Earnings call transcript: Envipco’s Q2 2025 revenue slides, stock dips

Envipco Holding NV reported a 13% decline in second-quarter revenues, falling to €23.1 million, while its gross margin improved slightly to 36.6%. The company’s stock experienced a 2.18% drop in pre-market trading following the earnings announcement. According to InvestingPro data, the company maintains a healthy gross profit margin of 37.08% over the last twelve months, with analysts forecasting significant sales growth of 31% for fiscal year 2025. The earnings call highlighted strategic expansions and product innovations, but investors reacted cautiously to the mixed financial results.

Key Takeaways

• Envipco’s Q2 revenue decreased by 13% year-over-year.
• Gross margin increased by 1% compared to the previous year.
• Stock price fell 2.18% in pre-market trading.
• Expansion into Poland and Portugal with new product launches.
• Market for reverse vending machines (RVMs) poised for significant growth.

Company Performance

Envipco, a leader in reverse vending machine technology with a market capitalization of $483.51 million, faced a challenging second quarter with revenues declining by 13% compared to the same period last year. Despite the revenue drop, the company reported an increase in gross margin to 36.6%, reflecting improved cost management. InvestingPro analysis shows the company operates with moderate debt levels and maintains strong liquidity, with current assets exceeding short-term obligations by a ratio of 2.03. Envipco continues to expand its market presence, securing orders in Poland and Portugal and launching its Quantum machine in the U.S.

Financial Highlights

• Revenue: €23.1 million, a 13% decrease year-over-year.
• Gross Margin: 36.6%, up 1% from the previous year.
• Gross Profit: €8.4 million.
• EBITDA: €400,000.
• Cash Balance: €18.9 million.

Market Reaction

Envipco’s stock price dropped by 2.18% in pre-market trading, reflecting investor concerns over the revenue decline. Despite recent volatility, the stock has delivered impressive returns, with a year-to-date gain of 31.74% according to InvestingPro data. The stock’s movement falls within its 52-week range, with analyst price targets suggesting potential upside. The broader market trend has seen mixed performances, with Envipco’s decline aligning with cautious investor sentiment in the sector. For deeper insights into Envipco’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Outlook & Guidance

Looking ahead, Envipco expects to fulfill its orders from Poland and Portugal primarily in the fourth quarter of 2025. The company remains focused on expanding its market share and is targeting a 90% beverage container recovery rate by 2029. InvestingPro analysts anticipate the company will return to profitability this year, with projected earnings per share of $0.21 for fiscal year 2025. The upcoming Capital Markets Day on September 9 in Oslo is expected to provide further insights into strategic initiatives.

Executive Commentary

CEO Simon Bolton emphasized the company’s strategic growth and market leadership. "We are a global recycling technology business focused on the recovery of beverage containers," Bolton stated. He also highlighted the potential for significant market growth, noting, "To cover all of these deposit schemes, we’ll need another 200,000 units."

Risks and Challenges

• Continued revenue decline poses a risk to financial stability.
• Market saturation in key regions could limit growth opportunities.
• Economic fluctuations may impact consumer spending and demand for RVMs.
• Supply chain disruptions could affect production and delivery timelines.
• Competition from other recycling technology firms may pressure market share.

Q&A

During the earnings call, analysts inquired about the performance of the Quantum machine in the U.S. market and the company’s expansion plans in the Netherlands. Executives addressed concerns about seasonal variations in North American sales and expressed optimism about growth prospects in Romania.

Full transcript - Envipco Holding NV (ENVI) Q2 2025:

Simon Bolton, CEO, Invipco: Good morning, everyone. Welcome to the q two twenty twenty five presentation by Invipco. I’m Simon Bolton, CEO of Invipco, and we’ll run through this presentation with my colleague, Michael Clement, chief strategy and IR officer. No more disclaimer. What are the financial highlights for q two twenty twenty five?

As we talked about in the first quarter, this is a transitional year for us as we deliver on existing markets and then we look forward to new growth markets coming up. We’re seeing sequential growth Q1 to Q2 this year and group revenues of 23,100,000.0. That is 13% down year on year. But as mentioned, we expect that to continue to build as we go through the year. More on that later.

