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

Okay. Welcome to the full year result presentation of Fugro. Welcome, everybody. Good morning, good afternoon. Good evening for some of you. We'll first start with the presentation and then open up for some questions. Today, we're wrapping up what has been a very challenging year for Fugro. At the start of the year, we were expecting growth, supported by a 4% backlog growth and ongoing client engagement. But instead of that, we actually found ourselves navigating uncertain and volatile market conditions, along with shifting geopolitical circumstances. All of this created a more cautious business environment and prompting many clients to rethink their projects, the timing and the scope of their projects. And I will come back on the markets a little bit later to give a bit more detail. All in all, that resulted in a EUR 427 million decrease in revenue, 16% on a currency comparable basis. That's enormous. And obviously, also with the consequences for EBIT and cash generation. We have responded decisively with a cost program, took control of what we can take control of. After rightsizing our operations during the recent quarters, we enter 2026, we believe, in a better position, more leaner, more focused and more resilient. And there are 3 specific points to highlight. We're nearing the completion of the earlier announced cost reduction program, delivering an annualized savings of EUR 120 million, resulting in a more flexible cost base. We also are successfully recalibrating our backlog, replenishing basically the reduction in renewables with oil and gas and infrastructure projects. And the capital expenditure will be significantly reduced, as announced before, to EUR 150 million to EUR 165 million for '26. Looking ahead at our markets in '26 and beyond, offshore wind is showing early signs of recovery, as governments and industry collaborate to revitalize this sector, specifically in Europe, I must say. I'll come back on that, obviously, as well. We remain committed to executing our strategy whilst, at the same time, adapting also to the new environment and new realities. If we then specifically go and look at offshore wind, there's a lot in the news lately. So I think there's a couple of things to highlight there. First and foremost, the North Sea Summit. Nine countries came together in January and made some significant commitments for 2031 and onwards, so a commitment of 15 gigawatts per year development of offshore wind. That is obviously 2031 and onwards. And today, we are in 2026. So it's important to note that despite the fact that Fugro is very early, a couple of years earlier before the construction starts, this will still take pain to -- this will take time to further develop and to come to our books in revenues. So, for the next 2 years, for sure, I expect still the industry to suffer in some areas because, yes, these projects are later in being kicked off. Having said that, there's a lot of push from a lot of supply companies, suppliers and even myself. I have been in Brussels to really push and try to accelerate basically this, as the supply base is ready to ramp up and to deliver more projects. Secondly, and that is positive, recently on the 14th of January, there was the AR7, the last license round for the U.K. That was concluded. And for Fugro, that means that anticipated projects that we already bid for now firmed up and are in our firm backlog to be executed already this year. And that is a good example of what can happen if projects come to the board, then immediately, Fugro will get work on the geotechnical, geophysical sphere. Additionally, and I think that's also good to mention, obviously, Europe decided on Contracts for Difference, a new contract form, where you basically compensate low or the other way, if it's high energy prices, then also the energy operators will have to pay back some money to the government. But at least, that is a very nice balanced way of, well, indirectly subsidizing this market to stimulate, yes, renewable energy for the future in Europe. If we look at the energy markets as a whole, in general, we can first say about offshore wind, what I just said, that Europe is really committing to be independent on the energy sourcing and basically the reliability and availability of energy in the future for the European Union being independent from the rest of the world. So, that will mean recovery over time for this industry. And we believe that, especially in Europe, this will be visible in the upcoming period already to some extent. In Asia Pacific, yes, short-term challenges remain, but we see that also the sector there is cautiously optimistic, addressing the bottlenecks that they have faced there, while obviously, in the U.S., and we have communicated that before that the current administration is not developing any new projects. Now, having said, the Americas, I think it's good, and you probably picked up in the press release already, we are starting a project in Brazil. It's a pilot project, although quite a sizable project where we do nearshore work for new offshore wind developments. And this is falling in nearshore and therefore, booked in the land business moving forward. So this is already starting also in 2026. If we look at traditional energy, oil and gas, energy companies are selectively expanding their oil and gas portfolios, really carefully assessing which ones they want to push along and which ones they leave aside with a strong emphasis on timelines and also cost efficiencies and how to quickly get them on stream and produce basically results there. What do we see? Quite clearly, South America with examples in Argentina -- for many years, we haven't seen Argentina on the board. Also countries in Africa are back on the board with projects, primarily in the deepwater, being developed in the years to come. Also, Asia Pacific shows some new areas of development for oil and gas. If we look at, yes, the general market fundamentals, they remain solid, supported by mid- to longer-term investments. Projections are shown here on the board. These are the standard reports. It's not necessarily our data. It's good to mention it's 4C Offshore, Rystad, global databases for infrastructure. And this is what you then see. If you talk about, yes, the CapEx and OpEx development, offshore wind, quite clearly still a CAGR 11%, 12%, significantly less buoyant than the last couple of years. We have seen above or close to 30% growth year-on-year, which is now down for almost a year already. And this is now also stabilizing over the last quarters around 11%, 12%. Oil and gas investments basically also hasn't changed too much. You see there is new investment. It's also really required to replace the depletion of many of these fields. But that also means that, yes, stabilizing this is quite important also for new developments, but it's obviously very related to the oil and gas prices. And recently, with a stabilizing oil price or even growing, that is positive, but that will obviously, over time, change again. Most of the operators actually count on longer -- lower for longer, so to say, where there will be modest pricing. Infrastructure, there's still quite a growth. This is also already for multiple years around this figure, primarily to do with urbanization, aging assets, climate adaptation needs, rising power and data demands. So we see a lot there basically in the longer term, still to be done on the onshore side and on the infrastructure there. If we go to specific projects, this obviously always gives a good indication what Fugro is actually doing and working on. You see here on the left side, some offshore wind projects; on the right side, traditional energy. Top left, there is, NordSee 1, a comprehensive geotechnical survey that we do for TotalEnergies in Germany in the North Sea, quite a large project. We kicked it off in the first quarter now. We have multiple vessels involved, quite sizable, important project for us to start in European region at least this year in a decent manner. The Dogger Bank, on the bottom there, a comprehensive geotechnical survey for eastern array of Dogger Bank South, offshore wind farm, obviously, as I said before, major initiatives led by RWE and Masdar to develop one of the largest U.K. wind projects, energy projects. On the right side, top right, we have spoken about that before, ENI development for Southeast Asia, very large project, the largest project that Fugro actually took over the last decade, I would say, on the geotechnical and geophysical survey work. It's involving onshore, nearshore and offshore work, combining all the geotechnical, geophysical surveys that we're doing. The geotechnical acquisition has actually already started end of last year or the fourth quarter, a little bit in the third quarter. But also there, there was a little bit of a shift from the project to the fourth quarter there. Petrobras at the bottom right, we have spoken about that before, but it's good to mention because this is a very significant 4 multiyear contracts, actually 4x 4-year contracts with extension options there for inspection and monitoring surveys, critical infrastructure measurements that we need to do in Brazil. And this really supports the long-lasting relationship that we have with Petrobras. And I mentioned already, Petrobras now also kicking off some wind projects, and we also will start that very soon in that area as well. We brought over the Dweller, the Fugro Dweller, one of the vessels that we had operating in Europe is now moved over to Brazil also to support these long-term contracts. I mentioned already, maybe also good to mention that Argentina, because there's developments -- YPF is developing LNG project there offshore. Quite -- yes, new on the board, I would say, because over the last decade, I haven't seen a lot of activity in Argentina. There are companies working there, Total and so on, but this is actually new, and this is also picking up in line with what I said before. Some other projects on the board that's good to mention there. Top left again, LanWin 1 and 2 offshore grid connections for TenneT. Quite an important project where they connect 14 offshore connection systems and try to link that, obviously, with the electricity grid. It will actually support 35 million European households with energy. So this is a major development. It's part of the 2-gigawatt program that TenneT develops there in Germany. Then Holtec on the right side, top right there, one of the first projects we did on the small modular reactors, nuclear, which is a quite interesting development. We spoke about this one before. We do the subsurface characterization with our new technology GroundIQ. And we have actually spoke even yesterday to our teams there in the U.S., multiple tenders outstanding right now. We expect a few more to come in, in the upcoming 1 or 2 months to actually do more work on SMRs there in the Americas, or in the U.S., I should say. We also recently signed a partnership agreement with Fermi in the U.K. Basically, they are looking at 30-plus sites for also SMR developments -- nuclear developments. So this is definitely something that we're focusing on. Tonga LiDAR survey, bottom left, an airborne LiDAR, bathymetric LiDAR survey, something to do to map coastlines, very important. This is specifically for Marshall Islands and Tonga, supported by the Green Climate Fund and also the government of Australia and New Zealand. And we see more of these projects coming up as well, as we have spoken about, in our water sector. This will take time. And especially these government-funded projects take longer to secure, but it's also very interesting for us to deploy our expertise. On the right side there, the bottom right, Alcatel, geophysical and geotechnical cable survey to enable Alcatel submarine networks to basically build one of the most efficient and feasible routes, and they call it the WABAN route, between South Africa and Malaysia. And the other part is basically the second part of the project there. We go to the next slide. This is a slide that you know quite well that we always present, and it's really good to see how we are diversified between markets. And I think it's good to say, once again, for the people that don't know us so well, we can use our people and our assets agnostically in these markets, so we can shift quite easily from one market to the other market, which is the benefit that we have. And here, you see that this is the first year where we see renewables being down compared to the previous year, so to say. We were growing up to 38% in 2024 for renewables being part of our full share of wallet of revenue. And now you see 26%. So quite a drop, and this is the EUR 380 million drop in offshore wind compared to 2024. And then, you see oil and gas taking a larger part of it, still not growing so much last year, now 45%. But you see a small decrease, and that has to do also with the latter part of the year that we won for where people were -- and companies were pushing out some of the projects and delaying and descoping things to the next year. We have some payments also. Barbara will talk about that in the working capital that some clients even asked to pay in 2026. So this is something that was related to what we communicated before where the energy companies really kept their hand on their wallets. And then, also on the right side of this page, you see the diversification between clients that we have. We work from energy companies, local, international energy companies, government agencies more and more as well, also for the offshore wind. Very important because the governments, for instance, in Germany or the Netherlands, BSH or RVO are handing out the most early projects on offshore wind. And then, there's only the phase thereafter where the operators come in. So this is important for Fugro because they're really early on. And then, obviously, contractors -- IPC contractors and so on that we work for. Quite a nice mix. Moreover, the top 10 clients in Fugro do not generate more than 25% of our revenue, and there's no real client that is much larger than 2% of our revenue, or only a few, so to say. If we talk about our strategy, then we have 3 pillars. We spoke about that before, a simplified picture here. The first pillar is most important. We said that the first pillar will generate most value in the short term -- or in the midterm, I would say, 2027. We remain committed in that strategy towards full potential. Having said that, we're more focused. So we are, over the last period of time, also during the phase where we went through cost reductions, have decided to reduce some of the actions that we have to tailor it more to what we really think will make the difference in the short term, where we focus on cost efficiencies and also execution efficiencies in the operations and really looking at how can we generate better returns and higher cash flows. This is the focus for 2026, which is, I think, quite clear that our focus is only on, yes, really generating -- not only, but on generating good returns and on good cash flows. What you also see here is that we are still focusing on new market opportunities. I spoke about the water market, coastal resilience, ocean health. I gave an example there. Also critical minerals is coming up in many areas. Obviously, a big topic on the board in the Americas, in the U.S., but also you see that in the Middle East, that being more prevalent and, for instance, also in Australia. So this is really growing. And opportunities that are not even mentioned here is, for instance, data centers, which is also offering opportunities for our new GroundIQ solutions. Maritime security and surveillance is something that we have on the board. We have a dedicated team there that is really focusing on it. That takes time because governments also are not so quick in this environment, but we're really working on that, and there are some great opportunities. If we look at Pillar 3, the data platform access, no details here, but I can say that we're making good progress there with TotaLite, with GeoDin, with EOMAP that we bought obviously a year ago; double-digit growth for EOMAP last year. We have new licenses for clients like GeoDin. We have new clients for TotaLite, more than 30 now. So that's really getting into a level where it starts to become, yes, slowly contributing to what we're doing there. Satellite positioning is also in the third pillar, so to say, with some new initiatives. We're getting back into the agricultural land satellite positioning business with the acquisition of OmniSTAR, something that we sold many years ago. We got that back into our portfolio for a very small amount, and we're progressing to make use of the existing clients there. Then the last slide that I will present for now is the overall financial highlights. I can't really call them highlights. I would say, financial lowlights because 2025 was very disappointing, and we don't have to debate about that. I think we're all very aware of that. It was a perfect storm with too high investment that we couldn't really stop during the course of the year anymore, and obviously, no returns and a big drop in top line. We generated EUR 1.848 million (sic) [ EUR 1,848 million ] revenues, which is, yes, significantly lower than 2024, EUR 427 million lower. And I already said that was EUR 380 million on the offshore wind side. EUR 170 million in Americas, EUR 180 million in Europe-Africa, and the rest in the rest of the world, Asia Pacific. EBIT decline was primarily driven by lower revenue, partly mitigated by cost measures. Barbara will say a few more things about the cost measures because this is obviously important. And it resulted in an EBITDA margin of 14.5%. Fugro's backlog, 12-month backlog -- and we will get some more details on that as well from Barbara -- EUR 1.4 billion, down 5.7%, and that's on a currency comparable basis, and that's also reflecting the big drop in offshore wind, which was still high at the end of 2024, and you see then still this drop. Q4 still has a significant drop in offshore wind, and you will see those details a little bit more with Barbara there. But oil and gas and infrastructure is growing this year. With that, I would like to hand over to Barbara for some more details on the finances.

