While the revenue and results were very encouraging, the order intake was somewhat subdued. The previous year was exceptionally strong. The Ukraine crisis and the upheaval in the European energy market led to a fundamental reorientation for many companies. If we had extrapolated the order intake from the first half of 2022, today, our CHP power plant delivery time would be three years. We now see a normalization in the order intake, but we also notice that industrial customers in Germany are very cautious.

Both large corporations and medium-sized businesses are currently finding it challenging to invest in our systems. Customers from large corporations often have the directive from their headquarters that whatever we do, it must be carbon neutral. In the German Mittelstand, we see a strong sense of uncertainty due to the economic situation as well as the bureaucracy, which does not make operating power plants any easier.

I completely disagree with that view. When you look at the energy supply situation in Germany and Europe, we are visibly heading towards a worsening bottleneck This will lead to a more rational assessment of the issue. We notice that this realization is already permeating municipal utilities. According to the Federal Network Agency's list, 11 gigawatts of capacity will be taken offline in the next three years, while the construction of wind and solar lags behind, just like the urgently needed construction of overhead power lines. None of this will be completed by 2030 – that is entirely out of the question. We are also the global technology leader in hydrogen-powered combined heat and power plants – and we can retrofit natural gas engines to run on hydrogen at any time.

We are projecting a revenue of up to 390 million euros for next year. This includes very little business with heat pumps, as this new business area is just starting for us. We aim to grow by 10% plus the inflation rate every year, so you can calculate approximately when we will reach half a billion using the rule of three. Predicting when we will reach a billion is a bit more challenging, but fundamentally, we believe that heat pumps will become a similarly significant revenue driver over the next few years as the combined heat and power plant, at least in the new machine business, not as much in the service business, because heat pumps require less maintenance.

We didn't have our own heat pump business before; we only installed heat pumps from other manufacturers on behalf of customers. We are now filling that gap. NRGTEQ did not have a dedicated growth strategy until now. The company generates between 1.5 and 3 million euros in revenue. The business in Benelux will continue unchanged. Simultaneously, we are beginning to market the company's large heat pumps in Germany, France, and the UK. We expect the first order entries and initial revenues in the single-digit million range in 2024. This can then quickly increase because there is a market in Germany. We can draw on about 200 references from NRGTEQ, so we expect that market penetration will progress significantly faster than if we had developed our own product. We have bought technology and references with NRGTEQ.

We bring our own service network and our own production. As a capital market-oriented company, we bring transparency and a certain size. When a company wants to switch to CHP with a heat pump, it has a certain interest that the provider will still be in the market in a few years.

The purchase price was agreed to remain confidential. We typically finance such acquisitions from our cash flow.

Our business model generates strong cash flows. In the power plant sector in Central Europe, it is customary for customers to pay 30% when placing an order, another 60% when the system is built, and the final installment when the plant is connected to the grid. So we have no reason to fear significant growth in orders ahead of time because it goes hand in hand with strong cash flow for us. In the international business, for example in Asia, it may be different at times, but it is widely accepted in the industry that upfront payments are made.

For M&A, we have a basic rule: We don't want to get overwhelmed by complexity. The companies we acquire should be relatively easy to integrate. In the current phase, where the energy market is in transition and we see strong growth potential, we don't want to focus on getting our new baby up and running in country XYZ. Now is not the right time for that. We want to concentrate the resources of our management team on the business and the market.

Compared to the percentage of women graduating in electrical engineering/thermodynamics, we have a relatively high percentage of female leaders who hold prominent positions within our organization, although admittedly not on the board. On the first level of leadership, 16% are women. Across all leadership positions, the percentage of women is 12.5%, but it should be noted that the field service department is predominantly male. We cannot create the pool of female candidates. If there are no female applicants, it's difficult for us. The question of skilled workers, in general, is also relevant: it is widely discussed who will install all the heat pumps that are being planned. We have managed to industrialize CHP production like no other company in the industry. A classic CHP unit in a container placed behind a hotel should be ready for use within two days. We want to industrialize heat pumps as well and deliver them to the construction site as a complete unit.

We want to stick to the same strategy as in the past. We want to maintain or increase the dividend when we are sure that the higher earnings level is sustainable.

Our goal is a 10% EBIT margin. For next year, we forecast 8.5% to 10%. The most significant lever next year will be that revenue continues to grow while fixed costs increase at a proportionally slower rate. We will have higher capacity utilization. We are currently also seeing a normalization of material costs. This does not mean that materials are getting cheaper but that our own list prices, which we could only increase once or twice a year, will be in a more balanced relationship with input costs.

We still have a few internal tasks to complete. We want to introduce cost unit accounting and standard cost accounting, and possibly IFRS. This requires a new ERP system. Our old one is now being replaced. The changeover should be completed by the end of next year. After that, it is certainly conceivable that we will switch segments.

Friedrich Pehle, born in 1971, has overseen finance and human resources at 2G Energy since late 2017. With a career at the intersection of business administration and technology, he brings over 20 years of experience, including roles with international agricultural machinery and energy companies, such as serving as CFO for the publicly traded Norwegian agricultural machinery producer Kverneland. His current contract with 2G Energy extends until the end of 2027.