ReFuels (Oslo:REFL) — ReFuels CEO & CFO present FY Q1'25 results and host a Q&A

0:01 Good morning, and welcome to the REFUELS Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses, which is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand you

0:31 over to CEO, Philip Field. Good morning to you. Good morning, and thank you. And, yeah, good morning to everyone either watching this live or on catch up. And, Baden and myself will go through our, first quarter results. That is the first quarter of twenty twenty five. And then, yeah, as if you have any questions, please feel through to pop those, through or into the the chat function, so we can go through those afterwards. So just a quick overview and a quick reminder of, who we are, what we do. So we're listed, in Oslo.

1:16 We're on a mission to decarbonize Europe's truck fleet. We are starting out in The UK. We've currently got 14 large public access stations operational in The UK. We currently refuel close to 1,800 trucks every day, through that network. We are very proud that, over the last twelve months up till, the end of March twenty twenty four, we helped our customers cut greenhouse gas emissions over that twelve month period of more than 150,000 tons. And if you look at this math map here, you can see 14 stations, but as we will talk about in a bit, we also have large expansion plans, not just in The UK, but also outside of The UK.

2:05 Just a reminder, once again, what is it we do? For those of you who are new, to our, presentations, you might not fully recognize or understand what a large public access bio CNG station that caters for truck or commercial fleets looks like. We don't have a canopy. We don't sell hot dogs, mouse bars, newspapers as such. This is a, a drone shot of our Newton Acliffe station up in the Northeast Of England. Can refuel 14 trucks simultaneously. We opened it in June of last year, and typically can, at full utilization, can refuel close to eighty eighty trucks, eight zero trucks, per hour. It's an unmanned facility, we, at least, are not aware of any, more efficient ways of distributing large quantities of renewable and sustainable fuel into trucks.

3:04 If we then look at some of the key highlights, we've still got strong underlying growth, and we expect that to continue going forward. Baden will touch a bit on it later on, but our annualized EBITA is close to 7,000,000, in q one. We are expecting that to get up to a run rate, of £1,000,000 per month by the end of March, so by the end of our financial year. RTFCs or renewable transport fuel certificates, which is something that we we generate by putting biomethane, sourcing biomethane, and putting into trucks are moving in the right direction. As such, we are starting to see a recovery in that. Once again, talk talk a bit more about that later on. We announced earlier in August or in August rather, that we have started constructing our sixteenth grid connected station, Livingston in Scotland, and we've got more coming down the line later on.

4:01 We are very excited about six by twos trucks coming, online and being produced by the manufacturers now. That is something that we've been lacking, in our growth so far. And finally, we have signed a term sheet with funds managed by Foresight Group to simplify, the structure that we've currently got with regards to the station and financing. Just look at some of the key figures. I think the one just to highlight here is unique customer fleets. We see continue to see very strong growth in that, in that category. One thing I think that's sort of stand out there is a lot of people think that because our most well known customers are very large, brand name, very large UK PLCs, we are now seeing that this solution running c and g trucks on a 100% sustainable and renewable by methane is is is not just a solution that the large fleets are now adopting. We are now seeing this, also as a popular solution for the smaller fleets, and that's contributing, to the growth that we have in customers.

5:11 On the right hand side here, you will see that certificates, this is back to the renewable transport fuel certificates, generation and solved sold, sorry, has been reduced. That is a timing issue, largely a timing issue. We are seeing growth in generation of those certificates. It is just a timing issue that Baden will also highlight a bit later on. We founded the company back in 2014, you know, so ten plus years ago. If you look at where we are today, we are now into mass adoption territory. There's no doubt at all that bio CNG is a, that is is not here to stay. On the contrary, most of our customer base where we now have stations covering their fleet, when diesel vehicles come up for replacement, they will go out and order CNG trucks and therefore replace like for like.

6:07 If you look at the capacity that we've got at our stations, we can today cater for nine and a half thousand trucks. We've got 1,800 plus on the road. We've got an order book and so on and so forth as confirmed by our customers. So we have a lot of capacity for our customers to grow into through our existing network.

