please go ahead. Yeah. Last question on my side. Thank you. On the Smart Grid business, have you seen a significant improvement in sales in the micro grids? I mean, what is your visibility in terms of order book here? I'm asking because I assume that this one delivers higher margin. I would like to have a bit more clarity on this one. Thanks. Our Smart Grid business unit is the revenue comes from more or less two segments. One is from the grid operators. That's about 2/3 of the revenue, and one-third is related to, say, projects. If you look at the Smart Grid situation, then we saw it against, say, last year, that we did the biggest growth was coming from the fact more or less, not in direct sense of growth in all segments, but for the fact that in last year we had, say, especially with Enexis, lower volume of revenue due to the fact at that time in the first quarter of 2021, we were introducing a new substation range after the tender they did the year before. It's more or less a stable quarter where we still have growth. Therefore, we also make the reference to the investment plans of the Dutch grid operators that say a double-digit growth can be expected because of the fact that the grid operators have to accommodate also all elements of the energy transition, that all elements in uses of energy is going to be transferred to electric energy. The heat pumps instead of gas heating. It means that the grid operators are extending, improving, and enlarging the grids. That means that they need to invest in cables and in transformer substations, and we see that of course as a reflection of that in our revenue. Because of the fact we have, say framework agreements with all the grid operators in the Netherlands, we... It's not a matter of more or less of, say, order intake more or less because, say, we have a certain set of substations that are ordering, and it is not depending on, say, each individual, order by order negotiations, because that has been done by the framework agreements. On the project side, of course, it is different. There we see that we need to, say, project by project orders to be able to get the revenue. At this moment, we have seen of course in last year there was some impacts of COVID and now also maybe from a relevant term, say to core price increases, especially in the base materials like copper and iron. Still, although also on those segments, we still see revenue coming from the different segments. Like the question was also before then on greenhouses, where say maybe five years ago the investments were maybe related to combined heat and power units to generate electricity. We see now strong investments in call that heat transfer from ground heat. They pump up water and then transfer the warmth from say the water to use it in the greenhouses. The investments are a little bit different than maybe five years ago, but we still see investments in greenhouses. We see investments in new solar plants, and therefore we are say we are moderately positive on say future capabilities to grow revenue in this market area. Okay, thank you. The next question comes from the line of Quentin Duquesne from Candriam. Please go ahead. Yes, again. Yeah. Hello. Thanks. Just a last question on my side. Can you share a bit more on innovation since you mentioned it, on what are you working on, in terms of innovation, on which product lines? The second question quickly is about the battery. Your battery systems. I've seen they're used as well in frequency control for the grid, in a recent project you mentioned. Are those batteries able to handle as well all grid needs? I mean, voltage control, frequency control, reserve control. Can we see then large grid operators further increasing the use of your battery systems? Maybe to start on innovations. I think you'll appreciate the fact that we will announce innovations or new products to the market at the moment we are ready. We are what we call then a company that tries to convince customer by the, say, the product leadership, so that we can prove that we have the, say, the highest reliability of all suppliers in the market. That we have all necessary features and even new features to accommodate, say, the changes in the market. On the other hand, we are careful in saying what kind of elements we're working, because there's also, say, relevant competitive information, and we would like to, say, keep those elements safe for ourselves up to the moment we are really bringing them into the market. On the other hand, to make a more general statement, we are convinced that we can maintain this product leadership in the coming years because we have several elements where we can enter, say, new functionalities of new products into the market. Related to the battery, I think you refer to, say, frequency control. Our battery storage system can accommodate all requirements or elements that are necessary to earn a little bit of money with the battery systems. Maybe to name like one example is that, say, the BESS mobile systems. I think we can claim the. We have, say, the best operating system at this moment available in the market, not only because of what we designed it, but also by the fact that we've been operating the system now for many years and have been continuously translating all elements that we can see on site, where there are small elements where we can improve. Step by step, we improve our product, and we think we have the most balanced mobile system that can run in any application. That's also the reason why we have seen that whether it is Greener or Eneco or Vattenfall to buy our equipment to accommodate the growth also in the temporary storage market. Okay. Thank you. Next question comes from the line of Thibault Leneeuw from Bryan, Garnier & Co. Please go ahead. Yes. Hi. Thank you for taking my question. Regarding EV charging, you mentioned Germany and U.K. as important markets for you, but did you see recent change coming from those markets in terms of EV charging demand over the last quarters? A second question maybe just on the working capital requirements. We see an important rise last year. What do we have to expect for 2022 in terms of working capital as percentage of sale? Thank you. Yeah. First on the EV charging in Germany and the U.K., I missed it. There was one word you asked, I missed it. In terms of, are we seeing things change? Yeah. A change coming from demand in those markets. Did you see a strong rise coming from those markets over the last quarter? Yeah, I think what we're seeing across Europe is just increased transition to EV driving. The U.K. and Germany are some of our key markets. We're seeing the adoption of EV vehicles in those markets. We're seeing the infrastructure build out. The demand is definitely there and continues to increase. Maybe to add, because you also referred to working capital, and although I hope you appreciate that we don't give an update on the balance sheet on a quarterly basis. I can say that we put our money at work for us. We have a strong balance sheet, we have a strong cash position, and that position definitely helps us also to keep on continuing and safeguarding our supply chain. If we are in a situation where we have to put a little bit more working capital in, because we do prepayments and safeguard components or have batteries in, then we will definitely do it, and we are in a position in doing so. Okay. Thank you very much. There are no further questions in the queue, so I will hand the call back to your host for some closing remarks. Okay. Marco Roeleveld again. I would like to thank everybody for their attendance and also for the set of questions, which I think, I hope, that gives everybody the most valued recognition of what we have presented today. I would like to thank you again, and then see you next quarter in August. Thank you. Thank you for joining today's call. You may now disconnect your lines.