PNE AG (PNE3) Q2 2026 Earnings Call Transcript

good morning everyone also from my side thank you for joining us today in this conference call regarding the half-year financial report for 2026. my name is heiko wuttke ceo of pneag and i am accompanied by dierksiemann's cfo before i begin with the presentation itself i would like to comment on the latest news on monday evening we published an ad hoc announcement in reaction to recent media reports since these reports had cited a possible price range that did not reflect the current demand situation we were from a purely legal standpoint obliged to respond and set the record straight in the announcement we provided an update on the current status of the sales process which we have initiated to identifying investors as part of the further development of our business strategy. However it is currently uncertain whether a transaction will materialize and what its terms would be. Please understand that we are unable to comment further on the ongoing process but we will inform the market of any relevant further developments in accordance with applicable law. So let me give you an overview of the presentation and the course of today's webcast on slide three of the presentation as usual i will begin with a summary of the h1 2026 followed by an update regarding the operating business then i will pass over to dirk for the financial after that i will conclude the presentation with the outlook for the remainder of 2026. we will then open the line for questions and as always our slides can be found on our investor relations website. Before I continue with the operating business, I would like to welcome Dirk to his first webcast in his role as CFO of PNEAG. As you know, our former CFO Harald Wilbert has asked the supervisory board to release him from his duties as a member of the board of management for personal reasons. And Dirk, who was our former chairman of the supervisory board, took over and provides a very strong solution to address the upcoming tasks. Thank you, Dirk. We are really happy to have you on board. Having said this, I would now like to draw your attention to slide five. Ladies and gentlemen, we are pleased to share that we have achieved important milestones in a challenging first half of 2026. We successfully sold projects in our core markets, Germany, Poland, and France, with a total output of 163 megawatts in total. five wind projects with a total capacity of 120 22 megawatts and one pv project with 41 megawatt peak in addition we completed two wind projects with 52 megawatts one with 18 megawatts for our ipp and one with 34 megawatts for third parties our own ipp portfolio now stands at 484 megawatt after the successful sale of the wind from Bokel with 25 megawatts and the addition of Gnutz Ost with 18 megawatt. Power generation increased to 408 gigawatt hours, which is an increase of 11% compared to H1 2025 due to higher wind yields in the German onshore wind market and also the total output of our services business grew to 20 million euros, a plus of 12% year-over-year, with good margins. I will elaborate in more detail on the next slides. Our total output in the first half of 2026 was at 123.3 million. Revenue grew to 96.8 million, which is an increase of 31% year-over-year. Our normalized EBITDA, adjusted for one-off items, and our EBITDA increased to 27.4 million euros, clearly up from 4.7 million in H1 2025. And please remember, from 2026 financial year onwards, normalized EBITDA will serve as the key financial performance indicator for our guidance, as it provides a better and more accurate picture of our operating performance. With this, let's move on to the project pipeline on slide 7. our project pipeline wind onshore and pv remain stable compared to the end of 2025 at 21.7 gigawatt thereof the pipeline in core markets germany france and poland is on a high level with 12 gigawatt i will i will go into more detail on the next slides on slide eight you can see our project pipeline onshore wind which was stable compared to end of 2025 at 14.6 gigawatt our home and core market germany which accounts for more than 40 percent of our project pipeline remained strong with six gigawatt as mentioned earlier we sold three wind farms with a total capacity of 39.6 megawatts including bokel with 25.2 megawatt one wind farm with 80 megawatt was completed for IPP and one with 34 megawatt for third parties. In addition, four wind farms with 59 megawatts were under construction in Germany, plus another four wind farms with 59.2 megawatt for third parties. And we received new permits here for five wind farms with 186 megawatt in total. With respect to our core market France, we see a stable project pipeline with 1.5 gigawatts and we sold a wind farm with 10.8 megawatt with the transfer of the project to gp energy environment environment we now completed our second project sale in france with a partner located in the haute de france region in northern france the wind farm was developed by pne france and advanced to ready to build status effective value engineering has made it possible to significantly increase the height of the wind turbines and electricity generation. Under a project development agreement, P&E France will continue to support the buyer with selected development activities following the closing of the transaction. Regarding our core market Poland, we also sold one wind farm project to a global player in the energy transition. The wind farm consists of 10 wind turbines with the total installed capacity of 72 megawatt. We will further develop this project to the ready-to-build stage, which is scheduled for 2029 with a commissioning planned for 2030. Coming to slide 9, we see that our PV pipeline was stable as well at 7.1 gigawatt peak. Our development activity is continuing to show good progress from projects to the later project phases, resulting in a 26% growth of phase three projects to 1059 megawatt peak coming from 842 megawatt peak at the end of 2025. We successfully sold a 40.8 megawatt peak PV project to Poland's leading energy utility all-in. The project stands out due to its strategic location and technical configuration. The PV farm will be connected directly to the internal power grid of the plot's refinery. This behind-the-meter approach offers significant advantages. By not using the general grid, it reduces regulatory risks and simplifies administrative procedures during development and construction. In addition, we received new permits in South Africa with 130 MWp. in our core market Poland with 81.4 megawatt peak in Italy with 29.9 and as well in our core market France with 12.3 megawatt peak. If you look at our own IPP portfolio in H2 2026 on slide 10 you see that the megawatt in operation slightly decreased compared to the end of 2025 as we have successfully sold the Bokel wind farm with 25.2 megawatt in Q1 2026, but added Gnud's Ost with 18 megawatt in Q2 2026. The total megawatt in operation now amounts to 484 megawatt at the end of H1 2026. 468 megawatts are coming from the wind onshore Germany, 11 megawatt coming from wind onshore France and 6 megawatt coming from the wood-fired combined heat and power plant Zylbits. Due to the comparatively higher wind yields, we produced 408 gigawatt hours of green energy in the first half year of 2026, which is an increase of 11% and avoided 308 kilotons of CO2 equivalents. The hidden reserves accumulated in our portfolio decreased to 153.1 million euros compared to 159.3 million euros by the end of 2025, which is partly because they are gradually recognized over the lifetime of these projects and partly because of project sales. More than 90% of our IPP projects are based on feed-in tariffs for 20 years, leading to an average weighted contracted tenor for the IPP portfolio of more than 15 years. This shows an interesting upside opportunity through short and medium-term PPAs that are more attractive than the EEG remuneration, and about 40% of our IPP portfolio already have a PPA. Let me also give you some more information about our services business on slide 11, since it continued to perform well and delivers growing high margin returns through long-running contracts so first of all operational management and technical inspections continue to grow the assets under operational management increased to 3.3 gigawatts and we had a great customer retention rate for the operational management of about 99% after the successful market entrance by the end of 2025 we now have an additional best asset under contract and as well as further contracts under negotiation. And last but not least, we conducted approximately 570 technical inspections in wind farms in the first half of 2026. The strong performance in wind and sights continued with approximately 300 wind assessments and expert opinions in the first half of 2026. And we have conducted approximately 190 LIDAR verifications. With these figures, we are well on the way to matching or even exceeding last year's very good results. In addition, we had a good performance of our PPA-as-a-service business under the new brand WattMate with 24 wind and PV PPA projects and a total output of approximately 243 megawatts and a transaction volume of around 430 gigawatt-hours. and also Bitbloom continued to show assets under monitoring of approximately 4.5 gigawatts with a high customer retention rate. Here a new German IPP was contracted for monitoring service after a successful trial multiple additional one-off performance verification assessments took place during Q2 and the monitoring for a new EU customer has commenced.

