DEME Group NV (DEME) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I am Carl Bussche, Head of Investor Relations at DEME. And it is my pleasure to welcome you to DEME's Half Year Analyst and Investor Earnings Call and/or webcast. Joining me today are DEME's Chief Executive; Mr. Luc Vandenbulcke; and our CFO, Mr. Stijn Gaytant. Both Luc and Stijn will take you through the presentation, which will be visible on screen during the webcast and also accessible on DEME's Investor portal. Slide 2 briefly outlines the agenda. Luc will kick off with the executive summary, after which both Stijn and Luc will further elaborate on the group financial results for the half year, the performance of our 4 segments, DEME's progress in the ESG domain, and then Luc will wrap up with the outlook. After the presentation, we will open up for the Q&A round, giving you the opportunity to ask questions directly to our management. Without further delay, I'll hand it over to Luc for the executive summary.

Thank you, Carl, and good morning, everyone. I'm absolutely proud of our first half of the year performance. Once again, we have achieved record profitability and that despite the unpredictable and unstable market conditions. These results clearly demonstrate the power of the One DEME Team. Every day, our employees work tirelessly to deliver incredibly complex projects to our clients worldwide. And I would like to wholeheartedly thank them for their continuous efforts. It's therefore with great pride that I will now share the key first half highlights with you. The turnover grew by 10%, surpassing the EUR 2 billion mark in another milestone achievement. This growth was mainly driven by the Offshore Energy segment, where revenue rose 27% year-over-year as a result of strong demand, high fleet utilization and most of all, effective project execution. EBITDA for the group climbed to EUR 464 million for an EBITDA margin of almost 22%. And that compared to EUR 345 million for an 18% margin in the first half of '24. The group EBITDA margin was also fueled by an outstanding profit performance by the offshore segment. Net profit rose to EUR 179 million, up from EUR 141 million a year ago. The order book was at EUR 7.5 billion, and that is in line with the EUR 7.6 billion level of last year. This is made up from a combination of follow-up orders, maintenance work, smaller projects and also reflects the addition of Havfram's order book because as I assume most of you will know, DEME has acquired Havfram, a Norwegian offshore wind contractor, and that in April of this year. This acquisition strengthens our offshore wind footprint, particularly when it comes to expanding our turbine and foundation installation capabilities. The company has 2 vessels under construction, the first of which is on schedule for delivery at the end of the year. And the second one, early 2026. Both vessels are already contracted for projects, as you know, in 2026. I believe the Havfram acquisition to be a very nice example of DEME's willingness to invest in its future, and targeting the right strategic decisions at the right time, in turn, allowing us to deliver sustainable, profitability results like the ones we are presenting today. Based on this solid first half, combined with the robust outlook for the remainder of '25, management expects full year turnover to be at least in line with 2024, and we expect the full year EBITDA margin now to slightly exceed the 20%. Now before handing over to Stijn, I'd like to share a preview of our new vessel, the Norse Wind. What you see here is the Havfram vessel during its full height jacking test at the shipyard, and is ahead of its delivery later this year. The vessel is jacked up to an impressive 90 meters above the seabed, and we look forward to welcome it into our fleet at the end, as we said, of this year. Stijn now over to you to walk us through the financials of the first half.

