Aker Carbon Capture ASA (ACC) Earnings Call Transcript & Summary

Good afternoon, and welcome to the presentation for Aker Carbon Capture's results for the fourth quarter of 2022. My name is David Phillips, Head of the U.K. and Investor Relations, and I'm joined today by my colleagues, Valborg Lundegaard, our CEO; and Egil Fagerland, our CFO. First, Valborg will take us through our main achievements and developments from the fourth quarter of this year, and we'll run through a number of topics that are important to our strategy. Then, Egil will take us through our key Q4 financials, including some outlook commentary for the rest of the year. And finally, we will take your Q&A by the online system. And just as a reminder, you can post your questions into the system at any time. And at the end, we will try to work through as many of them as time allows. So Valborg, over to you.

Thank you, David. This is the agenda for our presentation today, following an active and interesting fourth quarter. We will address the highlights of the quarter, our operations and business development, the delivery models, the financial highlights, finally, a summary of 2022 and the way forward, and then we will move to Q&A. But first, before we start with the highlights from Q4, we have a short introduction to the company. Aker Carbon Capture is a pure-play carbon capture company, with the strength of the Aker Group behind it. Our proprietary patented technology has been developed over 20 years and is validated to close to 60,000 operating hours and verified across several applications. Aker Carbon Capture technology is cost and energy efficient, robust and flexible, meaning it can be applied to existing parts or new build. The process uses a biodegradable mixture of water and organic amine solvents to absorb the CO2 and has a market-leading HSE profile. Since mid-2020, Aker Carbon Capture has focused on the European market with Scandinavia, Benelux and U.K. leading the way. We also note increased policy support and early-stage corporate activity around CCUS market in North America. We continue to prioritize 4 market segments where our technology has been tested and verified, cement, bio and waste to energy, gas to power and blue hydrogen. And we are also seeing good engagement with a number of additional segments where our technology is well suited to capture CO2 such as refining and process industries. Now the highlights of the quarter. There are 2 large carbon capture projects under construction in Europe today. Aker Carbon capture is delivering both. Brevik CCS, the world's first carbon capture plant on a cement facility where more key equipment has been delivered and installed. And Twence CCU, a modular carbon capture plant on a waste-to-energy facility when last weekend, the columns have been installed. In addition, we are the carbon capture provider to a consortium of Aker Solutions, Siemens Energy and Altrad Babcock for 2 FEEDs in the U.K., both mega scale gas to power plants with carbon capture, bp Net Zero Teesside Power and SSE Keadby 3. Both developments have been shortlisted for Track-1 funding. When we look at new potential work, we have signed a letter of intent for the delivery of 2 modular Just Catch. In the U.K., we are partnering with waste-to-energy company Viridor, to deliver a pre-FEED study on the Runcorn CCS project. We are also expanding into new industries and countries by winning studies for St1 in Finland and Rohm in Germany. The mobile test unit campaign for smelters in Rana, Norway was officially inaugurated in January. This pilot is part of the CO2 Hub Nord where the participants include Elkem and SMA Mineral and have the potential to capture up to 2 million tonnes of CO2 annually. When we look at our financial results, I am happy to share that through the past quarter, we have seen continued revenue growth. Overall revenue for the fourth quarter was NOK 239 million. We have a robust cash position at NOK 1.1 billion. Despite the war in Ukraine and the consequent energy crisis, political and corporate efforts to fight climate change remains strong. These efforts are exactly why the level of activity at Aker Carbon Capture continues to be high. I'm proud to announce that we have accelerated our market activity in the fourth quarter of 2022. First of all, we signed a letter of intent for the delivery of 2 Just Catch for a large carbon capture project with a planned capacity of 200,000 tonnes per year. The concept with 2 Just Catch in parallel demonstrate the cost and schedule attractiveness of this standardized and modularized product. Secondly, we became Viridor's partner on a pre-FEED study for the Runcorn CCS project. This project is shortlisted for U.K. Track-1 funding and has an impressive capture capacity of 1 million tonne CO2 per year, a clear addition to our strong U.K. market presence. Thirdly, we are entering into new regions and industries by winning 2 studies: a Power 2x study for energy company St1 with a captured CO2 from Finnsementti's cement plant will be used for the first renewable synthetic methanol project in Finland. We also secured a study for the development of 2 carbon capture plants for Rohm, a leading German chemical manufacturer to capture up to 500,000 tonne per year. Given Germany's new CO2 strategy, which could be announced later this month, our collaboration with Rohm couldn't be more timely parity. For us, bold innovation within energy optimization, is a critical component to deliver on our CCUS prosperity ambitions. Aker Carbon Capture has developed solutions for minimizing the net energy use. As a baseline, using the industry reference, MEA solvent and with no heat integration, the external energy demand is about 4.1 gigajoule per tonne CO2 for capture and liquefaction. By using waste heat from the carbon capture process, Aker Carbon Capture offer solutions where the external energy demand can be reduced to 1.6 gigajoule per tonne. Its excess heat is available from the emitting part, the external energy demand can be further reduced through heat integration to 0.8 gigajoule per tonne. This significant reduction in net energy use has a major impact on the overall cost of carbon capture. If you want to learn more about Aker Carbon Capture solutions for energy optimization, please follow the link on our website to the Technology Day that was held in London in January. Now we move on to look in more detail at our operation and business development. Maturing