Cadeler A/S

Good morning and welcome to Cadler's 2024 Annual Result Report presentation. Presenting today are Miguel Guerra, 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 Cadler's results to differ materially from today's forward-looking statements include those detailed in Cadler'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 Cadler 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 Cadla's annual report. The annual report and today's earning presentation are available on Cadla's website at cadla.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. Mikael Glirrup, you may begin.

Mikael Glirrup So, good morning, good afternoon and good evening, and thanks for listening in to our presentation, the annual report 2024. very pleased to be joined by all of you and looking forward to go through our annual results from 2024. So that's a disclaimer. I would recommend everybody to read the disclaimer at a convenient time. But we will dive directly into the 2024 highlights for Cattler. So in 2024, we had very strong financial performance and we believe that it was consistently strong through the year and that we were able to narrow the guidance that we had for 2024 in our Q3 presentation. And also as we have now shown in our final results that we are at the upper end and actually above the upper end on the EBITDA. We also give a guidance for 2025 that shows that we are on our trajectory for the growth in 2025, and as such are very pleased with that. In terms of our new builds, we have delivered Wind Peak in 2024 on time and on budget. And we have also in this year, in January 2025, we have delivered the first M-class vessel from Hanwha on time on budget. And are also at a point where we can say that we are on track to deliver the remaining vessels on or ahead of time target on budget. And we are, I would say, within hours from delivering the next vessel, which will really put us to 50% of the 2025 deliveries completed. In terms of our backlog, we continue to build the backlog and we will come more into that in the presentation itself, but we are now standing at a backlog of 2.5 billion euro as of today. We have also in 2024 been executing our projects incredibly well. And we are highlighting just one project here where we are saying that we also included, we installed successfully the 60 14.7 megabit Siemens turbines on the Maury West project. The reason we highlight this is that this is the first project installation in the world for this platform from Siemens, a next generation turbine. And we did that with one of our old class vessels with its new crane. So very proud of that performance and the team behind that project as we are with all the projects that have been executed during 2024. Very strong balance sheet remains. We have refinanced the M-class facility on what we say is materially improved terms. And we have increased our capacity on our unsecured whole core facility. And we have also extended our revolving credit capacity and raised equity to fund our third A-class order. So we are very, very pleased overall with the year and we'll go more into the detail now. So on commercial highlights, I think that most of the people that are following the call know what we have been doing during the year, but we have been installing on Orca on the Moray West, as I said before, the first installation of the 14.7 megawatt platform, then followed up after the completion of that with O&M. We have also on Osprey, we have completed the Godvin and Borkum project for Ørsted, including a release of the vessel from the project to go and do O&M for one of our clients on a different project, which is really something that is also important for the overall way we operate with our clients in the industry and show flexibility in the fleet. After that completion of the project, we also started to do O&M with the vessel together with one of our clients. Mancilla. We started the year with a big overall project of the vessel because we knew that she was going to the US and hence we wanted to ensure that the vessel was up to a very, very high standard before arriving in the US due to the complexity and doing any maintenance when we are over there and really preparing the vessel for a very strong performance on Ørsted's Revolution Wind project. On Saratan, we completed the UNLIN project and also then started to do an O&M phase with the vessel. And also pleased to say that we have also secured a significant portion of the year on Saratan for 2025 on continued O&M services. On Windpeak, delivered on time on budget, translated back to Europe, and immediately after coming back to Europe, started an O&M campaign for an undisclosed customer. And the windmaker, the first M-class vessel from Korea, delivered in January 25 on budget and then transiting to Singapore for mobilization of the project equipment and now in Taiwan, ready to start her first project on time. So I think in summary, really on-time delivery of assets, on-time delivery for projects, but also a lot of O&M work out there. If we look at the, this slide is one we have shown before in connection with these presentations, and we will just see that these numbers are growing. So we have installed more, we have installed more foundations, more turbines, we have more vessels operational, we have fewer on order because we are starting to deliver, and we are growing the team. Not only the team in the office, but also the team of offshore crew that are taking delivery of these assets and ensuring smooth operation after having either been trained internally with Cattler or have been shifted from a Cattler vessel to one of the new builds. So in general, very, very pleased with how we have also been able to build the team and continue to deliver for our clients. Catler today is positioned in the worldwide map for offshore wind installation as the leading pure-plate T&I company. We continue to work very closely with our clients and partners, and we believe that with the orders we made back in 2021, the merger we have completed, the following orders, we are incredibly well positioned and are very, very pleased with the platform we have built. And together with our clients, we will continue to secure strong utilization on this platform and making sure that we can build as much renewable energy as possible. We are very much focusing on the European market. We will show a little bit later in the presentation how strong the European market remains. And