Thank you, Luc. The table on the left visualizes what DEME has delivered in the first half of 2025. and compares it with the results from the previous 2 half year periods. It clearly demonstrates strong year-over-year improvement across all financial-related metrics, backed up by a high-quality order book. Some items I'd like to highlight. The order book remains strong at EUR 7.5 billion, slightly lower than where it stood this time last year. It's important to keep in mind that DEME delivered EUR 4.3 billion in turnover over the past 4 quarters. Turnover for the group for the first half year stands at EUR 2.1 billion, up 10% from EUR 1.9 billion at half year 2024. Profitability has continued to improve, outpacing the growth in turnover over the recent period. An EBITDA of EUR 464 million, which is an increase of 35% year-on-year, represent a margin of 21.9%. This compared to 18% year-over-year and EBIT of EUR 223 million, which is an increase of 49% year-on-year represents a margin of 10.6%. This compared to 7.8% year-on-year. The net profit for the first half year stands at EUR 179 million, which is an increase of 27%. This compared to EUR 141 million year-on-year. The EUR 241 million on depreciation and impairments for the first half year represents compared to the EUR 195 million year-on-year, an increase of EUR 46 million. This increase can be attributed to mainly 4 elements: the Yellowstone, our most recent addition in the fallpipe vessels was welcome to the fleet in June last year and started contributing to the depreciation only in Q2 of 2024. Secondly, a reassessment has been made to the useful lifetime of one specific auxiliary equipment for the Offshore Energy segment. The remaining useful lifetime has been adjusted to one remaining year being the end of 2025. This has an additional impact for the first half year of '25. Thirdly, a higher impact of depreciation related to IFRS 16 leasing and the increase to top it off in assets and depreciation related to the Fehmarnbelt project, which is a large marine infrastructure project in Denmark. The net financial result that is part of the bridge between the EBIT and the net profit of the group amounts to minus EUR 9 million. This compared to a positive EUR 30 million in the same period last year. The delta between both is related to the exchange rate differences in the first 6 months of 2025. Current taxes and deferred taxes account for minus EUR 49 million which reflects an effective tax rate of 23%. Similar to the effective tax rate year-on-year and lower of the 26% tax rate we had at the end of 2024. The joint ventures and associates has last contributor to the result of the group realized a profit of EUR 70 million as a combination of, on the one hand, positive amounts of the associates, mainly driven by DEME concessions. That said, offshore wind part saw a relatively low production in the first half of 2025 which had a softening effect. On the other hand, we noticed continued positive results on most of our operational joint ventures, of which a considerable portion is related to our setup in Taiwan. Now, how do these excellent P&L figures translate into the main balance sheet items? We present them in comparison to the half year and the end of 2024. The negative working capital of minus EUR 870 million half year '25 reconfirms that DEME's working capital compared to its turnover remains in line with the historical averages. DEME consistently maintain negative working capital, largely due to disciplined contract management. The CapEx investments in the first 6 months of 2025 amount to EUR 141 million. This is excluding the Havfram acquisition, and there's a decline of EUR 26 million in CapEx compared to the EUR 167 million year-on-year. The current CapEx mainly consist of project-specific investments lifetime extensions of vessels and capitalized maintenance costs. Of the approximately EUR 900 million communicated for the Havfram transaction, EUR 537 million were spent in quarter 2 2025. Now these expenditures in combination with the increased profitability working capital, slightly lower CapEx compared to the prior year and paid our dividend in quarter 2 of EUR 96 million, results in a negative free cash flow of minus EUR 440 million. Taking abstraction of the Havfram impact, the free cash flow amounts to a positive EUR 123 million. The cash and cash equivalents as of June 25 stands at EUR 709 million, compared to EUR 509 million year-on-year and EUR 853 million end of 2024. Taking the earlier mentioned elements into account, the net financial debt currently stands at minus EUR 480 million compared to minus EUR 352 million year-on-year, and plus EUR 91 million end of '24. As a result, our net financial debt on EBITDA ratio is now minus 0.42 compared to minus 0.49 year-over-year and plus 0.12 end of 2024. Moving on to the order book. The comparison on the left graph. The segment breakdown demonstrate a continued balanced and diversified order book for a group order book of EUR 7.5 billion in line with last year's level of EUR 7.6 billion. The order book additions in the first half consists of follow-on contracts, several smaller contracts across all contracting segments, and the addition of the Havfram order book for EUR 530 million. We know that order book intake can be irregular in timing. On the graph in the middle showing