our technology and products has been an essential part of our journey, scaling from a pilot plant to an industrial size plant was demonstrated already in 2012 when we delivered the Technology Centre Mongstad in Norway, with a capacity of 80,000 tonnes of CO2 per year, 80x the size of the mobile test unit. Through standardization and modularization, we can deliver a similar size plant, just cut of 100,000 tonnes of CO2 per year to Twence with a reduction in footprint and cost of close to 90% compared to the plant from 2012. In addition, we are delivering a Big Catch, Brevik CCS, 4x the size of the Just Catch and FEEDs for 2 mega-scale carbon capture facilities for gas power plants in the U.K., each 5x the size of the Brevik plant. Our technology is proven, scaled and industrialized. Let's have a closer look at these project. The mobile test unit was built in 2008 and have since then been upgraded in accordance with our latest technology development. Aker Carbon Capture can therefore offer our customers a unique opportunity to test our technology at their site and derisk their project prior to full-scale CCUS implementation. The mobile test unit is now in Rana, Norway and a test campaign for Elkem Rana and SMA Mineral smelters has started. The pilot test is part of a larger R&D project, CO2 Hub Nord. The main goal of the project is to verify the technology on real industrial gases from smelters and other process industries in order to prepare for a full-scale plant. CO2 Hub Nord is a collaboration between Elkem, Mo Industrial Park, SMA Mineral, SINTEF, Alcoa, Celsa Group, Ferroglobe, Norcem, NorFraKalk, ACT Cluster and Aker Carbon Capture with full-scale implementation, 2 million tonne of CO2 per year can be captured from their combined emissions. Due to the high interest of test campaigns from our customers, we have started building a second mobile test unit, we will be -- which will be ready by the middle of this year. In the Netherlands, at Twence waste-to-energy plant in Hengelo, we are delivering solid progress. Key equipment has been delivered from our suppliers throughout the past quarter. Last weekend, all 3 columns have been installed reaching a new major milestone. Aker Carbon Capture is delivering a standardized Just Catch. This first-of-a-kind modular carbon capture project is on track and will start capturing 100,000 tonne of CO2 per year already from the end of this year. The Twence CCU will reduce CO2 emissions associated with the energy generation from the incineration of nonrecyclable waste. The captured CO2 will be used as fertilizer in greenhouses, a unique example of circular economy. Also at Brevik CCS, we are making solid progress, having installed more key equipment such as the flue gas fan and direct compact cooler. All 9 waste heat recovery units have been installed. The columns, which you can see on this great picture have arrived Brevik 1 month ahead of schedule. The installation work will gradually accelerate as more equipment arrives. From next year, the plant will capture 400,000 tonne of CO2 per year. The Brevik CCS project is part of Longship, a full CCS value chain development and the largest climate project in Norwegian industry ever. The cement industry represents 6% to 7% of the global CO2 emissions, and CCS is a key solution to decarbonize this hard-to-abate segment. Through the Brevik CCS project, we help to create local employment and establish strong partnerships with local companies and other stakeholders. This delivery model is scalable also for other carbon capture projects. In the U.K., we are the carbon capture provider to a consortium of Aker Solutions, Siemens Energy and Altrad Babcock, for 2 FEEDs, both mega-scale gas to power plants with carbon capture bp's Net Zero Teesside Power and SSE's Keadby 3. Both developments strengthen energy security in the U.K. and has now been shortlisted for Track-1 funding. Keadby 3 received planning permission, the first carbon capture power station in the U.K. Each of these carbon capture facilities will have the ability to capture up to 2 million tonne of CO2 annually. Siemens Energy is providing cutting-edge gas turbine technology for the plant, which heats, will have a generating capacity of around 900 megawatts. As mentioned before, we have partnered with Viridor in a pre-FEED study for waste to energy of Runcorn CCS projects targeting 1 million tonnes CO2 per year. These FEEDs are crucial steps forward for Aker Carbon Capture in terms of further cementing our carbon capture business in the U.K. U.K. has an ambitious CCS strategy and aim to capture 20 million to 30 million tonne CO2 per year by 2030. A CCS infrastructure fund of GBP1 billion has been established to reach these targets. Aker Carbon Capture's proprietary technology is based on post-combustion capture. Our technology is cost and energy efficient, robust and flexible and has been verified across a number of emitting industries. There are other types of carbon capture technology in the market. But many of these address rather different markets to the industrial hard-to-abate emissions that we focus on. From a high level, we see the capture market in 6 categories: CO2 from fermentation, CO2 from cleaning up natural gas, various pre and post combustion approaches and direct air capture. When we analyze the future potential market for the carbon capture industry, we see by far the largest share fitting into the post-combustion capture category. Now there are a few industries that could fit into more than one category. But even after that, the post combustion addressable market is, by some distance, the largest. We have set an ambitious target to secure contracts to capture 10 million tonne of CO2 by 2025, or 10 in 25 target. In order to better reflect our activity status, we visualize the progress towards this target across 4 categories: secured development contracts, tenders for development contracts and secured FEED contracts, pre-FEED studies and mobile test unit campaigns. And finally, prospects. Here, the 0.5 million tonne represent our already secured contracts with Norcem and Twence. Then the tenders and FEEDs now 8.1 million tonne, which reflects Net Zero Teesside and Keadby 3 as well as ongoing tender activity for development contracts. We've seen continued growth in pre-FEED studies and mobile test unit campaign. This category now totals 12.2 million tonne. Now our CFO, Egil Fagerland, will take us through our delivery models and financials.