Thank you, Mark, and welcome, everyone, also online. Good morning, good evening, good afternoon. Let me start with Q4 before I move into the full year. Just a couple of comments here. As mentioned before, our business has a seasonal pattern, and this is very obvious now. Q2 and Q3 are the high season and Q4 and Q1 are the winter season. And we mentioned this before that this seasonal pattern has become more pronounced as the weight of oil and gas in our mix has increased again. And as a result, group revenue declined by 20.5% in Q4 versus last year. And although cost savings initiatives helped to cushion, it did not fully offset the impact of the lower revenue. And this resulted in an EBIT margin of the year -- for the year of 1.2%. We generated EUR 22 million cash flow from operations and a positive free cash flow for the last quarter of EUR 24 million. Then let's look at Marine, and this is the performance for the full year of 2025. And in Marine, the revenue declined by 15.4%. In 3 out of 4 regions, we were impacted by the reset of the global offshore wind market. Through targeted redeployment of assets and personnel, we partly mitigated this revenue decline by securing and executing more projects in the oil and gas energy markets, the traditional energy markets. However, this could not fully offset the shortfall, as mentioned by Mark, the EUR 380 million in offshore wind, which also, by the way, was partially on Land. In addition, the revenues were also impacted by 2 elements. One is the limited geotechnical vessel availability in the Europe-Africa region in the first half of the year due to a high number of vessel conversions. And two, we have seen scope reductions and postponements during the latter part of the year from our customers and an intensified competition in the geophysical market. Overall, the vessel utilization in '25 was 66% compared to 70% in 2024. Now, let's look at the performance of Land. The Land revenue declined by 18%, which was primarily driven by 2 factors: one, less nearshore projects in Europe, Africa and Asia Pacific, which was, again, largely offshore wind related, where in '24, we did a lot of work for landing zones and renewable customers; and secondly, we have witnessed subdued market conditions in some of our key countries, notably Saudi Arabia and Hong Kong. And this resulted in a disappointing negative EBIT of EUR 12 million in 2025. Now, if we look at the backlog, the backlog stands at the end of the year at EUR 1.396 million (sic) [ EUR 1,396 million ], which is down 5.7% on a currency comparable basis versus year-end '24, where we saw an FX impact of EUR 91 million. Just like previous quarters, this largely reflects the step-down in offshore wind. And I want to highlight that this decline was largely mitigated by the successful replenishment of the backlog with oil and gas and infrastructure projects, and you can clearly see that on this slide, and that's why we've included this slide. The currency comparable growth of oil and gas-related backlog was 5%. And for infrastructure projects, it amounted to 15%. And this is driven by nearshore projects, nuclear in Europe-Africa, as an example, and some SMR projects, as mentioned by Mark also, in the U.S. And this underscores our ability to recalibrate our business with our sector-agnostic model through our diversified end market business model, serving clients across different end markets and geographies. Now let's look at the cost reduction program. Our comprehensive cost reduction measures program of EUR 100 million to EUR 120 million addresses both fixed and variable costs to align with the current market realities with approximately 2/3 from the workforce reduction and 1/3 from operational efficiencies. At midyear, we started, and we started even earlier with cost measures that at midyear, we communicated EUR 80 million to EUR 100 million of cost measures when it became apparent how our markets had changed. In September, we announced further measures of EUR 100 million to EUR 120 million in response to the further deteriorated market conditions. And this includes increasing also the planned workforce reduction from 750 to 1,050 FTEs, a difficult but necessary step. We're now nearing the completion of the total savings of EUR 120 million. And of this total, the majority has been implemented per the end of 2025, and the remaining part will be implemented in Q1 2026. And this has taken a bit longer than originally planned due to the lengthy consultation process in the U.K. in particular. We continuously monitor top line development, and we will continue to implement measures to safeguard profitability and cash flow, while at the same time, maintaining a strong foundation for future growth. Now, let's look at the free cash flow. After substantially negative free cash flow in the first half of EUR 186 million, just like in Q3, we generated positive free cash flow in Q4, positive cash from operations, and partly due to an unwind of working capital of EUR 34 million. And we were able to balance the CapEx with cash from operations. On balance, free cash flow in the fourth quarter amounted to EUR 24 million, resulting in a negative cash flow of EUR 137 million for the full year. And there, of course, working capital as a timing component plays a role in that. And the increased working capital position is driven by 2 factors. First, several one-off payments at -- payables at year-end '24 temporarily elevated the payable balance, resulting in an unusually low balance and working capital position at that time of 7.6% of 12 months revenue. And this, I already mentioned last year, you may recall, at the publication of last year's results that this was a very low working capital position. Second, in 2025, we see a typical unwind at year-end of receivables. And this year, that was constrained by timing effects, most notably non-overdue receivables on a major APAC project and delays linked mostly to the U.S. government shutdown, in combination with, as Mark already mentioned, clients holding their hands on the wallet also in delaying payments to us. These receivables are expected to be collected in the first quarter of '26. And we already have seen this happening. I also want to stress that the quality of the receivables has not declined. Then we move to CapEx. And I highlighted phasing the transformation. CapEx totaled EUR 248 million last year, in line with guidance, and it was below the EUR 265 million, as you can see on the slide, in 2024. For 2025, transformation and expansion CapEx includes the final phase of the geotechnical fleet expansion and related vessel conversions, in particular, the acquisition and conversion of the Zephyr -- Fugro Zephyr vessel and the delivery and the related special surveys of Fugro Zenith and the Fugro Revelation. Maintenance CapEx included the Fugro Voyager hybrid conversion, which we completed, plus the special survey and our new headquarters. For 2026, looking forward, we are guiding for CapEx of EUR 150 million to EUR 165 million. We are adapting to changing market conditions by phasing the pace of our transformation program. And as a result, we're scaling back capital expenditure to around EUR 100 million maintenance and sustaining CapEx and selective discretionary CapEx to transform capability and optimize business performance. Now that the geotechnical fleet expansion is complete, we are shifting focus towards enhancing our uncrewed and remote operational capabilities, positioning us to seize the opportunities, amongst others, within the defense sector and realize additional operational efficiencies. Of course, all CapEx is subject to strict capital return guidelines. In 2021, we announced our ambition to achieve net zero emissions from Scope 1 and 2 operations by 2035. Sustainability remains a core part of our purpose. Together, we create a safe and livable world. It is part of our identity, and the goal is enhancing our positive impact in renewable energy with climate change adaptation and ocean health services. And as we continue to execute on our decarbonization road map, we have now decided to concentrate entirely on our SBTi targets. In recent years, technological advancements in sustainable solutions have slowed. Alternative fuels, while promising, remain prohibitively expensive and are not yet available for large-scale development. And client demand for sustainable solutions has not reached the levels that we originally had anticipated with limited willingness to absorb the cost. We continue to work closely with our clients and industry partners to forge partnerships and to create a safe and livable world. However, in light of these developments, we have elected to forego our net 2035 net zero ambition in favor of concentrating on the SBTi. And this reflects a more realistic and resilient pathway aligned with market condition, technological and financial developments. Now, let's look at the net results, some highlights of the P&L. Specific items: in 2024, restructuring costs in relation to the cost savings program amounted to EUR 21 million. In addition, we reported: a EUR 51 million goodwill impairment related to the full carrying amount of the goodwill for the Middle East and India region due to a more cautious outlook for the midterm; EUR 25 million impairment loss on Fugro's headquarters, following the sale and leaseback in the second half year; EUR 11 million various asset impairments in the geophysical fleet; and EUR 6 million other one-off write-downs. Then if we look at the finance expenses, the reduction was mainly the result of lower interest rates, resulting from the group's bank debt refinancing at better conditions at the end of December 2024. And this was partly offset by the increased interest expenses from the revolving credit facility drawdown. And then, lastly, the income tax expense gain of EUR 34 million comprises a current tax expense of EUR 14 million and a deferred income tax gain of EUR 48 million. And the deferred income tax gain relates to our recognition and utilization of previously unrecognized tax losses, mainly in Australia and Brazil. Net debt increased to EUR 382 million compared to the EUR 96 million in December '24. And this was primarily as a result of the lower EBITDA, in combination with dividends paid in respect of 2024 results of EUR 84 million, and additions to leases. Cash-outs were mostly funded through cash on balance with limited additions to gross debt of EUR 60 million. The balance sheet remains robust with a leverage of 1.4x, and there is no significant maturities until 2029 other than the 1-year term loan of EUR 40 million, which we put in place to add flexibility and as a liquidity backup, as communicated before. We arranged this loan as a prudent measure. Then moving on to capital allocation. And as part of our capital allocation framework and our commitment to pay annual dividends, we will propose a dividend of EUR 0.15 per share, representing a payout ratio of 28% of net result, excluding impairments, as these are largely one-off, noncash and nonrecurring in nature. And although we do not expect to be able to start a new program -- a new share buyback program soon, considering our net leverage, we have now included also share buybacks in our overall capital allocation framework. We have done so to provide an indication of future priorities for excess cash forward, and we will conduct an annual balance sheet review to evaluate whether excess cash is available to share buybacks. And now, I want to hand back to Mark for the outlook.