In terms of gross margin, we continue to work hard, make investments on our production capability, our supply chain, to drive down the cost of operations and cost of our products. So gross margin of 36.6% shows, 1% up versus the year before, giving a gross profit of €8,400,000 EBITDA of 400,000.0 and cash, which Michael will talk about a little bit later in more detail, ended the quarter €18,900,000 In terms of operational highlights, as we’ve discussed previously and will show later in the presentation, there’s a lot going on. Lots of markets are active. Some of those, some of those activities haven’t gone through to final commercial, decisions, and agreements and orders quite yet, but still we’re continuing to prepare, for the significant, opportunity ahead of us. That’s both on production and supply chain.

Whilst not all those activities have gone through to final decision, some have, and we’re very excited to, to have announced the first, two orders in those two new critical markets. So two fifty RVMs were announced to a major retailer in Portugal. Portugal, is an exciting market for us, and we’ve had certainly a really great business development team on the ground there for some years. As that starts to prepare for go live, you know, at the 2026. Poland, very large market potential, maybe up to 15,000 reverse vending machines, and we’re certainly we’re excited to announce the first agreement for a thousand units, to a major retailer in Poland.

And, you know, based on the current scheduling with the the customers, that’s expected to roll out during the course of second half. Romania, it continues to be a real success story for us, and we’re certainly we’re proud of the, the contribution that we have made to deposit return system in Romania and also the fantastic team and business that we’ve built in the country. As you know, we’ve been in Romania now, well over a decade, initially as a supplier, and we’ve built up that business to become one of our major manufacturing hubs, and also very active participant delivering machines, delivering services and support to the deposit scheme in Romania, which is working very well. As we’ve continued to work with the retailers and overall, you know, the country at large, certainly our market share has built up to now over our initial target of 30%, and we expect continued development in this exciting country going ahead. We continue to invest in the team.

This is something we’ve committed to do as we look to prepare the business, for the future. So a number of people were added in the quarter, particularly around business development, the service function, aftermarket, that’s important, of course. We only sell, and deliver a product with service offering. That’s super important for our customers, so we really focus on that. And then we also continue to invest in core functions as we grow the business, as we grow the organization, core functions, you know, particularly around finance and IT, also are developed.

For those who may be joining for the first time, we are a global recycling technology business. We’re focused on the recovery of beverage containers, and with the legislative framework to increase recovery, there’s an unprecedented market opportunity, really a tripling of the market in the next few years. We have positioned ourselves to capture our fair share of this, developing market, and step by step, we execute, with a seasoned team, and we’re driving both revenue growth and, we’re developing profitability. What does this look like? If we go back a few years, here on this chart, you see as new markets come in, and that’s our focus, really being there when these markets open up so we can capture our, our fair share.

And as they have, then you see that’s propelled our growth, over over the years. We, of course, still have a strong and stable US North American business, which Michael will talk a little bit more detail about. Whilst the number of deliveries was relatively modest this quarter, having production capacity is important. And we deliver North American products in North America from our North American operations in Connecticut. And then European markets, service through three facilities that we have, Romania, Germany, and Greece.

This is important. It allows us to serve the customer efficiently and quickly, and also that capacity that we’ve developed over the last few years allows us to respond when customers maybe make decisions later than we anticipated. So a number of these markets, there’s still work going on in the market to frame them and to organize them, particularly in Poland. But when those decisions are made, then we have the capacity, we have the ability to serve those customers very quickly. And we think that’s important, particularly as we head towards the, the regulation target of 2029.

Okay, with that, Michael, I’ll hand over to you for financial review.

Michael Clement, Chief Strategy and IR Officer, Invipco: Thank you, Simon. Thank you. Good morning. I’ll take you through some of the financial highlights of the second quarter twenty five. Starting out with the profit and loss.

