Earnings call transcript: Vistra Holding SE sees strong Q2 2025 growth, stock rises

Vistra Holding SE reported robust financial performance for the second quarter of 2025, driven by significant revenue and order intake growth. The company’s stock rose by 3.95% following the announcement, pushing it near its 52-week high of $72.17. According to InvestingPro data, the stock has delivered an impressive 122.22% return year-to-date, though current analysis suggests it may be trading above its Fair Value. Key financial metrics showed a positive trend, with a notable increase in net profit and a reduction in net debt. The company remains optimistic about future growth, supported by strategic investments and a favorable market environment.

Key Takeaways

• Revenue for the first half of 2025 grew by 9.5% year-over-year.
• Order intake surged by 44.7% compared to the previous year.
• Net profit increased by 33.1% year-over-year.
• The company reduced its net debt significantly, from €63 million to €8 million.

Company Performance

Vistra Holding SE demonstrated strong performance in Q2 2025, with revenue reaching €213.5 million for the first half of the year, marking a 9.5% increase from the previous year. This growth was supported by a 44.7% rise in order intake, reflecting robust demand for the company’s products and services. The company also improved its gross margin to 42.1%, up from 39% in 2024. InvestingPro analysis shows the company maintains a healthy financial position with a GOOD overall score, supported by moderate debt levels and strong profitability metrics. Get access to 10+ additional ProTips and comprehensive financial analysis with InvestingPro.

Financial Highlights

• Revenue: €213.5 million (+9.5% YoY)
• Order intake: €290 million (+44.7% YoY)
• Gross margin: 42.1% (up from 39% in 2024)
• EBITDA: €36.7 million (+12.2% YoY)
• Net profit: €21.8 million (+33.1% YoY)
• Net debt: Reduced from €63 million to €8 million

Outlook & Guidance

Vistra Holding SE maintains a positive outlook, anticipating continued revenue and order intake growth. The company plans a €50 million capital expenditure over the next three years and aims to increase prices by an average of 3%. Analysts project revenue for 2025 to be approximately €430 million, representing an 11% growth. With the next earnings announcement scheduled for September 3, 2025, investors can access detailed financial projections and analyst recommendations through InvestingPro’s comprehensive research reports, available for 1,400+ top stocks. The company is also targeting the first revenues from HVDC cable accessories by 2026/2027.

Executive Commentary

Johannes Lindt, Co-CEO, emphasized the company’s commitment to innovation, stating, "We are striving to be the preferred partner for innovative, reliable, and mission-critical electrical connections and insulation solutions." Konstantin Kovitz, Co-CEO, highlighted the importance of delivery times in the market, asserting, "Delivery times are still the key in the market to execute the project."

Risks and Challenges

• Supply chain disruptions could impact production timelines.
• Market saturation in certain regions may limit growth opportunities.
• Economic uncertainties in key markets could affect demand.
• Fluctuations in raw material prices might pressure margins.

Q&A

During the earnings call, analysts inquired about the company’s pricing strategy and market demand. Executives discussed the HVDC qualification process with cable manufacturers and clarified their approach to working capital management. The company did not provide a quantitative guideline but indicated that second-half revenue is expected to be similar to the first half, aligning with analyst projections.

Full transcript - Pfisterer Holding SE (PFSE) Q2 2025:

Conference Moderator: Good morning, ladies and gentlemen, and welcome to the Vistara Holding SE publication of Half Year Report 2025. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Johannes Lindt.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Hello, everybody, and good morning from Winterbach, 15 kilometers east of Stuttgart in the Southwest Of Germany in Europe. We are happy and proud to have you here today with us and to spend the next sixty minutes with you talking about the financial half year statement in the second webcast after our going public. And with this, I would like to start in the presentation. And I want to start with the with the management team, or to be more precise, on the executive board to, explain to you who is present here available for any questions and explanations. I am the the person on the left on this introductory slide here.

And as Lynn, my name, and I am a co CEO in Vistra holding SA and speaker of the executive board. From a functional point of view, I am taking care of the functional areas in operations and finance, and I’m doing this based on a background of having 24 of profit and loss responsibility in different companies, be it listed or be it private companies. And I’m happy to be at Vistra these days as this is a great company. And I would like to hand over to Konstantin.

Konstantin Kovitz, Co-CEO, Vistra Holding SE: Yeah. Good morning, everybody. My name Konstantin Kovitz, the gentleman on the right side besides Johannes on the slide. So I’m in the the industry more than twenty years. And as you can recognize, I’m within Pfistor more than thirteen years.

And below, you see I have been working for Vistra from 2005 to 02/2013. Then I joined NKT up to ’19, and then I came back to to Vistra, now being the co CEO. Besides Johannes, I’m responsible for sales and technology here in the company, and my background is engineering background. And looking forward to present now with Johannes together and answer the questions you have. Thank you.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Alright. So if we move on in the presentation, we have this introductory picture that some of you who we’ve been talking to before, you have seen this, but it is not clear to us whether there are any participants in the webcast, which which we have not been talking to so far. So I want to spend two minutes on this slide as it is a good example of explaining what Vistar is all about, what the business purpose of Vistar is all about. Here, a picture of an overhead line. And on the right side of this picture, there is a wire entering, the picture.

And on the left side, you see a pole. And the wire which is coming into the picture is carrying electricity, as it is a transmission line, overhead line that we see here. And now, this wire needs to be connected to a pole, mechanically connected. But from an electrical point of view, this mechanical connection needs to be in an needs to be executed in an insulating way. So, this is what pistol is doing in, many different applications, be it for plugs, sockets, be it for terminations, or be it for insulators as this example is here that you see.

