Cadeler A/S

Good morning, and welcome to Cattler's Q3 2024 earnings presentation. Presenting today are Mikkel Glirrup, Chief Executive Officer, and Peter Brogard, Chief Financial Officer. Please be reminded that the presenters' remarks today will include forward-looking statements. Actual results may differ materially from those contemplated. The risks and uncertainties that could cause Cattler's results to differ materially from today's forward-looking statements include those detailed in Cattler's annual report on Form 20F on file with the United States Securities and Exchange Commission. Any forward-looking statements made this morning are based on assumptions as of today, and Cattler undertakes no obligation to update these statements as a result of new information or future events. This morning's presentation includes both IFRS and certain non-IFRS financial measures. A reconciliation of non-IFRS financial measures to the nearest IFRS equivalent is provided in Cattler's Q3 earnings release. The Q3 earnings release and today's earnings presentation are available on Cattler's website at cattler.com forward slash investor. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. As a reminder, this call is being recorded today. If you have any objections, please disconnect at this time. Mikkel Glerup, you may begin.

Thank you very much and welcome to this Q3 2024 presentation from Cattler and good morning to the US audience and good afternoon to the European audience and good evening to the Asian audience. So very pleased to be presenting our Q3 highlights and overall performance in Cattler. And as of Q3, we can say that our financial performance is in line with our expectation. We have increased our full year guidance to now be between €243 to €253 million. And our full year EBITDA guidance, we have narrowed the range to the upper end of the range. So it's now €115 to €125 million. Our newest vessel, the Wind Peak, has arrived in Europe and is already on hire, which is very, very positive. Two significant new projects, including our second foundation projects, have been added to the backlog. And both of these projects that we have added to the backlog are multi-vessel contracts. And I think that that really showcases the strength and the versatility of the Kettler offering, but also really what the clients are buying in the market at the moment. which we have discussed before, involves a lot about the redundancy that can be offered. We also see multiple O&M campaigns that are keeping our vessels busy between the projects and maximize our overall utilization. And that is something we believe that we will continue to see and something that will eat any available days on the fleet, at least at what we see as today. And then last but not least, we have added complementary expertise with Thomas Thun Andersen, the former chairman of Ørsted, amongst others, that have joined our board as an independent director. We believe that his skill set and what he knows from many years in the industry is something that Kettler will benefit from going forward. In terms of the commercial highlights in the quarter, I think that we can say that we have, on the Wind Orca, we have completed the installation of 60 14.7 megabit offshore wind turbines from Siemens on the Morig West project. And this is the world's first installation of the 14.7 megabit platform from Siemens. And I think that we have learned a lot from that project and really also performed well and to the expectation of our client and have completed the project on time and on budget with our client there. And I think that the good news is also that we have continued from that project on an O&M campaign that will take this vessel forward to her next installation project. On the Osprey, we continue to execute on Ørsted, Skodvin 3 and Bokrum Rifkon 3 project. We have done many different things during this project with the client, where we, amongst others, have released the vessel in between installation on this project, where we have released the vessel for O&M support on a project in the Dutch zone, which really benefited both Kattler Ørsted as our client, but also the client that had need for O&M services. And then Ørsted has called additional 74 days on Bolven 3 and securing very strong utilization on Osprey going forward. On Scylla, we have discussed before, she continues to install in the US and we are very, very happy with that contract in the US and also the cooperation with both the local authorities, but also with the client and how we progress with our installation, our first installation in the US market. In terms of Saratan, she has completed her remaining 46 turbines on the Yunlin project. And I think everybody involved in that project are happy to see that that project is now completed. And we are now continuing an O&M campaign for an undisclosed client. On the Peak, we have completed the transit from China to Europe and she's currently mobilizing for her first job and an O&M campaign for an undisclosed client, but really happy to say that Peak came directly on a contract when she came back to Europe and that we had multiple clients looking to be engaged with the Peak before her first installation project, which is the Sophia project starting next year. In terms of The