Revenues in q two were €23,100,000, a decline of 13% from q two last year of €26,600,000. The key driver behind that decline are lower RVM sales to Europe as we continue to deliver on existing markets, whereas in the second quarter last year, we were still in the buildup phase in some of those DRS market introductions. 36.6% gross margins this quarter reflect underlying improvements in our production and supply chain activities, offset by lower utilization in our assembly facilities as we sold out older inventories finished goods inventory previously produced. Operating expenses EUR 10,400,000.0 in Q2, up from EUR 8,800,000.0 in Q2 last year. The increase, both on a sequential and a year over year basis, is driven by increased headcount, as Simon mentioned, five zero five employees exiting Q2 this year, up from four sixteen employees Q2 last year.

EBITDA in the second quarter, €400,000 versus an EBITDA of €2,600,000 in q two last year, with net profit at minus 2,500,000.0 in q two. For the year to date figures, Mvepco posted group revenues of €44,100,000, a decline of 18% from €54,000,000 in the first half last year. Gross margins in the first half this year were 37%, up a 170 basis points from 35.3% in the first half last year. Operating expenses first half this year, €20,200,000, up from €17,600,000 in the first half last year with EBITDA of 900,000.0, down from 5,600,000 in the ’24. Drivers behind our revenues.

Europe is the market that we are focusing on as new markets continuously are introducing and rolling out new deposit return schemes. Revenues in the second quarter were EUR 14,500,000.0 in Europe, down 16% from EUR 19,900,000.0 in the second quarter last year. We continue to deliver on markets. This quarter, Romania, once again, very strong performance. We are continuing to deliver in Hungary, but at a lower rate, and where Greece started out very or quite soft in the first quarter has built momentum into the second quarter but is expected to continue to build momentum into the second half of the year.

Our reverse vending machine sales in the second quarter in Europe were EUR 12,800,000.0, down from EUR 16,400,000.0 in the second quarter last year. Program services increasing still at a low level as we still are in warranty periods for a majority of our installations, €1,700,000, near doubling from €900,000 in the second quarter last year. Our North American operations are stable. In the second quarter this year, revenues were €8,600,000, down seven per point 7% year over year from €9,300,000 in the second quarter last year. We’ve had a weakening of the dollar versus the euro, so adjusted for that, the underlying growth is 3%.

The driver behind the decline are lower sold volumes and therefore also lower collected volumes in the North American markets. Program services declined 4% year over year. They comprise the largest share of our US business excuse me, North American business to 7,500,000. Our VM sales in North America in the second quarter were €1,100,000. Our operating costs EUR 10,400,000.0 in the second quarter, up 17% year over year and, as explained, largely driven by the increase in our headcounts.

Mbipco will continue to invest to meet anticipated market growth in the quarters and years ahead. This goes this goes in a wide variety of our activities, from market and business development to R and D, developing our technology and delivery platform further, our administrative capacity and systems. Including other income, total operating costs in the quarter were €10,300,000. Moving over to our balance sheet. Balance sheet total declined marginally from EUR 122,600,000.0 at the end of Q1 to EUR 121,100,000.0 at the end of Q2.

Non current assets were EUR39.2 million, down from EUR41.2 million at the end of Q1. Major components: PPE, EUR21.2 million and intangible assets of EUR 14,200,000.0. Roughly half the intangible assets are made up of capitalized R and D. Current assets totaled EUR 81,800,000.0, fairly stable from EUR81.4 million at the end of Q1. Taking out the cash balance of EUR18.9 million, inventories were EUR33.1 million at the end of Q2, up from 31,500,000.0, with the increase being driven by raw materials, offset by a decline in finished goods inventory.

Accounts receivables were €29,900,000 versus €29,300,000 at the end of q one. Equity stood at €57,900,000 for an equity ratio of 48%. Non current liabilities were €16,100,000, flat sequentially, with borrowings at €6,800,000, down from €7,600,000 in q one. Current liabilities were €47,100,000, up from EUR 42,600,000.0 at the end of Q1, with trade creditors at EUR 17,800,000.0 and borrowings at EUR 15,600,000.0, up from EUR 10,500,000.0 at the end of Q1. Total borrowings on the balance sheet exiting Q2 was €22,400,000 up from 18,100,000.0 at the end of Q1.