the geographical breakdown on the first half of '24 and '25, we noticed the following. Europe accounts for 76% of the overall order book, which is an expansion compared to the 62% year-over-year, reconfirming the importance of our home market. We see a decrease in Asia, Africa and the Middle East. All driven by a combination of effective project execution and currently less intake. I highlight as well again the order book evolution in the Americas, which reduced compared to first half of '24 from 16% to 10% and reflecting high activity and progress on the projects in U.S. the last 12 months, resulting in order book conversion into turnover in combination with limited additions of new U.S. projects to the order book. On the graph on the far right, we provide the order book runoff for the coming years. The runoff supports our guidance for the year with volumes for the second half in line with the same period a year ago. The order book volumes spread across 2026 and beyond amount to EUR 5.6 billion similar as compared year-over-year. Next, we'd like to highlight the trends in DEME's turnover evolution. 2 key takeaways I'd like to share. First of all, a 10% year-over-year growth in turnover, as shown on the left graph, and also DEME's half year turnover doubled over the last 5 years. The segment breakdown in the middle reveals some more insights. An increase in turnover year-over-year for the Offshore Energy segment, well surpassing EUR 1 billion turnover or specifically EUR 1.1 billion or plus 27%. This was driven by strong demand, higher fleet capacity and utilization and solid execution of projects in U.S., Taiwan and Europe. The Dredging & Infra segment reached EUR 950 million turnover. Small decline year-over-year, mainly due to a strong comparison base in the first half of '24 and some project phasing effects. In the Environmental business achieves a turnover of EUR 142 million, also lower compared to last year and also mainly due to project phasing. When examining the geographical breakdown on a year-on-year basis on the right, we observed that Africa remains stable in their relative contribution while contribution year-on-year from the Americas as well as Asia have been markedly strong driven by effective project execution in U.S. and Asia. The turnover breakdown further reaffirms that Europe with 53% remains for DEME, a key market, which aligns with our earlier conclusion from the order book. Our profitability is outpacing our turnover growth with EBITDA going up 35% year-on-year reaching an EBITDA margin of 21.9% from 18% year-on-year and 15% compared to half year 2023. EBIT increased by 49% to EUR 223 million. So the higher depreciations have not impacted on the EBIT margins, reconfirming that the recent additions also are driving profitability. Net profit ends up at EUR 179 million compared to EUR 141 million year-on-year. This results in earnings per share amounting to EUR 7.08 for the first 6 months, compared to EUR 5.58 in June 2024. Now while Luc will provide more in-depth business and operational insights, I will share some financial details on the individual segments. The Offshore Energy segment leads with an EBITDA margin of 31% compared to 18% year-over-year. EBIT follows a similar trend with 20% compared to 9% year-over-year. Segment's profitability has benefited from the higher fleet capacity and utilization, and also the solid execution of projects. The main projects in U.S. and Taiwan being in the second campaign in the first half of 2025 helped boost performance levels. In addition, Offshore Energy also recorded a onetime cancellation fee payment in U.S. and the profit on the sale of the Sea Challenger. For Dredging & Infra, we noticed a small reduction year-over-year in turnover, which can be allocated to the temporarily lower current occupation of the cutter fleet. The EBITDA for Dredging & Infra stands at 12% compared to 19% year-over-year. Similar evolution for EBIT at 0% compared to 8% year-over-year. The decrease in margins for the first 6 months is largely due to further adverse results on a large offshore marine infrastructure project in front of the Belgium coast, the same project that was mentioned under IAS 37 at the year-end. While the impact of this project on the DEME Group results is absorbed by the other activities, it has a notable impact on the Dredging & Infra segment figures for the first half. The Environmental segment maintained solid execution, delivering another half year of strong results in '25 with EBITDA of 15% compared to 13% year-over-year and EBIT of 11% compared to 10% year-over-year. On the Concessions segment, we see that the contracting revenue generated as well as the value of the projects mentioned indicate the overall contribution of the concessions to DEME in the last years. Until date, the own equity invested and loans granted now stands at EUR 242 million. The combination of the above initiatives, both on offshore wind farms and infrastructure generated recurring income in the first half of '25 of EUR 5 million compared to the EUR 11 million a year ago mainly due to very soft wind production in the first half of '25. That concludes for now the main financial highlights, which I believe we can summarize as titled in the first half press release, strong with record profitability. And I now kindly hand over to Luc again.

