Fugro N.V. (FUR) Earnings Call Transcript & Summary

[Interpreted] Welcome to all of you. I was already preparing myself. First of all, welcome to the shareholders. It is very important that they stay engage to our company. So welcome to you, but also all of the other people that were invited the former people in charge of the business. It's always good to see them. My name is Sjoerd Vollebregt. I am the Chair of the Supervisory Board. On my right-hand side, you see the executive management team, CEO, Mark Heine; and CFO, Barbara Geelen. Also the various members of the Supervisory Board, Marc de Jong, Anja Montijn, Petronella Hofste and continuing onwards to Ron Mobed, Antonio Campo, is present online, by means of the webcast. There were very valid reasons why he couldn't attend today. And furthermore, [indiscernible] from the auditors, who will also speak later, [ San Duane ] our counsel, the company's counsel, and I understood from you San also Head of Security. That's also your responsibility and Nikita, who is the Company Secretary and will take care of the minutes today. This meeting is held in the Dutch language this year but we provide simultaneous translation. And if you're speak English, please ask your questions in English, and we will indeed translate them as well as we can and reply to you. So please feel free. If you want to attend the meeting by the webcast now this year, it isn't possible to ask questions. So the active interaction that we provided in COVID times is no longer available, but we are very happy that people are interested to join us online. And we have a number of matters to be voted. A number of proxies have been provided by shareholders. Now I will now give the floor to Mark and Barbara, but there are some matters that we need to discuss first. First of all, the meeting will provide you with information about operations, first of all, and then we have more standard items to vote on and several appointments or reappointments this afternoon. The registration date of the meeting was the 29th of March 2023. The notice to convene was sent earlier on the 14th of March 2023. So out of 71,191,027 votes we have represented in the meeting, 63.4%. So the 71 million has been registered. So we've covered that too. During the meeting, you'll have the opportunity to ask questions. The microphones are available on the sides. In order to provide the correct minutes, please state your name and any organization if any, that you represent. So we can indeed include that in the minutes. The minutes themselves, the meeting will be recorded to enable us to record it properly. After the meeting within 3 months, we will publish the minutes and then you will have another 3 months to respond to these. And indeed, we will then adopt them. So these are the procedural matters. Now moving on to the very exciting time testing the voting procedure. You have received voting pads and a card with a metal part, the SIM part that you have to introduce in the device. So you can leave that in your device during the entire meeting. One is in favor, 2 is against and 3 is abstain. Now if you have any issues, yes, you do have issues. You could see them in a corner than, okay, now you have one. Let's correct that, indeed. If you have an issue with your voting device, and you did so correctly, sir, raise your hand and a person will attend to try to solve the matter immediately, so you can actually vote. So that's the voting procedure. [Interpreted] We'll conduct this meeting in Dutch, but please phrase your questions in English for us. And we will continue in Dutch after that, but we'll try to answer your question. [Interpreted] So all of your questions are welcome. Let's try to do it in a disciplined manner, so we can reply to you in a careful manner. And I review a number of matters that will be addressed later on. But let me see that the devices are being distributed? Or are we already -- is it already possible to do a test vote? Okay. So we have a test question here. Fugro's unmanned vessels are the ideal solution for government to secure their underwater infrastructure. It's a rather critical matter, but it's ratotopical. I would now like to open your option to vote, which is in favor, against or abstain. [Voting]

[Interpreted] So you see that votes are arriving from people in the room. There's one person who says abstain 85.4 -- 73% in favor at 14.7% against, which with the person who abstained is 100%. We think it's an excellent business model to range, but we will indeed incorporate your advice. So I think that we can move on to the explanation by the Management Board with regard to the present situation. The quarter 1 figures were published this morning. And this will be addressed too. So I would now like to invite Mark to start and then Mark will take over, and then we can move on to asking questions.

