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

[Audio Gap] in terms of commercial highlights, the acquisition of Maersk, we already have gone through the transaction rationale in a separate presentation. But really, it is about strengthening the customer offering and the execution capabilities that we have in Cadila, we do see this as one of the key components for a successful foundation campaign, and we do also see that our clients have been increasingly concerned about whether this tool can be sourced to the market at the necessary volume and that is something that we have decided to take an active position in to make sure that there's enough equipment for what the industry is needing and that really means for what our clients are needing, what our peers are needing and also what catalysts needing. And altogether, we believe that, that is a very very sound business move and as with having a on the cattle umbrella, but still on announced Link principle, ensuring the product overancstructure that we would expect as a peer in the industry. So I think it's also, as you see on the right side of the slide, it's also about access to really data from thousands of foundations and to already and with the acquisition line together other companies in the industry that have been driving most piles into the ground and hence, also a company now that sits on an enormous amount of data. And that data is something that we expect to use to really improve our customer offering when we go into a bidding round for every single foundation project to have a much better basis to evaluate the program length on a foundation project going forward. So the combined post between the companies is something that we very much expect will benefit not only our clients, but the industry as a whole. And then, of course, mainly it's a solid business. It's a business that is more and more shipping into a rental model, and we believe that the earnings profile of the company is something that is very attractive and that is something that fits well with how we business and capital and what we want to do on a forward-going basis. And then there's just a very strong strategic and industrial fit between the companies because the models they are very, very much aligned totally. In terms of what the company is offering, we showed the slide also just on the day of the announcement, but really the hydrolic cams that is the main part of the business and also the biggest part in terms of revenue generation, but there is a lot of other things that are very interesting to develop as we now go forward with the company, in particular, in lifting and handling where we also are big clients ourselves for this type of equipment but also on North mitigation. Nice litigation is something that is taking more and more attentive the industry, and I'm also pleased to say that Manhas good technical solution for noise mitigation and something that we will continue to develop together -- that's also routing and drilling, routing and drilling is also, in some cases, necessities on 1 rodent -- and it's good that there are solid technology base for both of these components for the future projects as well and something we all together, we believe will be positive effects on projects going forward and really increasing efficiency on rotation installation in the industry.

For Cadeler, we have been very open about how we see this. It is very much like we have seen with the vessels. We are aiming to be at scale, so we can offer clients redundancy. And I think it's fair to say that we have showed the redundancy, we have shown that it works. We also get the feedback from the clients that the journey that Kelahave been on is something that is working. It's also working for them because if there is delays on projects, then we are able to support with additional equipment or different equipment and still make sure that these projects are coming over the finish line. And we have done that already several times in the industry, and we've seen that, that is something the clients they greatly appreciate. And we believe that by merchants with the heme in the catalog case, that is also something that clients will appreciate because really, we remove risk interface on the installation campaigns and it's really one of the risk interfaces that they are worried about. And also, one, if it goes wrong, it will cost a lot of money for the industry. And hence, having the ability to merge the component, we believe that, that is something that will be sought after by the clients out there.

