Cadeler A/S (CADLR) Earnings Call Transcript & Summary

Good day, and welcome to the Cadeler Business Combination Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Peter Brogaard, Chief Financial Officer. Please go ahead.

Thank you. Yes, this is the CFO, Peter Brogaard. And together with me, I have Mikkel Gleerup, the CEO of Cadeler. Thanks to everybody for joining. The format here is that you have to go into our website to get the investor presentation that we are going to present right now. So I have to ask everybody to go into Cadeler.com. I will do it a little bit slow, so everybody has a chance to get the presentation before we start, Cadeler.com. And then going to Investor Relations, and then you scroll down, to the right, you will see EU Prospectus. And below that, there is the exchange offer. Please click on the Exchange Offer documents, scroll down. There, you will see all the documents related to the exchange offer. And the last item is the Investor Presentation that we will now run through. Please read through carefully Page 2 and 3, which is the important information about our forward-looking statements, et cetera. I will turn the floor to Mikkel.

Yes. Thank you very much, Peter. We have crafted a presentation for you guys, which consists of 4 different elements, and we will start with the introduction to Cadeler. Then we will look at the combination overview. Then there will be a point about the company and the financial update. And then last but not least, a market outlook. But we'll be starting here with the introduction to Cadeler. So what is Cadeler? Cadeler is a leading supplier in the offshore wind industry. And we are a company that was founded in 2008, and was operated under the name Swire Blue Ocean from 2010 to 2020. In 2020, we listed under Oslo Stock Exchange, and also changed our name from Swire Blue Ocean to Cadeler. We are headquartered in Copenhagen in Denmark, and we have currently a market capitalization around EUR 600 million. The 2 largest shareholders of the company is the BW Group with 30.84% and Swire Pacific with 15.11%. Over the course of the time since we have listed the company, we have successfully raised EUR 380 million in new equity to fully finance the equity portion of our 4 newbuilds that we have on order from COSCO, Qidong in China. As you know, we signed a business combination agreement with Eneti to create a leading offshore wind turbine and foundation installation company, with increased scale, track record and competence, significantly strengthening our client value proposition. As I said, we have 6 offshore wind turbine vessels, where 4 of them are under construction. All of them are able to install what we call the plus +20 megawatt next generation turbine. The O-Class vessels that we currently have on the board have been delivered in 2012 and 2013, and they are actually, as we speak, undergoing crane renewal projects in the Netherlands. And we have a small slide about that later in the presentation, but that's a very interesting project. On top of this, we also have 2 X-Class vessels that are being built at the moment, set for delivery in Q3 '24 and Q2 '25. We also have 2 X-Class foundation installation vessels to be delivered in Q4 of '25 and Q3 of '26. As a company, we have installed 8.3 gigawatts of offshore renewable energy since our establishment. We have done 528 foundations in total, and we have done 668 turbines. And currently, we had an order backlog of EUR 1.334 billion. Next slide. So what has defined Cadeler's routes to where we are today, and why do we think that the merger with Eneti is the right thing to do for both companies. I think that, at the first instance, when we started the growth journey, we really focused on growing the fleet, both when there was an opportune time to do this, but also when the prices were at the right point. That happened a lot with newbuild prices over the last years. And we do believe that the orders that are -- that we have are very, very attractive, both in terms of size and pricing, and hence, a good foundation for the combined company. We have had a strategic focus on the largest vessel designs. We believe that efficiency is really the driver in the industry and being able to complete projects fast, efficient and on budget, that is really what the clients are looking for. We have a robust backlog. We have deliberately decided to move ahead on quality projects and put them in the backlog. And we believe that, that is also a robust foundation for the combined company. To have a solid backlog would work well out into the future, which gives visibility for the company going forward. We have also decided not to be a first mover in the American market due to -- at that time when the market started, we found that the economics around the projects in the American market was not attractive. And also, hence, we said to the market that we were taking a backseat approach. And I do think that, that is something -- that is serving us well today because we do not have an exposure to the American market as of today. What I would like to add to that is that now, since the market is changing a lot, there are opportunities coming in the market. And I think that also the clients in the market have started to look differently at what risks can be fairly distributed to