Thank you, Barbara. Okay. So the last slide before we open up for questions, the outlook, summarizing basically 2026. I think it's all aimed at, as I said, solid performance and good cash flows. So that's what we aim for. That's also how we modified basically everything we do around cost, but also our strategic direction. We have spoken about the CapEx reduction, which is very important there as well. And basically, we're finalizing those cost measures that we have implemented, operational efficiencies that we introduced with our strategic direction. And then, basically, yes, we can only say that mid to longer term, and hopefully, the wind market will progress faster than, yes, everybody saw in 2025, recover that, realign that market, then we can also benefit from that part. In the meantime, we see backlogs growing, specifically on infrastructure and oil and gas, with multiple opportunities in other markets, as I discussed before, nuclear, critical minerals, security, surveillance, water market that we're also exploring to further expand markets that we serve with our expertise. With that, I would like to close this part of the presentation. I just want to mention one more thing, which is to do with the other press release that we issued this morning, which you all have seen. This is about, yes, Barbara Geelen, our CFO, leaving the company in due time, not yet. And I think this is also very important to say, this is absolutely no goodbye because you will see Barbara also presenting the quarter 1 results. You will see her on roadshows, some of you at least. So she will still be there, and we'll be working on the best results that we can get in the upcoming period. And this is an agreement that she made together with the Supervisory Board, and she will be there officially in this role until the end of April, and then will serve us even up till August. What I would like to say is, absolutely, already, despite the fact that there's no departure, emphasize what Barbara has done over the last couple of years, 5 years that she was with us to really professionalize the company also on the financial side and to actually lead the company in the right direction for all the teams that we have around the world. So also already thank you, Barbara, for that. With that, I would like to say thanks. With that, I would like to open up for questions. And I would like to also ask Barbara to join me again.