And I'd say also in the first half of this year, it has been very much about executing on projects globally. We continue on side to install in the U.S. We have been back a revolution wind, we are losing when tolling defining public turbines before we go back to Sunrise again to complete that project on a, we are installing the secondary steel for the onset project for us on Osprey, we are installing E3 turbines at a very, very rapid pace. Aspen has done incredibly well on that project. The remove is installing on the Baltic Pawel project and Masa has done owning campaign in Asia and is currently also operating on on out there. We are bringing in sartan into a new era, and we are doing some small open sartan to make sure that we can support other parts of the business going forward, and we are looking forward to seeing Greenert contributing value to the company as we go forward. With this was delivered, as I said, in currently installing mission equipment when analyzed on C3 and stalling and very pleased to see what we are doing there. And as you will see in a few slides here, we are now going from proof of concept to really doing it fast and safe. That is really the -- what we are aiming for here and the team has worked tremendously hard to reach the target that we have. And we team continues on a long-term agreement with this that's doing various work and very positive as well there. When peak has also completed the Super project and have subsequently done on campaign for an extra ultimately for Siemens, but currently working in the next setup and win pace this together with wire installing turbines on the A3 project. On Host, as we said, it's from first too fast. We are still working on further accelerations and efficiencies on the project because we will be doing many projects in the future. And hence, the learnings we get now from 1 is something that we can really implement into the company on a long-term scale. It has been an incredible learning journey to be on once and I think that we are very positive with where we are. We continue to find improvements that we can benefit from and that the client can benefit from. And I think that we are very ambitious in terms of where we want to be -- but really, the proof of concept, the fact that Tata is now installing full-scale foundation projects safely and efficiently, that is something that has taken a lot of work in it. And a great thank you to the team that is continuing to deliver on that. The mono milestone station continues and the secondary steel installation is also on track. And the logistics around the project that we're also handling is also progressing. We have 3 heavy transport vessels on charter. And we have around 100 mono parts that have been loaded into the Martin port. And really, as I already said, the focus is to continue safe execution on this project while still finding optimizations, and we are working with external people as well to really ensure that we take all the lessons learned in now to benefit this project but also to benefit future projects, but also the way we build projects going forward. And I'm really pleased to see that the team, how they work with this project and also the inventions we have with the client. It's a very positive interaction with the client, in my opinion, and we are working towards the same target, really safe, on-time on-budget installation of this project. In terms of Next, I'm also pleased to say that Nexa has seen a pickup in commercial performance, and we have had 3 vessels working in the Nexa space when sartan when Matane peak, that performed the owningsokes in Europe and APAC, and we have had more than 230 vessel days that has been working with service and also that the team in extra is working incredibly hardware with our clients to secure long-term commitments on the O&M side. We maintain our view on the oneneside. We maintain that this is very, very interesting for us and also a very solid business and a place that cater much want to play a role in the next setup. So we continue full speed ahead on Nexa and are also very, very positive with what we have seen in the latest months from the clients. And on the backlog standing at DKK 2.5 billion. As we always say, it's providing very solid earnings visibility. I think that what we are saying on this slide today here is also that we are bringing you a little bit behind the curve in terms of what is happening out there and win also part of why we are positive around what we are seeing for the future because at the moment, we -- in the category, vessel visitation agreement and preferred to buy agreements that are not currently in the backlog. We have 3 2D projects '27, '28, and 2031. We have a foundation project for 2028. We have also a project for 2031 on both Foundation and turbines and also a long-term on agreement, so a lot of work is at the moment going on to convert these vessel reservation agreements less preferred supply agreements into firm contract backlog. And I think that the team is fair to say that they are negotiating at full speed while we actually see a lot more coming at the moment, especially for the beginning of the next decade, we see an enormous appetite for the clients and especially with the announcement of the TCS vessels, we have been in a very, let's say, positive momentum with the clients who would like to understand the capabilities of the Titan vessels and how we can work together with data and the TC vessels and our foundation -- sorry, our templates to ensure a very, very efficient installation campaign and with the acquisition of Mint, I think it's also fair to say that we have had very positive conversations with our clients on the combination of the Hemanth vessel, but also with our peers where several of our peers have reached out to say that they would like to discuss availability of Hema on an ongoing basis, and we have also made very very clear that, that is very, very much our ambition, and we will prove it to the market that, that is something that we are going to do.