This is a silicon based insulator. And, we are summarizing this business purpose that we are following in our mission where Pistora states that we are striving to be the preferred partner for innovative, reliable, and mission critical electrical connections and insulation solutions. These solutions that we are providing, they are cable agnostic, and they are generation agnostic. And for this, I wanna state that we have solutions that we can bring together with every cable supplier in order to build system and with every overhead line and wire solution where overhead technology is needed. And by stating that our technologies are generation agnostic, it means that as long as electricity is being generated, it needs to be connected, and this is where VISTA comes into play.

And we offer the solutions across the entire power value chain and across different voltage levels. So be it so that electricity is being generated in a nuclear power plant or be it so that that would be the case on an onshore or offshore wind farm. It could be a solar field or a coal powered plant. As long as it’s being generated, it needs to be connected. And, again, this is where VISTA comes into play.

And this is typically the case in a situation where high voltage needs to be connected. You see these examples on the graph. We call this the electrical landscape in the illustration dark blue, dark blue for the generation examples, but also dark blue for high voltage, which we call anything above 53,000 volts. The generation electricity need to be transmitted as, typically, it is not being consumed where it is being generated. This is where the transmission systems come into play.

On the bottom left illustration, you see the overhead line situation. In the center, see underground cable example where Vistra is offering insulation and connection solutions for transmission systems. And then in red, after the transmission before the electricity is being distributed, or while it is being distributed, again, you see solutions and examples of Vistra products, and the distribution mostly is taking place in the medium, this would be green, or in the low or lower voltage areas, this would be purpley and illustrated in the purple color here. And, if we move on, where are we doing this? At Vistra, basically, we do it on a global scale.

Yeah? We have ensured quite a good proximity to our diversified customer base through our own company network, but also through collaboration with dealers and experts in this field. Through this, we are able to serve customers in over 90 countries. You see on the top left in the pie chart our revenue split in the half year 01/2025, mainly in this global situation we are acting at. We are serving with 54 revenue share customers in Europe and in Africa, mostly in Europe.

We have had Middle East and India with a 22% represented, The Americas at 15% and Asia Pacific at 9%. Later in the presentation, we will illustrate how this has developed in the year over year comparison relative to the first half year twenty twenty four. On the bottom left, there is the revenue split to the product segments. We report our financial figures by geographical segments, but also by product, technology type of segment. And there, you see that the largest segment would need to be in the 2025, the area of high voltage accessories, so cable connecting solutions for high voltage, about 53,000 volts.

Then we have the overhead lines with the meanwhile 23%. This is also mostly a high voltage situation. We see then the component business with 24%, which is in the first denomination to be looked upon as a low voltage situation, and then there is medium voltage with 14%. In the center of this slide, we see the world map with the physical locations. We are entertaining five factories, with, one in The United States in Rochester in New York located, three factories in Germany, and last but very important to us, the largest facility and factory of Vistra, which is situated in Kadan in The Czech Republic.

And other than that, we have our subsidiaries in the individual continents, be it in South America, in Argentina and Brazil, be it in The U. S, of course, where the factory is located. In Europe, we are present in The UK, France, Spain, Italy, but also in Switzerland and in Poland. In The Middle East, in The Emirates, and since last year also, and I would also say quite successfully already, in Saudi Arabia. And then in the Asia Pacific region, we are located with two companies in China and one in South Korea.

So if we want to look now to the specifics of the first half year twenty twenty five, we believe it’s fair to say that the the business we are serving, mission critical connecting connection solutions for the electrical infrastructure, that this business environment has proven to be continued, very positive. If, for instance, we look at the electricity demand, we can derive more and more that the demand is structurally increasing due to the trend of AI and digitalization. There is a lot of data available on this. We have here pulls one from the National Energy Agency, which is stating that by the year 2030, the additional electricity demand from AI only will be the electricity demand of Germany, but the one of Germany for three years. If we look to the grids, the modernization of grids, again, in Europe, we have pulled a second example here where the European Union developed or forecasted the investment necessities for the grid investment in order to fulfill the net zero target by the year 02/1950.

And despite that, we have already known that this is an area of significant investment. Only in April, it was so that the European Union announced the newest their newest study on the subject matter, and they found out that it needs to be even higher, the investments need to be even higher than than before. If before, the prediction was 1,900,000,000,000.0, meanwhile, it is 2 to $2,300,000,000,000 that is required. We see as a third example here describing our business environment that there is a rising global power demand, not only on AI, obviously, but also in many others other application areas. And we have we have taken here one example of of a company that is also with us in this market.

We have told Nexan, and Nexan was illustrating that they are growing by 7.8%. On the power transmission segment that they are reporting, and we believe we are very well positioned in this area as well. We could have put other examples, for instance, Siemens Energy on grid technologies. You can study or you can see that they were reporting a book to bill ratio of 1.5. So the message here is it’s not only studies that is telling us that there will be a growing demand for great investment, but it’s really shown in business of companies that are accompanying us in the market.

And you will see later that this is also seen in the business development of Vistra quite obviously. As a very last point, we want to strive also at The United States because opposite to some impression that you would, that you could get listening to the latest, Twitter message from the president of The United States. It is also in The US, so that there are massive US investments ongoing, in particular, for the high voltage technology. And, again, this is the largest business application of Vistara, HVA, and OHL, as OHL is also typically a high voltage situation. There are many examples.