[Interpreted] Good afternoon. Welcome. It's great to all of you are here. I'm going to comment on the year 2022, a year that's quite far behind us. So we have to get used to speaking about it again, but I also refer to Q1 '23. This is how it goes. So I will cover 2022 and Q1 of the current year. And first of all, let me go back to the full year 2022. We've concluded in a decent way. It was, as we say, a year in which we wanted to make a step towards the final objective. And for 2023, we're going to discuss delivering. So this was a step-up with 4.3% EBIT margin to 6.1%, not where we want to be, but a good step in the right direction. Also, in terms of the operating cash flows, we've seen a great improvement. It's 15% higher. And that's an important measure because this is about the cash in the bank at the end of the day. Looking at the order book, we see the most important [indiscernible] for the future. We see it really full with 37.5% increase vis-a-vis the year before. It's more work at hand, but also higher prices that can be passed on in the market by now. There are some other things that concern the full year. You see them on the slide, and this relates to the fact that we see good developments in our various markets, particularly in the energy market. I will cover this in greater detail in a moment. As concerns 2023, and I will highlight sea wind farms, in particular, we will come to this. Also, we stated in the announcement of the full year figures that we need additional capacity to serve all those markets. And therefore, we announced additional financing of new vessels. They are not new vessels, but they are going to be new for geological fleet, and we are buying them and converting them to become geotechnical vessels. In addition, we have announced something else that people want to hear about and that will be an update of strategy in the second half of this year. Given our view on development in the coming years because everyone wants to know what we are going to do with the money we invest, whether it will generate income, and that's a good question. In a broader sense, beyond finance, we see that we also have defined nonfinancial targets, targets that are related to 3 fields. The P for people or the P of planets or sustainability. And obviously, we have the financial targets for profit that I already touched upon. What do we see? We have defined such targets for the midterm. Sounds good. What is the midterm that covers the period 2023 and 2024. After COVID, we've amended this term. We have defined the midterm. It used to be between '21 and '23. As a result of COVID, some things were delayed or went slower. And therefore, we decided to define the term as '23 and '24. Some of the targets go beyond '24 and 2025, for instance, and you see what we have done vis-a-vis the targets in 2022. And the conclusion is that we're on the right track for all targets expecting delivering in either the course of this year or next year. For instance, people. This is about safety. But the second target is also about diversity and organization. We managed to make a significant step particularly in increasing the number of women in leadership positions, diversity is much broader than this. But this is one of the variables we've chosen to measure diversity. The ambition is 25% in 2025. It demands further steps. But luckily, we still have 2 years to go. Now what about Planet sustainability? We have stated that we want to diversify to the extent where our work is conducted in markets that are not so much traditional energy markets. So rather focus on the wind infrastructure and water and at least 65% of revenue should be generated in this segment in the midterm. We're already on 63%, and that's not completely our own choice. It also depends on market developments. But we're on the right track to hit the 65% in the midterm, then some other targets of a more technical nature. I come back to the very moment, this is about reducing the emissions of CO2, for instance, and for 80%, this is related to our vessels and we've already achieved a 30% reduction compared to 2020, which was the measuring point. And we want to move to 20% by 2025. So also we're on track. And then a last point that you may know, notice is the CDP rating. This is the carbon disclosure product, an independent organization. And it has various levels that can be achieved in terms of sustainability, and we have determined we want to move towards a rating B. In 2021, level was B- just not yet B but already in 2022. We achieved the B rating. Now that doesn't mean automatically that there will be a B rating in the future because you need to keep delivering. And just as sustainability nonstore buildings keep developing, this standard also keeps moving and you'll have to meet ever more stringent requirements to keep the status. And then the last field profit has a few financial targets that we will cover at length in the following slides, particularly in Barbara's presentation. Now at the bottom of the line, something really important. We've announced a net 0 target for emissions in Scope 1 and 2 emissions by 35%, it's complicated. So Scope 1 and 2 covers one's own activities and the power used by the company, Scope 3 emissions are the emissions of all suppliers and the emissions related to the supply chain that's much more complex. But we have announced a very clear target concerning Scope 1 and 2 for 2035. Q1 2023. Well, I assume you have seen the press release this morning and the picture is pretty good. In terms of strong growth vis-a-vis last year 27.5% growth of revenues and this is great, something you don't see every day, this growth level. And this is closely related to growth in the energy markets, particularly in solar wood box offshore. And Fugro is involved in these plants at a very early stage. All the foundations, the poles need to be struck in the seabed correctly. So this requires research and also you need marine investigations, subsoil investigations, prior to the foundations. And then you need to check the heating of cables, for instance, on the seabed and the definition of the necessary conditions. So this has generated strong growth for the company. Also in operational terms, the past quarter has seen good execution combined with better prices and the overall gross profit margin has been achieved at a level of 5.4%. This is reflected in the operating cash flow that has increased by 29.3% to EUR 42.2 million really beneficial. Certainly looking at first quarter that usually is strongly affected by seasonal effects because you are dealing with the winter month during which usually work offshore is less easy. Now the order book, the backlog is fine, 22.4% over the 12-month period which provides also solid outlook for the near future. Now going forward, if we take a global look at Fugro, and we have lots of people in the room who know Fugro very well, they may correct me later on. But I would state that Fugro means actually foundations and land mechanics. Well, that's not something you forget once you've heard it once. And we exist because our planet keeps moving and developing, you may have seen all those pictures, all the continents used to be one big continent. Now they're not connected anymore. And a surprise, surprise, they're still moving and such a continent as Australia moves up to 10 centimeters per year, and that means that everything is in motion. And that's great news for Fugro because everything you want to pin down in the ground is actually moving because the subsoil moves. And that means that just as you want to have a daily cup of coffee. People need daily research. And this may be the seabed, this may be on land, this may be a railway track. All of this is moving and the subsoil needs to be checked from time to time. Certainly, if you build a new building, the foundations need to make sense. Now an aside, something you will have followed. And if not, I would be surprised because I think that in 200 countries, press release have been published about the finding of the Montevideo Maru vessel. It came into the news over the last week and Fugro is very glad it was involved in such a research project. We work together with silent world. This is a group you see represented on the picture. The guy with the cap in the front is John Malan,someone who used to work in the Netherlands. He is an Australian businessman and philanthropist who organizes such events and tries to solve such mysteries. A mystery that was important to a country such as Australia, but also to countries such as Norway with a lot of people on board, such as Japan that has generated a lot of publicity because the vessel has finally been found. It required a lot of research. For years and years, research was conducted to try and see what a Hasek you had to look for a needle in, then the Hasek was found. And it was done properly because the footprint was considerably reduced. And over a 12-day period, the area was scanned at the depth of 4 kilometers under water. This is something that might sound easy, but just bear in mind that we can see for hardly beyond 4 kilometers. We're going down to the seabed or the depth of 4 kilometers brings you in a pressure environment that's unbelievable. It's pitch dark and no lamp poles or anything there. So you need to work with devices that use ultrasound to find. We've used an autonomous underwater vehicle that can go to depth of 4.5 kilometers. And we managed to generate such imagery, which is great. And a reporter was on board the ship that will make a footage program about this. So more publicity is to come. So what is our purpose? We decided to we need to formulate a clear purpose in this world. And we believe that by our services, we contribute to building a safe and livable world. Without Fugro, no building and no wind turbine can remain standing for 30 to 35 years. It needs to be done safely. It needs to be monitored and therefore, we see an important role for ourselves. And more importantly, as we will see in the current climate change, we see all kinds of work coming our way where the measurement operations of Fugro can be useful. So how are we organized? We are focused on gathering data. And data is always linked to Geo-data. So you have data linked to geographical quarters. And this is why we refer to Geo-data. Some years ago, we actually wanted to limit the use of Geo-data to Fugro by patent. Unfortunately, we were too late and all our competitors are talking about Geo-data. And this is because Fugro is speaking about this more and more. This is what we do. We try and gain insights combined with Geo-data. And this is important for clients who want to build. This is important for governments because as I said, coastal lines need to be protected for the rise of the sea levels or for flood risks. And this needs Geo-data. We gather data. This is acquisition. We analyze data. This happens in laboratories. We have 35 laboratories worldwide. And this is the land research into the first 50 meters of depth. The strength, the flexibility, the content stones or sand and the requirements for foundations and then also very often advice. We do this, as you know, on land and at sea. And in the markets where we operate energy, infrastructure and water, we always relate closely to the major topics of the world today. For instance, green energy, clean energy, which is the energy transition from traditional forms of energy to clean energy sources. This is also related to safe infrastructures because we want to have a safe living world, responsible work. Therefore, also sustainable infrastructure development. And then we have the climate change issue, the change of temperature. We would like to create environments where people can live safely. So all of this is underpinned by the sustainable development goals of the UN 17 goals with sub targets. There are 5 targets where we believe we can contribute, 14 is particularly relevant, life below water. This is something where we work together with the ocean decade of the UN because the UN have said that the oceans and SG 14 are so important, and they are underfunded. So for a 10-year period, they decided to focus on the oceans and on making more happen there. We became one of the few companies, commercial companies that is an alliance partner in this program. A few examples, and I'll keep it very high level. We are involved in many offshore wind farms. I often say that there's hardly any wind farm offshore where no thus companies are involved. And in 9 cases out of 10, Fugro will be involved in the past. We had the feeling we were involved in 90% of such processes maybe by measuring the wind, the early stage, maybe looking at the routing of cables, maybe looking at individual wind turbines. All of this needs to happen. And all of this needs to happen before the decision is taken on construction. Also, a few people know that a company such as SIF that construct poles do not make 2 identical polls because no location is identical. Why? Because Fugro keep saying that the soil profile is not the same. You might not as Fugro but then you're not sure the pool remain standing or the foundation remain standing. So everything you see at SIF in Rotterdam on the shore is unique, one maybe 5 meters longer than the other, the steel may be thicker. the diameter maybe larger. The end of the day, it all looks more or less the same at sea. And that is because Fugro is also involved in the straight installation of foundational poles, sounds easy. But if you want to have a vertical installation of a poll at sea with a movable crane on the soft surface. That's not what we do. But we measure the vertical position of the bolts, and we check it. We're involved in the development of wind farms in the U.S. more and more. Here you see Atlantic shores, which is a combination of EDF and Shell a joint project, investing lots of money. So nowadays, we have more work for Shell in offshore wind than we have in traditional energy, and that is worth saying Atlantic shores is one of the parties leading the way in the U.S. Major projects with a lot of work at hand. Now actually, not a single pole has been driven into the U.S. seafloor, although we have been talking for 2 years, only a few pilots maybe even longer than 2 years. In Europe, we recently celebrated 25 years of activities in offshore wind. And I think we already actually demolished the first wind farm recently in the U.K. So it's developing fast. It's developing in all the [indiscernible]. I was at the North Sea Summit recently in Belgium where there was reference to the huge growth of offshore wind farms. The ambition is at such a level that we, as an industry, told government that it needs to be done differently. Otherwise, it's not going to happen at all. Cooperation needs to increase. You need to be faster with issuing the licenses. You need to standardize on the types of pools and turbines you want to build? Because if the turbines have becoming larger and larger, you need different installations, different vessels and for the main construction companies, it means they have to keep changing their equipment and can't make money. Now something completely different. It is more onshore. We are involved in keeping infrastructure safe and keeping people living in urban areas safe. This is an example of digitizing a power network in New Zealand. This is something we do in many places in Australia and in New Zealand, this is well developed. They have many distribution links to private houses. In the Netherlands, everything is under ground and in New Zealand, It's above ground. And therefore, the networks need to be inspected regularly, particularly given the fact that there's a lot of vegetation. The eucalyptus trees may creep up to the power lines, which may lead to fires. So this needs to be checked and they create 3-dimensional networks to do this. You see it here in a cloud of points. It looks like a picture, but actually is a cloud picture of points. The underlying data is a photograph, but this is based on the data gathered from a plane. This is how we keep this world a safe place. Then something else. I've mentioned say the rising sea level, cost of protection, flood protection. This is something we receive many questions about worldwide. We are currently involved in several projects in the U.S. In Florida, we won a project but also in Louisiana and Texas. We have major projects on way about measuring the coast line. The first cost of resilience project in Australia is also on its way and I can keep going on. This figure is from Ireland, where we have also been mapping cost lines. This is one of my favorite slides that I always show because this is about our activities on change over the past years. I see some people here who were on the Management Board in the past. And I remember sharing the board room with some of them 6 years ago, and making the conscious decision to broadly apply the expertise of Fugro in several markets, and this is the result. It worked out very well. There is no year where you see decisive change. It's gradual process there can be changes between the years, and this is why we are cautious on publishing data on a quarterly basis. We do it on a half year basis, but you see that now 63% is in wind infrastructure and water a great change. We're also still important in traditional energy markets such as oil and gas. It's 37% now, and it's mainly reduced to maintaining the safety, and this is important for the overall purpose of Fugro. Keeping the -- maintaining the safety of infrastructure on CR pipelines, rusting, are they potentially leaking, are they going to pollute the world oceans really important issues now. If they have the room stamp under the EU regulations because it's oil and gas related. Still, we believe we should keep doing this. These tasks are important. They are important to us for future. And therefore, we believe Fugro must keep playing a role in the development of some new fields, particularly in gas fields because you'll see that in the future, unfortunately, traditional energy will remain important. But still, it's good to see such growth of offshore and 42% growth over the past year. That is really strong. And over the past years, we have always seen growth figures of 25% over the past 3 to 4 years, it has been a way above 25%. Now if we look at the development of all markets, we see growth all over the place. Energy and energy has become even more important after the situation in Ukraine from the start of last year and ongoing a very painful situation. A situation that is still affecting the energy balance and energy security for the future. Infrastructure is also growing although we do see the difficulties in some countries. The Netherlands have the nitrogen problem. Many projects have been stopped or interrupted, pretty difficult. And it also means that some markets are affected. And in a global sense, we see water as a growth market. It's hard to pin down this market. So we are working very hard on defining the markets and reporting on this market. It's a work in progress. We are working on ways to report on this. Now I want to zoom out and focus on news throughout 2022. We announced our intention to purchase 2 vessels. I refer to them briefly, 7-year-old vessels. So it's the Topaz Energy and Topaz resilience, I believe, we've given them new news. It was Topaz Energy and Topaz Endurance. And in Q2, the first will come our way. It's already on its way and in H2, the other one, and they will be converted to become geotechnical vessels. It means drilling a large hole into the ship, so we can have a drilling installation and then having the possibility to take ground or soil samples. This is what we want to do, and it is something we need to do because the market is growing to such in a bank that we need additional capacity throughout the world. We use vessels that we rent a lot but they keep becoming more expensive. So it's becoming very expensive to rent vessels and many vessel owners also have gone through a difficult time for years. And therefore, they don't want to pin themselves down for a long time because they may charge better prices next year. So this is hampering our development. If you only use rental vessels you see that the prices and the cash out of renting ships is actually very close to the cost of ownership. Now what about our fleet and the fleet allocation for the coming years. We see challenges there with the management team. And with Fugro, we decided we don't want to have any scope 1 and 2 emissions in the future. The scope is directly under our control in terms of energy use and emissions, resulting from our own operations. And in 2035, we want to have 0 emissions, net 0 emissions as it is called. That's difficult because a company with over 25 vessels generating most of emissions needs to act because the ships still need to stale. And unfortunately, we can't use a kind to propose them. So we need to do it in one way or the other. Well, batteries are out of the question too. You can do something but you'll have an efficiency of 7% to 10% less emissions. So this requires serious steps. We have invented several solutions. First of all, over the coming years, we are going to look for hybrid solutions with battery packs on board. And in 2035, that won't be the solution anymore, but the real change is new fuels. One of the fuels we have selected, like other companies such as [indiscernible] methanol obviously, green methanol. So it's clean methanol and then ships really have 0 emissions, neutral in terms of emissions. Now that's quite a job. It means that you need to develop engines that can burn methanol technically or technologically, they don't exist yet. Nice idea, but they need to be developed, they need to be tested. Subsidy has been requested from the authorities together with a consortium of companies throughout the Netherlands or the major maritime players. And together with them, we are conducting a number of pilots on converting engines over the coming 1.5 years, 2 years, we want to gather data on the performance of such engines. Having developed this over the coming 5 to 10 years, it's going to be really easy to equip vessels with new engines using methanol. Sounds easy? But methanol is not so easy to transport in the existing tanks. So this is also about the tank capacity the ceiling or the coating of the inside of the tanks on the fuel tanks and fuel conduit. So actually, a lot of required for a vessel to use methanol as fuel. We also start focusing on smaller vessels. The major vessels that have a lot of emissions are replaced by smaller vessels that are unmanned crew free. You've seen photographs of such vessels, and this is really taking off. Now we're trying to do this based on a plan working towards 2035 in order to reduce emissions to net 0. This is my last slide, and this is a lot of text exactly the same text you found in the annual report consciously. So because we don't want to say much more than what we have already said which is about the Brumadinho dam that collapsed in Brazil in 2019, an extremely painful situation that led to a lot of death, including 4 employees of Fugro. An absolutely dramatic event. I traveled there on my own immediately and I spoke with one employee who miraculously survived. The person that was on the dam at the moment of its collapse. It was a Fugro employee who survived miraculously, a very tragic situation. And from day one, we have kept track of the exact course of events of the underlying reasons why the collapse took place. And we've tried to understand whether Fugro had played any role or any had any thought that might, of course, be collapse. We've been on top of this and very early on, we concluded that we are not to blame for anything. We have highlighted this several times. And therefore, we have no provisions in the books because we don't believe something is going to come from this. Nevertheless, recently, a group of people. I believe 18 individuals have been held liable including 2 companies, Vale and TÜV SÜD two companies that are being held liable in part for the collapse. How this will go further? We don't know. It's an ongoing process. And then you can exactly see what we have stated, and I'm not going to deviate from what I have said so far. And with this, I would like to give the floor to Barbara.