In terms of the backlog, yes, as I said, around EUR 2.5 billion, 77% of that is leased and there are projects that are currently in the FID process now. And also, as I said, the projects that we see on the right side of this slide that are currently in the preferred supplier agreements status. They're not improved in the backlog, but we do expect that these projects are on route to be converted to backlog and to projects that we can announce in the not so listen future. So I would say, all in all, a very, very strong commercial momentum in the business at the moment as well and everybody is working full speed on those opportunities out there together with our clients. And in terms of progress on the newbuilds, now it's newbuild in singular before we are starting the T-Class vessels but we are expecting delivery on widepath second quarter 2027. This represents an acceleration that we have agreed with Costco, that is bringing to deliver towards the project that we saw in the preferred supplier category. We have seen that when Apex have achieved significant time optimization compared to the first vessel that was -- that was delivered and I think that our celebration with Cargo is really a technical aeration where we do understand it the and we can speak about the various things that are going on. And that is also why that it was fair for us to award Coit the new mills that will be delivered in 2030 and 2031, and we are looking forward to see them coming to the market as well to get our partners from of. We may also delivered ahead of schedule on budget. Again, a very strong performance. That's now the 11th vessel that has been delivered in the second of the 3 new bills and as we now start to take delivery of A class asset, we will also start to have a feed of these vessels that can support each other. It is going straight into mobilization with the mission equipment and having soon 2 vessels that are fully mobilized for foundation installation in a very flexible setup, we believe that, that is something that will give us a very, very significant flexibility to support potential delays in the industry and also our clients to ensure that we get these progressions installed on time on budget. And the next vessel coming next year will also be able to do that, although she will start with turbine installation for the first period of time. Coming into the financial line, I hand over to Peter, so we take it away to you.

Yes. Thank you very much, Yes. Focus on the Q2 standalone last 3 months ending 30th of June '26, we have adjusted for the comparable finish from '25 for the termination fee that we received last year in order to begin to compare on a basis on the main activity of cards we have adjusted here and for revenue EBITDA and net profit for EUR [ 10 million ] revenue for Q2 was EUR 22.8 million. That was a plus as compared to last year, [ 432% ] . Industry ratio was solid 50%. You can say -- and the manicure level near and also up from the adjusted number from last year. Borrowing cap around EUR 2 billion. EBITDA was EUR [ 160 ] million and that is an increase of SEK 406 million as compared to last year. Net profit, EUR 95 million which is plus 73% as compared to last year. As explained by backlog stands at EUR 2.5 billion. And that is compared to same period last year is up 3% 3 months daily as turnover EUR 6.9 million. If we look at the Q2 numbers in the full P&L, again, we see that revenue is up. And if we adjust for the national fee last year, it is significantly up and do more than. Fleet utilization increased to 85% as compared to 76% last year, and that is up from the 4% we had in Q1 this year. So we sort of the delivered misses, and they have been now mobilized and are on contract. The adjusting utilization is compared to last year comparable number. Cometals has increased by EUR 93 million and that is, of course, in by the full for operating cost basis of 3 additional vessels in a man. So we have now 10 basis operating as compared to 7 last year. SG&A is increased by EUR 7 million which reflects the continued gain of our offices as we have explained many times that should be able to to operate in the bigger fleet but also the foundation projects. Resales is per now 0.871 on euro ad which is above the level that we have seen in previous quarters recently the around or just below the EUR 4,000 million. If you look for the 6 months ending 30th of June, rent more than doubled to EUR 480 million where we adjust for the EUR 111 million in termination fees. And approximately the same on adjusted availability or you should say for '26 as compared to the first half of '25 and then adjusted expectation 85% for the 6 months, then to say behind the increase in a cost of sales and then driven by the 3 additional basis and again, the SG&A has increased by EUR 9 million as compared to last year, and again, due to the same reason of having a bonus to be into the additional investors and the foundation group. And again, the EBITDA more than double will be adjusted for the terms, which is noncar. Finance sheet, now we have an equity of EUR 4.8 billion which is of course of, the capital increase we made in the 25th of March this year and then the positive result, rattans at 50%, which is a solid balance sheet that -- this slide it's the same slide as we have shown before, with the hope of the new principle that now we have also included acquisition in this to illustrate that we are not in need of any increase to be able to time back and go through this acquisition. As at end of June 26 million, we have all on 1 facility on the last years, AB of EUR 18 million. Then in July, we made an additional opportunity with Santander, a EUR 4 million which has, of course, to available liquidity, make transaction. We got a big facility of EUR 380 million from Bank, which was then used for the payment of of mix around EUR 500 million. So then we are having the new bids still. We have the air class finance $510 million and as out in our CapEx is [ 425 ]. And then we are going to from the of the class rates of 21 actually. It's not steady here, but it's EUR 121 million, 20% in the quarter. So Net entries or and then the main facility needs to be repaid at some point of time. We will have on a cutibasis negotiating of an additional or a turnout facility of 250, i.e., we finance the rest of the few that we have in it facility by the cash that we have that we were on and 150 million -- this is part of time a catch and it doesn't include the operational cash flow that we'll be running in, in the coming months. And we also contribute to the repayment of the net facility. And it also only includes, of course, the first down payment and ordering Tamesis 15% because the rest of the installments will come in '28 and '29. And for the metrology will be within 1 year of delivery -- so this hopefully clear for everybody that we will not have to do caprincrease for the makers.

