European Green Transition (LSE:EGT) — Company Presentation

0:00 Good afternoon, and welcome to the European Green Transition PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Please just simply type in your questions and press send. Before we begin, I'd like to submit the following poll. I'd like to hand you over to Jack Kelly, CFO. Good afternoon, sir. Thank you, Charlie, and good afternoon, everybody. Thanks for joining us in this presentation where we'll talk through EGT's h one interim results for for 2026. I'm here with the managing director of wind service business, David Broadbank, and we're gonna take you through a few slides on on the financial performance in h one and then also the future outlook for the business. So first slide that's on everyone's screen really that sort of captures what we're trying to do here, building a high growth and profitable critical infrastructure platform. We will take you through this straight presentation.

0:57 So just to quickly touch on on on the team, you know, Karl Friel is cofounder and executive chair of of of EGT. It's his fifth IPO. Many of you will know him from from Amrit, HVivo, and and and and pharma. And Dave is is the managing director of of the wind services business. He's been working with Earth Mill for for in fifteen or sixteen years at this stage, and Dave can introduce himself in in in a couple of minutes. And and then from my own side, chief financial officer and cofounder of of of EGT and and and worked across a number of AIM companies over the last number of years, including HVVL PLC, Pillowback Pharma p PLC, and and and PWC prior to that. So I really just wanna take you through this slide and and and and ultimately what we're trying to do and what we're trying to build across EGT. So it's a fast growing critical infrastructure services company.

1:51 So we're focused on nondiscretionary services, really supporting energy, renewable, and other critical infrastructure sectors. And so we we don't wanna own the assets. We wanna be the service providers into these critical infrastructure and and and and renewable assets and and and the wind services business as an example where we're providing services into onshore wind assets. Point two around the recurring revenue model. So the focus really here is to to to get on to long term contracted revenue streams and and get on to these frameworks, which will deliver predictable, repeatable cash flows for the business. The focus is on on identifying capital light and and cash generative businesses, and really, you know, that matches the services model where we're not looking to tie up a huge amount of capital in in in infrastructure assets.

2:39 Focusing on resilient long term growth and and really multiyear services where we can keep these critical networks and, you know, renewable assets operational and performing to their optimal amount. You know, fifth point is really around strategic m and a. I think we've been clear that that's gonna be a key driver of the business and how we grow this going forward. And we're we've, you know, gonna do a number of disciplined bolt on acquisitions. We have a a pipeline, which we can talk about in a bit more detail shortly, but it's really gonna be funded from exit from existing cash resources and then there's scope for a small and modest debt facility across across the group. And then last point is is around a progressive dividend policy. So we've we've we've committed to a to a progressive dividend policy growing at 5% per annum, and we expect to commence that next year. And on on on the right hand side, just to talk you through some of the information on the business.

3:41 So we we completed a upsized and oversubscribed and upsized debt fund raise of 7,500,000 in in in March 2026, and that was in conjunction with acquiring the wind services business. That was on us at six p, and the share price more than doubled in that time. Here, have listed our significant shareholders, Carl Frill, who's who's exec chair and and and cofounder, Roaring Waters and then Premier Mike. And and as of today, we're sitting at about 36,000,000 market cap. So I just wanna take you through the the the h one financial and and and operational highlights for the business. So, you know, I think I mentioned that we we completed a transformational acquisition of our wind services business, and it was acquired from the liquidation process of Arena Capital Partners. And when completed in February 2026, this is achieved at a an attractive multiple of of of 3.9 times 2025 EBITDA.

4:37 In the first half of the year, we've seen strong revenue performance from the wind services business, and and the EGT reported group revenue of 6,800,000 for the four months since completion, that being March, April, and May, and June. From a balance sheet perspective, our balance sheet has certainly strengthened in in h one, and and that's largely due to the 7,500,000 oversubscribed fundraise. And this provides us, you know, with the firepower to to fund future organic growth across the wind services business and then look at other m and a opportunities. We do have, you know, quite a robust repowering momentum in the business. I think Dave is gonna touch on the repowering story and and and where we think we it can bring EGT in in the in the coming months and years ahead.