contractors and also what prices we are working for in that market. We also decided to widen our business scope and go into the full T&I service for the foundation installation of offshore wind farms. We also said that we are not going to do the full EPCI projects, but we certainly focused on the T&I, transform and installation for foundation installation, and secured our first large-scale T&I project in foundations in April of this year with Ørsted in Denmark. And then, what we call a transformational combination with Eneti, building really a solid company with a lot of fleet diversity and a lot of different capabilities and a very, very strong team, which we believe will create solid value to both our clients and our suppliers going forward. Next slide. So really, what we are aiming at is to make a transformational strategic combination, creating a larger company with a market cap approximately at EUR 1 billion, and a company that will be dually listed both in Oslo and New York with unique fleet and capabilities. And we do believe that both companies are quality companies, but also very much that we are stronger together. We will be looking at a fleet of 10 jack-ups with various capabilities, working in various segments of the offshore renewable industry, both across segments like wind turbine installation and foundation installation and the operations and maintenance of the turbines. And we do believe that, that large and more diversified fleet is really offering a very, very solid value proposition to the clients, and certainly not least, a degree of fleet redundancy that will be difficult to match and something where the clients currently are very, very concerned with the bottlenecks that we see in the industry. We are also enabling true global presence through scale, but also the presence that has been achieved by both companies in markets like Asia, the U.S. and also across Europe. And we do believe that the combined workforce of 616 people, we will be ready to take on the bigger and the more complicated projects of the future which is really what is requested by the market and the clients. And hence, we have also seen great support from clients during the phase since we announced the combination Eneti today, and continued from this point on. But also in terms of what the companies have done together, a very, very large portion of what has been installed has been installed by these 2 companies. So we are combining strength here. And also with that, we do believe that we can deliver very meaningful synergies in the companies going forward. Next slide, please. Now we move into the combination overview where we will talk a little bit about how we see the companies together. Next slide. So the transaction rationale, really strengthening the value proposition to the clients at a critical point in the offshore wind development. We do see that the demand outlook and the activity levels remain very strong and project terms are firming up. Although there has been a negative news in the market, especially centered around the U.S. market, we see activity levels across what we have seen historically. Also before news around the American projects came out, we continue to see very, very strong activity in the market and for the companies. We see around 43% expected annual global growth in demand, excluding China in the gigawatts to be installed from 2022 to 2030. We see an increasing demand for larger scope projects, including new regions, and that is especially the Asian market with Taiwan and South Korea driving this for now, but also with Japan and Vietnam and later on Australia, adding to this. We see higher value and more attractive project terms. We are able to generate very attractive financials on the assets, but also at the same time, we are able to protect the companies from the downside risks in doing project work. And we do think that we have, together, a very, very strong project pipeline and backlog with further available days, which I will discuss a little bit later in the presentation, but something we believe will be of value to the companies. And the scale and the competence and the commercial flexibility that we will be creating with this combination, really coming from the expanding fleet in the open capacity, where we do also believe that we can benefit from the favorable trends within the market, but also the work that will open up over the course of this decade, when projects potentially see delays or where supply chain bottlenecks will cause that you will need more activity at the end of the project pipeline. And we are going to show you a little bit later how we see that, that could be handled both to capture the upside for the combined company, but also how the combined company can protect itself from potential downside from any delays that would be on the course of the company. But also being a true global player, and it's something that is important for us because we will be able to follow the clients into the markets that they are building in. I think it's important to do this with a degree of prudence, and also ensure that the projects we put in the backlog are quality projects with very high certainty for execution. And I think also, as I said, that there is compelling price and delivery schedules on both sides versus entering