Moving then over to the cash flow for the second quarter. We exited the quarter with EUR18.9 million in cash, down from EUR20.7 million at the end of Q1. Cash from operating activities were negative EUR0.46 million, with EBITDA of EUR0.4 million being offset by working capital build of EUR5.3 million. Higher inventories, higher receivables, key driver behind that build. Cash from investing activities were €1,500,000 negative, with capital expenditures of €1,100,000 and capitalized R and D at EUR 400,000.0, key drivers.

Cash from financing was positive EUR 600,000.0, with FX effects of €400,000 negative. That was driven by an increase in borrowings of €5,200,000 while lease liabilities came down €500,000 during the quarter. Since Q2, now in August 5, we announced a new consolidated working capital facility with ABN AMRO Bank, thereby collecting financing arrangements in different markets that the company has had over time and built over time through a collective facility. This facility gives us a flexible capacity currently up to €21,000,000 As part of this arrangement, we have repaid all USA based financing, which then in sum gives us, net of these repayments, an increase in working capital capacity of €10,000,000 a very important stepping stone for the company as we continue to move ahead towards new growth opportunities. With that, I think I’d like to give the word back to you, Simon, for a few comments on our outlook.

Simon Bolton, CEO, Invipco: Okay. Michael, thank you very much indeed. Great. Just a reminder, obviously, on the webcast, you can enter questions, send questions to us. And after this outlook, we will we will then take those those q and a.

So please do send in your questions. Good. Right. Outlook. We wanted to we wanted to highlight again, the opportunity facing, facing us.

So we are recycling technology business. We produce reverse vending machines and services and systems that support the recovery of beverage containers. And that recovery is now very strongly written and driven in legislation, both the EU packaging and packaging waste regulation, which mandates 90% recovery by 2029, and also additional legislation in other countries, for example, The UK, which is mandating the introduction of deposit return scheme in The UK, by October 2027. Very powerful pieces of legislation which are driving activity in this market and of which, of course, we want to take we’re positioning ourselves to take our fair share. You know, a different way of looking this is in terms of coverage of population.

So last few years, roughly, you know, forty, fifty million people have been covered in those countries that have recently introduced a deposit scheme. In the next three years, there’s another kind of 270, 280 people, and then in the next five years, potentially another 150,000,000 people. And roughly, the number of reverse vending machines, our products that you need to cover population is proportional. So huge opportunity, and, you know, we’ve expressed this differently before to say there’s about a 100,000, a 110,000 units operating globally at the moment. And to cover all of these deposit schemes, we’ll need another 200,000.

So about 300,000 units will be needed in the next few years. This additional 200,000 units is a market opportunity about €4,000,000,000. So very significant, very exciting. But timing is a is is a challenge that we face. And, if we look at this slide, which we which we keep updated, and by the way, thanks for the feedback.

People find this very useful. These are the markets, that are finishing off a deposit scheme. So Romania, Hungary, and Ireland, These are markets we’re still delivering units in, as Michael mentioned. Hungary, in particular, for example, has done most of the installation last year, so that is being delivered at a slightly lower rate. And year on year, we delivered less in q two twenty five than we did in q two twenty four.

Romania has a longer tail. Lots of local independent stores have moved and want an RVM, which is great. So sequentially, actually, year on year has seen growth, and Ireland and so on is is filling in. And then we have, Poland and Portugal, which, for those who follow the business several quarters, are really key markets for us during this year and into next. And whilst there’s there’s still a lot of activity in both of those markets, you know, there are some, some things that need to be continued to be defined and sorted out.

So Poland, there’s there’s interoperability questions which are being worked through between multiple operators. Retailers and beverage industry are still working on their final plans. And this uncertainty, therefore, is, pausing somewhat some of the very final decisions of retailers, our customers when they buy, RVMs. So we’re seeing that move slightly, into, the latter part of, 2025 and potentially even to 2026. Good thing is we’ve now been there a few years.

We have a fantastic business development team. We’ve won the first agreement, which is great. We have pilots operating in many countries which in in many areas of Poland, which is exciting, and we’re ready to win when the customers make those final decisions. Portugal is smaller market, and certainly, there’s been no official announcement from SDR Portugal, the operator, on the go live date, but we expect that to be in the 2025. Again, you know, a slight delay has caused slight delay from from some of our customers.