Again, Siemens Energy, they have almost doubled their revenues in The US lately, But also GE Vanova is an example that we have pulled here, who is investing $100,000,000 in a facility in Pennsylvania to expand certain production capacities for highly requested parts where also Vistara is providing product into. And with this, we can now move to the business development of Vistara. We have already announced earlier this morning that Vistara has seen a quite positive business development, be it for order intake, be it for revenues and even more, be it for margin and profit. You see on this slide on the right side where we are comparing our financials in a profit and loss statement type comparing half year 01/25 to the half year one of twenty four. And then on the right, you see the column where the changes in percentage in between these two half years are illustrated.

So I wanna go through the table very quickly, and then after that, I would would go through the key comments on the left. So starting with the table, and they are looking at the order book. We have managed to increase our order intake, maybe starting with that second line, from €200,000,000 to €290,000,000 So PISA has increased the order intake in these first six months of this year relative to the first six months of last year by, I would say, an impressive 44.7%. We have managed to grow our revenues as well. This is the third line that you see here.

We’ve had €213,500,000 in the 2025, and this is an increase of 9.5% relative to first half year twenty four. And subsequently, the delta of these two lines, order intake and revenue, you see the order book has increased also massively. Yeah. We have grown this number by 57.3%. And it’s fair to assume that this is a very good basis for the coming period as we will be turning these order book information or data or orders into revenue step by step.

But coming back to the first half year, so with this increase of revenues by 9.5%, we have managed to achieve a gross margin of 42.1%, and this is also a relevant improvement compared to last year where we had already, I think, quite a good result with 39%. But, of course, 42.1% is even stronger than that. And this then relates into an EBITDA of €36,700,000 which is an increase of 12.2% relative to last year. So we see an over proportional increase of EBITA, 12.2% is higher than our revenue increase. And this is, of course, related to the gross margin, but there is also more effect to that when we come to this and explain this in a minute or two a little bit more in detail.

EBIT went up by 13.7% and the result of the period by 33.1%, ending with €21,800,000 of, yeah, period results. We have continued to invest relevant monies into R and D as we Vistra, we are considered to be the technology leader in our specific industry. And it’s our clear ambition to keep that position and to even extend it in the period to come. So we spent 5.5% in R and D, and our operating cash flow is at EUR $05,000,000 in the first half of the year. If you look to the report, it is evident that this is going back to an increase in inventories.

Please refer to the order book situation That has went up significantly. So we are, of course, working on this, and that means we need to organize materials. But next to that, also the growth in revenues is related to an increase in our receivables simply due to the timing effect of this. Yeah? If we have ninety days or a hundred and twenty days payment terms with our customers, we would see the operating cash flow effect from the increase of revenue, respectively, later than showing the revenue and the results in the profit and loss statements.

Our adjusted EBITDA is illustrating the impact of our virtual stock option program that Vistra has developed in order to incentivize effort of relevant number in the management team. So correcting these virtual stock options, which are IPO event related, so in that sense, they will be disappearing at some point as we do not intend to do a second IPO anytime soon. And therefore, we are correcting this, and therefore, we show that the adjusted EBITA would, from a business point of view, would be really the truth, the core of the business strength. And there, we see that we have booked a €39,500,000 of adjusted EBITA in the first half of the year, which is representing then 18.5 adjusted EBITDA margin. And this is, again, as it was already the non adjusted EBITDA, an improvement to the ’24.

The balance sheet figures at the bottom of this slide show our net debt, which is which went down dramatically from EUR 63,000,000 to EUR 8,000,000. And this is, of course, related to the IPO as we have generated cash in the IPO of approximately €90,000,000 and this went into the reduction of net debt. And the net working capital went slightly up, 25,800,000.0 was last year, and now we are standing at 30%. But this is related also to the reasons I was referring to talking about the operating cash flow. This has to do with our increase in revenues and therefore receivables, and at the same time also with the increase in inventories as a preparation for dealing with our increased order book.

We have grown the company from an employee point of view by 6%. And if I may summarize this page very briefly and starting from the bottom, yeah, Vistar has managed to increase the business by 9.5. However, we did this with 6.2% more people. Yeah. At the same token, we have grown our net profits by 33%, And with an increase of an order book by 57%, we believe there are good times ahead of us.

And with this, I want to comment on the left, the bullets that we see here, the significant increase in order intake I have covered. If you look to the regions and the product segments, we think it’s worthwhile to mention that all product segments and all regions have shown this increase in order intake. So across the board, we are participating on the growth investments into the electrical grid. If you want to pick out one the most impressive development, so to speak, would have to be allocated to the region Middle East, where we have managed to increase our order intake by almost 180%. So I believe this is worth to mention.

The Middle East is booming when it comes to investment in electrical infrastructure. I was referring to this earlier. We started with our own company in Saudi Arabia last year. We have continued to show a good gross result, yeah, over proportionally as the gross margin went up. And from a revenue point of view, we had the largest contribution when it comes to the share of the growth of the revenue in HVA and MVA.

However, it’s also here worthless to mention that OHL has, know, next to this booming income, has also managed to increase the gross margin in this business segment. So I think it’s fair to say that OHL is, at this moment, is really making us very happy. We have, as you know, relocated our production from the fire incident in the German facility of Bunziedel to Qatar, and this relocation is accomplished and finished. We have, meanwhile, started up that production. And obviously, our manufacturing costs in The Czech Republic are much more attractive than they are than they used to be in Germany and Bunzhede, and this is also slightly contributing to our gross margin.

And I believe the operating cash flow, net working capital and net debt, have covered before. So we can have a closer look now maybe at quarter two only. As a continuation of our reporting of quarter one results at the May, we see now the development of the quarter two figures, ’25 relative to ’24. Again, the same scheme of table is here. And I want to go also through the data here, order book and order intake.