6:24 However, it is important here to understand that we are only at this point in time covering a very small part of The UK logistics fleet, and as such, it's important that we continue to build stations. And finally, if you look at the graph, there are two cover colors there, dark green, light green. Light green shows the MRS volume, the mobile refueling station volume, which is a very important part, of our growth and important part, of our adoption strategy towards our customer base. Why? Because building large public access stations takes time, not just the construction of it, but sourcing land, securing land agreements, securing planning approvals, and so on and so forth. However, during that period, we can't have customers sitting there saying, do you know what? We'd like to adopt CNG trucks, but we have to wait for your stations to become operational.

7:19 So we've developed for well, soon five years ago, and, actually, we've developed, an elegant solution called a mobile refueling station that we can either bring onto customers' premise premises or, onto land that we are developing of interpublic station, and therefore, we can refuel trucks at their site whilst we are developing a, a station nearby. As of today, about 30% of all trucks so of the roughly 1,800 trucks, about 30% of those are today refueled through MRSs. We've got nine in operation, two more that we expect to be completed by by March next year, and we are expecting the fleet to continue to grow, past that. If you then look at our station, network, what's what's opened recently and and and what are we doing on the construction side, we opened our first site in in in Wales last year.

8:15 Similarly, we opened our first site in the Southeast Of England in Kent, our Aylesford facility that we opened in in May. Under construction today, we've got Doncaster, very important logistics hub. If you're very excited, we'll become we'll go live later this year. And then we announce in August, as mentioned, Livingston, which will be our second station in Scotland, and we'll open up some, well, additional adoption for some of our key customers in in Scotland.

8:46 Does that mean we're done with two more stations in construction? Absolutely not. We've got ambitious plans, to continue to build stations going forward. So if you look here, in build and under contract, we've got seven. The two of those in build, five under contract. But more importantly, in late stage development, we've got 11 stations that we're currently pushing through, and that will continue to be beefed up going forward. So as such, you know, our ambition of having 30 to 40 stations in operation and or in build by the end end of twenty twenty six, is absolutely, achievable, and you will see that, later this year and next year, as we announce more stations, going into build.

9:36 We founded the company ten years ago. We've got 14 stations in operation today, two more in build. So the future, stations that we're currently putting into build, we are able to high grade. So what does that mean? Well, that means that we've currently got a good enough coverage around the country so that we no longer need to build, let's say, strategic sites. So our first one in Scotland was a strategic site. Why? Because it's it's impossible to trial a biocNG truck if you haven't already got a station there. The stations that we're gonna build going forward, we are high grading in the sense those are our most attractive sites where we are confident that customers will order large quantities of trucks early on, meaning the economics of those sites should be attractive, from day one. And if you look here where we are or, you know, in this presentation, we're expecting an IRR, unlevered IRR in the range of 25 to 45% for the stations, going forward.

10:39 If you look at the cash flow generation and profitability from our station networks, this is only looking at station revenue. This does this does not include anything that we could generate from our biomethane sourcing and certificate generation business. As of today, we're at an annualized run rate of about 7,000,000. Once we get to the end of the financial year, we expect to be at an annualized run rate, sorry, of about 12,000,000, so 1,000,000 a month. However, if you then take the existing network, and this is important to understand, this does not include Doncaster and Livingston that are in build or any future stations. This is only looking at the 14 operational stations today. Once those are at so called steady state utilization, those will generate we expect them to generate close to £50,000,000 a year of EBITDA purely from those 14 stations.

11:38 So we had an existing funding arrangement, with Foresight that we entered into in December 2020. We have signed a term sheet with Foresight to simplify that structure. That means that we will be bringing the off balance sheet off balance sheet stations on balance sheet. Sorry. I can only see myself here now. Here we are. Back to the presentation. That means we'll be bringing the off balance sheet stations, which currently funded through the foresight structure on balance sheet. So they will be brought under the CNG FUELS company and the CNG FUELS brand today. So what will that do? That will strengthen the balance sheet overall.

12:25 It will consolidate cash flows from stations and by methane generation into one entity. We expect to have this transaction concluded, you know, this side of, basically, Christmas twenty twenty four, and we'll provide an update later on as to why we're doing sorry, as to the the the details as to, what this looks like, but also more, easier for investors to understand why we're doing that. And the primary reason for doing this is, once again, to ease, bringing in external funding in the future, whether that be future debt or or equity that that we can then use to further our growth. We announced, a while back, that we had joined a consortium called the High Haul Project, in The UK.