And we have a microphone in the room, so you maybe -- you raise your hand, and then, somebody...

Luuk Van Beek, Degroof Petercam. First of all, a question about your CapEx. We see quite a drastic shift in your capacity by segment. And I understand that your assets are market agnostic, but I can imagine that if you move, say, from a wind project to an oil and gas project, the way you use your assets are slightly different and you may need some additional equipment or other things. So do you expect any significant CapEx for that? And is that in your budget? My second question is on the impairment on the Middle East and India. You see lower demand in the midterm. Does that also have an impact on your capacity planning? And do you have any capacity or assets basically in that region that you want to shift to other regions or have to sell? And finally, on the headcount reduction, can you give a rough indication of how much of those people are worked in overhead versus project functions?

Okay. I will take the first 2, and I'll hand over to Barbara for the last question around the cost savings specifically there. And I don't know if we have all the details there, but we'll get to that. First, on the CapEx and the budget shift, and if we move assets to different environment, then normally, we do not have to do a lot to these assets. In actual fact, we have many examples where we have assets sailing, not even touching the port, moving from one project to the other, shifting between markets. So this is specifically the case if you talk about assets that, for instance, for the geophysical area where we do not touch basically the seabed, then we can actually move on and do these things. Where you see differences is, if you talk about water depth. So if you go from a shallow water to a deepwater project, you sometimes, yes, need to make modifications. Not all the vessels that we have on the geotechnical side can work in very deepwater, 1,500 meters or 2,000 meters water depth. So this is a difference. If we want to see and we see more opportunities with deepwater coming up, then there might be some assets where we need to do some modifications. At the moment, we have multiple assets that can serve deepwater, but we carefully have to place them in the right areas, and this is also what we're looking at. So these are the modifications you could think about. But in general, the assets are basically deployable immediately to other markets. So this is good to mention. On the Middle East, the impairment, what we can say is, there -- basically, there are still quite some opportunities in that region. However, as we have seen over the last couple of years, it takes time for these opportunities to materialize. We have made quite some changes also to the region with new management there that also have taken a more careful view on the outlook related to basically what has happened over the last couple of years. So we are basically cleaning up and revitalizing that region for ourselves. And then, you asked, if there are assets moving away from that region? In actual fact, we will bring one of the geotechnical assets to the region from the Americas over to -- for shallow water geotechnics. The Resilience will move during the course of the year towards the Middle East-India, and we'll let go off a leased asset, the [indiscernible] that we have there. Very likely that will happen. It depends a little bit on timing, how that exactly will happen this year. Then on the personnel side, Barbara, do you have those details on how much?

Well, I would say that by far, the majority has been in overheads, not only at corporate, but also in the regions. We have -- and maybe the question behind the question, what if the market comes back, do you have sufficient staff? The answer is, yes. Of course, there have been -- difficult choices been made, but we believe that the company at this point is, despite the reduced headcount, very well positioned to deal with the upswing, if it may come back, even though I have to caution that, that will be more towards the high season, typically Q2 and Q3 than in Q1.

Yes. Maybe 2 things to add there. Thank you, Barbara, not being specific about the numbers, but I'm 100% aligned there. And the vacancies that you probably still see if you go to the Fugro website, because some of you are very clever, and then look on the website, hey, what kind of vacancies do they have? You still see vacancies, and those are the vacancies of people that we don't have and that we can't redeploy in those areas and primarily are operational people that are required in very specific areas, where we still see the need for these things. So that is, I think, good to add.

[ Christian Brunke ], Kepler Cheuvreux. Two questions on the outlook. First of all, you're indicating early signs of recovery in the offshore wind market, but it will take time to materialize. Can you provide a little bit more feeling on that? When you speak about time to materialize, is this something for 2027 and beyond? Or can we already expect some kind of pickup later this year? That's the first question. And then, on the margins, the outlook states a commitment to taking measures to improve margins. How should we see this commitment in relationship to the medium-term objectives for the margins?