newbuild agreements, and that is a benefit for the combined company. The value chain bottlenecks drive demand for larger companies with bigger and more diverse fleet. The transaction unlocks value for the clients through increased redundancy required to minimize risks of project slippage. And this is really, if a project sees delays on the scope of work that is not relating to the Cadeler or Eneti company, then we will see that the clients would be potentially to have more days available after the project program in the contract has completed. And there we believe that with the fleet and diversity we will have in the fleet and the organizational capacity also to handle changes, we do believe that we are a very, very strong partner for our clients, and this is something we have definitely heard, reflected from the clients also in the last 4 months, and something they really appreciate. I think also in terms of adding meaningful value creation and synergy potential for the investors of both Cadeler and Eneti, this is something that is of very high importance to us. And having gone through more in detail these opportunities since we announced the combination agreement, I think that from our point of view, we are today even more confident that we can deliver these synergies and the value to our investors. We do believe that it will also result in increase investor attention, and this is something we, I think, we have seen already from the meetings we have had and also enhanced trading liquidity as a result of the greater market capitalization and the dual listing for the companies. And also, the stronger anticipated credit profiling expected to enable improved access to capital and at a lower cost. And I think Peter will talk a little bit about this, but something we have already seen in the period until now. Next slide, please. In terms of demand outlook and activity, as I said, it remains very, very strong. We look at a very, very strong development over the course of the coming years. And also, the backlog will continue to strengthen for the companies. And I think that for what we have seen in the recent awards, we have seen Eneti announcing some contracts, and we have highlighted a few here, but where the project terms are really attractive. And also the Cadeler T&I contract for foundations, where we also think that this really shows what these vessels can do if operated by a strong combined company. And this is really across the fleet. So we do believe that with the outlook that we see, we will add very solid quality into the backlog and also keep a degree of work open to capture the upside of the market. Next slide, please. No doubt about that there has been some news in the market over the last month that has given some headwind to the industry. But I think it's important to focus on that there has never been a higher announced wind capacity out there, but also that these value chain bottlenecks drive really the demand for the larger companies that can be flexible when things doesn't go to plan. And with what we see and what the supply chain has to deliver over the course of the coming years, especially now with something that the Round 5 in the U.K. having no bidders with all these projects coming into round 6. With all the round 6 projects, it is really important to be able to serve clients with a very, very high degree of organizational capacity, but also fleet utilization because this is the only way we can ensure that this is being built on time and on budget for us as a company. Next slide, please. As I've said a few times, I think that the combined company is really at a unique point to address the challenges of the industry, and this remains one the key focuses for the company going forward. We will be operating one of the most diversified fleets in the sector, and really this will add value to the clients. And as we see here, operating 4 of the existing assets and 6 newbuilds, there will be a total jack-up fleet of 10 vessels. And this really means that we are able, as a company, to rightsize the vessel for the right project. And hence, we are also starting to already now look to projects where we are telling the client that we will execute that project with a capable asset rather than a named asset. We do believe that, that flexibility should sit with us to ensure that we can build as much as possible renewable energy and also solve as many challenges for clients as possible. We will be cross-utilizing fleets, and we will be operating vessels in parallel. We will also capture synergies with regard to secondary field components on the foundation installation. This is a scope that fits also with the T&I provider. And there, we believe that the smaller vessels will be able to add a lot of value and also earn their own remit, so to speak, in the fleet. Scale to allow for true global presence, to be able to supply our clients in new markets, follow them there, have organizational capacity to be managing risks in new markets in the right way, we do believe that, that's also a great value both to our investors, but also to our clients. And as I said a few times already, improving the utilization and fewer repositioning voyages, really means that we can work more days per year on the assets, and hence, the commercial synergies are apparent for the