[Interpreted] For the results of 2022. So this is my third shareholders meeting of Fugro and the first one with audience presence. So I really like to be here today. And as I've heard many faces that are familiar that have visited this annual meeting for many years. Not for me, but it's very good to meet all of you today. As Mark has explained, I will provide some additional information on the year 2022. And we'll also give you more details about the first quarter of 2023. There are a lot of English terms in the results. Let me try to use that terminology as far as I can, but sometimes, there will be an English words incorporated in my speech. So first of all, this is actually as Mark has explained, but in a bit more detail. As you can see, nearly all the signals are green for the past year after a difficult period for Fugro as well. The turnover has been -- has increased by 14.8% and the backlog grew by 37.5%, that is really impressive. And later on, I will provide you with several details with regard to the financial results. But for now, I want to highlight growth of revenue. It is mainly related and led to an improved margin, mainly EBITDA which has improved from 12% to 13% and EBIT margin. As Mark as indicated, it's a step-up year from 4.3% to 6.1%, which is actually in line with the EBIT margin, the gross profit margin that we want to achieve of 8% to 12%. That's what we promised, and we want to do that in the period of '23 to '24. So we've already ended up in the year 2023. The net leverage, so the debt ratio has decreased considerably, which is related to the higher EBITDA that is generated in combination with EUR 100 million that we've collected in July as part of a sustainable financing -- refinancing in the last year of our debt. Now looking ahead to the results. And you can see that strong growth happened in the marine market which is the work we do offshore. The revenue increased by 12.9%, which is mainly driven by new developments. Operations and new developments and that's what we know is provided a lot of growth, which is wind farms, offshore. The occupancy rate of the fleet was 72% over the year on average. And when we look at land, we see that the revenue, let me see EUR 83 million in revenue, which is mainly related not just to the asset integrity side, but the site characterization side, so the new projects that we do. And mainly, we see that a lot of land business is moving towards what do we call that nearshore activities, but also what we noticed in the past years, an increase in the activities for LNG, liquefied natural gas. So where gas arrives onshore, which is with regard to the energy security that countries are looking for, it's a marginal market that really increased in 2022, and we have a share in that. And indeed, we have an impact of the exchange rate dollar euro. Now when you look at the lower graph, you see that mainly land has shown a lot of growth in the field of margin, and that margin on land has improved up to 6.1%. And the good thing was that actually all regions contributed to this result in which Europe, Africa were already within the midterm targets. So they are performing. They are achieving these targets. But in the past year, we also noted that Asia and Pacific, Apex, as we call it, is also moving towards the midterm target. So that's very good to notice. Now let me explain something about the operational cash flow. And what we see in the top graph is that we have an increase in operational cash flow for working capital of 50%. We see an increase of EUR 119 million in year 2021 up to EUR 179 million in 2022 which is related, of course, also to the increase in revenue. And when we address the next part, we see that working capital that we have. What will happen if revenue is larger, the working capital increases. And that's what we've seen in 2022. So the amount of money needed in the working capital is increasing. And we see that in the 12-month turnover. So working capital was 12.9% in December 2022, when it was 10.9% at the end of 2021. So working capital is an important focus area and also this year, and I will demonstrate that later on. Mainly with regard to the increase interest rate, working capital is very expensive to have. So we want to keep it as low as we can. Now I would also like to explain something about the investments. Mark has just discussed it. Let me just look back on 2022. Actually, we spent more in '22 than in the years before, EUR 123 million, which has a number of reasons why we did so. First of all, because we see opportunities, but also because due to the higher revenue, we need to invest more. More investments in future, in order to be able to execute the projects that we have already acquired for future. So it's also important that Fugro maintains its assets properly and it costs money. More assets, more money. And of course, we have new markets and the net 0 road map that Mark has just referred to. It's not free of charge. We finance part of it. Of course, we also look at grounds where we can. We talked to that, to our customers about that. And if we all hold hands, we will achieve the net 0, not just our road map, but also the road map that everybody has or rather should have in our view. Last year, we added Fugro Quest to our fleet, which is a geotech vessel. And we were late in the delivery of the conversion, which was a large conversion, but we're happy to report that since it has left the dry dock, it has been really productive for us and also for our customers. Now looking ahead to the balance sheet, what did we do last year? Well, we've been really busy. It was a difficult year on the capital markets. Fugro experienced that the years before. It was a very difficult period. When I joined the company, one of the tasks I had was to check out the financing that we had and to verify whether we could achieve a better situation for Fugro. In the summer of 2022, we managed to do so. We are very happy that we succeeded and it led to the fact that now the debt position has been reduced significantly below 1x, which is very prudent for project business. And it means that we have optionality and also flexibility, which is a very good position to be in. We've announced that we will not -- we propose not to pay dividends. And I think you've all heard about that. So I would like to explain. What we do for capital allocation, it's important to address that. And the target that we have is to create long-term value. So the money that you earn, what will you do with that? We want to do it in a proper way for all the stakeholders for society, for staff members, for shareholders, for money providers that we have, for customers that we have and everybody we serve. So we always consider very carefully. What do we do with the money that we earn? Do we want to invest it in assets, new vessels, new innovations, net 0 road map that we've discussed, shareholders by means of dividend? The balance sheet to have a proper and healthy balance sheet. It's really important to be in the driver's seat ourselves, that's really important. And also what the opportunities are. We don't have to invent everything ourselves. There's also an option for nonorganic growth, very selective. And I would like to indicate that we do that in a very careful consideration. We've done that to with regard to buying 2 vessels, which was not an easy decision. Because it was after many, many years of not really investing a lot. This was a very important and heavy decision for Fugro. But we believe that the market and the position that we have in it means that this is the right decision to take and the right way to spend our capital. Moving on the same vision that you've just -- the same image that you just saw -- seen about 2022. We are moving on now to the first quarter of 2023. You can't see that it's even a bit deeper, but we are very happy with the results, a growth of 27.5% in revenue. Further increase of the EBITDA margin. Further increase of the EBIT margin, the gross profit margin. I think for the first time since 2015, we have a positive gross margin to report on the first quarter. Positive backlog, the order position and we've increased yet again in generating operational cash flow. In the first quarter, from 13% to 42%. So that's an increase of EUR 29 million. And it is allocation for capital. We can decide once again, will it be part of the working capital, but we can also finance growth of the business. The balance sheet can be addressed, et cetera, what I just indicated to you in capital allocation. So operational cash flow is really important. Now eventually, free cash flow has also increased. So we've not invested a lot in the first quarter, which was EUR 14 million. We communicated to the market that we expect this year to invest EUR 200 million to EUR 225 million, which is also related to the 2 new vessels that we've bought. And -- so that is relatively low, so the cash flow is positive for the first quarter. Now moving on to the year 2023. What we see is continued strong revenue growth. We are moving onwards to the gross profit margin of 8% to 12%. We want to indeed state that we are operating very uncertain market situation geopolitically but also macroeconomical, with, on the one hand, inflation and interest rates that are moving. So it's something that we have to monitor very carefully. And of course, we are a worldwide business. We are active all over the world, and it happens in various sites, and it may have an impact, mainly also in the geopolitical environment. And we still have to cope with pressure by suppliers which is something that we expect to last for some time or rather become the new normal, which means that, what Mark discussed, that it will take longer to build a ship and that indeed has an effect on working capital. Now indeed, we may have higher stocks because we want to have more stock part so we can replace it as we are very busy. So it has our attention all the time. Now to round up, we have a strategy. We are now scrutinizing that also because the midterm targets are sort of finalizing next year. So it's prudent to check out now what would be the next phase for the business and we will present that on the 14th of November of this year, which is my story.

Thank you, Barbara, for this clear explanation. And also an explanation of the balancing act that is [ craved ] from us and thanks also to Mark for the comments on the way we have a hand and progress made. After this presentation of the Board of Management, the floor is open for questions. We have a microphone here and there in the room, please mention your name and if relevant those you represent for the minutes, and then we'll try and cover your questions as best as we can.

Who would like to speak? We have someone close to the microphone tactically and strategically well installed. Please go ahead. The gentleman, I think, was first. Please go ahead.

My name is [ Sty Lensnar ]. I am here on behalf of the Association of Investors in Sustainable Development. We represent about 80% of the financial institutions in the Netherlands and behalf of VBDO, I have four questions. But let me start by complementing or congratulating the company and the people at the table with the fantastic results. It looks great and as we said last year, it is impressive. And I think Mr. Heine mentioned [ SDG 14 ] Marine Biology, and we have 4 questions. One is about biodiversity, then labor conditions, then lobbying and advocacy. And the fourth question is about emissions. Biodiversity. Mr. Heine is something you referred to the importance of the marine decade. And in the annual report, we have seen that you have conducted the impact assessment on marine diversity. We've heard earlier on that this seen as important by the UN but also by your customers. And we are really curious about the targets you're formulating and the moment you're going to share your targets with the world. Chairman, if you allow, I'll carry on the right way, Yes, please. The next question concerns labor conditions. And this is related to the [ CSPD]. This refers to supply chain labor circumstances. You have once again conducted an analysis. And once again, we are curious about the outcomes and your reporting. And the third question is about lobbying or advocacy. And this also is a new point of attention also for VBDO. And this is about the question. What Fugro is lobbying about. Can you indicate your targets? Can you tell us when you're going to report on lobbying activities. And then a last question about emissions. It's great Mr. Heine, that you have told us about your work on Scope 1 and 2 that saves time on my question, but we are curious about your plans and targets for Scope 3, and the moment you're going to start reporting on this. That concludes my question, Mr. Chairman.

Some play questions, Mr. Chair. So we try and formulate answers right away. Mark, the floor is yours.