13:20 We have now chosen to withdraw from that High Haul Project, and I'd like to stress here that this does not mean that we no longer believe in hydrogen or we no longer believe in other energy vectors, whether that be electricity through battery electric trucks, hydrogen as mentioned, or any other fuel that may or may not be applicable, renewable fuel that may be applicable in the future. However,

13:43 what it does mean today is that as a company and given the challenges for the total cost of ownership of green hydrogen being used as a truck fuel today, We see it as better use of our resources and our capital to focus on our bread and butter business today, which is putting 100% renewable and sustainable biomethane into trucks. And we, of course, will continue to monitor green hydrogen and battery electric trucks as such, and we expect to get involved in these in the future. Whether that is couple of years away, or many years beyond that, we don't know. So once again, it doesn't mean that we are no longer believers in that segment. We will just get involved when the time is right. And with that, I will hand over to David.

14:31 Thank you very much, Philip. So I'll, run through the station profitability. This is the, CNG Foresight joint venture station profitability. We do not consolidate this into a profit and loss, but it's important to recognize that this is the portfolio that we run, and, and how it's performing, how it's performing in the underlying growth. The adjusted EBITDA means that we've adjusted it essentially for to remove the management fees between CNG fuels and refuels CNG fuels and the CNG force identity so that you have a clean, can get a clean view of the performance of the underlying assets themselves. Station portfolio in the in the last in q one twenty twenty five was 1,730,000, which compared to £764,000 in the first quarter of twenty twenty four, 125% growth in EBITDA over the year.

15:20 That, of course, is much more significant than the growth in volume we had across the portfolio over the year and demonstrates the operating leverage we have to growing the volumes over time as the overheads per kilo dispensed shrink quite dramatically at a station level. In q one, you can see our growth rates slightly dipped or whilst whilst the EBITDA, of course, grew continued to grow as is largely due to one large customer who had some internal restructurings. It's expected they will return to their normal utilization soon and provide both both to earnings, but also that we'll continue to see this growth trajectory as the as the additional customer trucks that are that we are aware of on order arrive over the coming months. Analyzed EBITDA across the portfolio was 6,900,000 in q one, and we believe the confirmed orders we have of nearly a thousand trucks will will will increase increase the the run rate of EBITDA to around £1,000,000 per quarter £1,000,000, sorry, per month by the end of the financial year ending 03/31/2025.

16:26 Here, we can see our biomethane margins, which are recovering. These can be an enormous, obviously, an enormous earnings generator for the business. The you know, we in 2016, we commenced dispensing RTFO, renewable transport fuel obligation, biomethane at our stations and have done ever since. The margins we've we've seen since then have averaged around 30%, and over the last four or five years, had we had had recognized margins in excess of that level. Although for the last six quarters, due to the bi the dislocations in the biome in the biofuels markets, largely brought on by the by the imports of Chinese of potentially fraudulent and invest being investigated biodiesel from from China.

17:14 We have seen a four four of the last six quarters have we have seen a significant fall in the below the below the average of these margins down to levels where where it was more challenging to to source biomethane. We are now seeing a recovery both in the underlying man market fundamentals of biodiesel, but that which leads through to an improving biomethane costs and improving RTFC pricing fundamentals. And our margins are now steadily improving and have now reached around 18% in the prior quarter. They continued that growth per the q one report into January into July. We we we generated and sold 34,400,000 RTFCs in q one at a volume weighted average cost of 17.8p per RTFC, which which corresponded to this positive margin over which we could purchase biomethane.

18:06 Based on negotiations we have with with, with suppliers, with suppliers and producers, of the for biomethane, we believe that we can we can, continue to see a recovery, towards the historic levels. And, of course, at these margins, given the massive, massive volume growth we've had over the last year or two whilst the whilst prices have been depressed, we should be able to see a substantial earnings potential for the group, as margins recover and volumes continue to grow. Consolidated revenue for the quarter was £27,600,000, which which in the corresponding period was £19,100,000, although that was a shortened period because we formed the group in May last year. And so that was have as I said, it was a shortened period. And whilst it was a shortened period, the the gas prices at the time due to the Ukraine Russia conflict and other energy crisis matters was was much higher.