So we are very happy with the performance of the services segment and with this I would now like to hand over to Dirk for the financials Thank You Heiko first of all I would also would like to welcome everyone in this call looking at slide 13 you see that revenue grew to 96.8 million which is an increase of 31% year-over-year this was mainly driven by increased project sales as well as improved results in the power generation in h1 our total output decreased to 123.3 million euros which was because few projects were built turnkey in h1 this is also reflected in significantly lower cost of materials our ebta and ebta normalized increased significantly to 27.4 million euros compared to 4.7 million euros in the previous year, especially due to project sales, mainly the wind farm Bokel and the improved power generation result due to the higher wind yields. The one-time effects of the first quarter of 1.3 million euros were offset by the end of Q2. The decrease in the financial result of minus 5.1 million euros was mainly driven by the valuation of interest rate swaps. The negative tax effect was mainly attributable to deferred tax arising in connection with project settlements due to IFRS 15, the capitalization of lease agreements, IFRS 16, and various consolidation entries. Looking at the segments on slide 14, I would like to mention that previous year's figures were adjusted due to changes in the segment reporting. The consolidation now includes all group consolidations as well as general overhead costs that could not be reliably allocated to operational segments. Consolidation was therefore renamed to corporate functions and consolidation. Having said that, we see growth in power generation and services by the decreasing output in project development in the first quarter 2026. In the project development segment revenues increased by 36 percent due to the increase in project sales. Total output however decreased to 85.7 million euros compared to 149.6 million euros in the previous year due to lower construction activities. Thus EBTA of the segment project development decreased to minus 4.1 million euros from 8.8 million euros in the previous year. Total output of the segment power generation increased to 49.6 million euros compared to 40.2 million in the previous year due to comparatively higher wind yields and improved prices. ABTA in the segment power generation improved in the first half 2026 by 17% due to 34.1 million euros. Total output of the segment services increased to 20 million euros compared to 17.9 million euros in the previous year, driven by a strong order book. EBITDA-wise, the services segment contributed 4.3 million euros, which is increased by 16%. Regarding the consolidation, eliminations of intergroup profits in the first half of 2026 were significantly lower than in the corresponding period, mainly due to more external sales and less intergroup construction activities, and thus led to an improved result. Balance sheet. On the asset side, we see on slide 15 that most is allocated to property, plant, and equipment, as well as inventories, what we see as investments in stable values and recurring cash flows. Our cash position fell to 56.9 million euros due to investments in project development, but is still on a good level. Equity decreased to 131.4 million euros, reflecting the negative net income. The equity ratio was 11.6 percent. However, we continue to aim for an equity ratio of 20 percent or more in the midterm and already expect a clear improvement in 2026. Adjusted for hidden reserves, the equity ratio was at a comfortable 22.2%. Liabilities to banks remain stable, resulting in a net debt of 723.5 million euros. In addition, it is worth mentioning that the majority of the bank liabilities are non-recourse project financing. To further optimize our maturity profile, we issued the 2026-2031 corporate bond in the first half of 2026 with a volume of 36 million euro, thereby taking early steps to extend our maturity profile and to partially redeem the corporate bond maturing in mid-2027 with a former phase value of 65 million euros. While the existing investors showed considerable interest, there was also a noticeable degree of caution amongst new investors, which is not primarily attributable to P&E itself, but it's closely linked to the challenging environment in the renewable energy sector. We continue to examine various options for strengthening our capital base. This includes considering possible capital measures, including debt financing. The final decision on this matter has not yet been taken. With that, I would like to hand back to Heiko for the outlook.