backlog and what we have added to the backlog, we have added the Baltic 2 and 3 project together with Equinor and Pol Energy, a VTG installation project in 2027. As we have talked about before, 2027 was a focus year for Kepler to make sure that we had strong utilization in 2027. But also we have secured our second foundation project with an A-class and an O-class deployment on the East Anglia II project with Scottish Power Renewables, where we both will do the foundations and the turbines. And the project is also starting in 2027. And the project that we really believe is a continuation of what we did when we uh announced the horn c3 project and we we do continue to see very strong demand for our services both in the turbine and the foundation space and hence uh very positive in the outlook for for these spaces and as i already said onm basically vacuums the rest of the utilization we have available at the moment because there's also very strong demand there We continue to have reservation agreements that we have not put in the backlog from various discussions with clients and still ongoing contract negotiations. And as and when they are coming to a final contract, then we, of course, will add them to the backlog. And as I said, also at the half year mark, we continue to see a backlog that consists of both work in Europe, in Asia and in the US. And we believe that that will continue going forward. In terms of how the contract backlog now stands, it stands at just short of 2.4 billion euros, so a strong addition in this quarter to the backlog compared to what we announced at the half-year mark. And this is a development that we expect to continue to see at least in the coming period due to the reservation agreements we have with clients and that we believe we will be able to convert into backlogs. But really, what has been adding to the backlog here, as I said already, the East Anglia II and the Baltic II and III, but also these multiple contracts on O&M services that are between the projects. So really filling in the gaps between the installation projects, ensuring very, very tightly knit string of pearls of projects and different O&M work that will secure a very, very high utilization on our vessels. And as we have already said at the half year mark, but I've repeated just for the sake of good order, that the old class vessels were out of operation in the first quarter of this year due to new cranes. And we also had the Saritan out for maintenance work before going back to the Jön Linn project. And that, of course, impacts the overall year utilization on the vessel. But I think if you look at the quarter alone, then we see very strong utilization. Yeah. In terms of the progress on the new bills, we continue to see very, very strong progress. So when Peak delivered on time and on budget, 15th of August, 2024, where we had the name-giving ceremony out in Qidong in China, and the vessel arrived in Rotterdam in November this year. On Windmaker, we expect delivery in Q1 2025. The overall construction completion sits at 83%. She's launched from the dry dock on the 3rd of June. And commissioning of the vessel is in progress, around 50% completed. And jacking trials and main crane load test plan to commence in December 2024. So we continue to push very, very hard on the yard and also with the performance we see out there because we are eager to get the maker delivered and get her out to work. And I think that we have a good cooperation with the yard to make that happen. So confident in our plan and our progress at the moment, we track it on a weekly basis on the maker and ensure that we deliver the weekly progress we need in order to secure the delivery schedule. On the wind pace, we expect delivery to 2025. The overall construction completion is at 99%. And here I might add that the way the different yards are counting this number is slightly different. So it's not an average comparison between the 83% on Mekai and the 99% on Pace. But Pace was launched from the dry dock on 25th of June 2024. And the commission and preparation for sea trials are ongoing. And the sea trials are planned for December 2024, as with the maker. And I think that we can overall say that the performance we see from COSP will continue to be very, very strong. And we will see vessels in general delivering slightly earlier than what we originally expected from the yard. On MUVA, not diving so much into the detail, but delivering Q4-25 on Allied, delivering in Q4-25, and then on ACE, delivering Q3-26, and APEX on Q2-27. So overall, a very busy year in 2025, where we will see the delivery of up to four vessels. And that is something that, of course, has meant that we have been planning for that, and also ensuring that we have the capabilities the resources and everything, the systems in place to make sure that these vessels, they come out and that they, as soon as possible, get into work and start generating revenue like we saw with Peak. But I think that the lessons learned we have from the Peak delivery now is something that we are baking into all these four vessels and believe that we are in a very, very good place on the whole CapEx program. Now we are heading into the financial highlights for Q324 and I will hand over to Peter. So Peter, please take it away.