Thank you, Valborg. We have 2 main product offerings, Just Catch and Big Catch. The Big Catch can handle from 400,000 tonnes of CO2 per year and up to several million tonnes per year. The standardized Just Catch comes with a modular capacity of 40,000 and 100,000 tonnes. Several just catch modules can be installed in parallel trains and allow higher total capture capacity, up to 300,000 tonnes of CO2 per year before a Big Catch module would make more sense. The Just Catch is also available in the larger modular design for offshore gas turbines on FPSO vessels and platforms. We can deliver all of these products on an EPC basis. And for Big Catch and Just Catch and the Just Catch offshore, we can also offer a license model with key equipment. And as a rough guidance, you could expect a license and key equipment contract to be in the size of around 1/3 of a full EPC delivery, but with a higher margin potential. Our standardized Just Catch is the key to our carbon capture as a service offering. And as a final reminder, we do offer aftermarket services to all our clients across all our products. Since the third quarter of 2021, we've shared quarterly updates for the estimated levelized cost of the full value chain carbon capture as a service offering. These figures, which are based on a European delivery model have been adjusted to reflect the current market conditions. The overall range is unchanged since last quarter at a range between EUR 75 and EUR 175 per tonne. However, compared to the update shared with you around this time last year, the combined range has increased by between 10% to 15%, mainly driven by market conditions and energy prices across Europe. The CapEx for the Just Catch plant, including liquefaction, temporary storage and financing remain within an estimated range of EUR 30 to EUR 45 per tonne CO2. Since we're currently delivering a Just Catch 100 unit for Twence in the Netherlands, we have recently placed purchase orders and started fabrication and installation, which confirms that we're delivering CapEx within this illustrated cost range. We've also been able to validate this range in recent tenders. The OpEx for our Just Catch unit, which includes solvent supply, energy, digital operations center, labor and maintenance covers a range of EUR 15 to EUR 55 per tonne, driven mainly by higher long-term energy cost expectations. And energy is the single largest component of this range. And our engagement with customers through studies, test campaigns and tenders has allowed us to identify several opportunities where it is possible to utilize excess heat or implement waste heat recovery systems. And as Valborg shared with you earlier in the presentation today, energy optimization through our innovative heat integration and waste heat recovery systems can significantly reduce the energy consumption and have an impact on the overall OpEx cost. If we apply the current high energy price forecasts, on the opportunities with no excess heat to utilize in the process, we would see the OpEx fall in the higher range of this bar. However, we see that most of our targeted prospects fall within the middle of the EUR 15 to EUR 55 per tonne range due to available heat. Then the highest range we see for transportation and storage. It's ranging between EUR 30 to EUR 75 per tonne. But please note that this is what we currently see for Europe with marine transportation. In North America, indications are that this range can be significantly lower due to CO2 transportation via pipelines, both offshore and onshore. The most attractive projects we see are typically located in hubs close to the permanent storage site, where lower cost for transportation can be applied. Then the EUA or the EU ETS as towards the end of 2022 been less volatile due to the reason reduced uncertainty around the political interference with the ETS system. The EUA now stands at around EUR 90 per tonne. And although we have seen a short-term volatility through the last year, the long-term outlook remains sound and analyst carbon price forecasts by 2030 continue to be in the range of EUR 80 to EUR 165 per tonne. And this is supported by the IEA's recent World Energy Outlook report, which based on net zero pledges, expect a carbon price at EUR 135 per tonne in 2030. These prices still compare with a range for the levelized cost of carbon capture as a service where some projects are already economically viable above EUR 75 per tonne without any help from government funding. However, it is dependent on good transportation and storage systems. In addition to rising carbon prices going forward, we expect the EU Green Deal Industrial Plan and the