Order book is the same. Order intake, we see €146,000,000 relative to 94%. So we grew it in quarter two even more than in the half year, 55.2%. That means the order intake is progressively increasing. Our revenues at €113,000,000 were up 21% relative to last year, and our gross result even more, namely 28.7%.

Our EBITDA at €17,000,000 is increased by 23,000,000 and the result of the period by 73.9%. The operating cash flow stands at six in quarter two, so we see that the larger portion of the deviation compared to the last year, in reality, took place in quarter one. In quarter two, we are reducing the delta, and we think there is a good chance that this will also be continuing in the coming weeks and reporting period. And if we look to the EBITDA margin, we see that the adjusted EBITDA margin in the second quarter was at 16.3%, which is an improvement relative to 15.9%. And maybe it should be stated here that quarter two was the quarter in which we went public.

So in quarter two, there was a lot of additional money that we I would from a financial point of view, it shouldn’t it it’s not really an investment. Right? But from an emotional point of view, it is an investment that we have done. We spent a lot of money on consultants, legal advice and marketing activities and so on and so forth in order to become a public company. And all of these costs, they were booked in the second quarter.

And obviously, they have been put some gravity on our EBITDA. But the good news is due to the high revenue that we have shown in quarter two and the even better improved gross margin, we were able to overcompensate these IPO related one off costs. And therefore, you see an even improved despite these additional burden, you see an even improved EBITDA and EBITDA margin in the second quarter. If I go to the comments on the left, I think also here, I have covered most of the points in my previous descriptions. And with this in mind, I would maybe move on to the next page in the presentation, where we want to share with you the development over five quarters on our order book and our revenues.

If I start with the order book, which are the columns in red, and we go back to the second quarter twenty four, as this has been the comparison period also on the previous table, we saw there that at the time, we had an order book of €198,000,000 and this number has continuously increased over the quarters of the past year, standing meanwhile at three and twelve point five million euros At the same time, also our revenues have developed in a positive way. So I believe it’s important to note that the order book didn’t go up because we couldn’t get you know, the business out the door, but we are working full throttle. Yeah? The order book goes up. And you may remember that we have also in our IPO continuously stated that Vistara is going to use the fund to increase its production capacities, its R and D capacities and to participate in the growing business that is ahead of us.

If we look to the comments on the left, we see that the order book from a segment point of view, in particular, went up in Europe and in The Middle East. We spoke about the income order intake in The Middle East previously. And if we take average data for the revenues in the recent years, it is so that in the calendar year 2023, Vistra was showing average quarterly revenues of €83,500,000 We managed to grow that number in the calendar year 2024 to an average 95.8. And in the first half year, with a growing tendency in the second quarter, obviously, we managed to grow this again to a 106.8. So we are quite happy with the development.

And, again, as we are growing capacities, the team is growing, we think there is more to come in the coming reporting period. If we take also this five quarter view on the development of the gross margin, we see that we have consecutively realized high margins. And based on our recent order book development, we are also confident relative to the margins in our order book. So the year over year improvement in the gross margin at 2.5% that we see has been stable now for three consecutive quarters. And yes, we think that in conjunction with the order book and with the stability we have seen here that there’s a good chance that we will see this continuation also in the coming periods.

And with this, I would like to move to the last slide of this financial section and to illustrate here our EPS earnings per share development, again, in these five quarter views. We have done here in the quarter two no, and we have done here in all of these quarters an adjustment to illustrate strength of the business. We have adjusted the VSOP program that we are the other financial data only adjusting on the EBITDA. But for the purpose of this particular illustration, we have now on this slide adjusted the VSOP, the same VSOP data on the earnings per share. And in quarter two twenty five, we have then furthermore adjusted the specific IPO related profit and loss effect, meaning EUR 1,400,000.0 of specific consulting expenses that we have seen and also €900,000 of an employee share program, where Vistra has subsidized the purchase of shares to Vistra employees in order to strengthen the individual commitment and, yeah, involvement into the company.

And if we take, if we adjust these specific elements, meaning the VSOP on all of these quarters because the VSOP was in place for all of these quarters, euros 1,400,000.0 as specific consulting expenses in the profit and loss of quarter two due to the IPO and the EUR 900,000.0 of the employee share program, again, allocated in the quarter two twenty five million, then we see that also our EPS is very stable and going up, and this is even more relevant if we look at quarter two twenty five, as in that quarter, the denominator of this number went up. Yeah? We had a capital increase. We became a public company, and obviously, the number of shares increased, but due to the fact that the net profit increased as well, we can see that the earnings per share have been stable despite our growth. And now we come to the revenue split in the half year one compared to ’24 compared to half year one twenty five.

We see on the right side the breakdown of the revenues as on the previous slide. And in relative terms, comparing our regional revenue split to the previous half ’24, we do see, first of all, that The Middle East went up from 16% to 21, and this is the root cause for the relative decrease in Europe from 58 to 54%, despite the fact that the revenues in Europe went up, but they went even more up in the, in The Middle East, and therefore, this proportional decrease of Europe and and Africa is illustrated here. Asia Pacific went down by 1% and The Americas by less than 1%, so more or less stable. And if we go to the preceding page, then we see the same breakdown of the revenues on our product segment, where I want to start with the HV components. There we see an increase of 37% to 40%.

This is, of course, illustrated earlier, good for us as the HV segment typically has a good and solid margin, and this has also been the case for the first half year in ’25. You see also an increase on the medium voltage accessories, whereas we see a proportional decrease in OHL. The business revenues as such have been stable, as it is the case for components as well, but due to the growth of revenues overall, the proportional share goes slightly down. Based on the order intake we have communicated earlier, in OHL, number will be going up very soon. And due to the fact that we have seen tremendous increases in the gross margin in OHL, this is good news.