19:02 And so, yeah, so that that so that was a higher revenue that was higher revenue, although on a pass through basis to our customers at that point. The group achieved a gross profit contribution in the quarter of 2,900,000 compared to the loss in the prior quarter in the prior year's quarter of 1,100,000 and an and a gross profit contribution over the whole of the prior annual period of 2,300,000. So this was a this was a a higher gross profit driven driven by higher RTFC prices, higher and higher station management fees. Adjusted EBITDA loss decreased to 1,300,000 versus the prior quarter of 1,700,000 and 14,770,000 for the prior year. The adjustments are to share based payments, fair value readjustments, and the EPC contract revenues, which need to be adjusted for a time on a timing basis.

19:52 Overhead cost is something we're extremely happy to see coming down on a per kilo basis. This is for the management of the stations, the overhead of the running of the business, and the growth we see for station the station portfolio over time, which we believe to be scalable. And we've now seen that the that our cost per kilo of overheads in the CNG fuels business and refuels business combined have now fallen from 59p per kilo in q one twenty twenty four to 29p per kilo in the comparable quarter, demonstrating significant economies of scale benefits we're now seeing. Total assets were a 176,200,000, of which $84.84.5 was goodwill and £10,700,000 was customer brand and intangible related assets.

20:38 This is significant because over the last year, in each of our quarters, we have we have reported to the market that there would be an independent valuation required on the purchase price allocation based on the formation of the group last year in May, where we brought together renewable transport fuel services and CNG fuels under REFUELS. That work's being completed as part of their recent audit, and that has led to an adjustment both in the magnitude of goodwill and intangibles and a transfer of some of the of some of the intangibles over to goodwill, which is why these numbers have adjusted and adjusted in prior periods. It's important to recognize this is not an impairment, and this has no effect on the profit and loss of the business. Trade and other receivables has increased across the period largely due to related party transactions with CNG Foresight. We have a principal and agent relationship where the customers where we're the invoicing party for the customers as well as for our suppliers.

21:30 And so the total balance of yeah. So so that that that generates significant levels of related party transactions. Borrowings in the current liabilities are largely made up of the working capital loans for to CNG fuels from from the foresight entities, from the funds management foresight entities, and the transaction and terms that Philip mentioned earlier. Under those terms, we would look to convert the working capital loans into shares in CNG FUELS LIMITED as part of that transaction. Cash flow generated from operating activities increased by 3,200,000 over the quarter, which was largely due to trade receivables decreasing and trade creditors increasing in the period.

22:16 And then we have also had us had an increase in from our financing activities, which was a further drawdown on the loan from the force from the funds managed by Foresight. Additional £2,000,000 of working capital was drawn, which takes the borrowings at the end of the period to £8,000,000. Thank you.

22:34 Thank you, Baden. So if we then look a bit at our market and go into some of the market slides here. In The UK today, there are about 230,000 so called HEVs, heavy goods vehicles, above 18 tons. However, our core market, the way we identify it, is not really the rigid segment, which is 18 tons up to 26 tons, which is eighty eighty five thousand trucks. Our core market is the so called articulated truck market, which is the tractor and trailer combination. That, again, is split into two segments, which I'll, you know, you you'll see some images later on, but which is four by twos and six by twos.

23:22 Once again, our core market of the articulated market has for now been the four by two market, because that is what the truck manufacturers have been producing and been supplying into The UK market. And if you look at at where we are today, once again, the vast majority of trucks that go through our network are four by twos. So as you can see, there's a large market here that we can grow into once the six by two trucks are made available. Now why would our customers want to adopt, BioCNG or use BioCNG and no longer run diesel vehicles but instead buy CNG trucks? Well, they need to decarbonize. However, as a lot of our customers say, we cannot afford to go green and lose money, which which I think is a very fair comment because the logistics industry, the haulage in this haulage sector is a sector with very tight margins.

24:20 On an average year, of course, some good years, some bad years, on an average year, the typical profit margin is between three to 5%. So not a lot of of fat if you want, not a lot of profit in there. So, therefore, if you're going to go green and start to use expensive trucks, expensive fuels, etcetera, etcetera, you will soon find yourself in a to in a competitive disadvantage. And that's one of the big advantages with going down the CNG route. Yes. The trucks are slightly more expensive, but the fuel is considerably cheaper than running diesel. So as such, you are not only going green, you are also, over a typical five year period, saving a considerable amount of money compared to running diesel trucks. Now back again here, to the four by two versus the six by two fleet.