company. And also the ability to take on smaller projects, potentially of very high value between the larger projects where it will be very, very difficult for -- in the current setting of Cadeler, for example, 2 vessels, this is much more challenging. But having more vessels available, with ready sea fastenings will mean that we are able to take on these projects and really offer them to the clients as well. Next slide, please. Overall, the transaction to accelerated growth by 2 to 3 years, really because we are able to increase the fleet for the combined company earlier compared to ordering newbuilds and also to deliver on the cash flows associated with the bigger fleet earlier compared to ordering newbuilds. One of the things that we think is an attractive point of the merger is the available days in combination that we will be having. And we have, at this moment 0 concern about the utilization, but also believe that it is the best decision for the company and for our investors to be ready to support our clients when some of these challenges arise, and hence, keep some capacity open for the market that we are in with potential delays occurring from bottlenecks in the value chain. Next slide, please. As I've said a few times, we are looking at delivering around EUR 106 million of synergies, and we do see a clear pathway to delivering those synergies. The post-merger integration planning is on track. We have been working on it. We are working as 2 completely independent companies with watertight bulkheads between a lot of stock on us, but we have been working together on what do we do from day 0 and try to look at how can we get up to the best start. So really trying to utilize time to the benefit of the company without overstepping any borders on that journey. We are seeing that we can generate around EUR 18 million of corporate and financing synergies via reduced corporate costs, reduced management costs, optimized hiring plan, especially on the Cadeler side, and also improving financing terms, and I think that last [indiscernible] is a synergy that we are already starting to deliver on. Peter will talk more about that in his slides. Also on the operational synergies, where we will be much -- it will be much easier for the combined group to cross-utilize mission equipment, sea fastening and tooling, which will only mean that we will be more cost-effective for ourselves on the projects that we are embarking on because project cost is fundamental in this industry, but also in certain projects and certain occasions, we will be the go-to company for any spot work because we will be sitting on a very, very large chunk of tools and equipment that will enable us to go out and do work on a project with very, very short notice, whereas others would potentially have to first design, engineer, build and install the same equipment. We do believe it's a very, very strong synergy and something that we will also be focusing on delivering. And certainly, last but not least, the utilization and the commercial synergies, which we have estimated to around EUR 51 million. It is from reducing mob-demob time between the projects, really rightsizing assets and right profiling assets for different turbine types and maker types, but also having the right sea fastening already from the outset on the vessel, reducing what we have to do in terms of mob-demob. Using smaller assets for the secondary steel scopes and foundation installation and optimizing the fleet utilization via speeding up projects with 2 vessels in a [ later ] start potentially, or speeding up early with an earlier completion compared to what the developer is able to deliver equipment and so on and so forth. But also the working in parallel, which we already have started to dip our toes into at Cadeler. This is something we believe that will be much easier for the combined company and something we will do much more in the future in the combined company, and we will then see that the synergies will deliver as well. Next slide, please. We wanted to highlight the market dynamics between the floaters and the jack-ups. Over the last years, a lot of floaters has been built with the assumption that they would be installing foundations across both jack-ups [ constructions projects ] and monopiles. I think recent operational performance of the floaters have shown that for -- especially monopiles, they are less efficient than what was initially anticipated. And hence, we see that the request for larger and more capable jack-ups for monopile installation has gone up significantly. And for us, as a company -- as a combined company, we will have the ability to serve our clients with larger jack-ups that will support foundation installation, a very value-creating segment of the industry on a full T&I scale. The thing about this is that, that will take some of the vessels away from the turbine installation market, which will make that market more tight because no matter which report we are looking into, we are seeing that all jack-ups are basically counted at the moment for turbine installation. And in that scenario, it's already tight. But since we expect that some of the jack-ups will move from the turbine installation to the foundation installation, the turbine installation market is assumed to tighten further going forward. And