And this was it. When it comes to the presentation, maybe we can give a very brief outlook, and I hope then there is still sufficient time for questions and answers. Very brief outlook about significant and strategic events that we have seen after the reporting date. And first of all, we are very proud to share with you also the announcement we have given about three weeks ago about the building permits we have received for the HVDC, high voltage laboratories we are going to build here in Winterbach. This is a relevant investment, about €30,000,000 And with the working permit now in our pocket, we have immediately started with the groundworks, and we are targeting to be ready with the laboratory by the ’26, maybe ’7.

And this is also the moment in time when we want to see the first revenues in our HVDC cable accessory business. We are working with quite a number of international cable manufacturers. And through this, we believe that our market introduction is to be looked upon with a very high probability. And if we have the time to share one additional slide with you, we believe it’s also relevant to inform you that we have acquired a relevant plot in Qadan in The Czech Republic, 50,000 square meters, where we are also going to start building soon in order to be able to continue to grow our production facility in Qara’an. It’s maybe also interesting to note that this plot is in direct proximity to the existing plant, so we will see a lot of synergies there.

And next to that, we have also rented additional warehouse space adjacent to our existing facility, which we can use immediately as we are talking as we are growing the business. And then as a very last element here, due to the growth of the business, we have also had the need to extend our guarantee bank lines in order to secure down payments. To guarantee down payments we receive from customers, we have increased this number of this credit line in the second quarter by EUR30 million. And we believe, the time being, this then will be giving us the chance to receive these down payments and guarantees as requested by customers. On the final slide for the moment, we want to share the financial calendar with you.

Next webcast will be quarter three, where, which will be on the November 19. If there is a chance to see or meet any one of you on these other conferences where we are going to be present and where we are presenting, It would be our pleasure to meet you in person. And with this, I thank you for your attention at this moment, and we will be ready for any question. We’ll be working hard to give you the best possible answer.

Conference Moderator: Thank you very much. I’m taking over for now. Dear ladies and gentlemen, please dial in if you have any questions for our speakers. So questions are only possible verbally within the conference call. If you dialed in, press please press 9 and the star key now to enter the queue and take your question.

I repeat, the combination is 9 star. We would really appreciate if you state your questions one by one for a better overview. One question has just arrived. So the first question is from Adrian Peel of ODDO BHF. Please, Adrian, over to you.

Adrian Peel, Analyst, ODDO BHF: Yes. Hi, everyone. Good morning, gentlemen. Congrats to the strong order intake again. I start with two housekeeping ones, pretty quick ones, actually.

On the insurance payments that you got in Q1, was there another payment in the second quarter that supported the overhead lines margin? And the second one is, again, a clarification on the one offs. So should we assume that Q3 or as of Q3, one offs are basically gone, I. We shouldn’t see any additional one offs here? Or how should we think of it?

Let’s start with these two. Probably, I have another one or two follow ups then.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: All right. So hello, Peter. Good morning. Starting with the insurance payment. Yes, there was another insurance payment in the second quarter.

It was at a lower level. I believe in the second quarter, it was €1,500,000 that we received, which is shown in the other income, yeah? But, it it needs to be it needs to be considered that we also have the cost, yeah, that justifies the insurance payment, and the cost is not shown in the other income or or expenses, but the cost that we have is shown in the gross margin. So if we wouldn’t have had these additional costs, you would have seen a better gross margin in OHL. This then is being corrected by the insurance payment in the other income.

Yeah? And I need to correct myself. It was not 1,500,000.0 in the second quarter, but it was 1, an insurance payment that we received. We would actually we would expect that there will be another payment for, the last two months of the second quarter that we expect to receive in the third quarter, it has not been received so far, and we have not considered this in the profit and loss statement yet. So that will be a small, yeah, a small tiny upside for the third quarter.

Adrian Peel, Analyst, ODDO BHF: Okay. So smaller than the 1,000,000 then, obviously.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Yes. It’s hard to say what the insurance thinks about it, but it’s not going to be the one that we spoke about in the first quarter.

Adrian Peel, Analyst, ODDO BHF: Yes. Okay.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: And the second question on the adjustment. Yes, you’re totally right. The only adjustment that we we made a little, let’s say, a trip into the adjustment room when we looked at the EPS. But on all the other adjustments that we show in our data, we only talk about the visa program. Okay?

Adrian Peel, Analyst, ODDO BHF: Mhmm. Yeah.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: And the visa program is not finished in the third quarter. There will be two more tranches out of the visa virtual stock option program. One will be, applying in the second quarter next year, ’26, and another one in the ’27 at the end of the second quarter.

Adrian Peel, Analyst, ODDO BHF: Right. Actually, overhead margin

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: But but the amount please. Maybe I can the amount will be slightly lower as now there’s a longer period ahead of us. And the the two remaining, tranches, they are 25% each of the virtual stock option volume. So the first one was 50%. So the amount should be lower.

Yes. Okay. Got it.

Adrian Peel, Analyst, ODDO BHF: And the overhead line brings me to the question actually on overall gross profit margin. I mean, obviously, OHL is a business considered to be lower margin, probably also lower gross margin. And looking at your last year’s reports, that’s pretty much confirmed. I guess the support or I guess the third party input is higher than in other business lines. But it looks like that even net of the insurance, in fact, you could improve the margins.