Yes. Thank you for your questions. And I think I'm going to go through them one by one. We want to give you a thorough answer. Your first question was about biodiversity. This is becoming more and more important in the whole world. And -- there is a lot of interest in biodiversity, particularly after the [ top summit of the 15 in Montreal ]. This was really placed on the forefront. We are working very hard on a biodiversity policy. And this means that we will have discussions with customers, but also internal discussions on what needs to be done. And on the role Fugro can play -- by the way, in the services of Fugro, we see many issues closely related to the biodiversity questions of our customers in development of offshore wind power. Biodiversity is becoming very important from the point of view of governments. It's becoming the #1 topic before they start discussing any other matters. Today, there was an announcement about they need to stop wind turbine during the migration of some bird species. This is becoming essential. And it's true that we have conducted our own impact assessment and we are particularly focusing on 3 topics there, emissions of CO2 by our vessels because this is the lion's share of our impact but we also looked at some underwater noise compared to the underwater wildlife and this is a data point that many people don't know, and that's the fact that 80% of life on this planet is actually in the underwater world. So we need to care for that life, and we fully support that position. Finally, we have looked at ways to -- of moving through ecosystems. So this is about ship movements happening in the oceans. A lot is happening in this field. And we are asked to report on this and this is something you find in the corporate sustainable reporting directive. We are working very hard on preparing the ground for this. This should start in 2024. Some reporting should start at least. And that means that there is a double materiality matrix analysis that is required and we are preparing such an analysis. It takes a lot of work. It takes a lot of preparation but we are taking this very seriously, and we're going to make sure we will be ready to start reporting on time. We are aware of this. A lot of work is still needed. It's on our radar and it is important to us. What I can share at this point in time, we have no obligation right now to report on this, but we are getting ready.

You indicated that some companies that you just compared are looking for a positive impact. Is that something you are aiming for?

Well, I think that in terms of biodiversity, Fugro can have an important meaning. Looking at the work we do, you see a lot of it is focusing on this. For instance, we conduct environmental baseline studies or surveys at sea and we believe that we can play an even more important role in developing on -- offshore wind farms. We think that with the technology and the experience we have in gathering Geo-data and further developments to Geo-data plus, which is always about coordinates. If something happens or if a bird flies where is it, well, 5 meters off wind turbine number ABC. This is important we can use it to make a positive contribution. So this is really important to us and we can do this by amending our services, but also by measuring the impact of our activities. So this has 2 [ facets ]. Your second question was about human rights. And in particular, about due diligence that is required in this field, mainly related to the entire supply chain company uses. This is a complicated question that many companies face. We at Fugro have 15,000 suppliers in 6 jurisdictions. So can I tell you today how all these suppliers deal with human rights and what they do with this and how the supply service to us? No, we can't. So a lot of work will have to be done in order to study this in a proper way. We want to do this in a serious way. We need to start doing it. We need to start recording it. And -- that also means priorities are required. We need to identify the countries where the problem is the greatest so we are going to look at our ESG due diligence policy to see what suppliers are situated in the highest risk countries. We're going to try and see how the situation can be managed in there. Some choices will be required over the coming years. And I think that in a few years, we won't have 15,000 suppliers anymore because we may have to conclude that some suppliers don't meet what we aim for. Having said this, it will remain a tricky issue. We are working very hard on building up a due diligence policy, and we need to take a risk-based look, trying to identify the highest rigs and then aiming to report on this matter. I also think that we, as a company, beside the fact that we are a midsized listed dutch company, we actually have a limited impact on some matters, but we will try and do things as good as possible. We want to make this tangible as well. We want to try and sit down with the first group of suppliers to see what we can solve together. So this is a dialogue that will doubtlessly start.

You just said that you are going to prioritize based on risks or countries that you would see as high risk?

Yes, this is how we would like to read. Let me highlight immediately that we have no reasons at this point of time to suspect problems or things happening that we believe are incorrect, but our values are about doing the right things so when at this point in time, we see grounds to act, we do act. I think that's also important to highlight. Then you asked a question about lobbying activities on behalf of Fugro, you could read about this in the annual report, you doubtlessly have and still there was a question, so I will have to give you a serious answer. In the annual report, we indicated very limited lobbying activities only in the U.S. and restricted to a very limited level. And this happens in order to support what we wish to achieve in the U.S., which is about climate targets in the U.S. So I think that we do lobbying at the right level -- what else can I say about this? I think that your question is phrased in a way to suggest we could be reporting in a better way about this. We will look into this, and we'll try and see whether we can communicate more about this in the future. But in principle, Fugro's lobbying activities are very limited. And we have also reported on the amount allocated to this, and it is really very low. And that brings me to your final question, which is about Scope 3 emissions. I did address it before, Scope 1 and 2 are moved aside so easily because everybody is working on this, but it's actually a lot of work. So I would say, let's keep talking about Scope 1 and 2 as well. So now moving to Scope 3, really difficult, as I said, with so many suppliers but Scope 3 emissions raised the question of the targets you formulate and we have decided that we want to have our targets validated by an external point beside basis, PTI, the science-based reporting initiatives. We are submitting our targets to them. This is a process that requires proper preparation, and it needs to be done within 2 years. We have notified them and we are now at the point we can submit our application anytime. And then I think SBTi has an enormous backlog in valorizing or approving these targets because every single company in the world is doing this. And it has also a road map for carbon emission reductions in the future. So we will have to deliver and we will have to have science-based targets on all matters validated by this body, meaning we can't be accused of green washing in any shape or form in the future. We don't believe we are greenwashing actually. We, as a management Board are working on this very seriously and I'm seeing this also in the awareness that people in Fugro want us to work on this in a serious way.

One last question, if I may. There's also a risk towards clients. You have suppliers, but what about clients? Scope 3 is not only about suppliers, but also about the emissions of the use of your services and work. Are you taking this on board?

Well, then you get to the discussion about upstream and downstream. That's a tricky question. In terms of upstream, we can do something. In terms of downstream, it becomes really difficult. But given the fact that we are closely involved in the construction of wind farms; on the one hand, this is a good thing, although I read more and more articles on the harm, the potential harm constructive wind farms could have in the world. And this is a separate debate that will come to the surface sooner or later. But I think that downstream is a difficult point to work on. Now that doesn't mean that Fugro has a huge downstream impact. And usually, the impact is positive, but upstream is something really difficult.

Very clear. Thank you, Chair.

It is clear that we, as a technology and knowledge company can make a meaningful contribution and this has been reflected in the discussion of the Supervisory Board today at length. On the one hand, we have ambitions, pragmatism and sense of reality. And we want things to happen fast, and it's high on our agenda.

I have another question about the demolishing of wind farms.

I think this is a very relevant question, but maybe for further discussion. Yes.

You can have your opportunity now. I see you are tied to your chair. Be careful with your clothing. Okay, almost fit for reuse.

Chair. I would like to state before I ask my questions, I want to congratulate you. In a week, the company will have existed for 60 years. I had taken a gift for you because in a week's time, we won't have an opportunity to present that to you. So first of all, congratulations on the 60th anniversary and for your wonderful achievements. The results that you've achieved both in the past year and actually, with the turnaround that you have -- that you've achieved in the past year and also the surprise with your quarter and I want to congratulate the shareholders that are so wise to make sure that they are still shareholder at this low price.

Well, that was a very brief statement and not a question. But thank you so very much for that.

So there's the gift for your 60th anniversary. It was a good start of your questions. Okay. Now the most serious parts I've shown all of you a graph and the graph demonstrates that Fugro up to 2013 once they were listed, have demonstrated very good growth, very straight growth. And then there was a period with a lot of losses, problems and issues and you've made a turnaround and improved. My question is now the level that you had in 2013 when you had a revenue of EUR 2.5 billion, and a profit of EUR 417 million net profit. When do you think you will achieve that same figure?

Do you want to know the exact day on which we do that?

No, I want to know the day before that.

Well, I'm not allowed to tell you -- let's not cause some problems. Of course, we are happy that we stepped up and I've indicated the fact that we've stepped up is very substantial, and I know how much blood, sweat and tears were spent by many persons to make sure that we end up here. And now I would like to give the floor to Mark and Barbara, maybe Barbara now to say something about it without making too many promises to you.

That won't be easy. Well, it's an interesting question, but I don't -- I'm not -- I can't predict the future, of course. Now -- we are on the way up. I think we are quite a different business than we were in 2013. And I think the world around us has changed a lot since 2013. The challenges are different. The activities are different. We do not have, and I think it's important to state a revenue target. We do not have that. We have profitability as a target. Of course, you can generate a lot of revenue and everybody will be really busy, but you still won't make any money. That's not the ideal situation. So we mainly have -- want profitable growth, which is what we aim for and the day that we will reach the level we had in 2013. Well, I cannot tell you, unfortunately.

Okay. In spite of the fact that you are on tiptoe with very high heels, you do well. My next question. The annual report shows a number of targets that are always indicated in 2 digits. So EBIT, 8% to 12% linked up to 2 years. My question is, is the 8% relating to 2023 and the 12% to 2024 or should I read it differently.

And that's also a very good question. These targets were assessed in 2018, that was the period before COVID. The targets have a bandwidth because they can only be achieved in a number of years, then COVID intervened. And I think that we also noticed a very strong level of growth in the wind farming market in which we are highly active. The world is so different in 2023 than we could ever have conceived in 2018. So therefore, we've applied bandwidth. And I've already explained that we are now reaching the end of the bandwidth. I think that's how you can interpret it, let's say, 8% to 12%, '23, '24 is at least that before the end of '24, we must at least be at 8%. And in 2023, we will be at about 12%. I think that's the bandwidth you should interpret. What we're aiming for, it is a bit difficult for the free cash flow target that we have because we were caught up by time because if you do arithmetic and you do, I know, we will probably not achieve that also because time has caught up with us. And -- the capital employed is, of course, very important, and that keeps us busy every day to make sure that we create that. So these are the bandwidth. This year, next year, but you can expect us to make sure that on the 14th of November, we will provide more clarity about the mid or long-term targets that we believe are appropriate for the phase that the company is in.

That's clear. Does it apply to the entire business or also for the 4 various regions because there are some differences in the regions. And the question is, can they all achieve that mainly Middle East and India and the Americas?

Yes, the targets apply to all regions. Europe, Africa have been within the bandwidth, it's a different market. We are mainly in the North Sea. We are working on a very small surface. Efficiency is high and we have a lot of demand by customers. It's not similar for all regions and the combination to traditional between traditional energy and wind energy is not the same for all areas, but to all regions, the same targets apply. And when you look at the sum of the parts, it will result in the mid and long-term target.

Does it also mean that you mainly try to expand in the regions in which you will achieve and to withdraw from regions in which you do not achieve it?