5:24 But just to to mention here, we have ahead of term signed at 65 clients, and and we've identified qualified prospects of of about 280 high energy users across our portfolio of over 900 wind turbines. And then the the the final point here is around Animas Analytics. We increased our stake. We initially acquired 52%. We've increased that to 79 percent in this advanced condition monitoring platform. And, again, Dave will talk about that later in the presentation. So to to to to walk you through the finances for for h one, you know, really, the turnaround is in progress of the wind services business. I mentioned we have 6,800,000 EGT Group statutory revenue for the four months since completion. Across the six month period, the wind services business generated 8,600,000, and this is quite strong year on year growth of of 13%.

6:18 But most importantly, we saw seen a significant increase across q two post acquisition, and I think that's up or around 37% year on year, which is significantly ahead of of of prior year. And from a gross profit perspective, we've recorded 1,760,000, so that works out at a a 26% gross margin since completion. And this is a a key focus that we're looking to continuously increase our margin and others. Actions are underway to to affect that, and we hopefully see that flow through in h two. Similarly with EBITDA, so we report an adjusted EBITDA loss of 580, and that's that's that's down on last year's loss of 660 k. And and, you know, in h two, we expect to see the the the benefits of stronger trading in in in q two and then stronger trading across this the second half of the year to reduce that figure.

7:17 Cash and cash equivalents at year end is five five point sorry. At the 06/30/2026 is 5,800,000, and we've guided the market that we expect the wind services business across the twelve months ending 12/31/2026 to do in the region of 17 to 18,000,000, which which would be a continued uptick in in in in the activity and revenue of the business. Take you on to the next slide. I'll hand over to Dave here briefly to talk you through the wind services business and and and the repowering pipeline. Okay. Thanks, Jack. And just to sort of introduce myself, as Jack mentioned, I've been with the business nearly sixteen years now. Started off as the operations manager.

8:02 So I've I've been all over the business for the last sixteen years. Started off in engineering, the stint with supply chain and also talent acquisition over the years. But a a bit about the the wind services business, it's it's formed out of, three core businesses, Earth Mill Maintenance, Wind Energy Partners, and Silkfield Engineering. We operate across The UK. We have six locations, four in GB and two further across the island of Ireland. But, essentially, we we maintain and, operate remote monitor wind turbines for private clients. We operate across four main brands, across endurance, Northern Power Systems, Vestas, and WTN.

8:50 And we'll do everything from your scheduled servicing to a reactive breakdown to a major overhaul in life extend life extension work all the way through to doing a repower. So, which I'll move on to repower a little bit more, in the next couple of slides. So, essentially, we we provide the client with twenty four seven monitoring. So that is if the turbine breaks down at midnight, we've got engineers who are remotely monitoring that turbine. If they can influence it, they will. They'll fix it there and then. If not, that gets escalated to a a works manager who will then schedule boots on the ground. Anytime we put boots on the ground, we charge the client. So, yeah, it's it's good sticky sticky revenue.

9:37 And if we if we look at the the sort of the the growth drivers, I mentioned repowering. This is essentially taking out an existing turbine and replacing it with a more efficient and more powerful turbine, still using the original grid infrastructure. So where where the client is is really benefiting from can be up to two and a half times the generation of of power. I've used an example in the past, so apologies if you've heard it before. We've taken out a 250 kilowatt turbine and put in a 660 kilowatt turbine, moving it from about a 175,000 of revenue to just shy of £400,000 of revenue.