U.S. Inflation Reduction Act to provide an overall better access to funding for CCUS. Combined with the implementation of the EU taxonomy, the overall fundamentals for seeing increased investments in CCUS is getting stronger. I will now take you through the key financial highlights of the fourth quarter before we move on to a summary by Valborg and then a Q&A. Bear in mind that all the numbers that I mentioned are in Norwegian kroner, and we'll start with the income statement. The overall revenue for the fourth quarter was NOK 239 million, which is up 85% compared to the same period last year. This reflects the periodic progress related to the Brevik CCS and the Twence CCU projects. The FEEDs in the U.K. with BP's Net Zero Teesside Power and SSE Keadby 3 and also activity on CO2 Hub Nord with the MTU campaign for Elkem. Our reported fourth quarter EBITDA was negative NOK 47 million, which is an improvement of NOK 19 million compared to the same quarter last year. The EBITDA now includes profit recognition on the Twence project, which started in Q4 after placement of the site installation purchase order and good progress. Both the Twence and the Brevik projects are now recognizing profit and are expected to continue to deliver positive results through 2023. The overall EBITDA continued to be driven mainly by high sales and tender activity and R&D projects. And the efforts that we currently invest in our business will have a significant future value. And for some of them, they qualify for capitalization, which we see as fixed assets and intangible assets in our balance sheet. In the balance sheet, our fourth quarter net current operating assets ended negative NOK 333 million, which represents a continued positive cash position on our key projects. The overall operating assets and liabilities or net capital employed, which includes fixed assets and intangible assets, was negative NOK 216 million. This shows that both our short-term and our long-term business activities are funded by our net working capital position. And we continue to have a healthy cash position at NOK 1.1 billion, which could cover all our liabilities 2.6x. The derivative financial instruments are related to projects where we hedge our currency risk. And finally, our equity remained strong at NOK 0.9 billion represented -- and this represents a 68% equity to asset ratio. We started the quarter with NOK 1,373 million in cash and cash equivalents. Through the quarter, we saw an overall cash outflow of NOK 280 million. The main driver was vendor payments on our key projects represented by a NOK 205 million net current operating asset cash outflow. The loss before tax was NOK 42 million, which is in line with the EBITDA and the interest income in the quarter. And CapEx was NOK 39 million, mainly related to standardization and modularization of our product portfolio. In addition, we are capitalizing the construction of our new mobile test unit. In total, cash and cash equivalents ended the quarter at NOK 1,093 million. And these were the highlights of our historicals. Now let's have a look at the time ahead. So we outlined some key figures concerning our outlook, and these remain broadly in line with what we have shared with you in previous quarters. First, our backlog ended the fourth quarter at NOK 1.3 billion. And by year of execution, we see this work roughly phased at NOK 1.1 billion in 2023 and around NOK 200 million in 2024. Please note that the letter of intent for the 2 new Just Catch units, which was announced 3rd of January 2023 is not included in the backlog phasing, and we will only include such order intake once a firm award has been announced. Second, our operating expenses. For the fourth quarter last year, we saw our salary and other personnel costs and other operating expenses together totaled around NOK 65 million. Excluding salary and personnel costs belonging to our projects, we expect these costs to remain around similar levels with a significant flexibility as we move through the next 6 months. And third, we continue to show a strong liquidity position, ending the quarter with a net cash position of NOK 1.1 billion. Through the first half of 2023, we expect to see a cash strengthening. However, towards the end of the year, we expect to see some of this cash flow out again as our project portfolio matures and our current favorable net working capital position is consumed. Please note that these comments do not include any assumptions for cash spend on M&A or additional investment opportunities that might arise going forward or any positive working capital effects from potential new contracts. Now back to Valborg for a summary.