Thank you, Christian. So I will take the first question there. If we talk about the positive signs that we currently see, we're careful, and you see the wording is very careful, and maybe also not sustained because I think you all were there when we saw multiple times in -- Fugro in the times that we presented our quarterly results, we had to modify downwards. So we're very careful now in giving too much guidance that we cannot deliver on, yes. So that is one reason. So I say that upfront. Then secondly, I want to make another point, and that is also very important. We can all become very enthusiastic about what is on the board and the projects that we present and also announce to the market, which I think are great signs of early recovery of this market. However, first and foremost, it doesn't say anything about the total size and the total growth. So that's one thing. And secondly, we have seasons in Fugro. So I want to also caution everyone for the fact that the first quarter, as always, is a winter season and needs a start-up time as well, despite the fact that we have projects that actually kicked off in Germany and so on. And then, we need to be careful that not people say, oh, there's a great project in Germany, and therefore, it will be full force ahead. Yes, but we need work also to deliver some results as well. So that's what I would like to caution you on. Having said that, there are some signs, and AR7 is clear, where we say, hey, this is great because this is already happening this year. There's even work that is probably related to the next license round in the U.K., AR8 already on the board, and we're probably getting involved in that for this year. Again, signs that things are changing. However, if you look at Hamburg, and this is fantastic, this is, yes, 2031 onwards. So what I said before, when I was in Brussels a couple of weeks ago, we're emphasizing that it's important that the supply base needs work now and next year and the year thereafter. And you will hear probably from peers and certainly also construction companies being very busy this year or last year, but will probably run out of work in '28 if there are no new projects on the board. And they already see some gaps in their planning as well, '28, '29. And that's logical because it takes time before these licenses are awarded, before Fugro has done the survey work, and then before they can actually start building. So I think absolutely positive, carefully optimistic. However, be careful and don't be overenthusiastic there because it takes time, especially what you see there. And as we said, on the U.S. side, we don't expect anything in the short term quite logically. And then, if you look at Asia Pacific, we are also carefully optimistic there, but it has really normally been the case that Asia Pacific is lagging behind a little bit the tendency that Europe actually follows. So there's always a bit of a wave that we see. When Europe picks up, it takes 1 or 2 more years before also Asia follows. And that's because the same operators are involved, and they can't operate everywhere in the same speed. So this is what I can say, Christian. And then, for the second question on margin, Barbara?

Yes. Thank you. So we have not indeed -- we're not guiding for any margin level. I think that has been very well explained by Mark, why we're not doing that, especially not at this point in time in the year. What we are saying we're better positioned, and we focus on cash generation. What does that mean then for the midterm targets? It's too early to say something about that. So for the time being, the midterm targets are the midterm targets, I would say.

Quirijn Mulder from ING. A couple of questions. And maybe Celine Gerson is going to hate me, but I will start about the U.S. again. When do you expect, let me say, that U.S. is becoming profitable because the results are despite the fact that you do a lot of cost savings and they were early on, and we haven't seen any results yet. The other question is about the market. So you said at the beginning of the year, last year, that's what your presentation started, Mark. You said we had a growth of the order book by 4%. So we expected growth in 2025. If I reflect that to today, then we have a minus 6% order book. So is the conclusion to make easy to say we expect lower revenues in 2026. Is that the correct conclusion at this moment? And if I look at your text, you speak about margin, not about revenue. So it is quite logical. But then I would like to get an idea about the expected utilization of the vessels because that is also important in my view.

Perfect. Okay. So first and foremost, maybe on the Americas and on -- let me put it like this, every region, every service line, every business line in Fugro needs to make money next year, this year. So it cannot be any doubt about that. This is what we're driving. And there could also be always something that changes or there's radical change or market conditions, but everybody can make money, and that's what we're steering for. There are no excuses whatsoever in that aspect. And that's something I want to be extremely clear on. So is the Americas going to make money this year? Absolutely, that is the plan, that is in the budget, and that's also what they are tasked for to do so. So very clear. And if that's not happening in any area, there will be additional cost saving, additional measures, and we'll step in very forcely. So that's one thing. Secondly, if you talk about the backlog, and this is absolutely true, backlog a year ago was growing by 4%. We have communicated during the course of the year that certain things were not happening anymore. So basically, even things that were in the backlog were taken off, a number of things, not a lot and other things were postponed and stayed in the backlog for a very long time. And this is a problem, and that's also what we communicated on during the course of the year. Now what you see in this year, you see things firming up a lot more and also be more secure in when it is happening. And that is also for 2 reasons. One, we spoke about wind already, and these projects are mobilizing and happening, as we say. And secondly, there's also a willingness to get them going, which I made very clear on what is happening in Europe. And secondly, if you talk about oil and gas, as I also communicated about, there was a clear wish to postpone things and descope things because they wanted to keep the cash in the pocket. Now as we have started 2026, some of these projects also go ahead now and payments are -- and money is flowing again because they obviously also want to progress. And there's a little bit of a battle out there who gets the oil or gas out first and who will get some money by selling that. So that is also what you see in the world. Then the last question was about.

Utilization of vessels.

Utilization of vessels. Now, I don't know exact number of the utilization in our budget, but obviously, the utilization has been low in 2025, quite clearly. We're continuously monitoring this. We're obviously also rightsizing the fleet always to what is required. So we're not keeping a fleet size because we have certain things. If we have a vessel that doesn't have work in our planning in the longer term or midterm, we're going to take action. That vessel either needs to be sold, needs to be scrapped or needs to be changed in the portfolio. Now, that still means that you might have a vessel on the wrong side of the world. We have seen that with one of the assets that we had in Asia Pacific. For a long time, the equator didn't work. And then it affects actually the overall utilization of Fugro quite a bit. And this is a problem. Secondly, we had, as you know, also quite a few modifications of vessels in 2025. There's still a big one ongoing with the Fugro Scout, which is still to be completed, not an easy one. It's also quite a major overhaul. But then we have more or less completed, as we said before, in [indiscernible] to -- yes, our expansion and modification of all the geotech vessels that we wanted to do. Does that mean there is nothing else to do? No, of course, there will be modification, maybe we turn things into deepwater or smaller modifications, but not new acquisitions of boats or new installations in that sense as we have seen over the last 2 to 3 years. I hope that answers your questions, Quirijn.

Kristof Samoy, KBC Securities. First question, just on the timing of the restructuring. You said during -- or in the press release and now in the presentation, you said the majority of the layoffs have occurred. I mean, the majority is pretty vague. Can you put a percentage on this so that we can get a feel how much extra savings are still to come? And then regarding the land performance, I understand it's also impacted by the drop in nearshore activities. But if you look at Clarksons data, for instance, you see that the expected FIDs in LNG terminals worldwide are really going up aggressively. You have been involved in these type of activities in the past. Is this not picking up for you as we speak right now? Are you missing out on opportunities? Did you lose a lot of tenders? That would be my first question.

You want to take the first?

Yes. I'll answer the cost measure program. So what I can say is that we have completed EUR 90 million of the program as at the end of 2025, and we still have around EUR 30 million to go. Of that EUR 30 million, largely the majority has been derisked. As I mentioned in my presentation, this has to do with the long consultation program that is happening in the U.K. And therefore, cost and personnel reduction will still be falling in Q1. We expect even maybe the financial impact, some residual impact in Q2, but the majority is completed. And this is the EUR 90 million is on an annualized basis. So that's not the P&L impact. The P&L impact, and you will also see that when you look at the P&L is around EUR 45 million, and that is divided by a personnel reduction and operational efficiencies. And for that, we've taken a restructuring cost of EUR 21 million.

We talk about the nearshore projects. I can confirm that we expect quite a change between '25 and '26 on nearshore projects. I already spoke about. It's not only LNG or nearshore LNG developments. There are absolutely newer projects on the board again in the U.S., in the Americas, I should say, also South America, and we're bidding for those. So tender activity has picked up since the end of last year. So a number of projects on the board there, not yet secured, but it's ongoing. But it's also projects like nearshore wind development, as I spoke about in Brazil, which is a significant project. We'll start doing that in 2026. And then we have multiple nearshore projects actually in the Europe region that is also awarded and starting in 2026, some of them in the Baltic and some of it in the North Sea. So we see indeed higher activity on multiple markets, so to say, but all nearshore and the nearshore activities is very closely related to our land business. So we continue to see in '26 a step-up in nearshore.

Okay. And then maybe one other question on the vessel capacity. You spoke about the relocation of a vessel from Europe to Brazil. Did that occur in the fourth quarter? Or was this the first quarter of this year? And secondly, you said, okay, if we're not keeping capacity just for the sake of keeping it, are there still possibilities to dry stack vessels? Or are you already at the end game there?