Thank you, Michael. Yeah, first the financial highlights for Q3, for the three months in Q3. And that reflects, of course, the ramp up in activity that we have had in this quarter as compared to first half. We now have four vessels on water in operation and Windpeak being delivered, but not on contract yet in Q3. So revenue significantly up as compared to last year, 80.6 billion euro. as compared to the 23.4 million euros last year. This year, of course, it includes in any financials and the vessels, whereas last year we only had the two O-class vessels, hence the increase in revenue. Energy ratio, 62%, still a solid balance sheet we have. Utilization also picking up as planned. Now, 86.5%. The market cap is at 2 billion euros. We have seen that higher, but I think there has been a negative sentiment in the market, so probably not due to company-specific news. Then we have an EBITDA of 48.4 million euros, where we can see The magnitude of what the vessels can perform of EBITDA in a quarter as compared to 8 million last year. Cash flow from operating activities, 27.5 million. The backlog, as explained by mail, is at a record 2.4 billion euros. Three months daily average turnover, 4.8 million euros. If we look at the PNN for the three months in 2003, we can see that revenue of course up due to the merger, but also due to higher utilization. With the old class out in operation, And the legacy energy as a cylinder and serotonin. So four vessels operating as compared to two last year. Cost of sales, of course, goes up with the volume. SDNA and other expenses reflects the build-up that we have done of the resources in the company in order to... execute on the projects that we have now and but also to execute on the projects that we have in the future especially on the the foundations so it is partly investment in the future and then of course uh due to the merger uh within the um We are reaping the synergies that we expected when we announced the merger. So this is really a ramp up for a bigger activity in the company. EBITDA at 48.4 million euro as compared to 7.9 million euro last year. We have listed here OPEX per day. where we have excluded project cost and fuel, just to have a comparison, but 35,927 for the quarter. If we look at the year to date for nine months, Of course, the numbers are impacted, but we showed at half year that Q1 was a quarter with lower activity due to crane upgrades and serotonin in the maintenance. So somewhat lower for the nine months as compared to what we generated in the four months, but it is really according to plan. and how we can see when we get more vessels in operations, then our resource will increase accordingly. We see the same in the future for with peak coming into operations and into four this year, and then with the four vessels coming in next year, as explained by Basal OPEX per day is in line with the last year, so we're under control. We see the same ramp up on the SDNA expenses as we explained in the quarter. We have now a headcount of 236 onshore in average as compared to 102 last year, and it is an investment in being able to operate a company with that many projects and then many resources we have. Balance sheet. Equity goes up due to the prime placement that we did. This is as compared to end of year 23. Equity goes up with the prime placement that we did and non-current assets is of course the basis that goes up with the delivery of WNP but also investment in new buildings. But still a healthy energy ratio of 62%. If we look at the program and the financing, then we have secured our signed and committed financing for the P-class and M-class, and we have also our own facility on the RCF as we have disclosed before, that is with the collateral in the legacy assets on water, the vessels on water, that is signed and committed. Then the A-class facility, there we have divided into two, 455 on the two first A-class places. And that deal has been launched into the syndicate recently. on a term sheet basis. So we are very confident that that can be committed first half of 25. And then it follows with the third A class basis or the 240 subsequently. We have decided to divide it into two because it's a 27th delivery of the third A class basis. So paying commitment fees in such a long period will not be beneficial. And then we have put on top 70 million euro, and that requires a little bit of explanation. It is not that the vessels has become more expensive or there is a change in the yard price. It is simply because in the financing, we have included also financing of mission equipment on the vessels when they are delivered for the first project. So when you see in the earnings release, the debt financing that we expect, that is including this mission equipment and is only related to that we are able to improve the terms in the facility, so it also covers the mission equipment, improving the liquidity and the cash flow of the company. The contract price is still the same, the financing of the installments is still the same. €1.5 billion in total. And then you can see what is outstanding of CapEx. It's on the second P-class, it's on the M-class to be delivered next year, and then it's on the A-class. So, Conclusion here is that we have the funding in place. We are not depending on issuing new shares. We can fund the capital program with our current and expected financing that are in advanced stages. Still, we have a hedging policy of hedging 50% of the US dollar exposure and 50% of the interest rate, and we follow that policy. guideline continuously. Financing overview shows what is committed, 1.4 billion, and what we have utilized as of end of September. And then you can see the uncommitted financing, that is A-class, where we are in a very progress stage with the lenders. If we look at the full year outlook, we have now the EBITDA guidance to the upper level of the range and increased the revenue. As compared to previously communicated, and it is due to reasons threefold, it is that we have seen customers calling for more options. We have seen that we are able to fill these gaps between projects with O&M contracts as we have been communicating. Throughout the year, we see a very strong market for that, and that is what we can do now, filling in the gaps, which is the foundation for this upwards narrowing. And then we have a termination fee from a terminated legacy contract. That was the update on the financials. Thank you, Peter.