Ørsted A/S (ORSTED) Earnings Call Transcript & Summary

[Audio Gap] [Interpreted] in the New York Round 4 tender. Later in the year, once we secured the final key federal permits, we took final investment decision on the project. As mentioned, we took final investment decision together with our partner, PGE, on the 1.5 gigawatt Baltica 2 project earlier in 2025. Baltica 2 has a 25-year inflation linked power purchase agreement and has obtained all regulatory permits. We expect the project to be fully commissioned by the end of 2027. In the U.K., we reached a significant milestone in 2024 when we secured power purchase agreements of 3.5 gigawatt in total for our wind -- offshore wind farms, Hornsea 3 and Hornsea 4. Once operational, Hornsea 3 will be the world's single largest offshore wind farm with a capacity of 3 gigawatt. Overall, we continue the progress our partnership and divestment program has embarked on, and we remain on target to deliver proceeds in the range of between DKK 70 million and DKK 80 billion for the period 2024 to '26. During 2024, we made significant progress, including in the U.K., where we signed an agreement with Brookfield Renewable to divest a minority stake in the 4 operational offshore wind farms with a combined total capacity of 3.5 gigawatt. In Taiwan, we closed an agreement to divest 50% of our offshore wind farm, Greater Changhua 4, to Cathay Life Insurance, which is the leading insurance company in Taiwan. In our Onshore business, we commissioned a total of 1.4 gigawatt of renewable capacity in the course of 2024. In the U.S., we commissioned Sparta Solar and Mockingbird Solar Center. Mockingbird is the largest solar farm in our portfolio to date. Furthermore, Eleven Mile, our combined solar and battery storage project was commissioned. We also took final investment decision on several projects during the year, including our 259 megawatt onshore wind farm, Badger Wind, as well as our Old 300 battery energy storage system located adjacent to our solar farm, Old 300. By the end of '24, we had around 800 megawatt of onshore capacity under construction. Our onshore business has also contributed to material progress on our partnership and divestment program through the closing of a number of transactions. In the U.S., we've divested a stake in a portfolio consisting of 4 operational onshore wind farms to Stonepeak and completed a partial divestment of 3 projects to Energy Capital Partners. We also made a strategic decision to deprioritize the French market and divested our French onshore business to ENGIE. In our Bioenergy and other business, we've also seen a number of developments in the course of the year. As part of our Orsted Kalundborg Hub project, we've entered a new major agreement on selling a further 1 million tonnes to Microsoft of the captured and stored carbon dioxide from the Asnaes Power Station over a 10-year period. The new agreement builds on an existing carbon capture and storage commitment by Microsoft to buy 2.67 million tonnes. In early '25, we've taken significant steps with the installation of the main components of the project, and we expect to commission the project in early '26. We took a strategic decision to deprioritize our projects within e-fuels. This included the decision to cease the development of FlagshipONE, our liquid e-fuels project. The decision was driven by a slower-than-expected industrialization of the technology, the commercial development of the offtake market and a deteriorating business case. We remain dedicated to advancing the global shift towards renewable energy, and our efforts in decarbonizing our energy systems continued in 2024. Since installing the first offshore wind farm in 1991, our massive investments in renewables have ensured that we're on track to deliver on our ambitious industry-leading science-based target to reduce our Scope 1 to 2 emissions intensity by 93% compared to 2018. In 2024, the renewable share of our heat and power generation amounted to 97%, or up 4 percentage points relative to 2023. In 2021, we established a net 0 emissions target for our Scope 1 to 3 emissions by 2040, making us the first energy company with a science-based target. In continuation of this, we've also continued to deliver on our sustainability efforts. Our work on sustainability is divided into 3 strategic priorities: decarbonization; biodiversity; and impact on society. Our work with sustainability ensures that our projects create value not only for our business, but also for nature and people. Decarbonization is important to us. During 2024, we shut down our last coal-based power plant in Esbjerg. It marked a major step in transforming our entire energy production to renewable energy. In addition, we are working determinedly to reduce our Scope 3 emissions, as exemplified by our long-term lower emission heavy plate steel agreement with the steel manufacturer Dillinger in 2024. This agreement contributes to the decarbonization of materials essential to the build-out of renewable energy, and it also supports Dillinger's efforts to decarbonize steel production. In terms of our biodiversity impact, we were the first in the industry to launch a new biodiversity measurement method to ensure transparent measurement and reporting to demonstrate that renewable energy benefits nature. We also piloted one of our innovative biodiversity projects in Taiwan, where we are planning to grow corals on offshore wind turbines. During the year, we also developed and applied a new technology for noiseless installation of monopiles, thus