that has an effect on the O&M space as well because in the O&M space, they are reliant on the best of the jack-ups that are not mostly attractive in the turbine installations space. But since we will see more tightening space in the turbine installation space, the O&M space is also expected to tighten further. And the O&M space is a space that is undersupplied significantly today, and where we see that clients are happy to go into very long-term contracts. And it is something that we are evaluating in terms of how this market is best served by this platform and in which settings and groups it is best served. But we do believe that all the 3 markets we are looking at here will be very, very value creating, both for investors and for clients around Cadeler. Next slide, please. On the next slide, we have tried to give a view on how we see that some of the commercial synergies with a bigger and more diversified fleet can play out. It's a simplified view because it is not -- it is actually not very simple to do this, but it is something where we want to give you kind of like a flavor of what we are thinking in terms of the installation speed and how you can do it. And we have shown a few here, both the standard installation with 1 vessel on how that would go in terms of time and project completion. We have also shown in a situation where we will exchange the vessel halfway through for another vessel, potentially a less capable vessel with the same sea fastening with little impact to the client or no impact to the client, potentially also enabling that we can complete the project even post the program because the other vessel has to leave. But also in a scenario where we add a second vessel because the project completion has been delayed due to, for example, too few foundations available, not enough progress on the foundation installation, not enough progress on delivering components from the turbine OEMs, but also a scenario where we have to start much, much later due to project delays, value chain bottlenecks and where we would have to work throughout the program with 2 vessels. But all really ending up with the same, and which is really the challenge for the client, ending at the right time so they can start generating power from that project and really protecting the project returns. This is something we believe will create a lot of value for the clients to work with a contractor who has an ability to be flexible, both from an organization point of view, to help the organization muscle to suddenly operate 2 vessels on the project in different scenarios potentially, but also accompanying with the assets rightsized for the project. And this is, of course, the upside because there's an upside for the company, for the combined company, but also should a delay potentially at some point in time derived from Cadeler, then we will also be able to speed up, and hence there's also a protection in this to the downside that we will be able to catch our own delay. And the way we construct contracts today, we are saying also that if we are able to catch up the program, then there's no penalties to the company. And hence, we do believe that there is a very solid upside potential here, but also potential protection towards the downside. Next slide, please. As I said, there's also the operational efficiency element, which is something we have looked into a lot over the course of the last 4 to 8 months. And we do believe that this will be a very, very attractive point for the company because here, we will be able to really reduce the mobilization windows, the demobilization windows and hence, create bigger windows for operations on the projects. It will enable us to bid for bigger projects that we would not be able to bid for in standalone mode, but it will also enable us to have a more or better project economics during the operational days because the project-related costs for the mob-demob period of time will be smaller in terms of actual cost to company. So hence, we believe that there is a very, very strong synergy in this as well, and something that we will be spending a lot of time and developing a lot of data on how we do this best in terms of having a pool of equipment and a very, let's say, forward-looking fleet utilization plan that ensures that this is really effectuated into the market both to the benefit of us as a company, the investors in the company, but also the clients who will get their projects installed. I will now hand over to Peter again talking about the significant leverage, operating leverage towards the offshore wind markets. So please, Peter, go ahead.