10:27 So it it's it's huge gains, huge amount of power. So yeah. And that's, as I say, across the across The UK, we can do that. If we go to the next slide. There. Thanks. Yeah. As I said, I've covered, repowering slightly. As Jack mentioned, we are targeting our 900 turbine owners, of which we already have 65 who have signed up, we have a contract for. We've got, I think it's 30 out of planning with more to come out of planning between now and the end of the year. And we've got turbines that have been built, commissioned, handed over to clients, and we've got them at various different stages, from getting groundworks done to getting the installations done to getting the final sign off from the DNOs at the distribution network operator, the grid, essentially. But as I say, taking out a turbine and putting in something more efficient, more powerful, getting better yields from your feed in tariff or your ROPS subsidy, and also extra power can go into the grid and, where you're getting paid your additional export rates.

11:44 Next slide. So, yeah, in a in a nutshell, essentially, what what we have got, in our pipeline, where it says the big figure there is a 126,000,000. That's two eighty qualified leads. These are, say, 95% existing clients, over the course of the year where we've been to agricultural shows. We have had new clients come on board where we're actually, we're not maintaining the turbine, but we are taking them through plotting, through the grid, and through the installation process of putting a bigger turbine in its place and then taking on the actual o m, thereafter. So, yes, we get the upside of the, the repower in the first instance, but then long term, that's taking revenue of the o and m business, will continue on.

12:35 65 has terms. I would say thirty hour of planning, twenty twenty projects have commenced, and eight have been handed over. Quarter well, sorry. Second half of twenty twenty six is looking just as good, and we're even looking as far far off as April, May with what's coming through the pipeline. So it the existing fleet, it's an aging fleet. So if you can take something out of the ground and put up a larger, more powerful turbine in its place. It's it's it's huge benefits. The energy security is is a is the hot topic. The geopolitical volatility out in The Middle East has has led to huge spikes in in energy prices.

13:27 The way they our clients, sort of protect themselves, and guarantee their energy securities by having some say in what they do, which is a wind turbine. A lot of clients have have diversified off the back of having a wind turbine and will continue to diversify off the back of having a bigger and more powerful turbine. So with with the the government's targets of moving from 15 gigawatts of, onshore wind to 30 gigawatts of onshore wind by 2030, we're playing a a small part, but we are playing a part in in moving that forward. There's a no slide. Sorry.

14:13 ANYBOS, which, Jack touched on. So this is a secondary set of sensors, and that is measuring vibration, proximity, and in some, circumstances, the actual, the the particulates and how clean the oil is in a gearbox. And that will that will lend itself well to give us early warning signs if there is contaminated oil in a gearbox, if a bearing is starting to fail. And getting these early signs means that we can go on to site, we can do work proactively as opposed to, you know, the the first thing we know about it is a bearing fails or a gearbox fails. So we've got this across a 133 turbines.

15:01 Looking at other avenues, This this is not not repair doesn't stack up for everyone, but what does stack up for a lot of people is the extended life of their existing turbine. And animals offering a condition monitoring system that will guarantee the extension of life and, the preventative maintenance. It can also go across multiple, different industries, anything with moving parts, And so that that could be we're looking at hydroelectrics. We're looking at shipping. So I guess it's machinery that doesn't have eyes and ears in place twenty four seven. This is essentially the eyes and ears of maintenance giving you the early warning. So, yeah, it's it's a it's a great great piece of kit to have to extend the life of a of a wind turbine and other machines.

16:05 Thanks, Dave. And and now I'm just gonna talk through where we are on on EGT's medium term target of 50,000,000 revenue and double digit EBITDA margin. So as you can see from the graph, targeting 17 to 18,000,000 revenue from the wind services business for 2026. And then really, do we get to to to the 50,000,000 figure across the medium term? And there's three key sort of drivers to this. The first one being the organic growth and service expansion. So there's quite a significant amount of things we're looking to do across the existing wind services business. I think one Dave sort of mentioned on was really working our way into into serving a number of the sub one megawatt wind farms across across The UK and Ireland whereby the the manufacturer's warranty has has now ended, and and there's a a clear demand for an independent O and M player to step in there on on a on a long term contract, which is is very interesting for us. Repowering, you know, I think we've we've outlined the pipeline there. Now it's refocusing on delivering on that order book and and and refilling the pipeline, and we think there's significant growth for the business from that front. And and then m and a, I think we've mentioned, there's a you know, we have a pipeline of sort of small strategic bolt on acquisitions