Thank you, Egil. Now let me share with you a summary of 2022 and the way forward. 2022 has been the year of progress and partnership. We have made strong progress on existing projects and secured new contracts. There are 2 large carbon capture projects under construction in Europe today. Aker Carbon Capture is delivering both. Brevik CCS, the world's first carbon capture plant on a cement facility and Twence CCU, a modular carbon capture plant on the waste-to-energy facility. In the U.K., we are the carbon capture provider to a consortium of Aker Solutions, Siemens Energy and Altrad Babcock for 2 FEEDs, both mega-scale gas to power plants with carbon capture, BP Net Zero Teesside Power and SSE Keadby 3. Viridor selected Aker Carbon Capture as partner for a pre-FEED study for the large Runcorn CCS project. All these FEEDs are crucial set forward in terms of further cementing our carbon capture business in the U.K. We have delivered a high number of studies to our customers. And we end the year with tenders and FEEDs representing 8.1 million tonne of CO2 per year. We deeply believe partnerships are crucial to grow the CCUS industry. We have, therefore, continued to mature and strengthen our existing partnerships with companies like Siemens Energy, Man and Carbfix. And we have established new partnerships with a number of CO2 transportation and storage providers to offer our customer the full CCUS value chain. In March, we entered into a unique partnership with Microsoft to pursue joint innovation and services to accelerating deployment of carbon capture. All these steps represent the successful work of our employees, and I am extremely grateful indeed for their focus and deterrent work throughout the year. We have set a clear direction to position for the huge market ahead of us. We have prioritized European market and 4 market segments: cement, bio and waste to energy, gas to power and blue hydrogen. We see opportunities emerging in North America and in other industry segments such as refining and process industry. Our proven technology is market leading. We will further improve energy efficiency and capture an increased focus on new technologies. Through standardization, modularization and digitalization, we are expanding our cost-efficient product portfolio. Collaboration with strategic supplier is an important part of this journey. We will continue to offer EPC and license models, followed by long-term service agreements. We are also bringing the full CCUS value chain together through carbon capture as a service. To meet the expected rapid growth in the market, we will continue to build strong partnership. And finally, we are building our company to committed people driving in a collaborative and innovative environment. We are in a strong position to make a positive impact on our planet and contribute to creating a sustainable future. Thank you. And after a short video, we will move to the Q&A section.