Again, great team on the ground, lots of piloting, and we do expect still in both those markets to win our fair share, which is 30% plus. The other markets are starting to come through. Greece, which Michael mentioned, we’ve got a fantastic, you know, footprint in Greece through, through work with a great partner. And as Greece starts to transition between pre DRS and DRS, then clearly there’s some things that need to be organized before that gets going again. So overall, we continue to see, you know, really exciting momentum in new markets.

It’s a multibillion dollar euro market, in Europe, and we have obviously outside of Europe continued interest in different markets and obviously potential growth within North America. The timing and character of these will influence final procurement decisions and delivery. We’re ready. We have the team. We have the products.

We know we can do it. We’ve proved we can do it, and we’re just waiting for that final go before, before launching those products onto the market. We continue to live on a tale of very successful launches, particularly in Romania and Hungary. We have our first agreements in Poland and Portugal, and we’re working hard with other customers on their final decision points. And look, we’re confident about the future.

We’re confident about the market, our ability to capture our fair share, so we will continue to invest to be ready, for when those decisions are made so we can deliver excellent products and services to those customers. So that’s the end of kind of the q two update. We’ll take q and a in a moment. Just a reminder, we are holding our very first Capital Markets Day update in Oslo, September 9. So those who are in Oslo or wanna travel to Oslo, you are more than welcome.

Please, you know, register and let us know. For those who can’t make it live, then we will be webcasting it live on, invipco.com, and we’ll it’ll be between one and four Central European Time. So hopefully look forward to seeing many of you there live. Should be exciting update, and obviously, the few hours gives us longer to, you know, go into a bit more detail about the business, about our targets, and as we look slightly further ahead to, 2030. In terms of the next specific event on quarters, we have Q3 results.

That will be on the November 12. And with that, I say thank you very much for your attention. And, Michael, I think if we have any questions, it’s over to q and a.

Michael Clement, Chief Strategy and IR Officer, Invipco: Yes. And questions are are coming in here.

Simon Bolton, CEO, Invipco: Thick and fast, I

Michael Clement, Chief Strategy and IR Officer, Invipco: hope. Yes.

Simon Bolton, CEO, Invipco: Yes. Absolutely.

Michael Clement, Chief Strategy and IR Officer, Invipco: Okay. Well, let’s just start on top. Could you comment on what is driving sales of the Quantum in The US? Okay. How how the characteristics of this machine fits The US market.

Simon Bolton, CEO, Invipco: Yeah. Great. Look. I think I think one of the things is that, the deposit schemes are have been established in The US for a long time, since the nineteen eighties. But as we’ve announced before and as you’ve seen in our numbers, Connecticut as a state has refreshed their their bottle bill, which has increased the number of containers which which are coming back to the scheme.

We’ve also seen increased volume in, you know, places like New York. The quantum machine is fantastic for, for high volume. We’ve seen that in Europe, and now we’re introducing that technology, into The US. Actually, the photo that you see here is in fact The US machine. And so we’re putting these machines in recycling centers which can be used by the public, can be used by, people in those recycling centers, the the team of those recycling centers, and they’ve been really well received.

And, you know, we’ve got lots of inquiries for other other machines. And so, you know, we feel very positive about Quantum as a product Mhmm. Platform in in The US.

Michael Clement, Chief Strategy and IR Officer, Invipco: Yeah. Absolutely. And we’re looking at producing it as well.

Simon Bolton, CEO, Invipco: Yeah. I mean, it’s it’s it’s it’s a big unit. I mean, for those who have had the pleasure of using it, one of the things that, you know, customers like is not only, it’s good for their their, you know, consumers and the people who use their shops. It’s very efficient, but it stores a lot of material. Mhmm.

And it’s easy to take that material, which means you need a big box. Yep. And shipping boxes, you know, across the sea is not the best thing to do. And there’s lots of people who make good boxes in The US. So one of the benefits, of course, of of having a dispersed manufacturing strategy and having factories that are ours, that we control allows us to be very flexible.