Yes. So first vessel, the Dweller that moved from Europe to Brazil, that was end of last year. So that is, I think, November time that was moving over. So that is basically supporting now the project in Brazil or is about to be mobilized there to work on Petrobras work. And then I spoke about the vessel that will move from the Americas to the Middle East, which is a geotechnical platform, nearshore or shallow water geotechnical boat, which is not required at the moment because there's no wind development so much in the Americas. So the project or the vessel will do 1 or 2 projects before it will leave the Americas. One of the projects is in the Argentina region. It was also working before in Argentina. So that will be done, and then we will move over to the Middle East. We still have some assets that we can retire, and we're planning to retire over time. So there's a plan, for instance, on one of the vessels in the Americas that has been there for a long time and is quite old. We spoke about retiring that vessel before. And we will decide exactly when there is no work anymore and what the right time is to do that. So this is normally what we do. So we retire maybe some older vessels and then move the newer vessels into the areas where we still need them. So this is a good option. Yes, dry stacking or cold stacking vessels is basically your last resort, I would say. And it's normally not very ideal because a cold stack means you have a lot of cost again to actually mobilize the vessel. A warm stack is hardly reducing any cost, maybe 10%, 15%. And then you even have, I don't know, hot stacking, warm stacking, cold stacking, it doesn't really matter. It all costs you money. And you should prevent doing it, you should just use this vessel or take it out. If you don't have it, they work anymore, get rid of it. A vessel is normally not something that you should be very much in love with, although you need them, but it is normally something that costs money if it doesn't work. So we need to be very careful there.

Jeremy Kincaid from Van Lanschot Kempen. Three questions. You've given us a bit of an update about the potential revenue outlook for '26, but I was just hoping if you could let us know what the type of revenue would be. Obviously, I'm looking at the projects you're working on this year, there's Dogger Bank, North Sea, the fiber optic cable as well that all looks quite geotechnical heavy. So just would it be fair to assume there's more geotechnical work in 2026 compared to 2025? And then my second question is on the sale and leaseback and impairment of the property. Obviously, the impairment is EUR 25 million, and I read somewhere that it was sold for around EUR 32 million. So does that mean that you spent nearly EUR 60 million building it and then selling it for EUR 32 million? Or is there some other accounting trickery in there? And then finally, you're adding the share buyback to your capital allocation framework or at least considering it. Could you let us know what time of year you conduct the balance sheet review for that share buyback decision?

Perfect. Okay. So I'll take the geotech question or the revenue. You said nicely, you have given some guidance on revenue. Well, let me be clear. I did not give any guidance today on revenue development. So for everybody, please take note of that. No guidance on revenue. I have specifically spoken about where we see work and where we're doing work. And those are signals. There are early signs that certain things are picking up in some areas and so on. It doesn't say anything about the overall revenue. Sorry. This is just a precaution also because we do not want to be in the same situation as we have before. And I hope you appreciate that. So this is very important. Now, we are not building additional geotech capacity. Some of the capacity wasn't working last year. That's true. We hope to deploy our capacity in a proper manner. So in that sense, in multiple markets, we do see opportunities and probably some more deepwater work over time for sure. That is also what we do see. Now, do we see more geophysical work? I think there's -- and we spoke about that before, more competition in that area, also more fiercer competition, pricing is under pressure. So also reviewing the way we actually deploy our assets there, how we do it, how much we need and what kind of systems we're going to use. We're going to launch USVs, you're probably following some of the announcements we're also putting online. We're bringing the first USV for geophysical operations on stream this year or during the first half of this year. And then there are 3 or 4 others to follow on geophysics, which is quite exciting. And in that sense, something that, yes, we believe will make a difference also on the geophysical side. But that will take a little bit of time. So we really need to fix geophysics because it was a loss-making business in '25. And we're really on top of that with multiple actions there. So that's how we look at the revenue potential then without saying how much that is and how much growth or decline that could be. So this is my apology, Jeremy, that just to make it very sharp. The other 2 questions maybe for Barbara.

Yes. So on the new headquarters, it is -- there's a couple of things to mention. One is the fact that we moved indeed from Leidschendam to Nootdorp, where we already have the tech center. It concerns location from a property perspective, property valuation location perspective, that has an impact on the sale and leaseback amount. And we have chosen to build a headquarters next to the tech center with high-quality builds. We also got a BREEAM Outstanding, which makes it very sustainable the new headquarters for and truly future-proof. That has meant that indeed, it's not EUR 60 million, but it's EUR 56 million. We have built a high-quality headquarters. We will still be receiving funds from the old previous building. And this is the current situation that we have, and this is how we came to also that location choice. Then on the share buyback, you can expect us to review that. We haven't communicated the exact timing, but you can expect us to do that at the end of the high season, so to speak, when we have clarity on the liquidity position of the company and the leverage and how that has developed through the year. On timing of the actual share buy program, obviously, we'll keep that fully flexible and at the company's discretion. But that is basically the thought process that we will follow, and we will not communicate or put on paper exact timings in this regard.

[ Derek ], ING. Some follow-up questions. First one on the write-down on the receivables, EUR 6 million. Is that a concentration of a bigger ticket or a combination of some smaller items? That's my first question. Second, on the remark you made on geophysical and the intensified competition. We know that it's been a more challenging market already for a while. So has that situation deteriorated over, let's say, second half '26 because you make this specific remark? And in this respect, what is your view on the order -- quality of the backlog in geophysical specifically now versus, let's say, a year ago at this point in time? And then third question, more a general one on the offshore wind ambitions as the supply chain has been involved in this process on the North Sea. We see a 15 gigawatt ambition as from 2031 for a number of years, for a decade even. Yes, if we look back, and I don't want to be the elephant in the room, but the installed gigawatts over the past decade or so have been around 3 in the North Sea region. So -- and also knowing the ambitions in other parts of the world, how do you see that materializing? It looks very, very bullish, of course, on the long term, but how realistic are those ambitions? As said, I don't want to be the elephant in the room, but any help here could be appreciated.

Yes. On the receivable write-down, this is a couple of specific projects that I'm not going to disclose further, but it's spread and it's in different locations. So not on one particular project.