Yes, it's a financing overview. What has happened since last quarter is that we have -- we have signed it with the Apex facility was in terms of July, we care and ECA backed by 1 -- we have set the RCF until December 2027. And then we have of-size the whole co facility with entrant there. So that is the financing of full year outlook. This test will be said, it's without MAC acquisition. So it's a counter stand-alone. We will communicate on the impact from a in coming months when we have the full overview of the impact. We maintain the outlook for '26. So revenue in the rate of 850 to 944 and the EBITDA still the level of EUR 420 million to EUR 520 million. So that was the financials.

Yes. Back to the commercial outlook, where I think that we're getting a lot of questions on how we see the market developing and what is we are talking to our clients about. And I think we -- as I already said, we are seeing a lot of activity at the moment, and we see also that our clients are really coming to us now for projects that are starting -- some of them are starting in '29, some of them are starting in 2030, 2031, 2032. But overall, we do see, let's say, a sharp uptick in client activity at the moment for these years. I think it's also clear from what we, in general, discussed that there will be a lot of need for electricity and 1 of the solutions for that will be offshore wind, and we believe it will be a firm part of that. We have also seen that with some of the recent geopolitical tensions that importation of fossil fuels is not as straightforward as it maybe one for and hence, there is really a focus on energy security at the moment, that is also building a stronger momentum for for renewable energy sources that are locally produced electrons in, for example, Europe, and that is something we do see having an impact both from a political point of view, but also in general with -- amongst our clients that are being strongly incentivized to do that. And we see that by auctions that are being adapted to be more developed offering. And we think that, that is the right direct to go in, and we saw that Denmark has successful auctions now after having shifted over to a CFD scheme. And I think that the successful auctions were also, let's say, aggressively priced. And that is something that we have also discussed quite a lot but one thing I would like to know is that in terms of projects being onboarded in the market, we have already seen in '26 more projects awarded than what we saw in '25 on a gigawatt basis and with more to come. And we do expect also that 2027 will be a very, very strong year as well. So -- so after a slightly, let's say, a downward trend, especially for the discussed in first half where our capital position still is that we are confident on '29 and the first half of '29. We have done good work to make sure that we have a very strong baseline there. But now we are seeing an uptick that will especially impact the second half of '29 and 2030, 2031 and so on. In terms of supply and demand, we maintain also our view that on the foundation vessel demand, there is a very, very strong demand for efficient vessels. This is what we hear again and again and again on the clients is that efficiency really matters. And if a solution is efficient, then that is the preferred solution. And there's still somewhat of a gap between what is required and what is in supply and the efficient vessels will be taken away from the market first, and they will be taken away first as well. We have also included the Hammerman in the slide here to give a view on what we are seeing because the Hammons are not exactly following the same as the vessel, although as a tolling a foundation project needs a Hamon,but there are also and the need to transit between regions and have the downtime for maintenance and stuff like that. And that is why we believe that there will be a need for a serious reevaluation of the needs in this space to ensure that the efficient vessels can work efficiency for the clients because there has been a real risk that vessels potentially would not be able to work simply driven through innovability of equipment to install foundations and why is that? So that is simply because the ownership structure of these companies have not been focusing on aggressive out build of the equipment needed, but maybe more on harvesting the cash in these businesses. And hence, we need to make sure that there is not the equipment ready for what we are coming with in the beginning of the next decade with 5 vessels potentially operating side by side and also our peers that definitely have demand and a demand that we would very, very much like to help them to supply. As we have seen a couple of times before on the vessel market and how it looks just in total numbers, not having any opinion about how these vessels are performing and how efficient they are. Taleo stands at 14 vessels with the 2 T classes now being firmly added with firm orders with the shipyard. And I think that, as we have said in the past, but it really gives us the flexibility, the redundancy and for the clients that really the reduced risks that they really appreciate and what we're also getting very positive, let's say, credit for from the clients at the moment. If we do look at what are efficient inflation vessels, then the picture looks slightly different, and that is why we do maintain the view that there is still a very verse high demand for these vessels that are efficient in dollars in the industry because we do see as we come into the next decade a lot of divestments will simply not be able to install efficiently or simply just hitting the 25-year mark and hence, having to look at the time from the industry. In terms of our loss early, I think it's evident '21, that is what we have been focusing on to be able to deliver a very strong customer offering and also a very, very strong let's say, value back to our investors with what we are doing. And I think that today's numbers also show that the growth journey is our plan, and it is working, what we are trying to do. But really, focus has been that vertical and horizontal expansion. And here, we really are deepening our