Thank you, Mikkel. For those who have joined a little bit late, the format is that you have to download our presentation on the Cadeler.com website. It can be found under Investor Relations. And then if you scroll down, you can find it on the Exchange Offer documents in the investor presentation. If we look at the next page here, 18, we have made some illustrative simplified pro forma numbers for capitalization. And how could the EBITDA, the generation look like in the future with a fully delivered fleet. If we look at capitalization, you can see that we have close to EUR 1 billion in market capitalization. We go into the merger with a very low level of debt, EUR 158 million combined, and cash of EUR 148 million. We have announced CapEx, which I will talk to on next slide. We have EUR 1.5 billion in total in the outstanding CapEx that needs to be financed through the available cash, operating cash flow and funded. If you look at the EBITDA contribution from a fully delivered fleet and it's from 10 vessels. And here, we have illustratively made some data points. If rate per day is as the last announced contract by Scylla, we will be an EBITDA generation of EUR 608 million per year. And if you go to the average and use last announced contract on the Eneti newbuild, it will be EBITDA generation before SG&A per year of EUR 831 million. And the assumption here is this on the 9 vessels with a variable rate, and then we have assumed on Zaratan that will be a rate of EUR 210,000 per day. Next slide, please. If you look at the CapEx program and the funding, we can say that we are fully funded to take a delivery of the newbuilds. We have the outstanding CapEx of EUR 1.5 billion in total. If we look at Cadeler standalone, it's EUR 970 million. And for Cadeler financing, we have in place or will be signed here in Q4 '23. We have a corporate term loan, which is an unsecured loan, which is expected to signed here in November '23, very advanced loan documentation. Then we have a commitment of revolving credit facility of EUR 100 million, which is committed, and then we have expected signed facility for the O-Class crane upgrade on a term loan, 8-year term loan, EUR 100 million, and then the X-Class financing, it's a [indiscernible] facility that we expect to sign here in Q4 '23. All our facilities is very progressed -- I mean in the final stages with the bank. And then, when that is done, in '23, we will start to look at the F-Class funding in a similar structure as we have for the X-Class financing. When we say that we have strong interest from the banks, that is visible through the commitments that we have received from the banks. On the X-Class financing, we got a 200% subscription. And on the revolving credit facility, plus O-Class crane funding, we have received a subscription of 160% of the ask. So very, very strong support from a number of banks in major Europe and Singaporean banks. As Mikkel said, we have also looked into the refinancing of [ ancient ] vessel the Scylla and the Zaratan, where we have a commitment where we can see we will have improved terms or condition, but also pricing. So that is a synergy that we are already have started to reap. When it comes to the hedging, there we have -- already, we have 50% -- of the interest exposure has been hedged on a forward stand basis for 5 years. And that means, for example, on the X-Class facility, when we brought our delivery in '24 and '25, we have already hedged 50% of the exposure on that facility. If we look across the interest rate swaps, it is -- the blended rate of 2.8% on the [ eurobond ]. Further, we have hedged 50% of the FX exposure that we have on the newbuilds also at levels favorable as of today. Next slide. Market capitalization. As I mentioned, we'll be close to EUR 1 billion, and that -- we think that it will attract a broader investor base and also enhance research costs as a result of the dual listing, where Cadeler A/S will be listed on the Oslo Stock Exchange as it is today, but also at the New York Stock Exchange. Further, it will mean that we will have an improved access to lower cost of capital due to stronger combined credit profile in a bigger company and it's something that we already see. As said, we have already also a commitment for refinancing of Scylla and Zaratan at attractive terms and improved terms as compared to [ strong ] combination. As shown, it will be improved pro forma cash flow profile as discussed. It will be a generation from a fully delivered fleet of 10 vessels will be to an opportune of the EUR 600 million to EUR 831 million per year, delivering a strong base for servicing but also localization of further investments and strategic opportunities. And finally, certainly we see strong support from our sponsors, our shareholders in Cadeler and Eniti. Our shareholders are really supportive of the companies and the combined company. Going to the offer on next page, Page 21. The exchange offer, you can see here the key dates, most importantly, expiration of the offer is 7th of December 2023. Cadeler is offering for each outstanding share of Eniti common stock tendered and withdrawn in the Exchange Offer 0.85225 Cadeler ADSs, and 1 ADS represents 4 Cadeler shares, i.e., exchange ratio of 3.409 that has been communicated before. It is set to expire 4:30 p.m. Eastern Time, 7th of December. Shareholders tender shares which is held in "street name" must instruct their nominee to tender through book-entry transfer through DTC. To validly tender shares held of record, Eneti shareholders must deliver a letter of transmittal enclosed in the F-4 to JPMorgan Chase Bank, which is the Depositary and Exchange Agent for the Offer and the Merger. For a complete overview of the procedures for tendering your shares of Eneti Common Stock, please see the F-4 Filing section "The Offer Procedures for Tendering Eneti Common Stock." And any questions related to direct it to D.F. King, which is our Information Agent. And by that, I will hand over the -- over to you, Mikkel.