Thank you very much for that Stijn and for this comprehensive overview of the financials. Now I would like to go together with you and outline some of the highlights of our 4 segments. I will start with offshore energy. And before we jump into more details, we have here a beautiful view of our Green Jade vessel at work during the golden hour installing jackets on one of our projects in the Taiwanese region. I think it's both the works and the picture are a real work of art. Without a doubt, Offshore Energy was really the star performer in the first 6 months of this year. The order book reached EUR 4.1 billion, rising from EUR 4 billion. This includes the addition of Havfram's order book of EUR 530 million, includes project add-ons and the addition of new contracts. Revenue exceeded EUR 1 billion for the second consecutive semester and profitability outpaced revenue with EBITDA climbing to EUR 358 million, representing 31.4% of turnover and that up from 18.3% in the first half of 2024. In nominal EBITDA, it's even more incredible. It is a 118% increase. A number of elements have led to this remarkable performance. First of all, effective execution of the projects, very efficient vessel utilization and strong project planning, as well as several ongoing projects now in the second installation season and some one-offs also as indicated by Stijn. Vessel occupancy reached 23 weeks in the first half year, and that is in line with last year. And as I touched on in the executive summary, in the second quarter, we completed the acquisition of Havfram. The integration is progressing smoothly. It's marked by strong team alignment, encouraging commercial contract developments and the unscheduled construction of the new -- the 2 new next-generation wind turbine installation vessels. Additionally, although on a much smaller scale, we acquired a 50% stake in Bauer Offshore Technologies, and that in the second quarter of this year. Bauer Offshore Technologies is a supplier of offshore drilling services. This investment is intended to further expand our drilling and installation expertise for offshore wind foundations. I'll just mention a couple of our main projects in 2025. In the U.S., Offshore Energy made steady progress at the Coastal Virginia offshore wind project and this included the installation of the first offshore substation and the second monopile installation campaign. Meanwhile, we also began the export cable installations for the same projects, and those will continue through 2026. And also, we had our fallpipe vessel carrying out rock placement activities on the project. The U.S. team continued to work on Vineyard Wind 1, including the turbine installation. We're also preparing to start the cable installation works for the Empire Wind 1 project and that in the third quarter of this year. In nonrenewables, the segment carried out Dredging activities for the West White Rose project in Newfoundland and that leverages -- and so leveraging, I would say, DEME's dredging capabilities. In Europe, we were mainly busy in France the U.K. and Poland. We completed the installation of 61 monopile foundations and the transition pieces at the Île d'Yeu and Noirmoutier offshore wind project, demonstrating DEME's capability when it comes to successfully installing wind farms in very challenging location. Additionally, we made solid progress on the Dieppe - Le Tréport project installing there the offshore substation and the pin piles. In the U.K., we completed the cabling works for the Nearth Na Gaoithe and the Dogger Bank A and B projects and the last one, the Dogger Bank C project is scheduled to begin in the second half of the year. The segment completed the 4 directional landfall drills for the Baltic power project in Poland with the inter-array and export cables works due to start in the second half again of this year. The team also began preparation for cabling works for offshore wind farms in the Netherlands. Then we come to Asia. In Asia, our Taiwan team installed the pin piles for the Hai Long project and began the second installation phase for the jacket foundation installations. The first turbines and the second offshore substation was successfully installed. And I can add with our vessel Green Jade, we completed all 73 jacket foundations for this 1 gigawatt project already last week. As well as this preparatory works have now begun on the Greater Changhua project and the Fengmiao offshore wind farm in Taiwan. Elsewhere in the APAC region, the team successfully completed the Darwin pipeline duplication projects, and that is in Australia. Now we're on to our Dredging & Infra segment. The financial results were already presented by Stijn, but my takeaways on this are that the turnover, I would say, is largely in line with last year. The order book shows a slight decrease but still at a very healthy level of more than EUR 3 billion. Also noting that we continue to see a strong tender activity and we are also tendering as always, I would say, some compelling opportunities. Now EBITDA is indeed lower. That's right, with the EBITDA margin standing at 12%, but that is largely due to these unfavorable results on the marine infrastructure project as described by