Thank you, Dirk. Ladies and gentlemen, this leads me to the outlook on slide 17. Like the rest of the industry, we have been navigating difficult waters so far in 2026. We are aware of the challenges, which still have to overcome. Nonetheless, we confirm our guidance for the 2026 financial year of EBITDA normalized between 110 to 140 million euros. Regarding our operating business, we aim to sell further projects in the second half of the year. At the end of July, we have already completed the sale of two further projects in Germany with a capacity of 45 megawatt. The expansion of our IPP portfolio will be consolidated this year, before we further build it up in mid-term. According to our stronger focus on selected core markets, exit for Turkey and Canada are targeted for 2026. With our Focus and Deliver transformation and cost reduction program, we remain firmly on track. In the first half of 2026, however, these cost positions still include program-related expenses associated with the implementation of the transformation measures. As we continue to execute the program, we expect further efficiency gains over the coming quarters. And, as already mentioned last time, we now focus even more on projects and solutions with high system and grid compatibility, such as BAS applications, to meet upcoming german german legislation coming to the end of my presentation i would like to emphasize again we are committed to future-proof sustainable growth and value creation and with this i would like to conclude our presentation and open the call for questions we will now begin the question and answer session anyone who wishes to ask a question may press star and one on their telephone You will hear a tone to confirm that you have entered the queue.

If you wish to remove yourself from the question queue, you may press star, then two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question is from Karsten from Blumenthal, First Berlin Equity Research. Please go ahead.

Good morning, Heiko. Good morning, Dirk. Thanks for presenting the H1 results. My first question is regarding the new EEG. The German cabinet has pushed it through. And as far as I understand it, it doesn't look very promising. So perhaps you could elaborate on your impressions on the new EEG and how this affects your business.

