Q2 prelims: Another beat-and-raise, estimates now look conservative

Research evidence excerpt

Q2 prelims: Another beat-and-raise, estimates now look conservative

July 22, 2026

Valuation

• We value VH2 using a DCF to best capture its long-term, infrastructure-driven cash flow

profile, supported by multi-year federally funded investment programmes, decade-long

grid and hydrogen project pipelines, and execution visibility through a >1.5x sales order

backlog.

• Peer multiples overlook VH2’s structural value, as near-term earnings are dampened

by project phasing and capacity ramp-up, while the benefits of rising tender activity,

post-2027 margin normalisation and operating leverage materialise gradually.

Risks

Customer and contract concentration risk. VH2 remains heavily dependent on a small

group of German transmission operators (e.g., TenneT, 50Hertz, Amprion). Delays,

reprioritisation or regulatory changes within major grid or pipeline programmes could

materially affect order timing and short-term revenue visibility.

Tender and budget timing risk. Large public-sector infrastructure projects are exposed to

political, regulatory and permitting cycles. Slippage in releasing tenders (e.g., Hydrogen

Core Network, Spessart–Odenwald) or changes in federal investment pacing could defer

order intake and shift revenue recognition into later periods.

Execution and capacity risk. The thesis relies on VH2 scaling execution capacity through

10%-12% annual headcount growth. Persistent labour shortages, slower onboarding of

skilled engineers or bottlenecks in subcontractor availability could limit VH2’s ability to

convert backlog and deliver the expected 21% sales CAGR into FY27E.

Project mix and margin risk. Near-term profitability is diluted by lower-margin projects

such as A-Nord (c.11%-12% EBITDA margin). A higher proportion of similar contracts or