25:12 Four by two trucks, which is what we've predominantly got going through our stations today, they typically generate a gross profit to us of about £5,000 per annum, slightly more. We're very excited about six by twos coming in, of course, because that's the larger market, but also because they typically do heavier work. And when they do heavier work, they use more fuel, and when they use more fuel, that also increases our our gross profit per truck. As you can see here, from just above 5,000 pounds per truck to north of 7,000 pounds per truck for a six by two. Now if we look at those two trucks, four by twos versus six by twos, A four by two truck here you see on the left hand side has one rear axle and can typically operate up to 38 tons, total combination weight, that is tractor unit and and and trailer.

26:07 Of the the six by two on the right hand side has two rear axles and can operate up to 44 tons typically. As you see, the larger market in The UK on the right hand side is the six by two market. 124,000 trucks registered as of as of last year, whilst in the four by two market where it's 21,000 trucks. As of today, seven and a half percent of all four by twos in the country are CNG, and they run through our network. In the coming six months, we expect that to be there or thereabouts, about 10% of the total market. On the six by two, however, we haven't really had the product available from the manufacturers. That's now changed. Iveco had a product for a while. They're now they're now scaling up production capacity, and Scania released sorry, announced and released their six by two offering in June of this year, which will be on the road later this year for trials, and we expect orders to start flowing later this year or early in 2025.

27:11 So we are now finally being able to address the much larger market than the one we have been doing so far. Now if you look at trucks on the road today, I've mentioned previously, we're close to 1,800 trucks on the road today going through our network. So what does that mean going forward? Well, we know our customers have ordered just north of 900 trucks, which will be delivered in the next nine plus months. Does that mean they're not gonna order any more beyond that? No. We expect them to continue to order a lot more trucks, but there are no customers out there. There are very few fleets out there that will order trucks, more than maybe nine months before they actually need them. So no one's gonna order trucks yet for delivery second half twenty twenty five, and they're certainly not gonna be ordering trucks for '26.

28:01 So, therefore, this is the the we will see a continual gradual buildup here of the order book as trucks get delivered and new ones get ordered.

28:13 Ben mentioned it already, but we have for the last eighteen months there or thereabouts been, been suffering, through a a imbalance in the biofuel market, which has severely depressed so called RTFCs, renewable transport fuel certificate prices. A lot of things, however, has happened, to improve that situation, and more recently, the EU imposed antidumping tariffs or tariffs on Chinese biodiesel. We expect The UK will do the same a bit later. And in general, we are seeing the the the market physically balance as well. So what do I mean by that? That there is now a better balance between supply and demand of feedstocks used to produce biodiesel and for the end product, which, of course, is biodiesel.

29:07 And as this market rebalances, we expect that will have a positive effect on the value and the price of RTXCs going forward, which will make it easier for us also to source by methane and also provide better margins from it. So then just to to provide a bit of summary. You know, if you look at where we are today, we've been doing this for ten years plus. We've got a very strong market leadership, and we are or we like to say that we are increasing the barriers to entry as we build more stations and become an even more established company with regards to the organization we've got and the capabilities, that we've got. We've 14 stations today, two more in build, and a lot more coming, in the future.

29:55 We're very good at sourcing biomethane. Yes. There have been market conditions in the last eighteen months that have been really challenging, but our team has still done an excellent job, in sourcing biomethane in a challenging environment. When it comes to customers, I think I mentioned that previously as well. We have historically built the company on strong relationships to very large PLCs. That doesn't mean we're no longer doing that, but we're now a lot more diversified with regards to our customer reach. It's no longer the very large fleets of a 500 or a thousand trucks plus that are going down the bias CNG path. We are now increasingly seeing family owned businesses that might have 10, might have 50, might have a 100 trucks are going down this path because, one, they see to the future, and, two, they need to provide green logistics so that they will continue to have renewed contracts.

30:51 Bentioned sorry. Baden also mentioned it previously. If you look at operational leverage, we're now starting to really harvest and see some of some of those, some of those scale effects come through. But more importantly, having done an exercise late last year, we only need to increase between 15 to 20% overhead in order to, to service pretty much three x or close to three x of the station network that we've got today. We sometimes get get get the question, are you only focused on The UK market? No. We're also focused on on other markets, and we're getting incoming requests frequently now from other countries in Europe, from parts from credible parties in other countries in Europe. Can we join them in developing a similar network to what we have in The UK? That is something that we are exploring, of course, but there's also a a timing for everything.