foundation offering with the acquisition, but also with the O&M offering. And we do start to see the effects of the O&M offering. And as you saw from the backlog slide, we also now are preferred by one of these long-term loan agreements, which we believe will be very accretive to the whole catalog story and organic and inorganic growth. I think it has been done both just a couple of weeks ago. So I think it's explanatory, but that is where our books have been to ensure that we maintain the position we have achieved with our clients where we are asked for basically everything in the industry that is coming up because they know that at any given time, we likely will have capacity available. And I think we have many good examples this year of discussion with clients and potential things that they will make use us for and I think that, that is something we will see continuing both in the short, the mid and the long term with -- as you saw in previous slides, very strong focus on securing some of these huge projects out in the future. On regional expansion, we are constantly focusing on being present. We see lots of expansion in the Asian market. And basically, we are bidding in every single market that is expanding in Asia at the moment and are very positive with these developments out there, where we are working very much together with our key clients but also with new clients and the commercial team has done remarkably well in getting us into the right position in these new markets. Then there's also a very strong focus in the company at the moment on monitoring and applying new technologies. We are actually starting to work with AI on some of our data handling to ensure that we are more efficient in how we analyze these thousands of data points that we have from projects and project to ensure that we have a better view of how the vessels were performing on the program. And this is something that we will communicate more or in the future, but also something that we will be starting to use on a more integrated basis in the company. We do see the value of this and we have been dipping our toes into it. But I think that it's fair to say that we do now see really the first 3 steps into using AI in our whole structuring of bids and programming with analyzing these many, many data points. And it also goes with with our main acquisition where we will be sitting on 50 million data points on pile driving, which we would like to also have to build a model around so we can ensure that both Mananda can deliver a very, very high value to our clients on their projects. And then, of course, continuing what we have always done focusing on strategic partnership with our clients. And also after the main acquisition with a new group of clients, which is with our peers, we have worked together with our peers for many years in many different ways. And I've always said that the beauty in tells that we basically can work with anyone and that is more evident than ever after the man acquisition. And we will do our part to really make sure that not only can they or fecal equipment that they need, but hopefully, they can also get a better service going forward in the combined structure compared to what they had in the future and in the past, sorry. So that is very much our ambition and also what we are currently discussing with our peers. And we will be also coming out whether there is strong governance more to give them the figure we're feeling around that as they rightly would expect from us. And just in terms of executing on growth in 2026, I think we have ordered the 2 new teas vessels has been a very, very tough negotiation, one of the topical I think the yards are in a situation where they're basically fully booked. There's a lot of activity in the yard. There's a lot of competition from other industries and to have the 2 class vessels now signed and ready for delivery in 2030 and 2031, is a real milestone for everybody that's worked on this in Kaplan. It has not been easy, but the positive thing is that it long not easy for our competitors. And I think that we will see that -- that will be displayed going forward, I think, and I think it will be very, very hard to order additional capacity. Section, we have announced that, and we are still working full speed on that, building the team at the moment, and we will be announcing also on the asset side of that business as soon as we are ready to do that. And then last or certainly not least, welcome all our new colleagues from Men. We are very, very pleased with this acquisition. We believe that the combined value proposition of the 2 companies will be better together than it would have been on a stand-alone basis and from the conversations we have had so far with domain team, and we're also incredibly positive by how motivated they are with this new journey. And yes, we will continue to visit locations and come around and speak to all of you and it's been really good. So last but not least, in terms of the key investment highlights, we maintained the lines that most capable mettle feed and mission critical equipment. And what does that mean? It really means redundancy for the clients. We focus on relationships and partnerships, and we do that from an industry-leading position where we will continue to create value for everyone. We have a global reach and experience, and we are now the company that has installed most foundations by any company in the industry. We continue to see a structure on the supply and an increasing market demand demonstrated also by the amount of preferred acquirer agreements and resolution agreements that we are talking about today. So we are in a very solid position. And then as we also discussed a little bit previously, we are now also seeing an increased, let's say, drive on the technology, not only on AI, but also on technology for tooling and stuff like that where we will be using what we are sitting on in terms of data points to really ensure that we can combine that and create value for our clients and really ensure that we are first with next-generation installation technology. So with that said, I think that we move into the Q&A. So you please take over.