We see growth in all regions at presence. I think 1 region is more impacted by traditional energy markets such as Middle East and India. When you look at the plants they have for hydrogen we will probably notice that in 2030 or even afterwards, that it will be a huge market. And also on land, we operate a lot. So every region will take its own path at a different place in different markets and as Mark explained at the beginning, everywhere on this planet, wherever you want to pin down something, we can play our roles and make money.

Okay. Now with your targets I miss. A general autonomous growth target or a net profit target? You don't mind about revenue, at least you don't mind that as much, but what is your target for the net profit in the long term or are you just waiting to see what will happen?

Well, we're not waiting for what will happen. What's important, I am focusing on operational cash flow. Finally, to be able to determine what we will do by ourselves and to execute the strategy, we need the money to do so and to serve all the stakeholders. There is no sum in euros fixed to it, but it must be positive and everybody must be well served. Well, honestly, I don't think that's specific enough. I would like to suggest to you that you consider that. Well, you have to be careful, but I think it's very clear that you're thinking today, tomorrow and the day after. And as an organization, you have the task to make sure that you claim the right today to invest in tomorrow. So the cash flow rate and also -- moving on from the questions that Barbara answered, has a lot of priority because you -- we want to invest in useful assets, new products, new services. And I think that -- and I invite Mark, we are working towards Capital Market Day at the end of the year. And I would like to invite Mark to say something about this, too.

Great. Thank you. Well, maybe in addition to what Barbara said, I think it would be good to stress once again that in the second half of the year in November, we will provide some information externally. And I think we need to because you see that the targets we show now were chosen in 2018. At the time, it was -- we were in dire state, actually. We were far from the 8% to 12%. The discussion we're having now is whether is it 8% in 2023 or 2024 -- it's a discussion that we couldn't have 4 years ago because everybody said, will you achieve 8% anyhow -- and I think that is what now indicates that you end up in a different period. And you need to indicate what is relevant for the next period. So we really believe that it is important at the end of the year to provide an update on how to move forward in the future. Is it indeed profitability targets that we want or also growth targets that we want. They may be added too. And indeed, we will have to address return on invested capital. And of course, that is always relevant. So that will be on the screen anyhow, and free cash flow is also important. However, sometimes you end up in a period, in which you will invest more because eventually, it will bring you more money in the years following to that. So all of these matters we want to make clear to you in November. So please be patient with us where you will hear then at the mid and long term and in what year and the day before that, what we will exactly make at the net level. So I think that I have to disappoint you for now.

Well, I can live with that. Of course, we all want to know that.

And thank you for your questions. And thank you for your gift that is really nice to give us an image of 60 years of Fugro. Are there any other questions? Please feel free to...

Good afternoon. My name is Kayner. I do speak on behalf of the Association of Stockholders. I have to follow-up on the questions that the other person asked. And I also have to compliment you, you are not used to do that, but you did very well. It's not just for you, the present management Board. But I believe and the Supervisory Board, but I forget about the person of our view with this team. He created the strategy as a matter of fact. But it's nice to have a good strategy, not be so vulnerable by oil and gas and a strong balance so that you have some security. More important than good strategy is proper execution. And execution, that's what -- this is all about, and you did that very well. When we prepared for this meeting, I was very positive, but the first quarter even made that better. So well done. Don't worry about my questions. They are not very critical just to increase my understanding. I read your annual report, of course, and I have followed your business for a number of years, and I think that the most things, I understood them well, but not everything. You give us an overview of the markets that you enter into, of course, offshore wind, et cetera, but also water infrastructure, construction services, even oil and gas, you've explained, yes, maintenance to make sure that it's maintained properly. The growth percentages for these markets look very attractive. But my first question is, do you believe that you will gain market share in these markets? So will you grow even more than the markets themselves grow? That's question one. And I hope you don't count this as a separate question, but how do you believe you will finance it? Because growth takes up capital? Will you generate enough cash to facilitate the growth? Is your balance superfluous enough to be able to do that? Or would you say let's not grow too fast so that we don't have to borrow additionally or to issue shares. So how will you acquire that growth? We believe you can grow faster than the fast-growing markets? That's the first item I wanted to raise. The second question. I also addressed, most of your financial figures look fine. Cash flow is a bit lagging behind, but you need to invest and your working capital is higher when you grow, and I understand it. So return on capital employed is affected -- but I would like to know what is the potential of capital -- return on capital employed on the longer term? Will it remain between the 8% and 9%? Or will there -- will you catch up later with the investments now, with growth in the market -- so that at some time, capital efficiency will increase considerably. Are there big opportunities. And that's when you actually will create value. Next item. It's a question that was also asked by Mr. [ Snuker ] about the other regions? My question is much more. I mentioned 3 regions that we're lagging behind. Asia Pacific is now moving forward. Congratulations. Two regions are lagging behind in margins. At what term do you believe that they will catch up to achieve the minimum between 8% and 12%. It's good that you put the targets like that, but how patient will you be with these markets. And finally, a very important easy question, but it's sensitive is what matter to invest. However, the engineers will make the difference. I'm an engineer like yourself, but not a good one like you are. I merely work on mathematics, but technically, no. It's worrying that 14% of your people are leaving or have left last year. I'm a bit surprised by that. I think that many businesses have issues in this respect, but you would expect in view of the dynamics in your field and the fact that you are becoming increasingly sustainable in the interest of your business, much of the engineers have intrinsic motivation, but there's also a risk profile of the business that's a lot lower so I think you can still pay your mortgage in 3 years if you stay with the business. Is there something happening within the business so that you can't your people long enough or are the people that are leaving the ones you want to get rid of anyhow? These are the questions. Well, indeed, it's important. But it's also important to look at the continents Europe and Africa, where it is definitely lower. And indeed, you see that young people, it's a precondition to be able to attract the right people and to make sure that they stay. So I now would like to ask Mark to say something about that, please.

Mr. Keyner, thank you for your questions. We highly value your contributions. The questions are good. I would like to return my compliments to you. You always have high-quality questions. So I would like to respond to these. The first question is about the markets and how these will grow. In the annual report, we see a report on that. And during the first -- the publication of the first quarter figures, we also do that. It's always different. When I ask an update from [indiscernible] today, they will provide different figures to me. And of course, they're always right because it's fully adapted all the time. So you are always right. So -- that's what we use prudently. So there is a trend in it. And I think the trend is important to observe. The absolute numbers is something that you need to be cautious about. And it's also because these parties do not often know what Fugro does. So that you need to address some categories within the market developments to really get an idea on how the business will indeed develop over time. So using the percentages, but cautiously, however, it is very common that you will use them as best you can. We've also indicated in our presentation that we want to grow in a controlled manner. It also means that we do not want to take on more than we can handle. And talking about the people that we need to have, we will address that later. To be able to execute the work in a safe manner with the expertise that we need in the various services that we provide. And we said, well, we can only accept a certain level. And there is a shortage in people and equipment. So how fast you will be able to grow depends on how much you can grow and how much you can handle. In the growth of revenue, which is volume and price, you see 27.5%, which is highly unusual, I have to say this level of growth, but it is something that's not just for you. Otherwise, it would be a problem because you wouldn't be able to cope. Now how to continue. Obviously, we want to be market leader, stay market leader in some markets. We've communicated about that always, Fugro always had the intention to be one of the top three ranking in the markets in which we operate. Nearly all the services we provide, we are either #1 or 2 in that, but there are big differences. What are the distinctions? Looking at Marine, in the maritime world, we are absolutely market leaders in geotechnical, geophysics, wind measuring at sea matters like that. Looking at land-based activities, we are facing different dynamics. You would be in much more competition with local smaller parties and when you have 5% market share. You may be the market leader. So the dynamics are different. To say that in future, in infrastructure, we would be a worldwide market leader. No, we cannot.

So you'd have to address that very locally in countries for the specific services, how you are positioned? Are we ranking 1 to 3?

Yes, we try to be so and it will -- there will be shifts. But you've also seen that we've said, in several countries in the years before, we won't discontinue because we don't see that we have the right position. Marine, in the maritime world, you should have 30-plus market share to be able to be the market leader in geophysics. But it's different per region too. We absolutely have the ambition to maintain our market leadership and the market will grow in some locations, and that's what we respond to. We try to add capacity. In the next few years, we will have to evaluate whether indeed we are able to win the part of the market share or at least to stay equal in those markets. In the past, it used to be true that in Europe, we would maybe be at 70% or 80% market share in offshore wind because nobody else was interested in. But now everybody is interested. So the market is growing in absolute figures, and we are too. And I think we will now maintain the market share and even increase in some cases. We have some data points for that. The large government contracts in Europe for the Netherlands, Denmark, Germany. Fugro is the one taking the lead. So these are very clear data points for us to position ourselves well. So it's important that growth is in a controlled manner. This can be the only thing of which we say, yes, we don't want to move as fast because we want to provide quality services too. But in principle, the target in the maritime world is to keep our market share and to increase it in some areas.

Just to clarify, control growth, my purpose of the question was a financial one, and thank you for responding, growth often means maybe one more growth and the market in total seems to offer a lot of opportunities. But at some time, it will become tight financially. And the question is, can we rely on the fact that you generate enough cash? Or do we have to consider that you need new structures to make sure that you can maintain Fugro's base to have growth.

I will transfer to Barbara too, so she can continue on from that.

I think right now, the margin generated by Fugro in the fast-growing markets, offshore wind is not high enough.

To do what you say to grow alongside the market? And why is that?

Because not every region is growing at the same pace and at the same time, and we have communicated very well in 2021. There was only 1 region performing, which was Europe and Africa. In the past year, we noticed that all regions are contributing but not in the maritime field where we are growing so fast [ site ] characterization, and we expect in the next few years that all of these regions in those locations will also grow. So it means all regions, all business lines will contribute to the margin. Eventually, the margin needs to be higher. And when it is higher, there will be enough free cash flow and we can invest and can invest in large assets in the future and mainly when we grow and 17.5% is a lot. But when we continue to grow as we did last year with some 15%, we will see that the revenue will increase and it will provide enough free cash flow to invest. And also to make sure that the return on capital employed is created, which is over 10% already onshore and marine is a bit too low because the margin is simply too low. Maybe Barbara would like to add to that? Or is it sufficient?

She agrees, that's pretty much it. So we agree. With your permission, I'd like to come back to your question about regions. I already addressed this. And my answer is that this all regions need to contribute, and I expect all of them to contribute this year whether it's going to be at the same level everywhere.