17:36 that are focused across the critical infrastructure sector in The UK and Ireland, and we hope to progress them over the coming months and and into next year. I I suppose the key focus from from a margin perspective, and and and we we referenced it earlier, was really focusing on the operational improvements and the efficiencies across the business. And, you know, these key areas that we're really looking at from pricing right through to to to procurement, whereby we can squeeze that extra bit of margin for the business and hit us at double digit EBITDA target and working towards getting to that point. Then cash flow generation, again, a key focus. We mentioned businesses which have low or capital light, and and and that's why we really like the wind services business and that it is cash generative and will put us in a position whereby we'll be in a position to to to pay an annual dividend, we expect a loss from from from next year.

18:39 So I guess to summarize and to sort of wrap it all up before we touch on a few questions, you know, the outlook for for for EGT. So, you know, as you mentioned, if you're done, we're targeting 17 to 18,000,000 revenue from the wind services business in the twelve months ending 12/31/2026. We've got a strong order book of contracted repowers, and and and really looking at trying to execute that over the next number of months and and and and refill that pipeline of the the the potential 126,000,000 repairing pipeline from our existing client base. Our existing client base, there's a a really solid, robust multi year 900 onshore wind turbines and are under contract across The UK and Ireland.

19:29 And and and that's a key focus to continue and to expand that. A few other points I mentioned, the new market expansion. So really targeting those higher value sub one megawatt legacy wind farms with institutional clients across The UK and Ireland, and that's a key focus on how I'm putting on ourselves in a position to to target them. Disciplined m and a. So I think, again, mentioned a few times, bolt on acquisitions funded from our existing cash resources to really broaden our offering across the critical infrastructure space. Animas Analytics, we see that being a key growth driver for the business, really supporting asset life extension across a range of our own clients, but other but also other o and m players across The UK and Ireland and then looking to expand it into further markets.

20:18 And then the monetization of our our our noncore legacy mining projects. So we have the project in Sweden and and and also the project in Sweden and really trying to capitalize on the tailwinds that are in place in both of those industries at the moment and and and do a deal that will deliver strong value for the shareholders of of of EGT. And then everything is really wrapped around hitting that medium term ambition being the 50,000,000 revenue target and double digit EBITDA. So, hopefully, you know, we expect to keep working hard and and and and focusing on on on some of these key opportunities that will bring us towards those targets.

21:09 I think next, we have a few questions. So I see some people have submitted questions already. So I might run through them, Dave, I can answer you and then yourself as well. Mhmm. Actually, I'll take it from from the top. Okay. First one is probably for you, Dave. How big is the market in the wind farm space that EGT is going after? Yeah. So one thing I didn't mention in my my spiel, shall I say, was the the the the new business that we've we've identified. We are members of Renewable UK. With that, you get access to certain databases, and we've identified circa 500 sub two megawatt turbines, Vestas turbines, across circa 50 wind farms.

22:08 These are wind farms that will have been, installed by Vestas, maintained by Vestas, and they are now outside of that warranty that warranty period. So the actual owner of the asset is not beholden to using the manufacturer at a huge crisis. So this is an area where we've we've we've we've we've determined to go down a down the Vestas route. There's over 50,000 Vestas installed worldwide. They are the workhorse of the wind industry. We're keeping it narrow so we don't have to have multiple branded turbines parts on the shelves, but this is where we're going after the O and M. And, also, if if we can get the O and M, it gets us a seat at the table to talk about repowers. So that that's the that's the huge area for us. That's the growth.