Stijn. The segment's hopper fleet had a lower utilization rate, which was mainly due to a lot of scheduled dockings. And the cutter fleets occupancy also -- that dipped, but that's, let's say, largely due to a temporary reduction in demand for specialized cutter work in the first half of the year. Our Infra team achieved several important milestones. The Princess Elizabeth Island project in Belgium progressed, with now status of last week, 9 out of the 23 caissons being placed in their final offshore location. Additionally, in Belgium, the tunnel elements were completed. And by now, 3 out of 8 tunnel elements have successfully been emerged for the Oosterweel Connection here nearby our office. In Denmark, the Fehmarnbelt fixed link advanced, where the first tunnel element successfully floated, at the same time, in France, civil works for Poland well project continued, including the construction of the key walls and the jetties. Our Dredging team also performed maintenance works for several multiyear contracts and started a number of new projects. In Germany, preparatory works began for the offshore terminal at the port of Cuxhaven and that following the completion of the widening of the Kiel Canal. In Le Havre, the La Chatière project kicked off with the soil investigation and uxo detection campaign. And in Italy, there was solid progress on several projects, including the modernization and extension works amongst others at the Port of Livorno. In the U.K. Dredging and reclamation work progressed well at the Ardersier Energy Transition Facility, where we are deepening and widening the harbor and the access channel. The segment also maintained a high level of activity in the Middle East. We continue to work at Abu Qir 2 in Egypt, deploying several dredges from our fleet, and we are busy with the dryer moving activities for the Oxagon Phase 2 project in Saudi Arabia preparing for the cutter phase of the project and that will be later this year. In Asia, Dredging & Infra strengthen its presence both through ongoing port maintenance projects and by securing new contracts as well as additional scopes for existing projects like in Taiwan, the project where the team completed dredging works in the port of Taichung and also deepened the access channel of Patimban and that is in Indonesia, and it won a new contract for maintenance dredging at ports along Australia's west-coast. In Africa, maintenance dredging and land reclamation projects were carrying out at several locations or stay along the West African coast. In Latin America, maintenance, dredging works for the access channel and bird pockets of the Atlantic terminal in Port of Moin in Costa Rica were successfully completed and meanwhile, in Uruguay, maintenance dredging for the Canal Martin Garcia were ongoing. And then we go to the Environmental segment. We see here the performance dashboard. The order book of our Environmental segment remained stable, standing at EUR 322 million, demonstrating the team's strength in the Benelux and their efforts to proactively target environmental opportunities in the U.K. and Italy, amongst others. Solid progress on several long-term and complex remediation and high water protection works in Belgium and the Netherlands, delivered a turnover of EUR 142 million and an EBITDA of EUR 22 million. The EBITDA margin increased to 15%, and that is up from 13% in the same period last year. The environmental team also made good progress in expanding and upgrading capacity at our treatment centers in Belgium and in the Netherlands. Meanwhile, Cargen which is DEME's environmental joint venture specializing in activated carbon treatment and remediation solutions and that was established last year. While Cargen is making steady progress and has begun deploying its innovative filter technologies at some selected projects. I would also like to spotlight DEME Environnement, which is a cornerstone subsidiary of the Environmental segment and our pioneering soil remediation and brownfield redevelopment specialists in Wallonia and France as they recently celebrated their 35th anniversary. And here, you can see the main projects our Environmental segment has been busy with in the first 6 months of this year. The team successfully completed a complex 3-year remediation project in Bergen, and that is in Norway and in line with DEME's focus on creating a better, more livable world, the site is now fully prepared for new infrastructure. In Belgium, we have several longer-term projects underway, including the Oosterweel in Antwerp, a remediation project for WDP in Willebroek. The complete transformation of the Blue Gate site here in Antwerp, the Feluy project and the redevelopment of the former ArcelorMittal site near Liège as well as maintenance dredging and restoring the ecosystem along the River Meuse. In the Netherlands, the team continued to work on 2 major projects, which are part of the Netherlands flood protection program. The Gorinchem-Waardenburg dyke reinforcement project and Marken, where the dyke has been strengthened to ensure long-term protection. And then finally, we come to our fourth segment, Concessions with here on the picture of Port-La Nouvelle in the background, showcasing