No, there will be differences. And Barbara already mentioned this before. Regions are different, regions act at various speeds. We've seen that in Europe and Africa, in particular, Europe has been active for years in offshore wind and is now starting on with even higher ambitions from governments. Well, we have a doubt about the achievability. But 300 gigawatts from offshore wind in 2050 is impressive. I think many people pronouncing these words don't know what it means, but that's the ambition. And it means that about 20 gigawatt per year will have to be developed because only 4 gigawatts is currently in place in the Netherlands. So just to give you an impression, Europe is moving fast. The U.S. has gone on steam only 2 years ago, but there is not a single wind farm out there on the sea and Africa is running or lagging behind, 2 years behind on the U.S., of course, in Korea, Taiwan, in Japan and Australia, many things are happening as well. And a lot is about to happen in countries such as Vietnam and others. But a lot of work is to be done there, but this may be the #1 growth market. Regions, therefore, are all involved, but they will start contributing at different moments in time, but I expect all regions to contribute during 2023. Now you had a last question about people. It's important to give you a bit more of detail a bit more information. 14% is disastrous in my view, when we see 14% of staff leaving the company. Last year, we have hired 2,359 people, 2,359 out of 10,000. So you can imagine what this means in terms of education, coaching, training people is a huge task. And if you limit the number of people leaving, you limit the number of people hiring because if you stick to 14%, we'll have to hire another 2,500 people in 2023. We actually have already hired 615 in Q1, just to give you an impression of what's happening worldwide. Now locally, the 14% has already gone down, and we are working very hard on keeping track of the situation on a country-by-country basis. Twice a year, we hold engagement surveys to see where the problems are, so we have a breakdown by country to see where things are going well or not. And it's good to see that throughout Europe, many countries are performing well already including countries where we have lots of people in the Netherlands, for instance, we are way below 10%, somewhere around 8%. And already last year, things were going very well, much better than in other countries. If you take a broader view, you see a number of countries, for instance, Hong Kong and Asia, but we have a lot of lower trained staff where the retention rate may be or the turnover rate rather is over 30%, that's a problem. So we have to cover it on a country-by-country basis. Does it mean we are not concerned. Yes, we are concerned. We are working very hard on doing the right thing to retain people, to train people to develop people in a professional, but also on a professional level and also in a personal way.

Great. I think the last first answer, answered for questions. So thanks for doing it in a comprehensive way. I have 1 point. You made a link to return on capital employed, but I haven't seen a breakdown. You said 8%, 9%, it may become 10% to 11%. Can you give some more background? Or is it the kind of [ Snooker ] country that you won't answer.

Maybe at the Capital Markets Day in November this year.

I can give you an answer. Between 10% to 15% is our target, so this is what we are aiming for. So that means the ratio is too low now. Also, the return on capital employed should at least be higher than the cost of capital of the company. In the light of the increasing interest rates, this is going up, something you could see in the annual report and as a result of this, we need to be even higher than 10% than before in order to create value. So the answer is yes. And I would see a minimum of 12% and as we have communicated, our target is 10% to 15% in 2023 and 2024.

Now human capital, it's clear. We and the full Supervisory Board and dialogue with the Board of Management and Relations Committee are focusing on this as well. And -- this is about robustness. This is about solidity to give you some key terms but it's also about a winners mentality, the willingness to be winners tomorrow and the day after tomorrow. So this is about carefully picking what you can do on retaining people and building towards the future. These are the deep occurrence that are crucial to generate capital, generate results with people. So that's one of the core points of our debates. A question on the left of the room.

I have a very brief question. My name is [ Tak ]. And my question is the following. Do you do any work for Russia and what's your assessment? I mean. And now it's [indiscernible] but worldwide, we are at the brink of a Third World War.

We are reducing our activities in Russia, Mark.

What's the state of play?

Yes. We have stopped our activities in Russia, and we are now in the last phase of handing over the company to a party that has signed the sales agreement. We are waiting for the last signature allowing for the transfer. So we're in the very last phase. It's slow. [ They do needs ] to place many signatures, that's a problem, but we're really in the final stage of the process. I assume your question was not whether we are going to start a third world war, because I have no answer to that. Question is inaudible. Interpreter apologizes. Yes, we are concerned. And you have seen in our communication that we obviously had a very close look at the geopolitical situation in the world. This is a point of concern for all companies worldwide. Yes. Yes, the complexity of companies and people is increasing. So this demands our attention. Thank you for that question. I then conclude that the report of the Board of Management has been discussed at length in the meeting in addition to all the documents available. And we have received a kick, we are putting away for later. And I want to bring the moment forward that we can actually enjoy the cake. So allow me to move to item 3A on the agenda, which is the report of the Supervisory Board. This can be found on Pages 91 to 98. We've given a great detail in the report on the activities on the engagement. It's a very gratifying job in terms of substance. Are there any questions about the report of the Supervisory Board? Yes, Mr. Keyner, please. Keyner on behalf of the VEB.

[Interpreted] In your report of the Supervisory Board, I read that 8 additional meetings have been conducted joint meetings with the Board of Management in the light of refinancing item in action 2 or 3 additional meetings with 1 or 2 members of the Audit Committee. But it gives me that fear that something important was happening that the company was about to implode. That's no longer the state of Fugro, that was a few years ago. So my question is, why did you need 8 meetings? Is this something we didn't know about when they're panic, it is a lot.

[Interpreted] No, you should see this in its contact. Fugro is an iconic company and has been for a long time. And we've had some difficult years and we want to be, nevertheless an iconic company, because we believe the substance is absolutely down. And that means we have several moments throughout the year when we have dialogue where we sound each other out, where we try and use all the expertise and knowledge, obviously, under the management of the Board of Management and with its steering, but such interaction is still important. And you also see this reflected in the corporate visit or the company visit [indiscernible] You see more people there. You see the local circumstances there under which people have to work today and tomorrow. That demands more from supervisory directors than it did in the past. So this shouldn't give rise to concern. We don't want to keep the Board of management from their job. They have weekends and they need some time to relax. So this is not a sign of any issues.

[Interpreted] Maybe I misread your text or misinterpreted it or maybe you wrote it down within 2 sharp words. I have no problems with cross-fertilization, learning from each other. It's a wonderful company, and that's been said enough today. But I think it reads specifically that you have discussed refinancing. And refinancing is always kind of a flag word for us.

This is a process you go through under difficult circumstances. Bringing about refinancing within a time frame. We've seen things can go wrong, but Barbara and her team have done a great job. Same applies to Petri. So we have gone through the rhythm with joint meetings updating each other, meeting that you can act quickly when you need to act. So that's the reason you have seen that high frequency in the report. As for the phrasing, yes, we have to be careful not to give wrong signals.

[Interpreted] There was no panic, was there?

[Interpreted] I'm not quickly panicking.

[Interpreted] Well, 8 meetings with such a topic is a sign of panic.

[Interpreted] No. The state of the financial markets also means that you have to have such frequent meetings.

[Interpreted] Very well. I think that there are no further questions about the report of the Supervisory Board. Then we come to the next item, which is the remuneration report. You have an advisory vote on this, and we are in interaction with some shareholders to gather feedback. So I would like to invite you to raise potential questions about the report, which can be found on the Pages 99 through 108 of the annual report. It's a very detailed report. Are there any questions about the remuneration report or have we been crystal clear and transparent. I see no one running towards the microphones. Well, then that brings me to the recommending vote -- advisory vote on the report. So let us now check whether your chip has been correctly inserted in your voting card. And if that's the case, I would like now to open the vote. I see some information on my screen. You can now press the button of your choice for against or abstention. [Voting]

I see it's stable now. I can give you the outcome. 93.16% of the votes cast in favor, 6.84% of the votes cast against and some abstentions which means that the advisory vote has a positive outcome. Thank you. That now brings me to adopting the annual financial statements. And we will invite the auditor in a moment to comment on this point because obviously, we would like the annual financial statements to be adopted. But Petri, could you briefly share some words because this is an illustration of the [indiscernible] given by the Board.

[Interpreted] Yes. Sure. This is a follow-up on what has already been expressed by Barbara and Mark on the substance of the 2022 annual report. So I will restrict myself to the subjects that have been given on a specific event in the Audit Committee. And in the report of the Supervisory Board, you also read that 5x per annum, we have meetings of the Audit Committee and we do this in presence of the CFO, but also in presence of the internal and the external auditor and others from the company who can have an important contribution to the discussions with the Audit Committee. So aside to everything that is needed to come to a recommendation to the Supervisory Board about the financial statements and the annual accounts. So that the audit plan decide the audit reports. This also is about important valuation issues. In addition to this, some issues have our special attention throughout the year, and you will not be surprised to learn that this includes the topics that have the special attention of the Supervisory Board. For instance, for the audit committee, this is a focus on the financial performance of the company, improving financial performance, but also generating cash flow. As said before, this is extremely necessary. Then we have investments, capital allocation, financing. Obviously, these points are subject of discussions of the audit committee. And last but not least, risk management of the company, the control environment, including the implementation of new ERP systems progress on that matter.

[Interpreted] Looking at the annual report, we see a detailed discussion of this topic in the report. We discussed it with the CFO, with the Group Controller. We discussed it with the group auditor. We are very satisfied with the results of the company with the growth it has shown. And we are also satisfied with the steps made in terms of transparency in the annual report, particularly in terms of transparency on reflecting non-financial ESG reports, CIF, for instance. And also, we are satisfied with further transparency on climate that has been achieved and on achieving climate targets. So our recommendation as Audit Committee to the supervisor has been to adopt the annual accounts, and this has been copied by the Supervisory Board. One addition to the previous point, for this year, we've had 8 additional meetings that included financing but didn't only concern the financing. So that may be the explanation for this misunderstanding. Now, in addition to the words of Petri, I would like to invite you for the last time because Richard is going to replace you another partner to give a brief explanation on the audits conducted.