we are seeing that the European market is continuing to be really the driver of offshore wind in the world. And this is also where Kettler has been focusing most of its efforts. The Asia-Pacific market is also very busy, and we do see that for us, the market really consists of Taiwan, Japan, and Korea as the key markets with development in Australia as well, and other countries that are also building what could at some point in time become a pipeline. Asia for us is a market that is today strong enough to have an asset in the market and to ensure a pipeline of projects. And that is really what we have said all along, that when there's a market that is strong enough to build up a pipeline, then Kettler will be there with a capable vessel to support our clients. The North American market has of course received a lot of attention since the American election in November, 2024. And I would say that we remain of the same view as we have had all along. This is a decision that was made pre-COVID where we said that we are taking a cautious approach to the US market. We take a project by project approach where we need to see that the project in its own right can basically support itself both on terms and conditions. financials and also overall engagement with our clients. So there are political headwinds in the market, but I think in the short term, the market remains attractive for Catalan. We have documented that by also having the next new build that is delivering heading straight into the U.S. market to work. And that marks our third contract in the U.S. market and really the third project we will work on in the U.S. market where we believe that we have a very strong cover on terms and conditions and also very, very sound financials on the projects. We remain having a relationship with Dominion Energy that we support. And of course, we'll continue to do that for their benefit as well. In the South American market, we are building relationships because we do believe that the South American market has some fundamentals that are interesting. But again, we are not jumping the gun or anything like that. We are remaining, let's say, as an outside-in viewer on the market, but building the necessary relationships to react should the market suddenly have a pipeline of projects that need services like the ones that Qatar are offering to the market. In terms of how we see the market at the moment and how the pipeline is growing, we do see, as I said before, that the European market is really the growth. We see an enormous amount of projects that are currently under discussion with our clients, everything from final stage tenders to final stage negotiations, open tenders and commercial discussions with clients. but really a lot of activity. And I will go as far as to say that we have probably never been as busy as we are in the European market. Asia is steady state, and we remain of the same view as we had when we presented this a year ago, that Asia will be able to form a pipeline of projects for at least one of the assets out there. In the US market, we are probably more active than most would probably think. But there is, of course, an urgency at the moment in the US market to complete projects. And we are doing our outmost to support our clients and partners in that market to ensure that projects are completed as close to on time and on budget as possible for them. But we do see increasing demand in Asia, as we expected that the region would ramp up in these years. Europe remains really as the driver of the offshore wind market globally and also an increasing or, let's say, continuing development in terms of longer-term agreements with our clients where we see, especially amongst the biggest of our clients, that they are, to a greater extent, requesting long-term agreements. The backlog today stands at more than 2.5 billion euro and that is a growth of 47% since we did the annual report on 2023. I think what is worthwhile noting on the backlog today is that 94% of our backlog has a final investment decision and that is of course really what matters. We have talked about it before. that there is this period of time from selecting a project that we are working on to having a vessel reservation agreement, getting contract on that vessel reservation agreement, and then a final investment decision by the client. That is really the process that is important to follow and really to bet on the projects that are having the highest likelihood to reach that final investment decision from its original development stage. And I think that our percentage of projects in the backlog with final investment decision is a testament to that strategy at least and really being selective on which projects we are working on. As we have said before, we are not including vessel reservation agreements in the contract backlog and they will be added when they have reached the maturity stage as we have discussed in the past. In addition, talking about what it is that we are adding to the backlog, we have added an O&M project to Saratan, where we are starting, I actually think there's a mistake here, it says Q4 2025, that is not correct, because we will be installing for the last part of 2025 on on Serratan in the market. And very happy to see that we continue to build strong O&M projects on Serratan. In terms of the O class and the P class, multiple wind farms, again, five O&M projects, and really looking into more and more O&M projects, filling out the white spaces between the installation projects. And on the wind pace, also an O&M project where we are seeing the B-class needed for a project in the US and also securing utilization from its arrival back in European waters and until delivery to the first installation project. We also continue to have a strong development on vessel reservation agreements, and we continue to see a very strong demand for our services amongst our clients. And also, especially as we have discussed before with our investors, that the redundancy that we can offer to the clients, that is something that the clients continue to see as a benefit and something that they really want to explore more with us and different ways of offering the assets to maybe not only one project, to a range of projects rather. As I said, the O&M, we do see the O&M space as a continued strengthening factor in the market with a bigger and bigger installed fleet of turbines out there. We see also that both the developers and the