[Operator Instructions] And our first question comes from Anders Roslund. Our first question today will come from Jamie Franklin rather at Jefferies. Jamie, you may now ask your question.

We're going to see obviously second quarter utilization really kind of stepped up. Just wanted to -- your help with kind of how to think about vessel utilization through the remainder of the year. Could we expect kind of a similar level in 3Q and 4Q or based on current scheduling? Is there any reason that utilization may be any lower in the third and fourth quarters? And then thinking more specifically about Hornsea 3, clearly, everything is very much on track so far. How should we think about the contribution from that project through the remainder of the year. Clearly, your progress on the monopole. I would expect that is continuing through the third quarter? And then is it right to think about the turbine installation kicking off at the start of the fourth quarter?

I think that we can say that we expect strong utilization for the rest of the year. We were building up in Q1, and I think that we will continue to see strong utilization for the rest of '26, there's a lot of activity going on. And yes, that's clearly our expectation. One, the program on NCI is what we basically have discussed already and has not changed as such. We are, as I said, focusing on speeding up. And where we end exactly with the speed that is still a little bit a guest mark, but we are very positive with what we have achieved, of course, in the beginning on Sapochen you are learning there are some big low-hanging fruits that you're picking and then the fruits become smaller and more but we continue because we are in business in this space also because it is something that we will continue to learn for the next project, we are an A2 in the not-so-distant future. We have other projects that are being started in the not so distant future. And hence, the learnings that we capture or for Monster is something that we can really bring into the company. And it is a mindset change because we are really talking about production here. It is a much more production mentality on a project like that. And hence, we are very ambitious in terms of what we want to achieve, still having a safe performance. So again, it is from first to last that we are looking at here now, and we are already pretty fast, but we want to potentially be even faster on that project. And in terms of total installation remains on track. That is also the ambition of everyone that we are starting the turbine installation as per what has already been contracted.

Okay. Very helpful. And then secondly, just thinking ahead to 2028. So you mentioned, obviously, the preferred supplier agreement, which hopefully will convert to a firm contract. And then also there's a turbine project for '27, '28 that could convert as well. Just wondering if there's much else you are working on and any other sort of potential additions for 2028 at this point?

Yes, I think the short answer is yes, but I think that they will be slightly later. And I think also the extension on current projects that are running into which is not something that we include in this, but we have seen extension on current products also running further into '28 than what was previously expected. So I think, all in all, I maintain what I said -- we believe that the baseline is strong and there are more to achieve in '28. But as we have said before, we believe that there will be additional work of programs as we get closer to '28.

Our next question today comes from Anders Roslund at SEB. You may now mute your line and ask your question.

Thank you. Can you hear me now? I had some problems with our technical solution. But anyhow, can you break down the backlog for the year 2026, '27 and '28.