a successful infrastructure concession projects. The net result of our Concession segment saw a bit of a decline to EUR 5 million but this was mainly due to much lower wind production when compared to the same period in 2024. In offshore wind, we continue to operate wind farms in Belgium and we are making progress with the ScotWind concession and preparing for some selected upcoming tenders. For Dredging & Infrastructure, concessions focused on projects and its portfolio such as Port-La Nouvelle in France, and the Port of Duqm in Oman, and additionally the team is working on the deepwater terminal at the Port of Swinoujscie in Poland. Then as part of DEME's long-term growth with regards to its concession activities, we continued laying the groundwork for green hydrogen projects. Currently, these efforts are primarily focused on the HYPORT Duqm project in Oman, where together with our strategic partners, we are working on a project road map targeted to develop a dedicated and suitable end market. In the deep-sea mining, the Global Sea Mineral Resources team continues to monitor the developments around deep-sea mining. Now moving on from our segments section, I would like to highlight some of our ESG achievements in the period. Firstly, environmental. In line with our strategy, we are playing a significant role in advancing and accelerating the clean energy transition, and that particularly by contributing to offshore wind farm projects worldwide. Earlier on, I already spoke about Offshore Energy stellar performance. And with most of its activity focused on renewable offshore wind, it increased its contribution to the group's turnover and is now accounting for 51% of DEME's total turnover. At the same time, in Dredging & Infra, we support the climate transition to major projects such as the Fehmarnbelt fixed link and the Princess Elizabeth Island. And as we continue a pace with our mission to have the most efficient fleet in the sector, we have taken again several important steps. I highlight the acquisition of Havfram here as the addition of these 2 new offshore wind vessels will significantly boost our sustainable operations capacity. This not only directly support the energy transition in their operational purpose, they also have advanced energy management, shore power capabilities, reducing fuel consumption, and they feature hybrid power system, and they are also designed to be able to adopt future cleaner fuels such as methanol. In addition, we are investing in shore power connections in Flushing the Netherlands to enable our vessels to switch off onboard generators, while docked and that to further reduce our emissions. And then for social and safety, we are continually investing in attracting and retaining top talent. And this commitment was also externally recognized when the HR team received the prestigious HR Ambassador Award. You can see that on the picture here on the right. And of course, we remain committed to achieving the very highest standards of safety, focusing on key safety performance indicators, incident reporting, inspections and investigations. Our ongoing initiatives such as Safety Week, safety success stories and safety moment Day, they all help to support this, embedding safety awareness in our organization. As an example, the focus team for this year being, think before you lift. Now you see a beautiful picture here. And I can tell you that for the third year in a row, DEME is a proud and committed partner of the Innoptus Solar team. That is the solar car team initiative of the KU Leuven. These brilliant students are taking on the challenge of defending their world title at the Bridgestone World Solar Challenge that is in Australia with their brand-new solar car. We are very proud to be a partner as a team's commitment to promoting renewable energy, sparking interest in science and technology among young people and encouraging entrepreneurship and advanced technologies aligns perfectly with DEME's DNA. The race has just kicked off as we speak in Darwin and the team has embarked on an exciting chase to get back in contention for victory. All eyes on Australia and on the finish line in Adelaide next week. I wish them very good luck. Now we come to the last part, important part, of course, the outlook. Despite the global macroeconomic turbulence and the current uncertainties regarding geopolitical issues, DEME's operations remain robust. We continue to deliver sustainable, profitable results while at the same time, taking timely investment decisions to support our businesses for the decades to come. Based on the solid first half year performance and taking into account the outlook for the second half, we expect full year turnover to at least be in line with that of 2024 and additionally, DEME's management now anticipates that the full year EBITDA margin will slightly exceed 20%. Full year CapEx remains forecasted at approximately EUR 300 million, which excludes the Havfram acquisition and completion and delivery of the 2 Havfram vessels. I think with that, that concludes my part of the presentation. I thank you, and I will hand you over back to Carl so he can run through the financial calendar and start the Q&A session.