Thank you, Carsten, for your question. In fact, this is, of course, something we very closely monitor. um and in general actually it's not just about the eeg amendment and as well on the on the grid package which is accompanied to that there are some aspects which which are leading in the right direction for instance if you look at the additional volume of 12 gigawatts that are planned to increase the auction volume until 2030 so there's a higher volume and this should be a positive signal to the industry however what we still see and this is mainly related to the grid package that we what was formerly called redispatch is has now a different name it is now capacity constraints bottleneck areas there we really see issues which have to be resolved in the ongoing process in the parliament because we of course have projects which are not just on those areas so we're not we're not just completely hit on the other hand there are unclear and not very very straightforward stipulations which are not very clear how this will result in the business in the business case for instance how to deal with the five percent restricted areas what is the average looking backward one year or or five years of this constraints and there are clearly topics which still need to be need to be addressed and the same is on on limitations on the on the overall capacity which could result in in redesigning wind projects and wind turbines and which cannot be done that fast so there must be another deadline for instance so overall i think from our side where we supported this in the associations where we are active in there have been many many proposals and we count on the parliament as well on the federal states because you have to remember that all 16 federal states have objection on the Redispatch Vorbehalt so on this capacity constraint measures for wind and PV farms and it's our understanding that the cabinet at the end of the day has to react on that. We are still closely on it of course we in the areas where we are active we are promoting this overall one can say there are some positive parts in this in the amendment but we are not overly happy with that looking at the grid package we fortunately not only having projects which are in these good constraints areas but in in other areas so it will not completely hit us however it needs better regulation to at the end of the day meet the 12

gigawatts additional 12 gigawatts that are now on the table because otherwise you have a higher volume but it's not feasible to invest in projects to meet that volume i hope that answers your question yeah that is of great help thanks for elaborating on this one follow-up to it have you a rough idea how much of your German pipeline could be affected by the capacity limited areas or so-called redispatch for bald?

Well, we have an idea but to be clear it's hard to say today. As I said there are not very clear stipulations currently in there. So what will be the trigger point to judge on 5% of curtailment measures within one year. What is the exact area? That's not fixed. And as long as this is not fixed, it's not very clear to be answered. All I can say is that based on the maps that we have currently, we will not be affected that much. However, if you don't have regulations, it's hard to really judge on it.

Okay, fully understood. So let's wait until the Bundestag pushes through the law and see what the outcome will be. I have another question for Dirk. I was a bit puzzled regarding your depreciation, which were much lower in Q2 compared to Q1, if I saw it right. perhaps you could elaborate on that.

So there is actually one impact that is from the sale of the project Bokel that obviously also then has an impact on overall depreciation.

All right thanks for that and thanks for taking my questions.

You're welcome, thanks.

The next question from Holger Steffen, SMC research please go ahead good morning everyone um i have only few further questions um once again about depreciation it was very low in the second quarter comparing to first quarter and i see no special effects in the first quarter um i i think that the sale of vocal is not enough to explain this are there any other effects so obviously there are some other effects

like the the maturity of assets and and and other things but if you actually need so we need to have a look in more detail and we'll come back to this one Another question in this area.

Receivables amounting to 3.5 million euros were written off. What are the circumstances behind this?

So there actually is one main effect behind this.

There was an arbitration result in Sweden that actually affected one of our receivables. and so we lost the case so to say and actually needed to adjust thanks okay i think to meet your guidance it is likely that service sales from the portfolio will be necessary this year to what extent approximately are disposals of existing wind farms planned?

Yeah, Holger, that's correct. We plan, as I mentioned, further sales of the projects and that includes some projects from the existing wind farms. that's why i mentioned in the outlook that we are consolidating this year whilst building the ipp portfolio up in in the midterm so your observation is correct and maybe what can you give us an idea about the amount of disposals from your portfolio well it will be a couple of projects two or three we will see but in that area

Okay, that's fine. Thank you for this information. The sale of the wind farm from the portfolio in the first half of the year generated a decontolidation gain of 2.3 million euros. perhaps you could explain this figure in a little more detail and provide an outlook on what deconsolidation gains might be achievable from the sale of further wind farms from the portfolio because I think it's important for your guidance.

So in more general to the um to the deconsolidation gains um this the situation in in 2026 uh compared to 2025 is slightly different because this year we are actually um having more external sales compared to um to last year yes so um as you know um when we are selling uh constructing projects and handing them over to IPP, there is a negative consolidation impact related to this.