31:46 As of today, our focus is on the growth opportunities we've got in The UK, but probably from next year onwards onwards, sorry, you will see us

31:55 capitalizing on some of the interest we're seeing outside of The UK. And finally, if you look at the outlook we've got going forward, we've got strong underlying growth. We don't really see that changing anytime soon. Sure. Growth is lumpy because it depends on which quarters, truck deliveries fall within. So there will be some lumpiness within there. However, that that evens out over time. We know that our customers of play have placed more than 900 trucks, or or have got orders for more than 900 trucks. We expect that to continue to increase going forward. And finally, when it comes to our network, we've got 14 today, two in build. That's nowhere near the coverage we need, so we're working hard to increase that coverage over the coming years, which again will drive e adoption rates even further because that means our customers, existing customers and new customers have more locations where they can adopt, via CNG trucks.

32:52 And with that, I will drop the slides, and I think we'll go into the the Q and A session. Perfect. Philip, Baden, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. I'm Philip Baden. As you can see, we have received a number of questions throughout today's presentation. And if I may now hand back to you and kindly ask you to read out the questions where appropriate to do so, and I'll pick up from you both at the end. Thank you. Yeah. We've got some questions here. So we'll dive into those and do our best to answer them.

33:40 And if for whatever reason you're not happy with what we provided here, you can always contact us as well. You you'll find our contact details and some of the press releases and at refuels.com. So here's here's the first one. When will further developments in the biofuel markets result in uplift in RTC prices? Well, I've sort of answered that briefly. We're already starting to see a small uplift in RTC prices as a reflection of what is happening in the biofuel markets. However, it's important to understand here that the the quantity of biodiesel brought in from China slash Asia in 2022 and 2023, was it such a a quantum and the certificates, not just in The UK, but also in in The EU or certificate equivalent generated from that did create a huge overhang.

34:35 That's taken time and will take time to to to flush its way through the system. It's hard to say how far we are down the the process of that happening, but we are seeing, you know, for lack of better description, green shoots, I would say, throughout the industry as such. So we we are now at at levels that are sensible and means that we can source biomethane. Not to great margins yet, but we are where we are. But we expect this to continue to improve. Although there might be some lumpiness, but we do expect this continue to improve, sorry, over the coming months and coming quarters. You've previously been excited about the new largest six by two CNG trucks. Can you provide some further details about expectations for the SkyNet six by two? Yes.

35:23 They launched it at a trade show early June. That is now being brought in and there are more models being brought into The UK for so that they're available for customers to trial later this year. There's always some paperwork and some approvals that need to put in place in order for new trucks when when they come in. But we expect trials to be underway firmly underway later this year amongst some of the really large fleets in The UK. The the demo list or the the the interest list that we are avail that we are aware of purely from our customer base and prospective new customer base is at a level we've never previously seen. So we're very excited about that, clearly, but we also need to be conscious of the fact it will take time for all of these fleets to be able to to get get hold of the vehicle and do their trials. So I think we should be fairly cautious in expecting huge orders to be placed in the next three to six months.

36:22 But, certainly, as we get into 2025, once the first trials have been concluded and we get enough demo vehicles on the road, we expect to see, large orders from, from the Scania, but also from the Iveco six by two to continue to to to flow through the system. The company continues to deliver strong growth with a solid customer base. What does the competition look like? Very good question. And I think here we need to differentiate slightly between how we define competition. Competition here could mean, putting biomethane into trucks, and there are two ways to put biomethane in trucks. You can either do it compressed like we do, or you can put it through the bio LNG route, which is liquefied. I see those two solutions as complementary.

37:09 I don't necessarily see them as competing. Why? Because some fleets prefer liquefied, and some fleets want to go down the compressed natural gas route. As of today, from the data we are aware of, there is stronger growth and stronger demand for bio CNG than there is bio LNG, but that doesn't mean that bio LNG is gonna go away or is not gonna be important going forward. On the contrary, it will continue to fill a role within the marketplace. So I don't necessarily see competition from LNG. I see those as more complementary. And then the question here might be, okay. So what what other options are there out there? What could competition look like? Could it be biodiesel? Could it be green hydrogen?