Thank you, Luc and Stijn. We will indeed now begin the question-and-answer session. [Operator Instructions] From our side, we will manage the flow and do our best to field questions from different angles. [Operator Instructions] And I see that people are already queuing up for questions. First in line is Mr. David Kerstens from Jefferies.

Congrats on the strong results in an uncertain world. And it seems that, that uncertainty maybe is so far only limited to your order backlog and order intake, I was wondering if you can comment on the order intake and the pipeline that you see in relation to your previous medium-term guidance for revenues to be broadly in line with 2024. And then I have a second question, which is regarding your profitability. Great to see that now 20% is no longer the maximum EBITDA margin as reflected in your previous midterm objectives. I was wondering if you could please quantify the one-offs in offshore energy and in dredging in the first half of the year. And whether you see 20% now is sustainable, I think your guidance implies you will drop below 20% again in the second half of the year. Any more color would be much appreciated.

Okay. David, I think 2 very good questions. We'll kick it off on the order book, a bit of color. Luc?

Yes. I think the first question, as I interpreted, David, was on the outlook versus 2024 and the order book. So the order book stands as you have seen, at EUR 7.5 billion compared to EUR 7.6 billion a year ago. I must say we personally, as a management, don't see that as a point of concern. There's still a healthy order book. We -- you have seen that for 2026. We have an order book which corresponds to, if you take last year's turnover for a comparison already 2/3. Of course, we acknowledge that, that includes the Havfram order book. But still, we don't see the order book too much as a point of concern. If we look at it a bit more granular, you can also see that within Dredging & Infra. There, we see a healthy tendering activity ongoing. So there's a number of projects in tendering in the pipeline. And the same is happening within the offshore energy segment. So that is, for me, something which I see currently and everything that is ongoing as a point of attention. But we continue to see the good tender activity, and we expect even some deals to close in the next weeks and months, I can say. And I hand over to maybe to Stijn for the second questions.

David, on your question on the profitability and the one-offs. We've identified in the Offshore Energy segment, the surplus on the sale of the Sea Challenger. You will have noticed in the half year report that the net on the sale of assets is determined at EUR 16 million, which the majority is related indeed to the Sea Challenger. On the second part, on the cancellation fee, on the reservation agreement, you will understand that on individual contracts, we never disclose the exact amount. But it is sufficient enough to have mentioned it next to the surplus value on the Sea Challenger. I refer -- I presume you referred on your questions on the Dredging & Infra on the additional loss that we have mentioned on the large offshore infrastructure work in front of the Belgium coast. This is indeed the same project that we referred to end of 2024 under IAS 37. The difference is that we are 6 months further down the line. We have a better insight, and we have deemed it necessary to adjust the loss to completion. Also there, unfortunately, we cannot really disclose the amount. What we can say, it is sufficient enough to visualize it in the EBITDA figures of Dredging & Infra. But I think it's also important to mention that -- it is not visible actually in the entire results of the deemed seeing the excellent results that we have had in the first 6 months. So I hope that's...

Thank you, Stijn. David, if you have follow-on questions, please get in the line again. And we'll move on to Mr. Thijs Berkelder from ABN AMRO ODDO.

Congrats with strong H1 performance. I want to start with 2 remarks. First, given the complexity of your segment reporting and the way your exceeding or falling far below analyst expectations. Can you please next time give this analyst call later in the day as we really can prepare for this. Second, can you please, next time better indicate one-off effects in the reporting as we, at this moment, all are only puzzling on what really happens underlying. So we like -- David, I have to start with further fact finding on what we now really read in this press release. Let's say, my first question is on your full year '25 guidance. When you exclude all these one-offs, you've talked about and you see -- would you still see a lift in your margin guidance for the full year and by how much. Then the organic backlog is down 15% from year-end. Can you maybe quantify how large contract cancellations impacted the backlog also because I see also the Havfram backlog is EUR 70 million lower than what you reported 3 months ago. So probably also there you expect to see a settlement fee?

Okay. Thank you, Thijs. We'll take your first comments on the timing of the conference call perhaps offline, but we'll switch to the questions. So first of all, on the full year guidance and the EBITDA margin full year guidance, Stijn, do you feel...

Well I think on the previous questions, we gave some further insight already on the one-off of the sale of the Sea Challenger. That being said, in the previous years, we also had minus op values as well. Yes, the guidance, first of all, we've increased the guidance for the EBITDA where we say above 20%. Taking into account, of course, the visibility we have for the second part of the year, where we still believe that the drivers that have made sure that the first half had excellent results are still there, meaning we still have the strength of the team and the fleet. The resilience of the business model has really proven to work on the first half. And we still have a very strong financial balance sheet as a company. And our portfolio is also very diversified and has a set of activities also geographically. So with that in mind, we feel confident that we are able to increase the guidance on the EBITDA. And as you know, we are a project-related business, and it is -- we do that based on best estimates and what we see today. And that is why we can fully defend the guidance that we have given for the remaining of 2025. Maybe briefly on your question on the drop of backlog of Havfram from EUR 600 million to EUR 530 million, can actually share that there is actually no loss of contracts compared to when we identified the EUR 600 million. Actually, it proves the very rigid rules internally we have to take elements into an order book of DEME. So the only difference of EUR 70 million is that each contract has optional days where the vessels could be employed by the client. And we have chosen, as we have always done in the past, high-quality order book. And for the time being, we have omitted them. So that is certainly not a loss of any contracts related to the Havfram works in the last 3 months.

Thank you, Stijn. We'll move on to the next in line, which is Mr. Luuk Van Beek from Degroof Petercam.