Whereas when we are selling projects to externals, then obviously there is no adjustment in deconsolidation and hence the deconsolidation result is obviously much better. as far as i understood these 2.3 million are the separate deconsolidation gain of vocal so i i i read your report and that seemed to be low to me so i will ask if you could explain me this special figure so actually this impact is not just related to vocal but it's actually an impact from from previous year included in there as well so actually it's a net amount overall okay great my last question is about your pipeline in germany i think projects in phase two and three were reduced by a total of 58 megawatts peak in the second quarter perhaps you could provide us with a brief explanation of this yes Sorge well that's that's correct as you know the PV market in Germany has mainly its

future not on only standalone but hybrid projects combined compared with batteries and as we constantly monitor the quality of projects that will really that can really succeed we have identified that amount that is not that we don't see able to be yeah to succeed or to be profitable enough that's the reason behind okay I understand great thank you very much for taking my questions you're welcome the next question from guido hoeyman mechler please go ahead yeah good morning gentlemen i have two questions please uh maybe we do it one by one so the first

one would be um on ppas you mentioned the ppas and the relevance of ppas for your company in your presentation and now again on the new eeg it looks it looks like under this new regime it is possible to opt out of the cfd which is to come once so my question is can you imagine that the market will split into sort of two segments one cfd covered segment with with low financing costs banks will still appreciate estate guarantees and um but also low returns and and the other one then with ppas only via funding costs but also higher returns so so the question is do you expect the ppa market to rather expand from next year onwards you know under the new regime or to rather decline yeah thanks for your question guido first of all, the new law is not yet set or cast in stone.

There are quite some discussions that especially having direct PPAs, because industry is really lacking and actually longing for direct contracts, that this shall be included. And we see at least signals that it could go into the direction and i um i think yes your observation is is correct eeg will remain and you we can opt out um it depends secondly on on the on the auction level that we currently will see um from from our point of view because if it will be on a very low level um there are more options um that you at the end of the day really go out into in a PPA and at a certain stage so the PPA market there will remain and if you have projects where you can have a kind of financing with this rather shorter PPA cycles compared to the EEG tariff then And the market, the PPA market, still has, let's say, a reason for existence and can be profitable. So we are, let's say, we are on one hand confident that there are a bit more possibilities in the upcoming EEG. and we see on the level that we are currently seeing on the auction prices possibilities to boost projects that are going in with a with a lower with a lower tariff and then switching later on into a ppa with a higher return in in the projects so it's both i would say okay okay thank you and yeah sort of connected to that the second question um in the in the may tender i

think we were awarded for two projects i think one in brankenburg and lower saxony at about 5.1 cents kilowatt hour so you know obviously a relatively low price um and we have already discussed that countermeasures are necessary to develop projects profitably under these terms. And maybe based on these two cases, can you describe what you are doing differently now to ensure their success? And I'm thinking of renegotiating these terms, maybe also renegotiating with turbine manufacturers.

So maybe on these two examples yeah it would be interesting to see you know what what is changing you know what what you are doing differently now that you have to live with this 5.1 cents yeah thanks it's of course a very low level compared to the recent years what we are doing mainly in order to still be successful in those tenders is that one is a certain goal that we internally have is really only the best projects will survive and the question is how we do this and we do and this is really a team and and department following this we do consequently value engineering in the project so we early on really turn each stone of the whole business case coming from from development capex and the opex side and that includes some of the the points that you have mentioned in order to not just renegotiate yes this is one element but really improve at the end of the day the output in terms of turbine choice in terms of setting up and micrositing so there are many many elements the main point is you have to do this very early on which we are doing in our stage gate process and with that we are confident that we are that we still can participate with profitable projects on that low level however of course the level is very low and there's a lot of pressure in all these elements especially on the capex side when when talking to all the stakeholders involved all right very clear thank you thank you as a reminder if you wish to register for questions please press star and one on your telephone there are no more questions registered i would like to turn the conference back over to mr wood care for any closing remarks thank you yeah thank you um well if there are no further questions we would like to thank you for your participation in today's webcast we look forward to welcoming you next time maybe at our next webcast on the publication of our quarterly statement for q3 2026 which is scheduled for the 12th of november 2026. so have a great day bye