Welcome to the Q&A section of our fourth quarter results presentation. I'm joined with Valborg and Egil. Thank you, everyone, for already putting a good all the questions into the system. As a reminder, if you -- you can enter more questions at any time. So please do keep them coming in, but we have a good list here already. So let's say in short time, kick things off. So first question, from John Delos Santos from Redburn. Aside for the projects that have been previously announced, what else has -- is behind the growth in our tenders and FEEDs and pre-FEED pipelines?

I think this large growth up to 8.1 million tonne per year in FEEDs and tenders really reflects that we are now moving closer to storage being available in Northern Europe. We see now Northern Lights being in operation already from next year on. And then there's a lot of other storage projects also coming on stream. And with the storage project, we also see the hubs developing. And what we experienced, for instance, in the U.K., where we have Humber and Teesside and also hub around HyNet, that there are a number of new emitters now looking into how they can tap into this existing infrastructure.

So I think it's a very important point. I think in the tenders and FEEDs growth, a big chunk of very roughly 2/3 of the additional activity being put in the chart in our fourth quarter presentation is from the U.K.

Yes, lots of activity in U.K. Yes.

Absolutely. Moving on, from James Winchester, Bank of America. Can you talk about the time line for U.K. Track-1 financing. It looks like it's getting pushed back. What's the risk if this keeps happening. And in the worst-case scenario, how would this affect our 10 in 25 target if the U.K. funding didn't go through?

Well, we are now in the last phase of our FEED contracts and are ready to move forward into more tendering phase. When the actual final investment decision will be made is really up to the customer, but not only the customer, but also here, we're talking about the new Ministry of Energy Security and Net Zero, which I believe it's being called and there is a process ongoing. And -- but we are ready from our side.

Yes. So actually, just worth -- I mean this is something that you have to keep your eye on by looking at lots of government websites. But as a reminder, this is currently in the House of Lords and very soon in the next 1 or 2 months going into the House of Commons. And then the expectation is it comes out during the summer. And then the next steps happen. But really, this very much is in control from the government and from the new ministry and also from our clients as well our customers. But the most recent comments are still very supportive. It's very clear that CCS is front and center in terms of the U.K. Net Zero policy. And Egil, maybe just in terms of the scenario, if in a worst-case scenario, how would we think about this 10 in 25 if the U.K. didn't deliver.

I think given the opportunity pipeline that we are showing right now, there are coming more and more backups to those projects as well. And as you see, the tendering and FEED pipeline is growing. So I think we have a decent group of other prospects and opportunities that came backfill.

Absolutely. And of course, North America, which we have not I'm sure. I've already seen it mentioned many times in some questions down the list here, so I'll sure come on to that in a moment as well. Just want to back to the U.K. again. If U.K. just go through in the first quarter of next year, given our work on the pre-FEED with Runcorn, does it give us enough time to get the engineering work done by that time frame?