I was curious to hear your thoughts on the relocation to Cardan. What does it mean in terms of incremental margin benefit in this segment from this from this very move? If you could put a figure to it just roughly would help, actually.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Well, on the on the Qaddan move, OHL is not only a Qaddan production. There is also a certain trading trading element with the OHL business

Adrian Peel, Analyst, ODDO BHF: Yes.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: That needs to be to be known first. And now the the Qadan move, if you if you would approximately say that the labor cost in insulator is 30%, yeah, you should assume that the labor cost in Qaddan is less than 50% of Germany. Okay? Yeah. So this is a a kind of a rule of thumb.

However, we have moved production. As I said, we have started the production in Qatar meanwhile, but we are ramping up that production. So we are we don’t expect to have, let’s say, the high point of efficiency in production from day one. Yeah? There will be a ramp up curve, and that ramp up curve will, of course, will then have again a certain influence on this relative cost position.

Adrian Peel, Analyst, ODDO BHF: Right.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Yeah. But maybe maybe coming back to the observation, yes, the gross margin in OHL has developed extremely well, extremely good.

Adrian Peel, Analyst, ODDO BHF: Exactly.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: And I think, you know, this is the result of the hard work of our sales team, and this is also situation that we incur at this moment that we relate at this moment to a very good market when it comes to overhead line transmission systems. Yeah. It’s very strong. More than anything in Saudi Arabia, but not only. Yeah.

It’s also very strong in other regions in the world, and, we are going to benefit from that. And then

Adrian Peel, Analyst, ODDO BHF: I have two final ones, actually, just probably quickly, I hope. On the revenue trajectory, obviously, given the strong order intake that you had in the first half, first of all, could you give us an idea on what’s the portion of orders from that being realized in 2026? And I recall last time, you mentioned sequentially, you believe revenues are going up. I mean I guess this is probably still for the next couple of quarters, the assumption the back of the order book, I presume. I just want to hear some kind of confirmation of that.

And and last question from my side. I mean, obviously, you have the successful IPO. Orders are coming in quite nicely. So I was just curious to hear your thoughts if the IPO and the intention that came with it has also helped you plus the financial security and the balance sheet probably on on winning new clients with that growth that you have shown. Did you win market share from the order book?

And and and how should we think of it? Thank you. That’s it.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: So if I start with the second half of the question, this appear I would believe so. Yes. But that’s of course, that is hard to quantify. Yeah? To say which customer now is fell more in love with Vistra and at which money amount, yeah, due to the fact that we are now a public company, I I believe that is hard to discriminate and to be to be precise and exact upon.

But you get

Adrian Peel, Analyst, ODDO BHF: more quoting activity from clients you didn’t have before or so, for example?

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Well, I think Vistra is, is in the market since one hundred and four years. So it it is certainly the case that we find out there is a new customer we never heard about. Yeah? So I I I would believe this is not this is not a dominant effect. But as as customers came to us before, you know, when we were in the face of of thinking about, you know, becoming a public company, as customers came to us and and they already told us at that moment in time, listen.

We have these growth plans. Yeah. We want to double our business in the coming five years, but we need you to double your business in the coming five years as well if we want to continue with you. So are you able to grow with us? That was always the question.

Yep. And and we said, okay. If, you know, if we become a public company, it will be it will be, indisputable, yeah, that we have the funds, the capability, but and also the obligation, you know, to grow with these customers. And in that respect, I believe, this, yes, this is positively recognized by customers, and I believe this is also, you know, supporting us. And that was the second part of the question, Appeal.

And the first one, I would need to ask again. Sorry.

Adrian Peel, Analyst, ODDO BHF: Yes. No worries. So that was rather on the phasing or, let’s say, timing of revenues, order backlog shifting into 2026, what you have already in hand? What’s the idea? Yes.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Well, we our statement on the forecast section is that we are looking very positive to a continued development, yes, be it on the revenues but also on the order intake for even continued growth. So we have not given a quantitative guideline there, but I believe the analysts’ projection has been in the area of a second half revenue in the in the magnitude of the first one. Right? The analyst revenue is about €430,000,000. First half year was 213.

So, and I think with the other situation that we have in hand, are not shy of this number. And if the coming period will be developing well, maybe we have some good news to share with you. But at this moment, it’s too early.

Adrian Peel, Analyst, ODDO BHF: All fine. Alright. Thank you.

Conference Moderator: Thank you very much, mister Pio. At the moment, there are no more questions in the conference call queue. So please, dear ladies and gentlemen, last call, please press 9 and star now if you would like to ask a question. There seem no more questions to be incoming so far. Let’s wait a couple more.

A follow-up from Adrian Peo of ODDO BHF. Please, over to you again.

Adrian Peel, Analyst, ODDO BHF: Yes. Then I used the time to have more management time. Very good. Actually, on maybe could you give us an idea, in the IPO process, we have been speaking about how prices influenced your growth in the past two years as a component of your sales increase. Obviously, I was curious to hear now given that, I mean, it looks like projections for revenues were rather in the ballpark range where utility CapEx is like 12%, 13% or something.

Going forward, now you’re printing order intakes that are in the vicinity of 40%, up year over year, which means maybe this is a reflection not only of the market share discussion that we just had, but the overall strength of the market. And then second question that comes out of it is, obviously, did you have the chance to increase your prices on that strong demand? Or how should we think of it? I think so far, analyst expectations have been this is rather volume than price, but, I mean, things are obviously moving and changing. And so any additional thoughts on on this would be helpful.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: So, if I start on the pricing, yeah, we have, in the course of the year, as an average number, our target is to grow our prices by 3%. Mhmm. This this is, you know, this is not a a flat number, and that is the right figure for each and every situation and case. But this is about the average that we are looking at, what we have been successful in doing in the past years. And, you know, I wouldn’t be shy to say that we this it will be our continued ambition.