turbine OEMs, they are requesting our services to make sure that the turbines are continuing to spin out there and generate renewable energy to the people. And for us, we have tried to be as flexible as possible and to really ensure that the vessels, they are available to our clients for these services as much as possible. And we have just tried to show you here a snapshot of how we do it where we are adding O&M campaigns in between the installation projects, which all in all ensures a very high utilization level on the vessels. And we will continue to see that going forward, but also an overall improved financial performance in the company along the lines of what we have discussed in the past, where we are saying that we are aiming for very high utilization on our assets. We also celebrated the wind pace naming ceremony This is the second vessel from a Costco Chiton shipyard. And we were out there on the 12th of March where we named the vessel. And again, a vessel that I would say some of the lessons learned we had from Windpeak has been incorporated on Windpace. And we see that the yacht continues with a very, very strong performance. We are ahead of schedule with the delivery of wind pace. And as I said in the beginning, we are more hours away from delivering than we are days from delivering. And that is, of course, very, very positive. So strong performance from the yacht that deliver ahead of schedule. And we do see that also for the follow on deliveries from the Chinese shipyard. In terms of the next vessels that are coming from Cosmo Cidong, the Wind Ally has already been launched, has already been sailed out of the dry dock and are being now outfitted alongside. We had the benefit when we were out for the PACE naming ceremony, we could see Ally as well, just a few hundred meters down the same yard. And that is really important for us because the Wind Ally is the project, the vessel that we go on, the Horn C3 project and the long-term agreement we have in our pipeline with Ørsted. So we're really important that we are following the building schedule there. And on Wind Ally, we are significantly ahead of schedule already in terms of delivery. On wind A's, the second A class, we have also had the steel cutting ceremony, and we have some pictures from that, and the same for wind mover as well. If we look at the overall track, we are seeing that on wind ally, we are at a very, very high completion rate at the moment, and we are looking to take the vessel on sea trials around the summer this year. On wind mover, also strong performance. We are set for delivery in Q4 at 25. And on the wind days, we are looking still at Q3 2026 and Q2 2027 on wind apex. So overall, very strong performance on the new build program. And as I said, in a very, very short time, we have delivered 50% of the new builds in 2025, which I believe is a very strong performance. And as we have shown you before, the fully delivered Kettler fleet, 11 vessels consisting of a smaller unit that will focus mainly on the O&M section, vessels that are focusing on turbine installation and vessels that are focusing on foundation installation. In terms of synergies, we are continuing to deliver on our synergies from the merger, and we are saying that we are approximately at 30% of the 2026 targets, but the follow-on synergies are really starting to materialize now with the new vessels being delivered. We continue to be optimistic and positive around delivering the synergies that we discussed already at the disclosure of the business combination agreement in June 23, and believe that the two entities now working as one will deliver these synergies. At this point in time, I will hand over to Peter for a deep dive on the financial results. So please go ahead, Peter.

Thank you very much, Will. This is a key financial highlights for 24. You can see revenue doubled from 23 to 24. XG ratio went a little bit up, but still very solid balance sheet. The reason for it is, of course, that we are drawn down on our loads when we're getting the vessels delivered. Utilization was 83% adjusted. And now we show, I think it's for the first time we saw both an adjusted and unadjusted utilization. And the utilization, which is adjusted, that is where we adjust for planned dry docking or fire, and for transit from the yards in China to Europe. So that gives a better number of what kind of utilization do we have on the vessels that we have operating. The reason why we see also a drop is that Saratan due to the Taiwan waters, they operate at a slightly lower utilization rate, but I think still a very good result with the old class cranes operates in the Q1 24. Market cap is 1.7 billion. EBITDA, 126 million, tripling the level from 23, very satisfying, but also shows the scalability in our business that we are able to triple EBITDA while revenue is doubled. Cash flow from operating activities started at 93, and as I've already said, the backlog is 2.5 billion. Three months daily average turnover is 6.8 million in general. I think what you cannot see from this slide with these financial numbers is that there's also quite an achievement on the SOPS compliance side where after one year of SOPS compliance, we are delivering an annual report without any material weaknesses or significant deficiencies in our internal control framework over the financial reporting. I think that is quite remarkable. For Q4, we saw revenue going significantly up. Please remember that we have in Q4, 23, where the old-class vessels were up for crane upgrades. Hence, there was a lower revenue in 23 on the fleet. And of course, this year, we have also full quarter, we have Zyratan and Scylla into the numbers. So we had a number of years, we had five as compared to four, but in 23, we only had nine days of legacy energy in the financials. EBITDA significantly up, 55.7 million in a quarter, which is a solid number. We see SG&A costs also higher, not significantly as compared to 2023, because then we also had a lot of recurring costs due to the merger with ANA, but we see costs going up as we ramp up the organization. Fulia again, 249 million euros compared to 109. Full-blown consolidation with the legacy netting. Utilization rate 66%. Again, Q1 without the O-class vessels. I think it's solid. And also with the winged silos and vessels, which carries a lower utilization rate than the others. So 83% adjust is quite good. Cost of sales are of course increasing with the number of vessels. You