And 2 questions on -- first is geophysical. First and foremost, I think we have spoken about it multiple times that geophysical business is a more commoditized business with more competition and pricing under pressure. Over the last period of time, we see actually that we are gaining traction to some extent again, with winning work -- more work again in the geophysical area. And then we need to be a little bit careful because geophysical is not geophysical as it is. It's not one thing. So if you do geophysical work for oil and gas or renewables is very different. You need also different equipment to some extent, mobilize some smaller equipment, not modifications to vessels, so to say. But it depends sometimes you need more seismic involvement. So a high-resolution seismic for the overburdened top layers, so to say, of the seabed or a more standard geophysical work or more deepwater where you also get AUVs involved, the friendly torpedoes that you can preprogram. So those kind of things are also geophysical or cable route surveys. In some areas, we're actually operating quite a healthy business. In other areas, it's more challenging. And that has to do with, I think, yes, obviously, a larger offering. And because the offshore wind market came down so much in '25, you see obviously a deterioration in that market because this market was or geophysical companies and also the competition could really flourish with this market growing so rapidly with large fields that had to be surveyed. Now these fields are significantly smaller in '25 and in some areas, nonexistent anymore, for instance, the U.S. And then you see obviously that everybody is fighting harder for what is remaining. So this is one of the key issues. However, having said that, we're making good steps. We're having a clear view on how to progress with this, and we're picking up additional work now. So more promising outlook for '26 than '25, and this business needs to start to make money again. As I said before, every business in Fugro should make money. And I hope that also everybody in the organization is listening because this is obviously a clear message that we have. If we talk about offshore wind, you're absolutely right, 3 to 5 gigawatts per year over the last couple of years probably being built on an annual basis. When we had this North Sea Summit in Ostend, I was present as well, lots of involvement from companies and supply base and governments. And there were some really good things decided there, but it never materialized in actual fact because people had to adjust, the ambitious goals that the countries had. Having said that, I think over the last couple of years, I think everybody realizes that this is also an unsustainable situation where we're fully dependent on LNG of the U.S. or Qatar or other places. So I think there is a very clear statement made also at Davos that Europe needs to become independent on the energy side. And this is a drive that helps in the mid- to longer term, Derek, to be clear, to have this business further growing. That also means that also Europe will start to look at nuclear and other options, everything that can bring energy and people are now not talking about energy transition, they're talking about energy addition because we all start using the copilots and the ChatGPTs and the clouds of this world, and that requires a lot of energy and a lot of data centers. So there is a lot more required. So there's quite a different view on what is the energy demand in the future. And this is definitely in the short term or midterm for Europe, important that we become more independent. So this is a drive. Now, can the supply base deliver basically what you just said? I think a lot of suppliers that I've spoken to say, yes, we can handle this or we can handle a lot more as long as we know that it's every year consistently roughly the same. The biggest problem that we have seen over the last decade, I would say, is the fluctuation. One year, we build 1 gigawatt and the next year, it's 5 gigawatts. This is a real big problem. And that's a problem for Fugro being in the forefront of our peers doing same surveys or geotech work and also for, yes, the builders, the construction companies and even for the operators, it's also difficult. So if there's more certainty on license rounds, on contract for difference, the stability and the longer-term outlook and also countries coordinating, "Hey, where are we building? What in what year? And this is still to be decided, I would say, but there is already a high-level idea about it. This is really important. And then I think we can get close to these things. But having said that, I think the politicians are always a little bit too ambitious.

Thijs Berkelder, ABN AMRO-ODDO BHF. Three questions. First one on you not coming back with, let's say, a repeat statement, which we've seen mid-COVID, you also cut out 1,000 staff and clearly said we ASAP want to be back at EBIT margins between 8% and 12%, back to a ROCE of around 10% or above 10%, et cetera, et cetera. That crisis, in my view, was way bigger than this 1-year dip in offshore wind. So why -- who has stopped you from again publishing that target? Is that related to the negotiations with, for instance, U.K. unions that it only will increase your redundancy amount? Or is it the Supervisory Board preventing you from publishing that or maybe that you want to have that in the cards for your new CFO? Second question is, in the press release, you guide for an improvement in margin. What margin are we talking about and compared to what your EBIT margin in second half '25 was more than 7%. And in '26, you will benefit from the cost savings. So are we expecting a margin improvement compared to second half '25? Or are we also including the horrible H1 we've seen in '25, which, in my view, is not representative of Fugro as a whole? And/or should we also read a rise in the EBITDA margin? Is it only EBIT margin or EBITDA margin included as well? And please, I'd like to have some difference in margins on marine versus land. Land margins have been very weak. So for sure, you want to have them back into positive territory, I would say. Does that mean that what are -- are you also expecting improvements in margins in marine? Third line of question is looking at your profit pool. Europe backlog is stable. So on first side, solid and sound, you act on cost reduction. So your profit pool in '26 then should deliver clearly higher results than in '25. Why wouldn't they?

Okay. So nice -- thank you for the 3 questions. We'll step through them, Thijs. So first and foremost, going back to the COVID days, yes, we were maybe in a different way, guiding very specifically on specific targets for EBIT and ROCE and so on. I want to be clear, we want to get back as soon as we can, indeed, also to a margin between those numbers, 8% to 12% and even back to what we have guided for in the midterm as soon as possible. And that's yes, for you to fill in when is as soon as possible. So we have not committed to a certain time frame there. But it's crystal clear that Fugro obviously will have to be in those margins, and we have a midterm guidance for 10% to 15%. You know that and -- or 11% to 15%, sorry, my mistake. So this is very clear that we need to basically get back on track there. But when that exactly is, we have not committed, and that is indeed on purpose. Nobody is specifically blocking us there. There's no particular person in the company doing that other than Barbara and myself taking a careful decision in what is wise to give guidance-wise. So this is what we have decided there. And then we move over to the improvement on the EBIT margin.

Yes. I concur what Mark said. I mean, there is not a lot to add there. We go there as soon as possibly. I've always maintained, and I will leave this for the next CFO, Thijs, perhaps. But what I've said is that the margins in land are lower. It's less asset intensive, but it should be around 8% and the marine margin should be north of 11% and there would be no reason of the prospects of Fugro that in a normal market, we can put the midterm targets on the board. But unfortunately, as we said, we have been navigating a very challenging year. And a downturn in the market is not reversed in 1 or 2 quarters. So this is what we have to deal with, and this is where we are.

In those days, Thijs, you will recall, we said always for land, 6% to 9%, 10% to 13% for marine. But that was guiding above 10% ROCE. And now we're at 15% ROCE. So the margin needs to be a little bit higher for 15% ROCE. So -- and that's what Barbara said, guided for that in that sense. As soon as possible, and we will not commit to any date for that as soon as possible. Europe, yes, nice question. So that was a hypothetical question or you created a picture of what is happening in the backlog in Europe stabilizing. It's the profit pool and with the cost savings. Yes, I can follow your reasoning. That's what I can say.

Quirijn Mulder from ING again. I have 3 additional questions. My first question is what you say about the wind offshore in Asia Pacific, and you treat it as one area, but I think there are different markets. So maybe you can give more some dynamics on the different markets from Japan to Australia. That will be nice. The second question is on the headquarters. Now I'm not an adviser of Fugro, but let me say, even real estate guys come to me and say, "Hey, guys, this -- the value of your asset is only EUR 35 million against your EUR 60 million and my balance sheet is fine, then I never would consider to do a sale and leaseback. So maybe you can elaborate on that because then you can easily keep it at where it is and to make nice depreciations on it. And then the third question is about your areas. So you have 4 areas where you do business. And then I see a massive impairment in Middle East. But in my view, if you look what's happened in the last couple of years that we are a little bit refraining from the developments with regard to sustainability and renewables, et cetera. And that means, of course, there will be more investments somewhere in the world with regard to oil and gas, especially in gas. And if I look at the measures and let me say, all the announcements from the Middle East, from ADNOC, from Saudi Aramco and other names, then I would never do something like an impairment of this size. And I can imagine that maybe a land maybe for the line is somewhat impairment justified, but not this amount in my view. But maybe you can discuss that.