Yeah? So this this will be one element. Second, the order intake situation, there’s a number of reasons for this, and my colleague can also comment on that maybe later. But, of course, it is it is so that we have a positive overall market development. Nevertheless, what you see is not everybody is participating in this positive market environment at the same rate.

And I think with the more than 50% of increase in order intake in the second quarter and also the order backlog, it is at this moment in time, it’s proof of the situation that we have a very close relation to a number of global customers and that we have the right product and the right approach to work with these customers. And maybe with this, I hand over to Konstantin, who can also add additional information.

Konstantin Kovitz, Co-CEO, Vistra Holding SE: Yes. Maybe a bit on the background of the technology, what means that for the pricing. I think, first, overall, I think delivery times are still the key in the market to execute the project. This is one that gives you a robust pricing even on the products we have at the moment. And what we see with the investments in the transmission lines, be it overhead lines and be it underground lines, we see also a definitely increase in the voltage level.

Yeah. What we see in those lines, that means also, I would say, the technology which is needed there is a high end technology. And for those robust undergrounds and overhead lines, even the customers are investing more money to have a, I would say, a really robust system. And I think what we also see, you know, Johannes was talking about our customers. So we have global customers like the OEMs.

They are preparing, and I don’t wanna mention any names. But if you look into the OEMs, you know, for transformers, high voltage transformers and switch fields, how they are investing in the different countries and hemispheres or even in China for markets in Middle East for transformers and switch fields and the application goes higher and higher from the voltage level that also gives us with our product and the innovation we are trying to bring into the market a good access there even for the pricing and the expectation. There was also a little bit our prediction, you know, in the in the product mix. Yeah? Mhmm.

High voltage accessory, what Johannes was describing. And I think this is a this is a trend, definitely. And I think with our investments, this is the way we want to go forward.

Adrian Peel, Analyst, ODDO BHF: All right. Okay. Very good. And then another question on phasing of CapEx. Basically, so you mentioned the €30,000,000 you’re spending for H3D.

I was just wondering, is that something I mean, now with the building permit, how should we think of it being distributed over the next couple of quarters, please? And what what is by the way, if you talk about that on your overall CapEx budget, what are the expectations that you are having for additional spending?

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: See, the data we shared in the in the IPO presentations and proceeds was an investment of roughly €50,000,000 for the coming three years. So for this not the coming, for this year and then the come the following two years. This this CapEx is related to building expansions. It’s related to production equipment additions, and it’s also related to to a number of r and d projects, which also are investment and need tooling and specific apparatus in order to prove the functionality of the systems that we are developing. So this being said, the investments, we are pushing them very hard.

Yeah? The investment as such, they are of course, this is not it’s not the ultimate target. Yeah? For us as management, it’s not the target to invest, but the target is to accomplish what we have, wished to achieve through the investments. Alright?

So with this, I wanna say, if we have planned for this year 10 I’ll give you an example. 10,000,010 million euros of machine expansion, for silicon production because of, the increase of volume that we are looking for. But we we find out we only need seven because the other 3,000,000 capacity was we can accomplish through tool improvements or more efficient procedures in production or a new material type we have qualified, which is curing faster than the older one, then, of course, we, you know, we don’t stick to the 10, but then we go for the seven. So as we are, you know, people which which try to run the business in a profitable way. So this being said, the HVDC project you were asking for, this is I think the the major portion of that will be next year, the twenty sixth.

Mhmm. I don’t have the precise number on the top of my mind, and I couldn’t tell you as we talk now what it is in quarters. But if that is of value, of course, we can share that with you later, how that will be splitting over the time period. But next to the HVDC, we have a relevant expansion project scheduled to start in at the ’26 in Qaddan as we want to expand the factory. We have already acquired the plot I was talking about earlier.

We are expanding our facilities in Gothenstadt, where we are having the metal fabrication as we, you know, have a very good order intake also on the components business. We are going to build a new administrative building in Winterbach as this is the headquarter relative to R and D. This is the center of gravity for our r and d team, and we are growing these teams as we want to grow the r and d investments proportionally to our growth in revenue. And for this, we have to have attractive offices, you know, in order to be attractive for newcomers joining the company and so on. So I believe, Zappe, the €150,000,000 of investment that we have announced, this is sufficient to grow the business even slightly more than what we have anticipated in our IPO presentation.

Adrian Peel, Analyst, ODDO BHF: Mhmm. Yeah. It was my my my feeling about this number being quite sufficient or even a little bit, you know, leaving some margin.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Let’s say some customer in it. Yeah. Yeah.

Adrian Peel, Analyst, ODDO BHF: Yeah. Yeah. Okay. Perfect. That’s it from my side.

Thank you.

Conference Moderator: Thank you very much. Next question is from Yasmeen Stylen of Berenberg. Please over to you.

Yasmeen Stylen, Analyst, Berenberg: Yes. Good morning, and many thanks for taking my questions. Unfortunately, I have not received the telephone dial in details in the first place. So apologies for late joining. So I have three questions, and I will take them also one by one.

So the first one on HVA. The segment has seen a strong sales development year over year but also sequentially. However, looking at the EBITDA margin, it was down year over year and sequentially. Could you elaborate on the reasons and what we should expect for the second half? That’s my first question.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Yes. Okay. So you are right. If you look to the EBITDA margin in HVA and compare it to previous periods, you would see that there is a certain decline. But, when we when we talk about, you know, managing the company here from a fiscal management point of view, we we are focusing more on the gross margin.