improving the protection of marine life in the surrounding sea. In addition to the noise reduction, the technology may also lead to significant reductions in costs and installation time. In terms of community impact, we continue to integrate local jobs, possibilities for training and community engagement into our project delivery. An example of this is in the U.S., where we supported the development program of a local workforce that has provided more than 300 workers with the necessary credentials for working offshore. Sustainability is an integral part of our activities and the way we operate. And by 2024, we've ensured an even clearer anchoring of responsibility for this area in our group executive team. In 2024, we fully implemented and carried out sustainability reporting in compliance with the new EU rules on corporate sustainability reporting, CSRD. Our sustainability reporting will continue until the end of 2025 with additional focus on, for instance, identifying risks, reassessing controls and establishing additional controls where necessary. We fully support the intention of transparency and standardization on relevant issues, and we see the CSRD regulation as a way of working, in addition to being a reporting framework. We do have also support current discussions about the need to simplify the framework by eliminating reporting obligations that are less relevant and pose an administrative burden. Hence, we are closely following the debate in the EU on the issue. This is an important discussion to ensure that the focus is both on sustainability and competitiveness. I'll now go through the key financial highlights of the year. Our operational earnings before interest tax depreciation, also called the EBITDA, amounted to DKK 32 billion for the year. The result was positively affected by the finalization of contract settlements with better outcomes than assumed in relation to our decision to seize development of Ocean Wind 1 in the U.S.A. The EBITDA, excluding new partnerships and excluding costs related to discontinued project development, the cancellation fees, amounted to DKK 24.8 billion, which is approximately DKK 800 million higher than in '23 and in line with our guidance for the year, which was between DKK 26 billion and -- DKK 24 billion and DKK 26 billion. The earnings from our offshore sites improved by more than DKK 3.5 billion because of higher wind speeds, ramp-up of generation and higher prices on both green certificates and inflation indexed power purchasing agreements. The reported net profit was DKK 16 million, which was significantly impacted by the impairments in our American portfolio of about DKK 14 billion. Adjusted for impairment losses and cancellation fees of a total of DKK 6.3 billion, our net profit for the year was DKK 6.4 billion, which was lower than in 2023 due to lower earnings from new partnerships, higher financing costs and higher tax. However, this was partially offset by higher underlying earnings. Adjusted for impairments and cancellation fees, our return on capital employed stood at 10.1% at the end of the year. The reported return on capital employed stood at 4.5% for 2024, and this is expected to increase over the coming years, in line with our target of an average of approximately 13% for the period 2024 to 2030. Cash flows from operating activities amounted to DKK 18.4 billion in 2024. This was lower than in '23, primarily driven by the payment of cancellation fees related to Ocean Wind 1. Our gross investments amounted to DKK 42.8 billion in '24. The majority of our investments were related to the build-out of offshore wind projects in Europe, the U.S. and Taiwan. The remainder of the investments were related to the build-out of onshore projects in the U.S. and Europe and the construction of our carbon capture and storage facility in Denmark. Our divestments amounted to close to DKK 22 billion in 2024, which includes proceeds of DKK 6.2 billion related to prepayments of power following the divestment of a minority stake in a portfolio consisting of 4 U.K. offshore wind farms. Our interest bearing net debt stood at DKK 58 billion at the end of 2024, up DKK 10.6 billion relative to the year before. The increase was driven by increased investments as well as payments of cancellation fees related to Ocean Wind 1. Our key credit metric, which is a measure of our ability to generate funds from operations to service our debt, also known as FFO, relative to adjusted net interest bearing debt stood at 13% compared to 29% at the beginning of the year. The decrease is primarily attributable to the payment of cancellation fees for Ocean Wind 1. Removing the impact of these cancellation fees, our credit metric at the end of the year would have been approximately 22%. To ensure we have financial robustness and the strength to operate in the international energy and financial markets, we target a solid investment-grade rating with all 3 credit rating agencies. I'd also like to highlight a few elements of the 2024 remuneration report for the Board of Directors and the Executive Board. The remuneration report reflects the changes that we've seen at Executive Board level during the year. On April 1, 2024, we established a new commercial area under Rasmus Errboe, who was appointed Deputy CEO and Chief Commercial Officer. At the same time, Trond Westlie was appointed CFO. On February 1, 2025, Rasmus Errboe was appointed new Group President and CEO of Orsted in place of Mads Nipper. This recent event does not impact the remuneration reported for 2024. For