37:55 Could it be, BEVs, you know, battery electric trucks, and so on and so forth? If you look at biodiesel, yes, that's a very elegant solution because you could take a perfectly good diesel truck and you can run it on fossil diesel on a Monday, and on the Wednesday, you can run it on a 100% biodiesel. The challenge is around supply, you know, getting a long term contract and getting a long term price that you know makes sense to you. The biodiesel market is a volatile market. Long term contracts are pretty much impossible to come by. So, therefore, yes, we see biodiesel as an important solution to decarbonizing trucks, but we don't necessarily see it as one that majority of our customers see as a long term solution for them. So then you get over to green hydrogen, which we've just touched upon. As of today, we don't see a total cost of ownership offering two fleets that is attractive enough for them to actually adopt green hydrogen.

38:49 That may or may not happen in the future. And when that does, we will be there, as a supplier of such a solution. When it comes to battery electric trucks and and, you know, large battery electric trucks, there's a lot of focus on the truck itself. Once again, we don't necessarily see that as where the main focus should be. Yes. Battery electric trucks are more expensive today. I'm sure batteries will continue to to become better over time. It is more about how do you actually get electrons into the batteries. We've got a constrained or many distribution centers, many locations in The UK today have a constrained capacity on the electricity grid, so therefore, taking the electricity you need off the grid in order to charge your vehicles, is challenging.

39:36 So we see a multi fuel future here for a very long time to come. And once again, we don't necessarily see that, you know, these technologies are gonna be in direct competition. We think they will be complementary to one another for a long, long time. And when the time is right, we will move in, and provide whatever our customers demand because at the end of the day, we are led by our customers. If they want an energy solution that we're not providing today, we will provide it. REFUELS has withdrawn from high oil project. Can you provide some additional comment in relation to other competing solutions to decarbonize trucks? I think I've just answered that one, so I think we'll just move on. It seems the start of development of new stations is slower than expected. Is that fair?

40:23 If so, what can we do to change that? Yes. That is a fair observation. And I think the what can we do about it? Well, we're working day and night to improve that, but I'll just give you some examples, as to why developing stations is pretty hard business. The actual construction of a station takes about eight months from we put a digger on-site until we can can cut the ribbon and refuel the first trucks. So that is not really what's holding us back. It's all of the stuff that comes, ahead of this that is challenging. So as of today, we need to go out, we need to negotiate with landowners. That can take two months, can maybe take up to a year.

41:12 Once you've got an agreement with landowners, you need to do your environmental surveys, drainage surveys, lots of other surveys to prepare for so submitting so called planning application to the local councils. Depending on the time of year, depending on the complexity of the site, those surveys can take three months. They can take twelve months to carry out. Once they've been carried out, you then have the information that you can submit to the council. That should take a planning approval process should take twelve, sixteen weeks. Yeah. We can forget that. That's not happening. For a number of reasons, and I won't blame the councils here, but for a number of reasons, the process takes a lot longer. There's nothing controversial about what we do, but as such, a typical planning process can take a year, maybe more, maybe less. Then we might get some conditions that we need to comply with before we can start construction.

42:07 So which can take two months, three months, six months to discharge, and then it takes eight months to build. If you add up all of this, you can typically see that from we identify a location until we're going to build, it could take us three years, maybe more. Mean, I we've got sites that we've been developing or trying to develop for a lot longer. So as such, it's not about the construction. It's about all of the work that comes beforehand. We have a dedicated team doing a very good job doing that, but this is a function of time. It's not a function of money. And that's why that's where our focus is, is to unblock that process so that we can then build more stations and do it at a faster pace. Can you provide any color of truck demand against truck supply? Are truck companies investing in capacity or seeing better demand in other models?

42:59 I think that refers to whether truck supply can keep up with demand from the manufacturers probably of gas trucks. Babe, jump in here if you read it. Yeah. I've I've I think potentially or other other other technologies better demand or alternatively other, yeah, our CNG fuel trucks getting enough getting enough manufacturing space. Yeah. So And and and will they continue to? Yeah. So the answer is that today, the truck manufacturers are not constrained by capacity. We have been constrained by the lack of the six by two model, but as of today, we are not constrained by the production capacity of the truck manufacturers.

43:45 If a large fleet would like 100 CNG trucks tomorrow, they can't get them tomorrow clearly, but order them tomorrow, as of today, the lead time is from what we're hearing is similar to that of diesel. So, yes, we do not see any constraint in that market, and we don't see that as a factor that will hold back our growth. So given expected 25% IRR from high capacity stations, how confident are you in maintaining this return amid any potential market or regulatory shifts? Well, you know, our crystal ball is probably as good as anyone else's. We can only look at what we're seeing today. We don't see anything on the horizon today.