You know, below the gross margin, we have a certain key how we distribute our sales and admin costs. But this key is well, I wouldn’t say artificial, but it is, you know, it’s been when we do the budget, we develop the key how we distribute the cost. Alright? So now if you have a change as you go into the year on the on the cost development, the key remains the same. So this distribution of cost is then somehow diluting or it’s it’s not you know, it it it it does not give you the true information on the on the on the nature of the business.

The better information is the gross margin. If that is really true, you know, what we get in the market, what the cost of the product are, so we look at the at the gross margin. If you look to this, to the gross margin data, it was 44.4% in the first half of this year. It was 45.1% in the first half of last year. So I would say this is more or less the same.

This the data of 0.7%, this does not put any sweat on our foreheads. So this is a normal fluctuation that we see. We believe the margin is very stable in HV.

Yasmeen Stylen, Analyst, Berenberg: Okay. So basically, the H1 margin is something I should also expect in the second half of the year?

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Absolutely. Yeah. I wouldn’t see a reason why not. Let me answer like this. Okay?

I cannot confirm, but I don’t know anything that would be standing against the statement.

Yasmeen Stylen, Analyst, Berenberg: Okay. Just to clarify, so there’s nothing structural behind it. It’s just allocation of cost, and that’s according to your budget. Okay.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Yes. As for instance, HPE is the biggest segment. So it would in the second quarter, it would receive overproportion of the increase in the admin cost that we have seen due to the IPO, okay? So in the as we run continuously through the year, this will be coming lower.

Yasmeen Stylen, Analyst, Berenberg: Okay. But this does not explain kind of the swing in the second quarter. But anyway, maybe moving on to the working capital. So working capital stood at 30% of sales in Q2, and that’s basically attributable to the trade receivables. And you mentioned already the regional mix.

Is this the only reason? Or is there also a change in the payment pattern? And are there any countermeasures planned to manage the days of receivables outstanding? That’s my second question.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Well, first, if we talk to the about the receivables, we need to distinguish between overdue and not overdue. Yeah? Mhmm. So we do not see any negative development on the overdues. Yeah?

Overdues are very low, and they are stable low. So meaning the fact that receivables go up has nothing to do with outstanding payments that customers are are late or, you know, are hesitant or whatever. So this this as a start Mhmm. The overdues I’m sorry. The receivables, they are they are they are simply linked to the regions.

Yes. If you sell a product into Germany, yeah, and you have FOB, let’s say, as an Incoterm, yeah, the the the period in between yourself shipping the product or leaving leaving the warehouse and and being at the customer is one day. But if you have the same with the customer in Saudi Arabia and it’s a container transport, then, you know, the difference between one and the second is eight weeks. Even the the payment term as such is the same. Yeah?

And this is one factor. As you have, you have seen, the revenues in The Middle East have gone up. Yeah? But transportation distance is longer. So this is an element that you see.

And second, what we also see is that in the region of The Middle East, yes, payment terms are basically thirty days longer than they are in Germany.

Yasmeen Stylen, Analyst, Berenberg: Just to follow-up on this, as you also expect significant growth to continue in The Middle East, you still stick to your midterm working capital target of 27% to 28%?

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Yes. Okay. Perfect.

Yasmeen Stylen, Analyst, Berenberg: And then the last question on HVD. So you mentioned in your intro the collaboration with the international cable manufacturers that are currently qualifying the complete solutions. Could you share more details on the rough numbers of customers you are now currently qualifying? And so are we talking about a low or mid single amount of customers? And when do you expect the qualification process to be finalized?

That’s my last question.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: I would my colleague would be answering this question.

Konstantin Kovitz, Co-CEO, Vistra Holding SE: Okay. So it’s me again. Thank you, Johannes. Just to answer your question. We are working on all regions with different cable manufacturers to qualify our systems.

So we are planning the type testing now. So I recently was even in China visiting cable manufacturers. And as you know, China is not only working in the Chinese market, they’re also coming to Europe. They’re investing in Europe. They’re investing in Middle East.

They go all the way down to Australia, even to The U. So we have partners there. We work together. We have partners in India, cable manufacturers. We are going into the type testing.

We have them in Europe. And we also have cable manufacturers, but not that much in The U. We are working together. So we are talking about, and I think this is very important, to work with 20 or 30 doesn’t make any sense.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: But

Konstantin Kovitz, Co-CEO, Vistra Holding SE: having two handfuls of qualified cable manufacturers worldwide, this is a bit our strategy. And I think not saying too much, at least, I think that was beginning this month, we had the first finalized type test now for three twenty kV, yes? But this will be then, I would say, communicated also together with cable manufacturer when the time is there. So I think we are on a good way, and we are going into tight tests now in 2025, in ’26 to to execute the first projects. And as Johannes said, when we have the laboratory ready, when we have the production ready in ’26 or latest ’27.

Yasmeen Stylen, Analyst, Berenberg: Okay. Perfect.

Konstantin Kovitz, Co-CEO, Vistra Holding SE: If that answers your question a bit.

Yasmeen Stylen, Analyst, Berenberg: Yeah. That’s very clear. Thanks very much. I’ll step back into the line.

Conference Moderator: Thank you very much also from my side. As there are no more questions in the queue, thank you very much for participating. If you have more questions, further questions, please contact the Investor Relations team. And with that, I’m handing over back to Mr. Linton.

Johannes Lindt, Co-CEO, Speaker of Executive Board, Vistra Holding SE: Yes. Also from Vistar’s side, we appreciate your time and your attention to our webcast here today. We will be happy to see you on one of the investor conferences. We were looking at the year or to talk or to present to you again on November 19 when we are going to present the quarter three webcast. Thank you very much.

Keep us in good memory. Bye bye from Germany. Bye bye.

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