can see that the vessel OPEX is more or less the same as last year. The vessels OPEX that we show here is without the project costs included. So with that, we have communicated several times that it is around 40,000 if we take also the project cost into the OPEX per day, but to compare, Without that, it's more or less the same as last year. Income tax expense, it's a small number, in the UK and the Danish tax regime in Denmark so the fleet is covered by tax to a very large extent but we are paying some taxes on the Taiwanese projects and we have some deferred taxes being expensed on which is Japanese owned and under Japanese corporate income tax. EBITDA solid improvement from 42 to 126. If we look at the outlook we had out in the market from Q3, revenue is in the middle of the range that we communicated 243 to 253 and EBITDA in the upper end of the range, a little bit north of the upper range. of the EBITDA we had there, of course, driven by the increased revenue. SG&A and other expenses, 55 million. We are continuously ramping up, number of employees are going up. in order to be able to have the support to drive, especially the foundation projects, both for the tendering for the foundation projects, but also on the execution of it. So we see costs coming in now, whereas revenue coming in in 26 and onward. So that is an investment. The balance sheet continues to be very strong. The balance sheet that we have is not mentioned here, but Goodwill is still 17 million euros. from the PVA, when we did the merger with Enel, that means that we have not... That is closed now, once for 12 months, where you can adjust the takeover balances, and we didn't see any surprises in the balances that we took over from Enel, so that is really also good news, to be able to maintain that, so we still have the 17 million euro of goodwill. Non-current assets, of course, going up with the additions of business and investment in the new builds. And equity goes up in a few ways. We did a year ago and with the result for the year. The payments program, now you can see that the We closed the A-class financing. We did that last Friday. And that was with a 450 million euro facility plus equipment so that is we possibly try to be ambitious and improve the loans that we have with our lenders and we agreed with the strong support we have from the lenders that we could put in also financing of the mission equipment for the first project that the A-class residents are going into and also pre-delivery financing on the on the wind age. So at this similar price, we've got better terms and conditions. So now we have only outstanding the third A-class vessels with Apex. We expect to be able to sign a commitment for that for 240 million euro. And the vessel is delivered in 27. So it's really not meaningful for us to bundle that with the A-class vessels and then secure that financing yet because we are then going to the commitment fees for a rather long time, and we are not concerned about getting financing for that. So we have shown this slide many times, but I think it's obvious that we have the funding in place and it is committed. Most of it, we have the funding committed in place for the CAMEX program that we are looking into. And even with a significant surplus, we have 50% of the US dollar exposure A last part of the remaining installments to the yachts are in dollars, and we have 50% of that, I think, which has been beneficial for us. And with the recent weakening of the dollar, then the KMXL program is actually lower now than it was at the 31st of December, when the new solar were stronger. But that is, of course, something that can that goes up and down as the time passes. So yeah, uses the A-class financing. We have utilized the M-class at Trance when Vapor was delivered in February and we have requested the Trance for the win pace, which is going to be delivered here in March, very soon. This is the financing, you know, you chose a community 1.9, we have utilized 586. But since we didn't end where this status is from, we have now utilized the one case, part of the P-class facility and half of the M-class facility as well, when Maker was delivered. Then the last slide is the full year outlook for 2025. And you can see the answers here, but the outlook is for revenue 485 to 525. And the EBITDA of 278 to 318. I think what is worse to notice is, of course, it will be impacted by timely vessel deliveries. We have already seen the delivery of two vessels, so mitigating some of that risk. Then it's a second time being deployed and we have signed a contract for that. And then there is, of course, some timing in a business like ours, when we move from, you know, being a TCE business, that is, it's easy to, to plod into and essentially to become more project based, more foundations. So we would like to put the attention towards a couple of non-recurring items. I think even though we had a very, very strong result for 24 with a data of 126, actually, there was some project costs to the tune of 2 million euro being pushed into 25. We have six extra crew on the legacy padlock in order to train the crew. for the new buildings, and that amounts to €4 million in... Sorry. I didn't touch anything. Sorry about that. So that amounts to €4 million. That is also another recording item. So there you have six... A million euro, you could say, which is impacting the 25, but it's an investment in the future and not really impact the business case. And then also, one of the last bullet points here is the value and cost foundation process. It's starting to be recognized by more. And by that we mean that some of the TNI scope on the Honshi III is already starting in 2025, but as we have talked too many times, then the TNI, some of the TNI scope that is not the vessel itself carries a lower margin. And then that starts in 2025, and then it comes in with a lower march in 2025, but it has nothing to do with the total profit of the project over the project period, but something you should be aware of. And also, as I said, we have ramped up the organization and continue to do that because we want to be able to develop this foundation business. Where we before have said we are around 60 million euro in SDNA, we will be around 70 to 72 million euro in SDNA going forward. So that means EBITDA in this range, which I think it's pretty good when you with four vessels being delivered and starting executing on the foundation projects. And back to you.