23:01 Okay. Thank you. Next one, probably one for myself. So what type of bolt on acquisitions is the business looking at, and how are they progressing? Okay. So look. I think we're really trying to capture our our our target criteria. It was set out in in one of the first slides where we're looking at, you know, bolt ons that are service based businesses across the critical infrastructure space across The UK and Ireland. So, you know, it's it's it's areas that are you know, we'll be receiving significant investment over the next five to ten years, such as, you know, water. We've seen a huge amount of investment required, you know, largely due to, you know, renewables that will be required in the grid and and and bringing the grid up to speed across The UK and Ireland.

23:53 So there's a a number of opportunities in the pipeline that we're looking at from from from that perspective. And then other critical infrastructures sectors such as rail, there's there's there's potential opportunities there, but it's really about targeting those industries whereby there's significant investment going in over the next number of years, and and and we can identify businesses that that can get on these long term o and m multiyear frameworks. Okay. Next question is probably for you, Dave. Where do you find the turbines that you use for repowering?

24:41 So as we, in The UK, have got a, a strategy of of repowering, so have the, a number of countries across Mainland Europe. So we've established really strong supply chain across Europe. So without going into too much detail, yeah, we've we've we've got a number of partners we work with, kind of coming the turbines are coming out of Mainland Europe, essentially. So yeah. And that that's being built, as I say, over the last fifteen, sixteen years. We've we've had these relationships, and it's it's coming into fruition now. Actually over at there's a big wind expo in Hamburg next week. And across two days, I think I'm I've got 10 meetings booked in already.

25:31 And this is, a, to get new business and new, I suppose, supply chain streams, but also to continue developing what we already have. Yep. Another question probably for myself. When it comes to m and a, are you looking at distressed or more conventional bolt ons? How do you see that, playing out? No. That's that's that's a good question. I think there's a lot of value in distressed businesses, and and and it's an area, you know, we've had quite a bit of success. We're we're always prepared to to to move quite quickly as we did with EarthMill and the the wider wind services team, and we think we've got a good bit of value out of that for for for for EGT. I think, you know, what we what we won't be doing is, you know, we won't be sort of going into formal sales processes. You know, I think this is quite a competitive space, so we need to be a bit more creative.

26:29 And, you know, we're not gonna get into sort of bidding wars with with with with other parties. So it's finding our niche within the market and and really identifying targets early and and working with them to show, you know, ability to you know, whether it be refinance, whether it be sort of provide capital to invest in in in other areas and expand their offering. But, yeah, I think I think we see a good opportunity in distressed businesses or or, you know, more conventional sort of small, relatively modest bolt ons. Okay. A couple more questions. A nice direct one. What's the EBITDA going to be for the year?

27:15 So no. Look. We haven't we haven't issued an an update on that as part of this announcement. I think that we published EBITDA for h one across the group. EBITDA loss of £580,000, but we expect h two to, you know, be significantly improved on that. I think if if as I mentioned earlier, you know, q one trading, where we've acquired the businesses in the end of February, but q one trading across the wind services business was was quite flat. There was people who were sort of hesitating to to put down deposits or actually to to commit to work with with the business until it it exited the liquidation process that the parent company was in. And so we saw a significant uptick in in in q two.

28:07 Trading has has commenced well in in in q three where we we are on track to hit that target of 17 to 18,000,000. And then I think if we get if we get there, there'll be significant operating leverage as a result of that to to to put us in a much improved position from an e top perspective. Okay. Looking at a couple of others here. In what other areas can Animas be used previously had mentioned shipping? Dave, that's probably one for yourself. Yeah. As as I mentioned, it it's it's anything that's got machine, you know, pumps, motors, gearboxes, drive shafts, and that's that covers a multitude of industries.

28:55 I mentioned hydroelectricity. I think these can be smaller hydro schemes that are in the middle of nowhere. They don't have an engineer sat there watching it, but they they certainly can have a set of post installed sensors that are are reading vibration proximity. And, you know, it it can it can look at step changes. It can look at just the the general behavior of a of a machine. If it if it's if it's running not quite as it should, we you know, you can get in and and change what needs to be changing. Whilst treatment, mentioned, but, like, food and beverage manufacture, you know, e even across yeah, conveyor belts. Yeah. It's it's anything with a machine that you need to have operational, for as as as as many hours in every day as possible. So if you can if you can do a controlled and planned shutdown of a piece of kit to change an item of that machine, proactively, then rather than it falling apart and and failing, which will lead to longer downtime, it's, yeah. Anything with a machine, essentially.