So just like we have done in Greece, to localize the quantum product, you know, that localization we can also do in The US, which allows us to be highly flexible and, of course, you know, particularly in the current regime, you know, very cost effective.

Michael Clement, Chief Strategy and IR Officer, Invipco: Yep. Can you provide a bit more color on if you are expecting Poland and Portugal orders to come into the p and l in q four this year, or is it more split between q three and q four?

Simon Bolton, CEO, Invipco: Yeah. Look. That I I think we wanted to, you know, highlight highlight the timing, of of these opportunities. You know? I think we still it’s not a matter of, you know, if it’s gonna happen, it’s gonna happen.

Both of those are those those schemes will will happen in the next, you know, in a in a next short period. It’s it’s the timing of those. Now, certainly, the we’ve announced the two new agreements. You know, we expect those to be delivered, you know, during the course of, the second half of the year before the end of the year. And, clearly, we are working hard to add to that.

So far, because of the work still going on to, you know, solidify and clarify some elements of the of the schemes in both countries, there’s been really no no more, you know, announcements or conclusions by customers anywhere. You know, we’re ready to obviously jump on those as soon as they, as soon as those decisions are made and they want the product. But certainly, we do expect, influence of Poland and Portugal in the second half of the year to revenue. The extent of that, again, is the extent of timing. And yeah.

So we’re we’re we’re we’re basically ready to go.

Michael Clement, Chief Strategy and IR Officer, Invipco: But more in q four than in q three.

Simon Bolton, CEO, Invipco: Yeah. That reasonable assumption? Yeah. Think so. I mean, here we are, you know, we’re mid August now.

Yeah. And I think it’s it’s reasonable that, you know, as we’ve said, we can we see, you know, momentum building as we go through the year. But, you know, like we’ve seen in last couple of years, we do expect, you know, q four to be, you know, quite busy. Yeah. Yeah.

Yeah.

Michael Clement, Chief Strategy and IR Officer, Invipco: Do you see anything significant with regards to the decrease in North American sales? Well, as we explained, program services were down. Q two this year, lower sequential seasonal growth than we’ve seen in previous years. From what we gather, the sell in of new beverages has been lower, weather partly explaining that. Yeah.

Right. Specifically in Northeast, lower sold volumes also then results in lower collected volumes. So all in all, the North American market for us is still looking as a stable market, moderate, growth, it will vary on a quarterly basis, but that’s still what we see, there’s no difference, structural or in the North American market for us. Do you expect working capital build to reverse over the course of q three and q four? We’ve seen in terms of seasonality, we’ve seen a build in Q2 over the last few years.

We will have a higher activity level moving into Q3 and even higher activity level into Q4. That will drive receivables. We have different types of contracts with different types of customers. And of course, the mix of that could be changing that dynamic. In terms of our financing capacity, we’re very comfortable with what we have to deliver on what’s to come for the Portugal and Poland.

We have a strong focus on our working capital,

Simon Bolton, CEO, Invipco: but

Michael Clement, Chief Strategy and IR Officer, Invipco: we also need to have an availability to deliver on the opportunities that are arising. So let’s see here. Can you provide any further color on The Netherlands win and how big this could be for 2026? Do you expect to win any further orders in other existing markets? In other words, yeah, I can see that.

Simon Bolton, CEO, Invipco: Yeah. Yeah. Certainly, you know, one of the things that we’ve put in a report, subsequent event is we’re very pleased to announce the kind of frame agreement with Staskeld Nederland, the operator of the Dutch, system, to, kind of formalize some of the pilots and some of the work we’ve done over the last six months in terms of introducing Quantum to the Dutch market. You know, as we presented before, the Dutch market has grown from big bottles and then introduced small PET bottles and now introduced cans. And cans is a huge fraction of the overall beverage containers in in in the market in Netherlands.

And so this has created kind of an issue, also created an opportunity for us to introduce Quantum. And we’ve had several fantastic pilots by private, private groups, which have also been supported by Stahel Netherlands, and that’s now culminated, you know, in recognizing that technology, as a huge potential and an investment and program that lifts, The Netherlands towards the 90% recovery target. So, yes, we do expect, we we do expect, of course, follow on orders both during the course of this year and during next. You know, it will be step by step. You know, as we talked about just before in in The US, these are big machines.