the shared KPIs in the short-term incentive scheme, the results varied, utilizing the whole performance span across financial, ESG and the individual targets. The Executive Board shared short-term incentive score ended at 31%, reflecting the delivery of the earnings in line with expectations as well as the continued challenges with the execution of our U.S. offshore portfolio. In the long-term incentive scheme, the Executive Board didn't receive shares in 2024 due to Orsted share price development relative to peers in the energy industry. Our employees continue to be at the core of our business. I'm grateful for the many talented and dedicated employees working for Orsted. Even through a year of uncertainty and redundancies, they've once again proved their unwavering commitment and taken us a further step towards our vision of a world that runs entirely on green energy. We are navigating in a rapidly changing industry, and that requires us to constantly adapt. In 2024, we had to make organizational adjustments, including redundancies to maintain our competitive edge. While employee satisfaction, motivation and voluntary turnover levels remain healthy compared to the industry benchmarks, we have had -- and all this has had a notable impact and led to a significant drop in 2024, and we are actively addressing these challenges. We're increasing our focus on internal communication and change management, strengthening our focus on good leadership and mental health and reaffirm our commitment to transparency and the well-being of our workforce. In the executive management, we still have an ambition on the 3 priorities that job satisfaction and motivation should be at the top level. In 2024, we reduced our total recordable injury rate, and that's the second year in a row that we have a reduction in that number. We continue to deliver on our long-term focused efforts on safety. We welcome the reduction and will continue our safety improvement to ensure that the trend continues. It was with great sadness that we recently received a news that 2 external wind technicians at our Plum Creek wind farm lost their lives in a fatal accident. Our deep condolences go to their families and friends, and we are working with our external suppliers to support the families in any way we can. Right now, we are focusing on the current investigation that the relevant authorities are conducting. We'll continue our efforts on recruiting and retaining female employees in Orsted to promote diversity and a more balanced gender composition across the organization. Across the entire Orsted workforce, we have an ambition to reach a gender balance of 40% women and 60% men by 2030. Even though we succeeded in increasing the share in female leaders at our most senior levels during 2024, we didn't improve our overall gender diversity as planned. To achieve our ambition, we have a talent development team dedicated to ensuring that diversity and equality are taken into account in the ongoing organizational review process. This team is crucial in including diversity considerations in our succession planning and promoting a balanced representation of men and women in leadership positions. As part of the capital markets update in February 2024, we announced our decision to suspend the dividend distribution for the financial years 2023 to '25 to strengthen our capital structure. Consequently, the Board of Directors proposes that no dividends are to be distributed to the shareholders for the financial year 2024. For the financial year 2025, we expect EBITDA, excluding new partnerships and the impact from potential changes in cancellation fees, will be in the range DKK 25 billion to DKK 28 billion. Our gross investments for 2025, which are planned to be invested in our current construction portfolio, are expected to amount to between DKK 50 million and DKK 54 billion in 2025. With that, I'll summarize with a few concluding remarks. Throughout 2024, we navigated an energy industry characterized by regulatory and macroeconomic challenges and continued pressure on supply chains. Combined with project-specific challenges relating to our U.S. offshore wind projects, this has had an adverse consequence on our capital structure. Therefore, we have updated our business plan to strengthen our capital structure and support our target of ensuring a solid investment-grade rating. We have decided to step away from our long-term build-out ambition as we want to prioritize value creation over growth and ensure a full focus on the delivery of our construction portfolio, which will ensure close to a doubling of our installed offshore wind capacity in the years to come. During the year, we have carefully reviewed our approach to project development and construction, and we have taken several steps to strengthen this at both Executive Board and Board level. We delivered solid operational earnings in 2024 with a total EBITDA of DKK 32 billion. In addition, we achieved a number of strategic milestones, including the commissioning of approximately 2.4 gigawatts renewable energy capacity, final investment decision on 2.5 gigawatts of offshore wind capacity and secured power purchase agreements of 3.5 gigawatts in the U.K. sixth location round. Finally, I would like to express my sincere thanks to our skilled colleagues who throughout a year of uncertainty and redundancies, yet again proved their wavering commitment and who continue to drive the energy transition forward. Thank you for your attention, and I'll turn the floor back to the Chair of the meeting.

