Bonheur Asa

Good morning, everybody, and welcome to the fourth quarter presentation for Bonner. My name is Annette Olsen, and I am the CEO of Bonner and Fred Olsen & Company. Today, as usual, our CFO, Richard Olavo, will start the presentation with an overview, and then the individual CEOs of our subsidiaries will then present. We'll have the Q&A session at the end. So, a hearty welcome. Richard?

Thank you, and also good morning from me, and welcome to this webcast. I should maybe start saying that this has been a special quarter. We have had several of our key assets out of revenue generating activities. I think most notably Braveturn and Bolturn. Braveturn been at yard and Bolturn in transit back from Taiwan. But also other assets have been out of operations. Despite this, we land the fourth quarter. solidly but also the full year very solidly and on the back of this solid performance and a strong position the board yesterday arrived at the proposal of a dividend of 6.75 per share which is a dividend growth of 12 and a half percent and represents several years with the consistent dividend growth of double digit showing the strength of the group I will not go into detail of each segment because that is covered by the various CEOs, but just some of the highlights, starting with renewable energy. I think the main event in the quarter was the FID of the Windy Standard 3 wind farm, which Sofia will cover in more detail. When it comes to operations, we have had downtime, significant downtime on Midhill and Crystal Rig 1. Midhill have been down the full quarter due to a transformer failure outside our control, and also significant downtime on Crystal Rig 1. That will be covered more in detail. On wind service, I think I already mentioned Brave Turn and Bolt Turn. That will be covered more in detail, what those vessels have done this quarter. But despite this, it's been a good quarter in wind service, where Blue Turn has operated well, and Global Wind Service and UWL also have operated quite well this quarter. When it comes to crews, we have had also there Balmoral in Dry Dock this quarter, a big undertaking of our oldest vessel. And fourth quarter is normally a weak quarter. Despite this underlying corrected for last year that we had the gain of sale of Bremer and the dry docking of Balmoral in this quarter, Cruise Line is improving year on year also in fourth quarter. And underlying for 24, Cruise Line has an improvement of approximately 100 million in operating performance. So Cruise Line is on the right track. it comes to other investments also an improvement there this quarter and also a strong improvement year over year and and this is driven by better performance in the media business of nhst and also finally we have brought the sas company my news desk finally into black black figures already mentioned the dividend of 675 per share and After that dividend, the equity in the parent company stands strong of 8.1 billion kroner, which is an equity share of 66.4%. Taking a little bit on the long-term view, as we know, are at the end of 24, how the year panned out and how this is in a longer-term perspective. We show these graphs first time in the third quarter presentation. And our intent is to repeat them because we think it's good to consistently look at how we are doing to develop the group of companies over the long term. And the trends we have seen the last years is also the same in this quarter. That our biggest revenue area now is the wind service segment with wind carrier, UWL and global wind service driving the revenue. Fred Olsen Renewable, even it's a lower generating, revenue generating unit, is still our biggest EBTA contributor. But this last 12 months, wind service is catching up and EBTA is now on par with renewables. And finally, Cruise Lines emerging back from COVID with two new vessels and now at a higher level. EBITDA level than pre-COVID. And that is the same for all the three assets we see in this graph. Pre-COVID, it was mainly EBITDA coming from renewable energy, renewable energy significantly higher than pre-COVID, and then wind service going from a very low EBITDA level. pre-COVID to a strong EBITDA post-COVID and also then cruise lines coming back up. So we have three, all the three segments are now delivering solid EBITDA and also knock on wood, the media business is finally also delivering a positive EBITDA. Then over to the consolidated summary. Fourth quarter, lower revenues than fourth quarter last year. That is basically due to Braveturn being at the art and Bolturn being in transit and utilization of Fovik has been less than 33% in the quarter. And that also translates into the EBITDA, which is 300 million lower this quarter than fourth quarter last year, related the same to the wind service, the two main vessels being out of the market. And then also 100 million related to cruise. And we looked 85 million on the sale of as a gain of sale of Bramar in fourth quarter 23, which, of course, is not repeated in fourth quarter 24. And then you have the dry docking, so small underlying improvement in cruise. Depreciation at the same level as last year. Then net finance came out quite positive this quarter, and especially compared to fourth quarter last year. These are really unrealized profit and loss on financial instruments, basically interest rate swaps and exchange rates. So they developed in the wrong direction in the fourth quarter 23 and developed in a very positive direction in fourth quarter 24. So the positive deviation year over year on net finance is approximately the same as the negative on EBITDA. So earnings before tax is at the same level. Slightly lower tax cost and then the net results is on the same level as the fourth quarter last year. Then EBITDA and revenue per segment, starting on the top with renewable on par. Prices, and Sophie will cover this more in detail, but prices are down in especially Sweden, a significant drop in Sweden, but holding up and actually increasing in the UK, which is the most important market. Also to note that we have booked insurance related to Mid-Hill, so the downtime on Mid-Hill has a very limited effect financially in the fourth quarter. Wind service, again, very strong in fourth quarter last year, but also strong on the revenue side in fourth quarter this year. Håkon Magne will cover this more in detail, but we have the termination fee with Ørsted that is covering the quarters where we would have had the contract. Then on the cruise segment, slightly down on revenues due to the dry docking. And then other slightly up. On EBITDA, renewable energy almost on par despite the operating issues. And also to be noted there that we booked 65 million on positive reversal of EGL in fourth quarter 23. So adjusted for that, the results are more or less on par. Wind service, we don't need to comment anymore. Håkon Mang will come back to how we booked the termination fee. And then cruise lines already covered and then the improvement on the other segment