30:15 K. Understood. Question from, Chris h. What do you need to do to to scale to achieve 50,000,000, then say 75,000,000 market cap, and what are the catalysts that that can action? Well, I think I think the we've had a a good performance on on on share price since doing our since completing this deal. And I think the market sees the opportunity. I think the first things we need to you know, the priority is to hit our, revenue guidance, for the wind services business for the twelve months to the end of December. I think that's the key the key priority. And then also really start building out the the repairing order book and and and and on on that order book, converting it into into into actually completed jobs and recognizing that revenue and and and and sort of driving that gross margin up on those projects is is critical.

31:13 And then as as mentioned, there are a number of m and a opportunities that we we we have in the pipeline and that we're reviewing and and and that, you know, executing on on on one or more of them, I think, would make a material difference over the coming months and into 2027. Okay. Dave, one that I'm gonna hand off to you here, what happens if there is a change in government in The UK? Oh, we're all doomed. Oh, no. Sorry. Fortunately, we're we're in a we're in a space which is so, such a hot topic. I mentioned the geopolitical situation in The Middle East.

31:59 Energy security, Earthville, the wind business, that we we operate in, we're we're part of one of the, Department of Energy Security and Net Zero's steering committees for supply chain and resource. So, you know, we're we're parties to some reasonably high level information, and energy security isn't gonna disappear. You know? You just have to see well, rewind five years ago, how many electric cars are on their own? How many electric cars are on their own now? We are so reliant on electricity, producing our own from a free resource. It's just a no brainer. And I think any anyone that comes into government, who who changed that strategy would not be in government for very long.

32:50 But, yeah, it's the a lot of we're we're not the we're not the massive wind farm, huge blue chip businesses. All our clients are or the majority of our clients are small business owners, and and these turbines remain critical to their their business being, viable, whilst giving them a say in in the in the the the cost of their own energy, and they can they can upscale what they already have. So it's yeah. I don't I don't see it being a problem whatsoever. Yeah. I think just to add to that, I think Dave just correct me on the on the on the figure, but it's it's it's well over 80% of our customers are, you know, high energy users that actually use the majority of the energy in their own business. Correct. So these are typically, you know, farmers.

33:44 And and and I think putting putting their businesses the viability of their businesses at risk, I think, if you took away their turbine in in in some instances, the business becomes unviable. So, you know, I I don't I don't see with the infrastructure already in place, the connection to the grid, that there's gonna be any any real risk of of this sort of for the distributed wind space. No. Okay. And last question we have is is what is the update on on Alstrom? Okay. So Alstrom, the rare task we have, I think I mentioned it there, but, look, I think we're keen very keen to to to to find a credible partner to to to monetize this with. But, you know, we have the license till till 2029.

34:31 I think it's about finding a a a good deal that brings value to the shareholders. And and we you know, discussions are ongoing with a couple of parties to structure something that gets us you know, ultimately delivers value to the business on on on on the back of that and to to put it into the hands of of of management team and then into a company that actually can deliver that, which I think is is is critically important. So, look, those conversations are are are are ongoing as they are with the copper project up in in Northern Sweden. And we hope to have an update on on those in due course. Okay.

35:18 That's all the questions that have come through. I think thank you to to to to everyone who's joined, everyone who asked a question. Hopefully, you found found it informative, and we we'll we'll thanks for taking time out of your day to to to join us, and we hope to speak to you again shortly. Perfect. Thank you for updating investors today. Please ask investors not to close this session as you now be automatically redirected to provide your feedback. On behalf of the management team of European Green Transition PLC, we would like to thank you for attending today's presentation, and good afternoon to