44:31 Market or regulatory shifts that would that would change that view. If if that view does change, we'll, of course, update our investors in the market. But, yeah, as as of today, our view of the market is that, you know, huge quantities of biomethane will be required to go into to go into to decarbonize trucks. And as such, we we believe that once we put stations and build stations and open them, they will be around, and they will be profitable for many years to come. You mentioned you cover only a small percentage of the transport in the fleets. How do you market into the rest of the untapped fleet? Well, as of today, I would say 90% of our marketing is probably largely incoming, interest and incoming requests from fleets who today do not, do not operate CNG trucks, but they have peers, they have competitors who are operating them. So as such, we are now at a scale where this is largely starting to sell itself or at least interest is is, is sowing itself.

45:37 That said, we need more stations in key locations because the reality here is that customers cannot afford to do off route big mileage to go and refuel and then go back on route. So if we haven't got a station in a key location, which is either on route that they can use or next to a distribution center, they won't be able to adopt. So the biggest impediment to our future growth or holding our growth back is the number of stations, which is why that is our key focus area when it comes to unblocking future growth. Can you comment on how REFUEL shares will be valued in exchange with foresight? Thanks. No. Cannot comment on that today.

46:22 That is something that we will get back to the market on when we yeah. When when the time is right. So that'll be later in the autumn. Apologies. One, please. Yeah. So why is investment cash flow positive if company if the company is at a growth stage and investing in expanding network? It's a €100,000. It is that's a it's a small intercompany transaction. That is that's that's is why that is not a zero. What was the dollar difference write down in goodwill pre and post the transaction group consolidation? Yes. Okay. So the independent valuation experts along with the auditors, as I said as I said, adjusted some of the intangibles across to goodwill and decreased the overall quantum between all of the movements has decreased about £40,000,000 based on the estimates that were that that were done on on on group on group cons on the group on the group coming together last, May.

47:28 Once again, these are not impairments, or write downs. These are the restatements across, across all the periods. Then we have a question on any guidance on timing on The UK share issue. No. But that is something that we are definitely looking into. So, yes, can't get any give any more more timing on that, but we will update our shareholders in the market, when that becomes something that we will be taking, potentially moving forward with. Does the UK government have any specific targets of goals for CNG use in transportation? The answer is no, but it's a bit more nuanced than that.

48:13 What The UK does have, it has the so called RTFO poll policy, renewable transport fuel obligation policy, which is important to understand. It's a market based mechanism, and that is The UK's, UK government's main policy to decarbonize road transport today. That is a technology neutral policy as such, and it leaves it up to the market, to basically, find a way to supply fuels into that. And therefore, you would expect and you do expect over time that the most competitive fuels here will win out. As such, you know, the the the vast majority of fuel that currently is supplied under the RTFO is biodiesel, then there's bioethanol, but biomethane, is a is a is a rapidly growing part of the RTFO and as such of the fuel supplied under it. So whilst there isn't a specific target today on CG use, there is an overall target on renewable fuels that need to be used in The UK, and that continues to grow year on year.

49:22 And therefore, that gives us and gives biomethane, a large segment to grow into, and we expect over time biomethane as such to grow into that segment and therefore displace some of the fuels that are already in there. So, yes, not a specific target for biomethane, but a specific target for renewable fuels in general where biomethane is part of the mix, and we expect that to continue to grow in importance within that mix. That's great. Philip Baden, I believe you have addressed all those questions for investors today. So thank you for that. And of course, the company can review all questions submitted today, and we will publish those responses on the Investor Me Company platform. But before redirecting investors to provide you with their feedback, which is important to the company, Philip, could I please ask you for a few closing comments?

50:12 Yes. Thank you once again, and thank you to everyone who's been giving us some interesting and good questions here. And and for those of you taking the time to to to view this either live or or on catch up, As previously mentioned, if you have any specific questions that we didn't answer, didn't feel comfortable, etcetera, please contact us. You will find our contact details on press releases and so on and so forth. And, also, please, you know, sign up to receive our news in the future. But, yeah, thank you very much to everyone, and have a good day. Philip Baden, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations?

51:02 This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of REFUELS, we would like to thank you for attending today's presentation, and good morning to you all.