Sure. First, wind offshore, Quirijn, a little bit more color in Asia. So we see a similar pattern as in Europe, where Asia also slowly dried up with new projects in Asia and Japan really being very slow, slowing down in -- they still have an ambition, but projects are postponed. Some projects where even the first projects that you might recall that Mitsubishi took were also given back, so to say. So you see also stagnation there. And we should not forget that this was a big ticket in '25 for the industry where these projects were given back, but also what happened with Orsted in the midst of 2025 that really put a bit of a blanket or a down view, negative view on wind as a whole in Europe on top of what was already happening at the time in the U.S. with the new administration there. So you see a lot of things happening, a perfect storm in that sense also for Fugro, still investing quite a high number of dollars, so to say, in new equipment, which we couldn't stop during the course of the year because those programs had to be finished, while actually very much the revenues, EUR 427 million came down, yes. So that's obviously very painful. If you talk about other countries there, Australia still is committed, but I have said before that I also have to see how much of that will eventually come to play, but we do have work and have done work there, and there's new licenses also to be executed on. But there's not any building yet executed or a lot going on there. And some of the ground conditions there in some areas are very, very complex. So that will be an expensive exercise to push through. Then you have Taiwan and Korea, also that we see some slowdown, albeit for sure, also continuing. But yes, overall, that market is also affected by the whole tendency. So we have seen basically projects reducing quite a lot in Asia and also the backlog there in renewables is significantly lower than we have seen before on the renewable side. The sale and leaseback, you wanted to add something there?

Well, thanks for the advice, Quirijn. We've decided differently. And on a like-for-like basis, also the lease costs are lower, and it was not the intention from the start to keep owning the building. So that's a decision that the company has made. You want to take the Middle East?

Yes, sure. No problem. So we have taken quite a goodwill impairment for the Middle East. So there's a few areas that we have decided on. Obviously, the goodwill spread around the world was decided a few years ago when we went over to regional segmentation. And that was, yes, not arbitrarily defined, but at a certain way defined how much goodwill would sit in certain areas. This has been looked at year after year. We have taken after quite a few years of losses and difficult operations in the Middle East, and that must be said as well, a different view on how this market is progressing. Do we see the opportunities that you mentioned as well from ADNOC from Saudi Aramco? Absolutely. Was Saudi Arabia one of the most difficult areas for us to work in, operate in last year? Absolutely. So we had to cut cost a lot in Saudi Arabia because it was not progressing and because projects were stalled. Are they still saying that they're going to ramp up on production? Absolutely as well. So you see this region has a lot of difficulty with pinpointing when what is happening. And we have suffered from that quite a lot also with Lower Zakum, Upper Lower, Umm Shaif. We have seen a lot of delays in when these things really happen, and then we're waiting for it for a very long time, affecting our results overall. So this is something that we have taken on board in our outlook. We still believe that there's a lot of potential in that region, but we have taken that on board in a more conservative view and potential in that region in the mid- to short term or short to midterm. And also, I think it's for the new management that is there to review that in the upcoming period. But yes, we felt that this is applicable and also discussed with our external auditors, obviously, extensively.

Thijs Berkelder again, ABN AMRO-ODDO BHF. Three follow-up questions. One on other side of the Middle East, the Mediterranean Gaza war more or less has ended, a lot of activity picking up gas related in the Mediterranean around Cyprus, Greece, Turkey, et cetera. You had a contract with ConocoPhillips, which was canceled. So for Fugro is activity coming back there as well. Second question, can you give an update on your defense related efforts and/or contracts coming in or not? Thirdly, in your search for a new CFO, where should the new CFO be smarter, better, stronger than the current CFO?

You want to answer that one, Barbara? Okay. Let's go back to the Mediterranean. So you know we spoke about Cyprus indeed before with a project Cronos from Eni. We did part of the project in the fourth quarter. And part of the project was also pushed into the new year. So we have also done now some of the geotech work in the last period of time in Cyprus. So there is indeed there is more activity there. I haven't heard yet if ConocoPhillips is back on the board or happening. So we'll have to check. Still pretty unstable as well in that region, to be honest. Also, this is what we have seen, obviously, in the Middle East, just to come back on the Middle East in general, this is also affecting, obviously, our outlook is what we have seen over the last couple of years on -- especially last year with the geopolitical situation has also impact on how we look at what could potentially happen. But there's absolutely an element that we also need to take on board there. So that's what I can say about the Mediterranean. I think there's absolutely potential to further grow there. We're well positioned also with our office there in Egypt. So -- and then supported by our European activities and out of Italy. So that is on the Mediterranean. Then defense, as I said before, we have obviously some good contracts. We have the patrol vessel, Galatea that is since the beginning of last year, operational there. There's adjacent work that we're doing there to test all sorts and pilots, all sorts of things together with the Navy, the Dutch Navy. There's a lot of discussion happening between the various countries how to further develop security at the North Sea. And we're participating in all these discussions, but things take time there. So we continue with this project there. We have done before also some work with USV to prove what we can do there. So there's actually 2 elements that you can see there is, first and foremost, the security element at the North Sea, which is actually not a defense activity. It's a government activity, but a lot of governments do not know how to tackle this. So they ask also their local navies to support. So this is an ongoing discussion that needs to materialize. We're also part of discussions where they talk about data and how can you actually make a baseline of data of what is out there. There are pilots where we, for instance, now develop something where you can monitor vessels and see if they might cross a critical pipeline, for instance, or cable. And if they go in that direction, then you can follow that vessel and another vessel that's actually not necessarily steering towards that critical area, you might let go of. So you can actually automate that with AI, and we're working together with some partners to develop a tool and to do a pilot there also for defense. So these are some examples where we're now very active in, but it takes time. This is an area where also the government is really looking at what is the best option. The other element, and that is, I think, also important is, yes, defense needs equipment and material for protecting themselves, more defense activities. We're less involved in that. Although there are some specific expertise that we have that we try to contribute there as well. But we're obviously not building weapons or fighting boats or those kind of things. So that is not what Fugro is doing. We're trying to deploy our core expertise on the geo data side.

[indiscernible]

We are using actually a lot. So we have -- on our USVs, we have VSAT, we have Starlink, we have Iridium. We have sometimes even mobile phone connections. So we have multiple backup systems. Having said that, also, if we talk about our satellite positioning business, they can see if something is spoofed. So if you have no authentic position, which is also coming up a lot more, but all these things can be blocked and shut down. So this is just a fact of life. And this is also what we have seen in the Middle East area where some boats and some operations even from our clients could not continue because a couple of hours a day, no positioning. And then they can only throw a beacon on the seabed and say, okay, we know where we are, and that's it, but there's no GPS. And we are so accustomed to GPS, GLONASS, Galileo, or BeiDou, one of the 4 satellite systems that are out there. We use all of them. So I think we can also play for defense actually in Europe, depending fully on GPS. I think that would be wise if they also depend on some other systems. But in the end, everything is being -- could be being blocked quite easily. Do you want to answer that?

Yes, I want to answer that. I don't think it's a question for Mark or myself. I think it's a question for the Supervisory Board who will -- who has launched the search for my successor. Thanks for the question, Thijs.

Okay. Maybe last question, and then we'll stop. So Kristof?

Yes. One last question, if I may. Regarding CapEx, obviously, we were all happy to see a reduction in CapEx for 2026. But as of today, do you have any firm commitments already for growth CapEx beyond 2026, which is material?

So what I can say is, there's not a lot, but we are building some USVs at the moment that will roll into 2027, and they will have to be finalized. We can probably still stop some of the work. So if we have to really do that, then it's possible. We also modified the programs that we had on the board. So quite clearly, with a lower CapEx, you have to look at your earnings potential and how much you invest in one go. That was not possible last year anymore. So in that sense, very painful. Now moving into 2026, we're still more flexible there to modify that. Well, thank you very much. And that concludes our presentation for the full year results of 2025. Thank you everybody for the attention. Have a great day. Thanks.

Thank you.