[Interpreted] Thank you. Before I open up for the debate concerning items 1 to 5 in relation to the approval of the annual report, I can inform you that the audit report can be found on the Pages 250 to 254 in the annual report. It is in English, and that also applies to the audit report. And we have translated it into to Danish, and this is what it says. In our opinion, the consolidated financial statements give a true and fair view of the group's financial position at December 31, '24, and of the results of the group's operations and cash flows for the financial year January 1 to December 31, '24, in accordance with the IFRS accounting standards as adopted by the EU and further requirements in the Danish Financial Statements Act. Moreover, in our opinion, the parent company financial statements give a true and fair view of the parent company's financial position at December 31, '24, and the results of the parent company's operations for the financial year January 1 to December 31, '24, in accordance with the Danish Financial Statements Act. I will now open the floor, and I can inform you that ATP, the Danish labor market supplementary pension fund, the Danish Shareholders Association, Bjorn Hanson and Friends Provident Foundation have informed me that they wish to take the floor. Let's hear first from ATP. Claus Wiinblad is the first speaker.

[Interpreted] I am Claus Wiinblad, and I represent ATP Pension Fund. Thank you for the report and the presentation of the annual report. As we heard in the report, 2024 was yet another year of difficulty for Orsted. The underlying EBITDA result was at the expected level, but the result was negatively affected by another round of extraordinary impairments to the tune of DKK 14 billion. In particular, the most recent one, DKK 4.3 billion for Sunrise in relation to delays and additional costs gives cause for concern. And it does not continue the previous good track record held by Orsted in a number of respects. In the light of the most recent development, it is a question of having to reduce the long-term ambitions and instead execute what is already under contract. We hope that Orsted will be able to get back on track and restore the confidence of the environment in its ability to perform. We have a good review now of the ambitions and the initiatives taken by the Board. Wind farms at sea now have a value of between DKK 70 million and DKK 80 billion, and there is a major challenge here, although DKK 22 billion worth was sold in 2024, which brings me to 2 essential questions. What do you find to be the biggest risks in connection with the execution of the upcoming 8.4 gigawatt offshore wind? What do you find to be the largest risks execution of the large divestment program without compromising the value of the projects? I focus on these 2 questions for a simple reason. As I see it, a successful solution of these 2 major issues are vital for Orsted's ability to subsequent development of a more ambitious long-term strategy for the company. I also have a comment to the CSRD report that we heard about. At the general level, it seems that Orsted is in control of that process. It's also a very comprehensive presentation we see from Orsted's side. We don't know about the future requirements from the EU because everything is up in the air now. But no matter where we end up, it's important for ATP that companies focus their reports on the issues and matters that are important to that -- through the individual business because if the reporting is too wide, there's a risk that the important things will simply drown. So one could say less is more. And by way of conclusion, I'd like to welcome Rasmus Errboe as new CEO, and I look forward to continue our dialogue, which is already established and very satisfactory. So let me conclude by wishing you all the best in your work in the coming year. Thank you.

[Interpreted] Thank you very much. Let's hear from the Chairman of the Board.

[Interpreted] Thank you, Claus. I always appreciate you and your ideas and thoughts about our business. We appreciate that a great deal. You said that once we can go back to setting long-term targets, I just want to say that we are leading in relation to offshore wind farms, so we intend to hold on to that position. And we have not forgotten that that's where we are. It's also true, as you say, that there are some focus areas that we need to make sure that we focus a bit more on in the short term. And there is not only our divestment program, but also the construction of our 8 gigawatts of offshore wind that we need to land successfully. Everything that we do is attached to risks, and I cannot give you any guarantees. Risks are plenty-fold, those that we cannot control. We don't know about the level of interest rates, we don't know about tariffs that has been proven very clearly over the past couple of days. And we don't know what will happen in relation to corporation tax. I'm quite sure that you also think about something that we can control ourselves, how we execute. That is a very important focus area for Rasmus and the rest of the executive management focusing on execution. And that also explains the adjustments we have made to the way we work. As I said in my report, we have strengthened exclusion of risks in the projects, in management and on the Board. So we do what we can is an obvious and clear focus area for us. With regard to divestments, well, yes, it would be wonderful if I could issue a guarantee that, of course, we can divest and earn a lot of money in the same instance. But divestments have always been an inherent part of our business. We are good at divestments, and there is a demand for good projects. So I feel quite comfortable that we will land this one as well. Thank you for your comments concerning our reporting in relation to the EU requirements. I think there is an important discussion going on at the moment because what matters is what you do. And then you need to make sure that the reporting does not take control of the whole situation so that -- well, so that the relevant things don't drown in a mass of data. I hope I answered all your questions. Thank you very much. And I will now hand over to the Danish Association of Shareholders. After him, it will be Bjorn Hanson.

[Interpreted] Thank you, and thank you for the floor. My name is Mikael Bak, and I represent Danish private investors and the Danish Shareholders Association. Thank you for organizing a hybrid AGM where you can participate both online and be present in the room. And also thank you for a good report and the commitment from all employees and management in Orsted. On behalf of the shareholders, I would like to start by welcoming you, Rasmus Errboe, as new CEO. You have many years of experience, and I'm sure the Board of Directors has chosen the right profile. But I would also like to hear some details from you because just like in sports, we, as shareholders, feel we need to support our favorite team and the coach, that is the CEO. But we -- and we also respect that just like Mads Nipper, who came to the company at a difficult time, you have taken over a CEO at a difficult time. But I would like to ask how will you change the management style. Or what will your style be? And how will you make a difference? Because we think we need a new set of eyes, a visionary CEO, a brave CEO to show us the way to the new step, we might call it. And also have a couple of questions to the annual report. Close to what ATP asked, but with different nuances. In the U.S., we have seen great challenges for many years. Both Revolution Wind and Sunrise Wind caused these significant impairment costs. So how will you handle these financial losses in the U.S.? Because we have seen that the U.S. since change of the government has become more critical, vis-a-vis green energy. And then I also have a question about the so-called farm downs where you divest projects. It's described on Page 9 in the annual report, how you handle that risk. But it's also important to say that when you want to maintain a good credit rating, you need to really stay creditworthy. So do you still believe that the plan you have for farm downs can be implemented also in these tumultuous political times we live in? And which consequences might it have? If you cannot live up to that plan, do we maybe in a year or 2 or 3 years' time have to raise new capital? With that, I would like to thank the management, and I also look forward to hearing a few words from you, Rasmus. We need a strong Orsted, so good luck for the rest of 2025.

[Interpreted] Thank you very much. I heard 3 questions, I think, some of them about the annual report and some directed to the CEO. So I think I'll first give the floor to Lene Skole to answer the third questions and then to Rasmus Errboe.