[Interpreted] Let me see how I can move to the next slide. One more, please. Okay. My name is Jeroen Vernooij. I'm the external auditor with EY Accountants. And I have the ultimate responsibility for the audit of the financial statements of Fugro. And I would like to use this opportunity indeed to provide a brief explanation on the audit conducted. And I would like to do this by focusing on the scope of the audit. In other words, what it is that we check to look at the audit plan, on its focus, on the strategy of the implementation of the audit plan. And finally, I would like to highlight the main conclusions, the main findings of our audit. What about the scope? It's on the screen now. We check the consolidated financial statements and individual statements of Fugro, and we check whether the annual report complies with the relevant requirements. And for this year, we have non-financial KPIs in our audit assessment. I would like now to move to the audit plan. The audit plan is compiled based on the knowledge gathered about Fugro over the past years. And also based on our knowledge of the industry, it's discussed with management and also with the Audit Committee, obviously. The audit plan covers the scope and the materiality of our audit. And as for the scope, we determine what operating companies are involved in the audit. And for the past years, we have included all operating companies with revenue of about 1.5% of the total revenue and this involves 42 operating companies in various countries. And together, these operating companies represent a percentage of 81% of the total revenues. The other operating companies not involved in this list are still part of the general audit, making sure that there can be no material errors in the audit. We also look at materiality. That is the level of depth of our audit and the materiality for the audit of Fugro is annual accounts is 10 million. This is a risk based audit. Therefore, we conduct a risk analysis with our team to identify the major risk to make sure that the implementation of the audits addresses the risk correctly. We also take stock of the risks for going concern in respect of fraud or non-compliance of rules and regulations and also we look at environmental risks concerning the energy transaction. And if you look at the last risk mentioned, let me invite you to look at our auditors opinion. As included in the annual accounts of Fugro because we indicate the details of the outlet conducted on these risks in our audit. And by the way, in carrying out this audit, we have not come to any specific findings or conclusions. And that brings me to the key audit matters. Key audit matters are the points we give most attention to in our audit. For Fugro, we have identified 3 KAMs, risks concerning the valuation of goodwill and the valuation of the vessel fleet. Secondly, revenue recognition and this is a representation of revenues and also the related valuation of work at hand or backlog. And then the estimates when valuing deferred tax assets. As concerned, goodwill, we checked the models and assumptions that have been used. And the assumptions conducted for the goodwill impairment tests have been verified on being in the correct bandwidth and the conclusion is that they are. Now as for deferred tax assets, we challenge management to see whether the valuation is not too aggressive or too conservative the assessment they have of deferred tax assets. And in the course of our audits, we have confirmed the positions reflected in the annual financial statements and also the comments on that valuation. For the details on these key audit matters, I invite you to consult our report as included in the annual financial statements. Let me also point out that, together with the EY team in Brazil, we have looked at the Brumadinho case. And based on our audits, we second the comments provided on Page 22 and also shared on the slide earlier today. So that's Page 22 of the annual report. And that brings me to my last slide and the conclusion of my report on the audit conducted by EY. Our conclusion is that based on the audit conducted, we have concluded that the Fugro annual financial statements give a representative image of the financial situation of the company in 2022. We also concluded that the annual report meets the requirements, and it fairly represents the financial statements. And the Annual Report does not contain any material discrepancies based on the knowledge that we have gained about Fugro from the annual financial statements. And the review has not led to any material errors found in terms of non-financial KPIs. That concludes my presentation. I am happy to conclude my presentation here, and I thank you for your attention.

[Interpreted] Thank you, Jeroen. Any questions? The right-hand side, I see one question.

[Interpreted] Yes. My name is Keyner on behalf of VEB. I have a question to you and maybe the auditor can confirm this. This is about impairment testing. So there are some parameters that are really important here. The first, obviously, is the discount rate. There is more risk in the marketplace. And therefore, it grew by 2% in your internal models. That means that future cash flows will be made current at a higher rate with the risk of having to evaluate. But then the long-term growth rate of some business units has also been increased by about 2%. And this might lead to the suspicion, a potential suspicion, that if the risk would have grown by 4%, the assumptions of the growth for the long term to company might have been increased by 4%. Is this by accident? Or have your models move toward this in order not to have to come to an impairment?

[Interpreted] This is about Page 144.

Jeroen, you can say something, but I think you reported whatever you reported.

Indeed.

[Interpreted] Yes, we have looked at the bandwidth. And based on this work, we share the conclusion that the parameters full within an acceptable bandwidth, Indeed, some of the parameters are related to the impairment.

[Interpreted] But you must have been surprised as well, it was a 0% long-term growth rate for most business in the past years. And now in the year with higher risks in the market, all of a sudden, the growth rates are also increased. Maybe this is about growing prices and growing margins. And therefore, the net cash flow is irrelevant? Is that your logic?

[Interpreted] I think inflation expectations are an important factor. Then you have risk assessments, and we certainly use experts that look over our shoulder in our audit. But this is a technical explanation of the weight of cost of capital and also the cost of making funds, cash, and it's a bandwidth.

I have no doubts about the correctness, I think the risk profile of many companies has increased. And therefore, there is a high interest, has a higher uncertainty in the market. My question is more about the other side of the coin. Growth of business for Fugro is also assessed at a higher rate, and it's exactly the 2% that you see in the discount rate. So there's a 2% growth in business. And this assumption may be to some suspicion.

Yes, and that suspicion does exist. We do raise challenging questions with management. And also in the various regions, we conduct impairment tests and we include the question, what information we have from other parties, market information and that market information is also included in the audit. Management also has conducted a very detailed analysis of its operations. Barbara?

Yes, if you allow, I can add some points. I think there is a major difference between 2021 and 2022. What we have seen in 2021 is that our market position was significantly improved by the order book in Q4 2021. We didn't see that before. So we see growing confidence. Yes, there may be more risk in the market on a worldwide perspective. But if you look at the markets where Fugro operates, if you look at the customers that Fugro serves, we believe it is a proper assumption to assume 2% growth vis-a-vis the current position. And yes, I do think a shift has taken place in 2022, which allows us to modify the assumption. So I would rather explain this as a matter of coincidence and I think that goodwill impairment tests are very sensitive with lots of variables, but we have done this through the best of our honesty. And so the suspicion I think is misplaced.

No, I wouldn't expect it differently. And maybe you want to say that I'm saying nonsense.

No, no. Well, The risk is growing. So 2% increase is absolutely, but the situation is much better for Fugro and you believe you'll be in existence 3 years down the road. That may have been different in the past with your financing position and your dependence on oil and gas. It could also have been that you would say that in the light of development of the markets, in the light of you being a more solid party a growth rate of even 3%, 4% or 5% might have been called for. Let's be conservative. Let's reduce the growth outlook. 2% is enough not to suffer from the higher discount rate. I think that's a very rational thoughts and I see Mr. Heine nodding.

It's clear. We have the undercurrents and the tide is beneficial for us. We see even the possibilities of performing in a more efficient way. And at the same time, there are challenges on the market. I think the balance is correctly reflected in the annual financial statements. Thank you.

Over there, please. Please use the microphone. Otherwise, you cannot be heard outside the room.

You have issued a limited assurance. What was the reason to issue a limited assurance and not a reasonable assurance?

We have done that concerning for non-financial KPIs, it's customary at the moment to issue limited assurances for non-financial KPIs. There are very few places where reasonable assurances are given for non-financials in annual financial statements. Many companies including Fugro, are currently in the process of bringing the reporting of non-financial KPIs to a higher level. We look into this as well. And this is a level of certainty that we believe matches with the current state of play.

Thank you. I think that covers all questions, and that brings me to the most exciting moment the adoption of the annual financial statements. But before I do so, I would like to thank you everyone for the very constructive, but also critical cooperation. It keeps us awake very constructive discussions. And Richard [indiscernible] as the joining partner. Welcome to you. You know our company very well by now. So that's great. Now the annual financial statements, 2022 have been drawn up by the Board of Management. Have been discussed at length in the Audit and Risk Committee and by the full Supervisory Board, and also have been audited by EY. And therefore, I invite you to cast your vote. One is, yes or 4. 2 is against, 3 is abstain, and then I'll keep my eye on the screen. [Voting]

So indeed, there is still a percentage for no vote, but I think this is the finish. Yes, the result is that 99.9% indeed voted in favor and against 0.01% and a limited number of abstain. So that adopts the annual accounts, and I thank you for that. So moving on to the next theme, granting discharge for the Board of Management and Supervisory Board separately. So indeed, I will ask you now with what we've published in the annual accounts, the information in the annual meeting and the public announcements taking all of that into account for that part to grant your discharge. And I now give you an opportunity to ask questions. So I think we can move on to the -- to casting votes. So I request you to vote on Item 5a, which is discharge of the members of the Board of Management. [Voting]

I see the same pattern. I find that this year has been granted, 99.99% in favor, 0.01% against. And traditionally, some people have abstained. So thank you for that for granting discharge for the Board of Management. Now the Supervisory Board, much more exciting. And the same applies. You know what we've announced, and you can only make statements about that. Do you have any questions? If not, I would now like to ask you to grant discharge to the members of the Supervisory Board, and I request you to cast your vote. [Voting]

Yes, I see what the result is 99.99% in favor, 0.01% against and abstain a number. So thank you for granting discharge to the members of the Supervisory Board. Moving on to item on the agenda, 6, adoption of the new remuneration policy for the Supervisory Board. The Management Board will be address next year, probably. It is largely unchanged. There are some amendments, and I would like to ask the Chair of the Remuneration Committee, Anja Montijn, to provide us with an introduction.

I had tested no microphone and still, as the Chair already said, the policy hasn't changed actually. Since 2020, we have had an official remuneration policy for the committee. And we have -- what did we do? We performed a benchmark. We always do that in the same way as we have done that for the Board of Management. So we do that with a labor reference group, which is actually the same group. We use for the Supervisory Board. We use for that. Based on that, we've done a few things. We indeed increased the members fees. There is a member fee for members of the Supervisory Board and the committee fee. The members fee was increased with about 10% to 12%, and the committee fees have stayed the same, except for the Chair of the Audit Committee, we deemed that it should be increased from EUR 10,000 to EUR 12,000 a year, which is now similar towards the markets pace. And the fees were dated from 2011, I would like to remind you. The attendance fee was now renamed for a travel allowance because it is much more appropriate. And we've introduced a total allowance for traveling within the continent. So that's not traveling within the Benelux but indeed within the continent, where we -- well, you know where we live. So actually, these are the main changes.