I think in general, like Valborg said here, we are now nearing the completion of our FEEDs, and we are ready to go. And we follow the client pipeline when projects come along and deliver on that.

Absolutely. One working capital question, which again, I think is a very popular one today. Can we give some color on the order of magnitude for working capital outflow in 2023?

Yes. So what we're seeing now is that through the next couple of quarters, we will see a strengthening of the cash balance in the company related to inflow. But towards the end of the year, last 6 months of the year, we will see an outflow and that will be in the order of magnitude of the net working capital position that we have, plus/minus new activities coming in and so forth. But NOK 300 million to NOK 400 million is what we see.

Yes, absolutely. And the last one, as James does say, testing is luck, 2025, if we achieved 10 million tonnes, target EBIT margin I think we all know the answer to this one already, but...

Yes. As we've shared the earlier quarters, we are not going to start guiding on this on our margins just yet, and it's too early to say and too many moving pieces in terms of new markets, new opportunities and where this will go.

Absolutely. Moving on, [ Christopher Bulkin ] a very short question. Our forecast for revenues and net profit for 2023.

So when looking into 2023, what we can say is that we provide our backlog phasing, and we are phasing NOK 1.1 billion worth of work in 2023. And additional new projects could contribute to that, but the secured work we have is NOK 1.1 billion expected this year.

Yes, absolutely. And we don't value any further down the P&L in terms of any guiding or any comments whatsoever. So moving on, [ Turner Holm ]. Last 4 quarters, it's very difficult to work out any breakeven turnover for the company. What can we say about our average gross margin for our Just Catch and Big Catch and so on? And when do we think we might have the first FEED on the Just Catch offshore. Maybe to take the gross margin one first.

I think, again, I have to say, we don't guide on these margins. It's too early to say. We have said before, and we can say again that for some of these projects, it's a ticket to enter the market now. However, we do see a favorable effect from delivering a standardized solution like the Just Catch. And when it comes to when these will be breakeven, we don't guide on that.

No, certainly. And of course, from a company level, the breakeven also reflects our own position in terms of personnel costs, how much we grow ahead of a growing market and so on. So it's -- yes, a lot of moving parts is an easier way to answer that. Just Catch offshore, Valborg.

Yes, we've done a number of studies for Just Catch offshore in various regions. And now DNV has qualified the product. So we are really ready to move forward. And with the growth that we see within the oil and gas industry these days, I'm very optimistic that we soon will see a FEED for Just Catch offshore.

Absolutely. Moving on, Nikhil Gupta from Citigroup. So the first question is around the U.K. again. I think we mentioned this already. There's a lot of known to unknowns. I think as a phase goes in the U.K. policy radar screen. But as we talked about, the main bill is soon moving into the House of Commons in the U.K. And then the expectation is that will -- during the summer, it will appear and then a little bit will pass through the system and then the next steps come. But further than that, it's very hard to say. And I think we'll be unfair of us to speculate too much at the moment. A financial question, Egil, about salary and personnel cost. It did decrease in Q4. Is this phasing linked to construction or something else?

Yes. I think I have to look at both the salary and personnel cost line and the material goods and service line a little bit in together. So when we report these lines, the personnel costs related both to our overhead personnel but also our projects is split out on the personnel line. So right now, we have projects in a heavy procurement phase and also some of them into installation phase, you've seen in the presentation today, pictures of Twence lifting up columns. So there are effects of that impacting these numbers now that we have a more procurement and construction heavy phase.

Absolutely. Okay. So moving on to Victoria from RBC. Just questions around the LOIs we talked about, the 2 Just Catch. Are these awaiting EU funding commitments?

Well, we cannot go in detail into this letter of intent, but we are really pleased that we have a customer who's decided to select our Just Catch concept. We've seen a very good progress with the trends we now can demonstrate that we can deliver within less than 2 years. So hopefully, we will see a final investment decision soon. And based on the experience in Twence, we are ready to start.