[Interpreted] Thank you very much for your kind words, Mikael. You asked some questions. And as you say, some of them have to do with what Claus Wiinblad from ATP asked. If I start with the question that was a bit different, whether the shareholders will need to raise capital in other places or increase your capital, I have to say we have a plan we believe in, and we will implement it, and that's our full focus. And that plan does not need us to increase the share capital. So this is what we're working on and what we'll execute on, and that's what Rasmus and his team work on. About the American projects, I heard your question as being sort of twofold. Firstly, what do we do to ensure that we don't have any other negative consequences of American projects. Of course, I can't give you any guarantees because things are moving. But again, I have to say that what we'll guarantee is that we have updated our way of working, both in the project and management and in daily management. For instance, when steering the projects, we also have independent advisers. And then the Board of Directors, we also have a special committee that looks into this. So we are focusing on everything we can control ourselves. You also asked about whether developments in the U.S. will make us change the opinion of our projects. The projects we are finalizing, we are continuing with them. They have the approvals. They need to be -- for us to continue with them, and that's what we are focusing on, and that hasn't changed. I think that answered the questions directed at me. And now it will be interesting to hear from Rasmus.

[Interpreted] Thank you, Mikael, for your support and the support of the Danish Shareholders Association. That means a lot to me. And of course, you can understand that I'm happy and humbled to take on this job here where I've been working for 13 years, both with a headwind and tailwind. I have a lot of knowledge about our business, I have a lot of knowledge about the industry, and I'm going to use that in the years to come. When we presented the annual report, I already tried to set the direction about 4 clear priorities: firstly, to strengthen our capital structure; secondly, to deliver on our 8.4 gigawatt construction program for offshore wind; thirdly, having a disciplined capital allocation focusing on offshore wind; and fourthly, to improve our competitiveness further. I'm convinced that with our plan -- our updated business plan and the initiatives I mentioned, we will ensure to be competitive and strengthen our position as a global leader in offshore wind. And on a more personal note, I believe that we are facing major challenges, both for Orsted, but also for the industry as a whole. But I believe Orsted is a fantastic company, and I am -- I've seen already what we can do when we are at our very best. And I'm convinced that it will be a lot of hard work for a long time. We need to earn the trust of investors, and we need to turn things around. And that's what we'll work very hard on every day in the years to come. Thank you very much.

[Interpreted] Next speaker is Bjorn Hanson. You have the floor, sir.

[Interpreted] I am Bjorn Hanson. I represent shareholders, a group of minor shareholders and a few large ones. I have also done a bit of research. I travel to the Middle East every year to the Emirates, where we are a group of people with industrial interest that get together. Thank you to Lene Skole for her report. She is good at delivering her reports, still is. So well done. And congratulations, Rasmus. I think it's important to Orsted that we now have a new man at the helm that knows the business inside out. I think that is important in times such as these. And with Lene's international experience, it's fine. And Trond, no one has referred to you. You're Norwegian, aren't you? You see, you need to hurry if you need to do some trading in dollar because only today, it has risen upwards of 6%. So any payables in dollar, hurry. And it will also affect the dividend to shareholders, of course, but just don't forget that some of the -- well, I don't know what main banks you work with. But as far as I know, they barred [indiscernible] from trading because it rose too much. So the banks will be the big winners in this game, that's my opinion. I also have some questions. According to Nordnet, Orsted owns 50.1% of -- well, 50.1% is owned by Danish state. There is a profit of plus DKK 16 million for '24. And in '23, it was DKK 20 million -- DKK 182 million -- DKK 20.182 billion in particular, because of losses in the U.S. with their offshore wind farms as there has been in political and financial turmoil, but who lost most krona and dollar of all the partners that you are working with. I'm thinking of the settlements. Didn't the U.S. lose? Was it only the American consumers that lost or consumers in general? We are told today that a cable -- a high-tech cable renewable energy from Canada to New York will provide 20% of the power required to turn the lights on to New York. I don't know who does your cabling work for you. Is it NKT? Or is it the Chinese? I prefer that we use Western operators, both here and now and in the future. Because all of a sudden, we risk finding ourselves with a lot of Chinese sea cables and a lot of breakdowns. How many millions or billions in DKK have you taken up loans in hybrid bonds in Luxembourg and in other countries such as the U.S.? And which U.S. and EU banks did you use for the lending arrangements? The loans apply from 3019, 3021 3022, 3024 and, again, 3021, approximately DKK 21 billion. Perhaps a bit more. I don't think it's less. What is the plan for this payback -- or rather the repayment? And what is the cost to Orsted and Danske state these hybrid loans in bonds until redemption? What is the cost per year? There are different accounting principles when it comes to hybrid loans, people have told me. I heard this in particular from people abroad that also work in the Danish market. My third question, is it the Norwegian oil fund that pays? It has paid additional shares in Orsted recently. How many percent does the oil fund hold? It would be interesting to know when they get upwards of 20% because that means a Board membership, and they probably know things better than many others. And I don't mind that it's Norwegian oil that all of a sudden becomes involved. The Norwegians have invested all over the globe, and they're doing fine year in, year out, generation after generation. Fourth question. Orsted must reduce all climate reports and environment and instead invest in offshore farms and solar cell farms in the Western part of Ukraine and let Russia and, in particular, Putin pay for the reconstruction, in particular, of the Eastern part of Ukraine, where the soil has been polluted and which is ravaged by war. But what does one of the biggest company in Denmark do for this transition and the future? I think that we should sound out the possibilities for setting up a large wind farm, but as far as away from the war zone as possible. In Ukraine itself or in a neighboring country, it doesn't really matter. But sometimes, the grants differ, and Ukraine is really in a difficult position. When you look for places to set up these offshore wind farms, you do an excellent job. But I think over the next 3- to 4-year period, we shouldn't really involve ourselves with the U.S. But if U.S. companies practically come begging, well, I think we should refuse also because if you can't make money on it, we should refuse. So these are my initial questions, and I may come back. We see how the politicians are passive, and they are really dragging their feet in relation to creating peace. Thank you for listening, and it is good to have a good woman at the helm of this company. Thank you.