You know, it needs, you know, planning permission and and zoning and so on and so forth. But certainly, everyone’s very excited. We’ve got now a team focused, on that brownfield opportunity in Netherlands. We have technical support and so on. And certainly, our, you know, the feedback from customers, feedback from Starship Netherlands is very positive.

So yes. And in general, what you see, and hopefully, we try and communicate as best as we’re able through these quarterly updates, is you see a spread of quantum. I think, you know, you go back two or three years, really, quantum was only in Sweden. But step by step, now we see Quantum pretty much existing in every market, that we are that we’re working in. It’s a very it’s a great product, unique product to the market.

Consumers love it. It’s very quick. It’s very efficient. They don’t have to stand there putting bottles in one by one. You know?

And, you know, our customers, retailers or even private individuals like gas stations, they like it because it’s high footprint. It drives footfall to their facility, and, of course, with very high volume, they get a lot of handling fees. So overall, a fantastic product, which we will important for us and we’ll continue to, you know, develop and also apply in other markets. Could

Michael Clement, Chief Strategy and IR Officer, Invipco: you please explain the gross margin decline sequentially? Q2 production was lower than in Q one, so it’s a utilization factor. So lower utilization of our assembly facilities. So in other words, part of the sales in Q two was sell out of previously produced finished goods inventory.

Simon Bolton, CEO, Invipco: Yep.

Michael Clement, Chief Strategy and IR Officer, Invipco: That’s the explanatory factor. Yep. Great. Let’s see here. I’m just trying to see which questions may be overlapping.

Could you maybe elaborate on your performance in Romania?

Simon Bolton, CEO, Invipco: Yeah. Sure. Yeah. Look. We wanted to highlight Romania.

It’s, actually, its biggest single market in q two and showed very strong, both sequential and also year on year growth. Yeah. As I as I mentioned, I think, in the presentation briefly, you know, we’ve been working in Romania now for quite some years, initially just as a supplier of our compactors, very high quality, very efficient. And then we’ve built out that business both from production point of view. Now we fully make the whole product in Romania and the full range to, also then, supporting the Romanian deposit return scheme.

And, you know, we’ve made several announcements, you know, over the course of the quarters in terms of key wins that we’ve had with international retailers, but also, you know, more importantly, we have a very active local sales team and commercial team that look at the the much wider, opportunity of, local and regional retailers. Mhmm. And we’ve built, therefore, into that market. They really like the fact that they can get the product quickly. It’s simple to use.

It works. It’s, you know, it’s it’s effective. It’s good price point for them. And so that, you know, that has developed our our market share, you know, and we’ve surpassed now 30%, and, you know, we feel we can continue. And this is an interesting dynamic because we see similar dynamics in some other markets like, you know, Poland probably being even more, like this.

So, you know, 15% maybe of, of retailers are kind of international retail groups or large groups, and then you have the majority being these smaller chains, smaller local retailers, which are very effective, at what they do in those markets, but maybe, start off with manual collection, then they have an RVM, a reverse vending machine later in the process. So these, you know, the this market share builds over time. So we’ve been, you know, working in Romania now commercially for, you know, well over two years, but it shows, you know, commitment to the country, commitment to the market, a great team on the ground, clearly, allows us to have, you know, a very nice, you know, solid business, and ultimately build up to, you know, a good market share.

Michael Clement, Chief Strategy and IR Officer, Invipco: Yeah. Then we’re through all the questions.

Simon Bolton, CEO, Invipco: Very good. Okay. Excellent. Well, thank you, Michael. Thank you, everyone.

Thanks very much for your attention as ever. Again, a reminder, September 9, do put it in your calendar. It’s the InVIPCO very first Capital Markets Day, either online or, of course, warm welcome to Oslo. And then we’ll see you again for q three update in November. With that, we’ll sign off saying thank you very much for your attention.

Have a fantastic day. Bye bye.

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