driving from NHST. Then taking also a step back on looking at the preliminary figures for 2024, this will be then final in our annual report. Again, if somebody had told us that they had the 23 with the declining energy prices, we would actually come out on the same EBTA in 24 as we did in 23. I would have a little hard time believing that. But that's where we ended up. Renewables is down year over year on the revenue and the EBITDA down 335 on the revenue and approximately the same on EBITDA, mainly due to lower power prices. While wind service is up 1.3 billion on revenues and up 225 million on 2024 and a record year again for the wind service segment. Cruise lines, stronger bookings, revenues up 335 and EBITDA up 19. But if you then correct for the 85 million sale of Bremer in 2023, EBITDA is up more than 100 million. And then the other segment, 87 million more revenue and 74 million less loss. Also, here we have all the overhead costs of Bonheur and so on. So a better performance in the media segment, meaning that we also then come out very close on revenue. on the EBITDA and then we have slightly higher depreciation so the EBIT is down 118 million and then you have some on the net finance pluses and minuses so actually the net result for 24 is slightly higher than 23. then on finally on the balance sheet and the capital allocation Taking the numbers first, we end the year quite good on the cash and the debt. We have delevered the group of companies quite significantly this year. So for the entities we control 100%, we end the year with a cash position close to 5.4 billion and external debt of 3.6 billion. So net cash debt of what we control 100% is positive 1.8 billion. Then where we have the significant debt in the joint ventures in the UK, I think things are more or less stable with a smaller cash position and external debt being amortized as we go and a net cash debt of minus 4.8%. Then on the wind service, where we have a blue turn, global wind service and UWL, also a significant deleverage in this year and now a net cash debt only over 295. So then over to the financial policy. And I think I'll just repeat the financial policy here because I think this is very important for the next slide. We have three pillars on the financial policy that's been in place now for several years. First and foremost, the financial and liquidity position of the company shall be strong. And the company, there we meet Bonheur ASA, where you find the line where we have 3.6 billion in cash and 3 billion in external debt and a net cash debt position of more than 400 million. So we can really check the box that the company is in a strong financial and liquidity position at the year end. Subsidiaries must optimize their non-recourse financing. None of the debt you see in the external debt in this column has any recourse to Bonheur or any cross-recourse within the group. So we fulfill this policy. Then we are fully aware that with these strong limitations that we will never expose the model company and that the subsidiary must find their own debt without guarantees from the model company. There is a strong obligation on us to find innovative financing sources for the subsidiaries. And I think at the end of 2024, I think we are in a good position there with several good joint ventures, industrial joint ventures. We have the fund in Whitstown, where we know we'll have two new wind farms being dropped into the fund. And of course, we are also evaluating, and we have been in the past, public markets and M&A. So this financial policy stands strong. Then we have thought a lot before this quarter how we should think about our dividend policy. We have had a dividend policy for many years. We had a discussion with our board how we can modernize our dividend policy more into a capital allocation framework. So what I'm going to present to you is the summary of this work and the framework we have now decided on. So first and foremost, the goal of this is that the combination of the financial policy that I took you through and the capital allocation framework is to make clear the company's priorities and make clear our ambition to create long-term shareholder value. So the shared financial policy is the foundation on this, and we will never compromise on the financial policy. And I don't have to repeat the bullet points in the financial policy. Those are the same as I had on the last page. But on top of the financial policy, we have the capital allocation framework and where the dividends must see in the context of the capital allocation framework. So again, the company's financial policy is the foundation. But on top of that, our key aim is to generate competitive long-term shareholder value through a combination of share appreciation and distribution to shareholders. And we have looked over the long term, we have looked at the S&P in the US, we have looked at the Oslo Stock Exchange and see over time that the very best companies, they have a solid combination of share appreciation and distributions to the shareholders. Some companies reinvest everything in the business if they can generate good returns and other companies that don't see the prospects of good returns, they distribute everything to the shareholders. I think we are long term here and we see that a combination of share appreciation and distribution to the shareholders is the aim we want to achieve on. But then it comes the key point on the capital allocation and the transparency the company wants to give with this policy is that when we are considering the balance between share appreciation and distribution to shareholders, We have then declared goal to allocate capital only to areas where the long-term value creation on a risk basis is considered attractive. That meaning if we cannot find value creation above what the market demands on us, we should rather pay the money out to the shareholders. But this also considering opportunities outside the current ownership holdings, which has been a key factor of a group of companies over many, many years that we have managed to innovate and transist the group from one area to others, like, for example, entering into renewable energy many years ago. So on the back of that, when the board is considering dividend proposals, The company board of directors then have to take into account companies' other capital allocation opportunities and measure that they can give a long-term value creation over about the cost of capital on a risk-adjusted basis, but always based on the financial policy. And I think on the back of this financial policy and the capital allocation framework, the board had a discussion yesterday and then arrived at the proposed dividend for 2024 of 6.75 per share, which is a dividend growth of 12.5%, and is now in line with several years of double-digit dividend growth. So I think that's ending my presentation, Onette.

Good. We will then move to the CEO presentations. And Sofia Olsen-Jepsen is next with Fred Olsen Renewables.