[Interpreted] Thank you. There were 4 questions here to the panel. First, Lene Skole, you have the floor.

[Interpreted] Thank you, Bjorn Hanson, for attending our AGM once again. It's always wonderful to see you. And thank you for the update about what's going on in the currency market. It's difficult when you're in a meeting such as this. You talk about losses and gains. Well, the financial results that we report are ours. That's what has to do with Orsted. It's all Orsted that we deal with here. And what happened to others in a number of different markets is not really up for me to talk about here, but we have focused on our figures. You talked about Chinese cables and other issues in our industry. And in many other industries is practically impossible to do something, have projects that do not involve Chinese spare parts or elements or components. Norwegian bank, if they are shareholders or not, I'm not quite sure if I understood you correctly, but I can tell you that we have shareholders reporting to us how big their holdings are. And we know that the Norwegians are own 10%. Yes, this is what they have reported themselves officially. I think I had better go by the official reports made by the shareholders to Orsted. It's all I can do, and that's what I'm doing. And then you asked about Ukraine is -- it's a desperate situation. Ukraine has been in for quite a while now. And from time to time, there are proposals and suggestions what can we do. And we always take stock of the situation, but we haven't yet found something which really makes sense for us as Orsted. And that's why I have to say that at the present time, Ukraine is not a market that we consider when it comes to the construction of energy projects. But you also talked about where we will go in future, and you mentioned the U.S. As I said before, when we make decisions about projects and start of a project, we try to find out where we can create the highest value for Orsted and for shareholders. That's what determined our actions. And of course, we do that in our core competencies area, which is offshore wind. The world is changing, and you said so yourself, but that will never change. It is offshore wind. And then there was a question about hybrid loans, and I would now like to pass that on to Trond.

[Interpreted] Orsted has issued 5 hybrid bonds. It is an integral part of the financing structure in our business, and it underpins our investment capacities. The reason is that hybrid capital is considered to be a combination of outside capital and own capital, and it is also special in relation to leverage. We had this 100-year term for these instruments. And the interest level will go up in the course of this period. So that usually, the hybrid capital will be repaid for a period of between 5 and 20 years. But it is predetermined system. Today, we are paying between 1.5% and 5.2% on the bonds. As in order of magnitude, we are talking about just under DKK 21 billion. Thank you.

[Interpreted] There is a request for the floor. Did you bring your access card? Thank you. [ Gil Baya ] is your name. Okay. If there are other requests for the floor, please approach [ Ulrich Yalo]. I said this initially in order to be signed on to the list of speakers.

[Interpreted] Thank you very much. Yesterday, Donald Trump launched new tariffs, and I haven't heard anything from you about how you think that will influence Orsted. So I would really like to hear about that. We're also here to adopt the annual report, but there were no accounting figures on the -- in the slide show. So it's difficult to adopt something you haven't seen. And I'm sad to say, when you print the text, it's in such a small font that it's impossible for me to read it certainly. So it would be very useful if you check the text and also check all the different varied and difficult wording you use. You say there's a profit of DKK 16 billion, and that's lovely. But the capital explanation show that capital has increased by DKK 16 billion, and that's quite a lot. And I would like you to review item by item what the components are of this, so that you can actually understand the profit and loss account. And this is all also in the capital statement. But the account is also in English, and I would really like to also have a Danish version because I don't feel like you are on the side of the Danish shareholders anymore. It's very difficult for us Danish to understand what's going on in the company because everything is in English. So I would like you to protect the interest of the Danish shareholders, and I would also like to say this to the Danish legislators that there should be a requirement for this also to be in Danish when we are talking about the Danish company because there are far too many difficult words also. So there should also be a link to explanations. Sometimes, we shareholders are completely lost even at Novo Nordisk. It's -- the wording of accounts are just -- it's just too difficult, and only other countries or foreign investors benefit from this. We should really put Denmark first also linguistically. And you also mentioned the CO2 footprint or the carbon footprint. Now I was trying to find this on my phone now, but I can't find it. The carbon footprint, the CO2 contents of the air is 0.004%. And that's what you now want to reduce. If you get down to 0.2%, both plants and people will die. And if you get to 0.5%, plants actually grow better. So instead of listening to Microsoft or whoever, can't you just sell the captured carbon to Danish farming, for instance, so that we can grow plants and also stop being so hysterical about CO2? And that's just -- and the people have really been conned by this whole CO2 hysteria.