Thank you very much, Peter. So next point will be a company and a financial update, which will be shared by Peter and myself. So I will start with the company update. I will go to the next slide immediately. And just talking about the execution of the newbuild program. We currently, as I said, we have 4 vessels under construction at the COSCO shipyard in Qidong in China, where we have the 2 X-Classes, X1 and X2, and the 2 F-classes, F1 and F2 under construction. We currently have a local supervision team in China over different geographical areas in China because we produce various things at different locations. We have 22 people there. And we are intended, to following the manning plan, compared to the construction activities on the X and F-Class hulls, and we'll really ensure that we are delivering very, very high quality. We have data supervision by our local site supervision team to ensure vessels are built according to our approved drawings and the quality standards. We can say that X1, which is the most progressed, is exactly where it should be, on time and on budget. And the same goes for our X2 vessel, and we are looking to float out the first X-Class vessel on the 20th of December at the moment, with continued plan to deliver this vessel by Q3 2024. On the F-class, we are happy to say that we have been able to start the construction of the F-class vessels even 2 months ahead of schedule, which is a significant improvement to our original plan, and also a result of the great cooperation we have with the shipyard in China. And I would really like to emphasize this because the cooperation that we have with the shipyard in China is very fruitful, and we do see that we are working on the same target and the same goals to really deliver 4 very capable, very high-quality vessels on time and on budget. Next slide, please. In terms of executing on the O-Class crane renewal project, there has been a lot of preparation and a lot of planning, and now we are actually in execution mode. We have talked to investors at length about this since we did the listing in Oslo in 2020 because this was the point in time where we decided to go ahead and order the first crane. So already from that time on, we knew that this project could take place. The cranes have been in construction, and we were starting to plan how it would take place, where it would take place and with what equipment it would take place. We have added a few pictures in the presentation. So you can see what risk we are doing. This is a picture of the biggest lift so far. The old swing platform of the existing crane, a lift of around 850 tonnes where the vessel was in fully jacked mode in order to avoid the leg protrusion through the swing platform, so the big PTC frame, the world's largest PTC frame actually could lift off the swing platform. I think, thanks to our rehearsal of concept, the close cooperation with our external and internal stakeholders, we are where we want to be in terms of time. And we have also a great belief that we will deliver both new cranes on the vessel on time, ready for the projects in 2024. The first crane, which -- both cranes are constructed in Korea. The first crane has been completed and has now been delivered in Europe actually. The second crane is also ready and has been -- and has left Korea just as we speak. So it's on route now to Europe, ready for installing on the Wind Osprey. And as I said, we are planning to have Wind Orca the new crane ready, and also for Wind Osprey, the new ready -- crane ready and installed by Q1 2024. I'll hand over to Peter again here at this junction.

Yes, next page is the consolidated profit and loss for first half of '23 for Cadeler standalone. Going forward, we will be doing quarterly reporting starting Q1 '24. But this is first half of 2023. Revenue increased EUR 25 million, [indiscernible] of 57%. What is remarkable is that we saw 100% utilization of the 2 vessels, Orca and Osprey in the first half, and really remarkable when you consider that on both vessels we were changing from 1 contract to another during the first half year. It's a testimony, I think to very, very strong team performance in the whole Cadeler Group, both onshore and offshore. In the administrative expenses, there was some huge EUR 3 million in transaction costs with regards to the merger, hence we have shown here adjusted EBITDA in the bottom, which is EUR 44 million, which is an increase of EUR 21 million -- EUR 22 million -- sorry, EUR 21 million as compared to first half of '22. Next slide, you can see that it is the consolidated balance sheet. It is a solid balance sheet with the equity ratio of 80%. The increase as compared to last year is due to the investments in the O-Class cranes, the upgrade of the O-Class class cranes, and the newbuilds and the equity is increasing due to the this, of course, the positive result, but also due to [ two participation ] done. Of course, we have the CapEx program, which mean that the balances will increase, but we have sufficient funding for that in place. Over to you, Mikkel.