Thank you, Anja. You contributed a lot of work to that. So thank you for that. Do you have any questions? It sounds a bit strict when I ask you like this, but I would still like to move on to casting votes. Would you please cast your votes? [Voting]

Fine. maybe we didn't raise the bar so high because 99.96% is in favor, 0.34% is against and some people have abstained, not so many. So the proposal has been adopted, and I thank you for that, and we will work very hard for these fees. Now moving on to a part that is much more important item 7 on the agenda. Mark Heine. We've explained it. He became a member of the Board of Management in 2018, when he started his position as CEO. And we would now like to propose that he be reappointed. We do that very considerably, very carefully. But I think personally, but also on behalf of the entire Supervisory Board, it is a very good achievement in these turbulent days that we do not have only the right foundations, but also have firm ground to make sure that the business is made more adequate for these times and to continue to do that in very difficult circumstances. We have a clear ambition also for the day after tomorrow. These have been laid down. And at the end of the year, we will address that later. So we will warmly recommend you to cast your vote in favor of reappointing Mr. Heine. Because when you have talent and actually want to make sure that they stay. So I would now like to ask you whether somebody would like to make remarks about that before we cast our votes, which is essential. Okay. So I see that when you -- indeed, are silent that you will most probably be confident. So let's cast vote with regards to the reappointment of Mark. And we are unanimous to support that. So please cast your votes. [Voting]

Oh, yes. We've got a results, 99.9% is in favor, 0.1% against and a limited number of votes that are abstained. So this has now been approved by you. I thank you for that. And Mark, let's increase the level of your bar. So that is very deserved. So thank you. I'm really happy about that. So composition of the Supervisory Board. Obviously, people will leave and other people will join us. 8 years, maybe we -- if we can -- we will indeed like people to continue almost after that. But Petri has very good reason to state why she doesn't want to be reappointment. And I tried really hard to convince you, but sometimes you have to accept. So we need some changes. At the end of the meeting, I will, of course, thank Petri . But for now, the first step will be to reappoint Anja. And she also has made contributions for a very long time to the company. And we also want to introduce a new member to the Supervisory Board. So first of all, I would like to address the reappointment for Anja Montijn. You can see the explanation we've added to the agenda. And I would like to ask you, would somebody have any questions about that. If not, we see a nice picture. I would now like to move on to casting folks. I invite you to cast your votes for this matter. [Voting]

I think we have results 86.40% in favor and 13.6% against. Recognizable for the terms as these are. So it has been adopted. It's our proportion. And I'm happy that at least 50% of the percentages we have based on the people that we have in this. So I'm very, very glad. Anja, thank you. Congratulations. Even more exciting we have a new candidate with a lot of track record, a person that has been the CFO for a listed company. Has been the Chair of Audit Committees for listed companies and knows the energy sector, construction, infrastructure and shipping, which is not a simple field. So that's Mr. Kairisto, and I would like to ask you to introduce yourself before we cast the vote. Please?

Thank you a lot. Ladies and gentlemen, let me introduce myself. I do it in English. My Dutch is so minor. I don't want to be embarrassing here. So my name is Essimari Kairisto. I'm born in Finland. I'm a resident in Germany where I've studied economics as well. I've been living abroad now, well, nearly 40 years and in various countries. During my professional career, I've been working in oil and gas, in energy business, in chemical industry. And last but not least, in the construction and infrastructure business as well. I'm a Finnish person for my background. So in my operational time, I spent a lot as the CFO. Taking care of issues, Barbara, what she's doing at the Fugro, so accounting, audit, controlling, risk management, purchasing, legal, IT, topics like that. Since 10 years now, I'm serving in various boards and chairing audit committees as well. In international business, listed companies, but private or even government-owned business. Some of you might have noticed that I'm in Netherlands, I'm in the Board of TenneT as well. It's an honor to be nominated to become a member of Fugro, which is I think it was already today mentioned it's an icon here in Netherlands. And I'm happy to be available if I'm chosen. Thanks a lot.

Okay. So we move on to the vote. Please cast your votes. [Voting]

Thank you. So 92.13% in favor and 7.87% against and a limited number of abstain. So now your appointment is effected. So welcome, Essimari. You didn't run away, so that's a good sign. Welcome. We're looking forward to this cooperation. So moving on to the next item on the agenda, which is Item 9, the reappointment of the external auditor to indeed assess the annual accounts for the -- for the financial year '23 and '24. So Indeed, we cooperate. I have addressed that. There will be different parts. Next year, we have considered value well within the audit committee, what are the highlights, what are the focus area for the next period in view of the playing field and the situation that the company is in. We have shared clear insights. We have an approach plan that looks very robust. So I would now like to ask you whether you have any questions about that? And if not, I would now like to ask you to cast your votes on this agenda item? No. The room is very quiet. So I would now like to ask you to cast your votes, please. [Voting]

Yes, indeed, this is very fast. 99.9% in favor and 0.01% against some abstain. This has now -- this means that this appointment has been approved as well. So Item 10. And what is consecutive to the 10a, 10b and 11. You know these items, the first request is to the shareholders to appoint the Board of Management as the body with authority with approval from the Supervisory Board to make sure that they can issue shares, rights on ordinary shares and all types of financing of preference shares up to the maximum of 10% of the issued capital on this meeting. It replaces the one of the shareholders' meeting of the year 2022 and will indeed have another term of 18 months starting from the end of this meeting. So this afternoon. Do you have any questions about this? Now if not, I would please like to ask you to cast your votes. [Voting]

So we have a result, 99.63% in favor, 0.37% against. Some have abstained. And as such, you've approved this item on the agenda. Thank you. Linked up to that is the second part of the proposal, which is authorization of the Board of Management as the body with authority to limit or exclude with approval of the Supervisory Board to limit or exclude pre-emption rights in respect of issues and/or grants in connection with preferential rights in case of issue of granting ordinary shares as discussed with Item 10a. Linked up when this authorization is granted, it will replace the authorization that we've granted in the year 2022 during the AGM, it will be effective at the end of this meeting for a period of 18 months. I see no questions. So I would like to ask you to cast your votes, please. [Voting]

So we have the same results, 99.37% in favor, 0.63% against, some have abstained. And this item on this agenda also has been approved. Thank you for that. Now the final item to cast your votes on that's indeed the authorization of the Board of Management to repurchase shares of Fugro. Now this also is a replacement of an existing authorization, and we proposed that the Board of Management be authorized, in due observance of the requirements -- statutory requirements of the Supervisory Board, indeed cause Fugro to repurchase shares in its own capital. When it is granted, it will replace the authorization of the year 2022 of the General Shareholders Meeting. And it will also be applicable for a period of 18 months starting as of the end of this meeting. And we would like to say that the acquisition of shares is limited to a maximum of 10% of the issued capital at the date of acquisition. And I would like to refer to the explanatory notes on the agenda. Do you have any questions about that? If not, we will now cast votes, and I would like to ask you for the final time to indeed cast your vote. [Voting]

Yes. 99.78% in favor, against 0.22%, some have abstained. And as such, it is granted by the shareholders' meeting. Thank you for that. So now we have the final item on the agenda, any other business. Yes, Mr. Kayner.

[Interpreted] Kayner of VEB, question following to what you've explained at the beginning. You've bought 2 vessels. You need to do a lot of work on these to make it useful so that you can actually put them into operation. And what you said, it seemed rather a lot of work. But Fugro's also leasing vessels. But I never realized, well, you don't go to her, do you have a few vessels and then we will start to examine the soil -- slip soil. Now what will you do when you would lease vessel that you would have to adapt? Or are these small adaptations. Or do you only use the leased vessels for situations that you do not have to adapt a lot?

[Interpreted] Yes. Thank you, Mr. Kayner for your question. It's a very good question. Actually, it is a bit different when you address the various markets in which we use these vessels. When we discuss the new technical vessels that we've discussed in which we have actually bought 2 standard platform supply vessels -- not really standard because we actually checked out what capacity they have for staff on board. What do these vessels look like? What's their status is? Can we use them well for the work that we do? And mainly, these 2 vessels are very important because they have a low fuel consumption. So it's a reduction of some 40% when compared to a number of vessels that we are using nowadays. So that means that we take a considerable step with regard to CO2 emissions. These vessels must be adapted. It takes a lot of work because we need to create a hole in these vessels. And that is a lot of work. We've checked with regard to the equipment that is below the part where we want to create a hole in the hull of the ship. So that we can and that we don't have to do a lot of structural work on the vessel. However, it takes a dry dock period of several weeks or 1.5 months, depending on whether we can put the tower, the drilling tower onboard or not, the rig on board or not. Now when we look at the vessels with regard to geotechnical matters, we nearly always have to lease them for 2 years, 2 to 3 years, perhaps longer if you want to make it indeed, if you want to acquire some return on investments. Now some of the owners don't want to do that. Prices have been raised at some sites. They have been doubled or even more. So it means that it will be very expensive. Moreover, if you can't fix that, if you can't contract that for a long time, but you would indeed think, well, it's quite different with the ship owners, we often try to create situations in which they invest. But rather they say themselves, well, we think it is good to at least have a member in the ship as we know, the whole, because they may be able to use that vessel on the market and sometimes they make sure they pay, that's correct. Sometimes we can negotiate something different with them. In principle, the ships owner says, okay, it is fine, but Fugro you have to pay for it. For instance, we will take it back, and we believe that we can move on with that adaptation in the future. Thank you.

Thank you. Any other questions raised. Yes?

So I have been in a number of roles over the period, as Fugro has existed also in the role of [indiscernible] I think that this meeting went very well, and the atmosphere was really good. And in the past few years in which the market was difficult, it was different. So I would like to compliment you as the Supervisory Board and also the Board of Management. That's very important. I also have to say that from all of the questions and the replies that I've heard most of the questions were intelligent. It isn't always true, but the answers were very well, too, and I am very confident in what I hope we will hear in November. And I would like to wish you good luck for the year 2023, but you've probably already achieved that, but even more so for your preparations for the next 5 or 10 years, 10 years, 5 years, perhaps the max, so thank you.

So thank you. [Indiscernible] yourself, and I know that the question would be -- well, it would be better if we could pay our dividends. We are working very hard to do so, but we can do, of course, when we've reached that structural position in our policy. I would now like to close the meeting or rather soon. I would like to take an opportunity first to say something to Petri. Of course, we will have dinner together and we will enjoy speeches and perhaps also share the tea, but also enjoy some good food. I would like the person who can climb and stand up very quickly to take -- to make sure that you get the flower. So please be careful, Petri. You served for 8 years, and I know that it takes a lot from you. We have put some pressure on you, and we would have liked to keep you on board for the next phase. You've been through a lot. In the final 3 years, you've already been the Chair of the Audit Committee, something you take very seriously and continuing on from another CFO that I've worked with a lot of Martin [indiscernible] But also at very special times of refinancing, issuing shares, so the more technical and careful side of matters, but also collaboration in the team is very important and a person with a character like you have is always highly valued, a very huggable team member, a very valuable member. So we will miss you so much. And well, we regret this. Both of us do, but I have to announce it. Thank you. So indeed, we would now like to invite you, unless you want to say something.

Well, if you challenge me like that, yes, indeed. I regret that after 2 terms in the Supervisory Board, I relieve now, but also I'm very proud now and I have great expectations for the future. The turnaround that was achieved was really important, and it was achieved in the past few years because it always takes a few years. And as we say, great expectations, not for the team of the supervisory, but also for the management Board. So after these wonderful words, I would now like to invite you to have drinks with us and we will be here for some time before we move on to the next event this evening. So thank you for being here and your good questions, and I hope I will see you next year. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call].