[Interpreted] Thank you. There were some questions for management. I think Lene Skole will start replying.

[Interpreted] Thank you for the question, Gil. First, tariffs, well, some tariffs were introduced early on in March. And of course, we have a picture of what that will mean. And without being able to put exact figures to it, it is relevant for our American projects, Revolution Wind and Sunrise Wind. It's also for insulation. But if you look at the context of the entire project, it's not something that really has a major impact on the return on investments. I know a lot of new things were launched last night, and I don't think anyone fully understands what that will mean. But of course, we are following closely and do a lot of calculations. And of course, we'll make announcements if there's something that means we need to inform you. And the last comment from you, I'm not sure I can comment on that. Of course, you're right that in the annual accounts, there are a lot of technicalities. And we strive to maybe give some glossaries every now and then, and maybe we need to explain a few more things. It's also true that our accounts are in English, and I understand where you're coming from. And of course, it would be nice if it were also in Danish. However, all companies, not just Orsted, have to be efficient and make savings to deliver a good return on investment. And the trend we are seeing is that accounts will be in English. I don't really see that as being reversed. So we'll continue to communicate in English. Then there's the whole discussion of CO2. I won't go into that. But for us, it's important to help create a more sustainable world. And reducing our CO2 footprint matters, and we will continue to do that. Then there was a question about capital, and I would ask Trond. Could you -- you haven't been here for that long, but could you say something?

[Interpreted] I'm sorry about speaking in Norwegian, not in Danish although what we're talking about is in English. With regard to capital increase, it was a bit over DKK 16 billion, mainly I think was that we have invested about DKK 42 billion in new investments, and there has been a payment of about DKK 8 billion. So net after investments and payments, it means that we have a net debt of about DKK 10 billion over the year. And this means we have a capital intensity. That means our total capital increases by DKK 16 billion. The accounts also show that we have a net capital definition that means that we go from '23 to '24 has an increase.

[Interpreted] Thank you. Mr. Bjorn Hanson has also asked for the floor again, and so has [ Mr. Gil Baya ] for a brief comment. And if anybody else wants the floor during the debate, I ask you to contact [ Ulrich Yalo ] in the front row, while Bjorn Hanson is speaking. And then we'll close the speaker's list. Bjorn, go ahead.

[Interpreted] I think you are mistaken, Trond. It's not a 30-year loan you have taken up. It's a 100-year loan. And I would like to hear if -- well, we have heard of companies raising loans that are 1,000 years in term to maturity. I based myself on what Nordnet told me, and I have seen the American accounts that you report, and I look forward also to see a report from you in Norwegian or Danish. It's okay with me. We don't have a statement of income, and Gil Baya also said that there are things that are not evident and easy to find in the accounts. And how does it affect us going forward? It's the 100-year loans and those loans that are older than that.

[Interpreted] Thank you. There were some extra questions for Trond on the mobile loans -- hybrid loans.

[Interpreted] Yes, the hybrid loans in the balance, you find between the debt and the equity capital because under costs usually entered under financial costs. And with regard to the maturity, it makes good sense to send -- it's a 100-year loans, but they are usually repaid over a shorter period because of the structure of the loans.

[Interpreted] Thank you says the Chair of the meeting. The next speaker is Gil Baya, and we have no more names on the list of speakers. So Gil Baya is the last person to speak, and I have closed the list now. Thank you.

[Interpreted] Thank you. You always hear a company saying, we want to save money by not issuing an annual report in Danish, yes. But what about the cost to Danish shareholders that we cannot read the publications properly? It's not just DKK 1 million to us. So it's actually a cheek on your part to do this. And I'm glad to see a representative in the room from the Danish financial supervisory agency. You're a Danish business, you should report in Danish. And I like Norwegians, but I don't understand what you're saying. Trond, I'm sorry, I don't understand anything of what you say. So we would like a translation into Danish. I asked for the capital statement review done by you personally verbally here line by line. We are not talking about peanuts here. We're talking about an awful lot of money, but you have completely omitted it from your report. Explain to us what is going on. It's the capital statement, and that's where the interesting things are to be found, not in the balance sheet or in the statement of income.