Yes. Thank you, Peter. A bit about the market outlook. As I said in the beginning, we continue to see very, very strong demand for our services. And if we look at the global expected outbuild between now and 2030, excluding China, we do see a very, very, very strong growth across all regions. I think that what we are doing is that we are producing that number and have our own view on what we think is a realistic outbuild of the industry in the regions going forward. We believe that offshore wind remains essential for the energy transition to reach global renewable targets. And these are really targets that governments have committed to. We see that Europe remains the main driver of the offshore wind market and also Asia Pacific and Americas is moving, although with some headwinds, especially in America, and with more tailwinds in the Asia Pacific region, I would say. We see increased global Power-to-X focus, which increases further demand for offshore wind. And also, we do see that the increasing demand for offshore wind is not offset by an equal increase in suitable capable installation vessels, leading to a very clear imbalance. And on top of this, with what we discussed earlier in the presentation, with various segments of the industry itself, cannibalizing other areas for getting capacity. This in total will certainly create imbalances across the offshore wind industry on the vessel side and especially on the capable vessel side. And I think it's fair to say that massive global ambitions remain. And also, this is for the next many decades we will be building a lot going forward and building not only a lot of offshore wind, but also building a stronger supply chain in general. Next slide, please. We see capacity growth enabled by next-generation turbines. And although the financials for the wind turbine manufacturers have been challenged, and that has slowed down the turbine growth to an extent, we still see and still believe that turbines will grow although a bit slower than what was initially expected 3, 4 years ago. No matter what Cadeler and the combined company is prepared for that future because we can handle the bigger turbines. We have designed so we can handle efficiently both the models that we will see coming to the market in the next couple of years, but also the models that will be coming into the market, probably towards the end of the decade or maybe even at the beginning of the next decade. There are benefits in what we see in the market today as, let's say, the upgraded assets in the fleet likely have better inflation opportunities for a longer time with more positive cash flows coming in on these assets. Next slide, please. As I said, we see that the turbines are bigger. And this is really a chart that we are showing you from Spinergie, where we see that the bigger turbines are driving bigger projects. And I think if we were to say something about this, then you can say bigger projects, it is -- then it's better to have a bigger fleet and more vessels on every project. And this is a clear trend we see that the clients that have the bigger projects, the plus 2.5 to 3 gigawatt projects, they do prefer to have several vessels on their project to derisk the project execution. And there, I think that the fleet diversity that will sit in the combined company will be a very, very strong value proposition to these clients. And we do see already at this stage that we are discussing with clients for bigger projects, larger portfolios out in time and even further out in time than what was also expected just a few years back. Next slide, please. Also, with the development of the wind farms and the outbuild of the industry, we do see a general trend where the projects are moving further away from the shore. So the distance to the shore increases on average. This is beneficial for the bigger assets that can transport more components per round trip because we will be more efficient because the difference between a vessel that can load 2 for example, 18-megawatt turbines or 7 of those is significant because you are simply having fewer transit trips. And in those scenarios, you will be able to save the clients as much as 2 to 3 months of installation time just capture from the transit alone, and this is not considering restrictions from title or pilotage or weather windows and all of that. And it will really compute into a lot of value for the developers, and hence, also creating a very clear case for the best vessels in the industry. Also, we do see that the water depth is increasing in average on the projects. And hence, the best vessels in the industry will have the best position to capture these projects. Cadeler broke a record this year, where we completed the Seagreen wind farm. And on Seagreen, we installed the so far deepest offshore wind turbine ever. But we do see that for the projects coming in the future, this record will not stand for a long time because it will be broken again and again and again over the course of the coming decades. Next slide, please. So the last slide, I think that what we are showing is really the supply and demand both on the WTG installation vessels, but also on the foundation installation vessels. And we do see a significant imbalance in supply and demand in both spaces. And as I said, if we were to add a third picture here on the O&M space, it would make the same picture. And we do see that clients are [ excited ] in all 3 segments to capture capable capacity, to execute their projects and fix their challenges on existing projects. And I think with that said, I think that the combined company will be a very, very strong company that will add lots and lots of value for investors, but also lots of value for the clients in the industry. And hence, we do very firmly believe that this combination of the company is the right thing to do. With that said, I think Peter and I would like to say thank you for listening in, and we are looking forward to the period coming now.

Conference has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.