First of all, a question about the U.S. project, where I've seen that the Trump administration also sometimes holds projects in full execution. Can you comment if you see the risk for the projects you're executing? And to what extent you're covered from a contract point of view, if the customer has to pay any compensation in case you cannot execute the work? And second question about the customer stance. And in general, you hear lots of stories about companies being more uncertain and more hesitant to take big decisions. Do you see that in the conversion of your pipeline into actual orders as well?

Sorry, Luuk, the first question did not really come through.

I heard the first question that...

Your line was not super clear but we...

Second one, I will reply to the first question and then maybe Luuk can repeat his second one. So I understood it as the risk on our projects currently ongoing in the U.S. Now for the moment being, indeed, revolution came as a bit of a surprise to many people. We are not active on the Revolution project. Today, we are in almost finalization of the Vineyard project. We are well advanced on the Virginia, on what we call the CVO project and we are preparing for the cabling on the Empire Wind project. We see, at this moment, no indications and neither do our clients that these projects could be hampered by any executive orders. That's, I think, was the first part of your question. The second part is, if that would happen, of course, we have contractual arrangements in place to compensate and protect our contracts, that's sure, yes.

The second question. Luuk, if you wouldn't mind to perhaps rephrase the second question once again, please?

Yes. So the second question is basically with all the uncertainties that you hear around this, do you see any hesitance of customers to take a decision on the projects that are in the pipeline? So are they being delayed or you seeing normal progress of those?

Okay. So the -- well, of course, on the U.S., I think already the timing, I'm not 100% sure. But I think in one of the previous calls, we already indicated that we are not counting on, let's say, new lease and subsidy rounds in the short term. On the other hand, we have, of course, the 2 big bases are Europe and Asia Pacific. In Europe, you have seen together with us a couple of experiments of tenders, which was either too low CfDs, floors or no CfDs. That is not the way to go. I think many people and also the governments agree they have been rearranging the tenders now, and we see currently a healthy pipeline of projects getting new CfD awards. And the same in Asia Pacific. I think once the projects have their awards under a healthy system, they are not so much hesitating or impacted by the transatlantic decisions.

Yes. Thank you -- thank you also. And yes, we'll move on to next in line from KBC Securities, we have Guy Sips. Guy, floor is yours.

I have 2 questions. First is on the Havfram project. Can you give us some magnitude of the project and the timing of these project, when are they expected to be executed? And the second one is on the Sea Challenger. So what's the reasoning behind the shift of this vessel?

Yes. Very, very concrete questions. Thank you, Guy. So perhaps on...

On the Havfram project, so we are -- the first ship will be delivered end of this year. Second ship is being delivered early 2026, and both of them will start being operational and contributing in '26. And then they have an order book running over '26, '27.

Until '29, 2030.

Until even into '29, 2030. But the magnitude, I think we haven't given any specific details on that sub part. But that's, let's say, the time line for contribution of the Havfram vessels. Now on the Sea Challenger, the Sea Challenger has been brought into our Japanese joint venture. We think that, first of all, Japan is one of the upcoming markets where experienced vessels will be needed. And we also think like we saw in our model in Taiwan that having a common asset is, I would say, an asset, it's really a plus. You have a shared interest, you can develop the business together, and that's why we have brought in the vessel into the joint venture. Mind you also that Japanese regulation is complex. The vessel has to be adapted to the Japanese rules and regulation, and that supports having the vessel in a permanent situation under the joint venture.

Yes. Thank you, Luc. Thank you, Guy. Moving on to Mr. Tijs Hollestelle from ING. Thijs, you have a question?

Yes, if I, let's say, run the numbers on the Offshore Energy division, taking out the disclosed one-off and let's say, assume kind of an all-time high EBITDA margin, and I would say that the cancellation fee was above EUR 55 million. And when exactly did you learn about the positive EBITDA contribution from this cancellation fee, the day?

Well, perhaps I can take that myself. We already made reference as a subsequent event to the cancellation fee when we disclosed the full year results of '24. We did not disclose the amount of the cancellation fee, Tijs.

Yes, you can indeed -- I think you can run the numbers yourself. Okay. So then the -- let's say, the Q1 outlook statement that was basically repeating the outlook given earlier and that had to relate with the uncertainty to the Belgium infrastructure project. Is that a correct assumption?

So the question is, whether our Q1 comments on uncertainties was referring to the marine infrastructure project in Belgium. Is that the question, Tijs?

Yes. When did you learn about the loss provision on that?