[Interpreted] Thank you very much. By way of introduction, I'd like to point out that the annual report has an unqualified audit report, and it lives up to all the international and Danish standards. It's been available on the company's website since mid-March. And Trond actually gave an explanation already concerning the capital movements in the balance sheet. And I also heard the comment concerning the language of the annual report as being aimed at legislators and not the company as such. And the company has heard what you said, I think. So on that basis, I think I find that the debate has now been concluded. So I find that we have taken note of your report with such additional comments as has occurred in the course of the debate. We will now have to decide on items 2 to 5 on the agenda. By way of introduction, I'd like to tell you that according to the Danish Company Act Article 101, it is possible for any shareholder to ask for a complete statement of how many votes were in favor and against in relation to a given proposal. I propose that we do not have a written vote if we are to have a vote at this meeting because the weather is so fine outside for -- and there are also other reasons. In relation to the individual items, we can determine the exact result of the vote without any ballots being involved. If you are ready to answer 2 questions, are anyone against? Are anyone abstaining? If only a limited number of shareholders wishes to vote against or refrain from voting, then please talk to Ulrich Yalo and bring your access card because then I will take it that all the others in the room are voting in favor. Once the votes have been decided in this way, we can then find out what the situation is on the basis of postal votes and powers of attorney that have come in, in advance. Do you have any comments to this? Okay. Item 2, approval of the annual report, I'd like to hear if there are shareholders that wish to vote against the approval of the annual report or abstain. That is not -- Gil Baya, please approach Ulrich Yalo subsequently or after. I take it that all others in the room will approve the annual report for 2024. It has been approved. Item 3, the remuneration report 2024. This is just an advisory vote, which means that if shareholders do not approve the remuneration report, Orsted will have to explain in its remuneration report 2025 explain how this has been taken account of. Anyone wishes to vote against or abstain? If that's not the case, I take it then that we all approve the remuneration report, and the remuneration report 2024 has been approved. Item 4, discharge of responsibilities. An approval of this proposal means that the company will inform members of Board and management that they are exempt of liability with regard to the matters mentioned in the annual report 2024. Are there anyone that wishes to abstain or vote against? If that is not the case, I take it that everyone is voting in favor of approval of the proposal concerning discharge and responsibilities, and this will now be given to members of Board and management. That brings us to item 5, proposal for the appropriation of profit. And as the Chairman of the Board stated, it's proposed not to pay out dividends for 2024, but to transfer the profit to the next financial year. And according to the legislation, the AGM cannot adopt a higher dividend than proposed by the Board of Directors. So that cannot be changed, I will just conclude that the Board of Directors' proposal not to pay out dividends is final. Does anybody want to vote against or abstain from voting on the appropriation of profit? That is not the case. So I conclude that everybody is voting for the proposal not to pay out dividends. That brings us to item 6. Here there is a proposal from the Board of Directors an amended remuneration policy for the Board of Directors and Executive Board, and just briefly go through the proposal, and the complete proposal appears from the convening notice, Annex 1. The most significant changes are that the members of the new project committee will see -- will receive a fixed annual remuneration. The fixed annual travel remuneration has changed from DKK 200,000 to 0.5x the fixed base fee. Members who live outside of Denmark can be compensated for tax payments on the basis of their fees from the Board of Directors. The long-term share-based incentive program is updated, so that results criteria from vesting can be a combination of financial and nonfinancial criteria. And 40% of the shares given to the executive management will be fixed for 2 years. The share requirement for members of the Executive Board is updated to 25% of their fixed annual salary, whether they're part of the long-term incentive program or not, and they can build up over a period of 5 years. And finally that the authorization from 2021 for an indemnity scheme from members of the Board and the Executive Board is renewed and updated. After the Danish business authority stated some things in 2023, there's the need for an update. And that appears from the remuneration policy item 3.9. And the total text appears from the Annex 1 to the convening notice. Does anybody want to vote against or abstain from voting on this proposal? There's a question. Go ahead.

[Interpreted] It's about all the share programs. They could be difficult to understand for our shareholders. So one way to legalize it would be that it appears from the 5-year overlook, so that you can see what you've promised to the Board of Directors. So we can all take joy in all the money you get.

[Interpreted] Thank you. This was more of a piece of advice, I think, than something that requires a response. But we've noted that. Thank you, Mr. Gil Baya. Are there other questions or comments? That is not the case. So does anyone want to vote against or abstain from voting? That is not the case. So I will conclude that everyone has adopted the remuneration policy and that the proposal from the Board of Directors is adopted. That brings us to item 7, election of members of the Board of Directors. And in accordance with the Articles of Association, all members of the Board are for election. And Dieter Wemmer, Peter Korsholm do not run for reelection, and I've agreed with Lene Skole that she would propose the 2 new proposed members of the Board. And I give the floor to Lene Skole.

[Interpreted] Thank you, Anders. The Board of Directors has evaluated candidates for the Board of Directors through our Nomination and Remuneration Committee, and we're delighted to present 2 strong new candidates for the Board of Directors...

[Audio Gap] [Interpreted] Lene Skole, I would like to have a written reply to my question. Is that a yes? Good. And my second thing, I know PricewaterhouseCoopers. Do they know about those 100-year loans? Otherwise, I need to talk to the Danish Competition Authorities. I don't know whether they're represented here today.

[Interpreted] Thank you, Bjorn Hanson. We'll note that you would like a written reply to your questions, and we'll make sure of that. And about the accounts, and I know PW is present, and I think I can confirm on their behalf that they are fully aware of that. And there's an unqualified audit and something is said of -- we'll note all comments. Does anybody else want the floor under any other business? I don't see anyone who has asked for it, so I'll conclude that we've come to the end of the agenda, I'll lay down my work, and I'll give the floor back to Lene Skole.

[Interpreted] Well, I would just like to thank you all for participating. Thank you to the shareholders. Thank you to Chair of the meeting. And thank you to the Chair for guiding us through the AGM in a competent and pleasant manner. So thank you all, and have a safe journey home. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]