Cadeler A/S H1 2025 Earnings Report

Cadeler A/S EPS Results

• Actual EPS: $2.12
• Consensus EPS: $0.61
• Beat/Miss: Beat by +$1.51
• One Year Ago EPS: N/A

Cadeler A/S Revenue Results

• Actual Revenue: $136.09 million
• Expected Revenue: $128.33 million
• Beat/Miss: Beat by +$7.77 million
• YoY Revenue Growth: N/A

Cadeler A/S Announcement Details

• Quarter: H1 2025
• Date: 8/26/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 26, 2025
• Conference Call Time: 8:00AM ET

Cadeler A/S (NYSE:CDLR) is a Denmark-based specialist in offshore wind turbine installation and related services. The company operates a fleet of dynamically positioned (DP3) self-propelled jack-up vessels designed for the transportation, installation and commissioning of foundation structures, turbine towers, nacelles and blades. Cadeler’s capabilities encompass project planning, logistics coordination and offshore operations, enabling wind farm developers to deploy large-scale turbines in challenging marine environments.

The company’s two flagship vessels, Wind Orca and Wind Osprey, are equipped to work in water depths of up to 70 meters and to handle the installation of next-generation turbines. Cadeler offers end-to-end installation services, including pre-commissioning, cable laying support and site intervention, drawing on a team of offshore engineers, marine specialists and project managers. Its integrated approach aims to streamline project schedules, optimise vessel utilization and ensure safety and environmental compliance.

Cadeler traces its origins to the offshore wind division of DEME Offshore and began operating under the Cadeler name following a spin-out in 2021. Shortly thereafter, the company completed its initial public listing on the New York Stock Exchange. Led by Chief Executive Officer Søren Rødgaard Hansen, Cadeler has positioned itself as an independent player focused exclusively on wind turbine installation, differentiating its specialized business model from broader offshore maritime contractors.

The company serves major wind markets across Europe, Asia-Pacific and North America, supporting projects in the North Sea, Baltic Sea and Asian waters. Headquartered in Copenhagen, Cadeler maintains regional offices and project teams in Germany, the United Kingdom and Taiwan to support local permitting, engineering and supply-chain requirements. By targeting the growing global pipeline of offshore wind developments, Cadeler aims to capitalise on accelerating clean-energy investments and expanded turbine capacities.

Cadeler A/S H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: H1 2025 financial performance exceeded expectations, prompting an upward revision of full-year revenue and EBITDA guidance in July, which the company maintained for the half year.
• Positive Sentiment: Secured a three-year charter with Vestas for the Windkeeper plus 2.5-year options, with tailored upgrades to support Q1 2026 O&M and installation operations in European waters.
• Positive Sentiment: Order backlog remains strong at €2.5 billion with 97% of projects having reached final investment decision, bolstered by a new Formosa 4 contract in Taiwan despite Hornsea 1C4 delays.
• Positive Sentiment: All four remaining newbuild vessels are on or ahead of schedule and budget, highlighted by the early delivery of WindAlly in September and WindMover in Q4.
• Negative Sentiment: Work on Revolution Wind is halted under a stop order in the US; although contractually protected, the company’s ability to redeploy the vessel is limited until further clarity is provided.

Presentation

[Operator]

Good morning, and welcome to Caterpillar's H1 twenty twenty five Earnings Presentation. Presenting today are Mikael Glerop, Chief Executive Officer and Peter Brogaard, Chief Financial Officer. Please be reminded that presenters' remarks today will include forward looking statements. Actual results may differ materially from those contemplated. The risks and uncertainties that could cause Caddler's results to differ materially from today's forward looking statements include those detailed in Cadler's annual report on Form 20 F on file with the United States Securities and Exchange Commission.

[Operator]

Any forward looking statements made this morning are based on assumptions as of today, and Caterlors 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 annual report. The annual report and today's earnings presentation are available on Kadler's website at kadler.com/investor. As a reminder, this call is being recorded today.

[Operator]

If you have any objections, please disconnect at this time. Mikael Glerop, you may begin.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Thank you very much, and good morning, and good afternoon, and good evening to the people that have dialed into this presentation. Happy to present our half year results together with Peter. And what we can say around the first half year result in 2025, our financial performance is above our expectations with the full year guidance increased in July 2025. We maintain that guidance in this half year report. When Keeper delivered a long term contract with Vestas was secured, I think, a process that we entered into earlier during the year where this opportunity became possible for us and where we also had a discussion with our client to come to the point where we are now.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Upgrades are waiting for Keebah before we would put her into commercial operation in Q1 twenty twenty six. Seven vessels are on hire around the world, including two in Taiwan and two in North America. Strong and increasing demand for O and M services, especially for the larger turbines, is reinforcing our decision to establish NexTra, our service concept, where we also have seen now the first real evidence of that coming to the market with the Windkeeper. Our catalog continued to strengthen even with the removal of the Horn C4 after delay from on that project, and we currently stand at EUR 2,500,000,000.0. Commercial highlights in the 2025.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

The Wind Keeper is certainly a commercial highlight. It's a vessel that negotiated, acquired and took delivery of all ahead of schedule. It's the newest addition, and it's we have secured a long term contract with Vestas, a three year period with additional two point five years of options with the with the same client. The contract, as I said, commences in the 2026, and we believe that the the Windkeeper will be a very versatile service vessel where the client can mainly do operations and maintenance for the vessel, but also have an ability to support transport and installation for certain projects. And before as I said before, we we we put her on work for Vestas in q one twenty six.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

The Windkeeper will undergo tailored upgrades really to fit the cattle operating model, but also what we would like to deliver to our clients in terms of vessel and and and also what the vessel can do in European waters on projects there. Overall, on the fleet, we can say that the Windorca is continuing the installation on head ride. She had an o and m campaign earlier during the year, but it's now installing on head ride. Wind Osprey is also had also an o and m campaign and is installing on Baltic Power now in in Poland. Probably a question that I will receive in the questions and and and answer session around the revolution wind, but we are working on revolution wind for for us still, and the rest is still here in The US.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

On Saraten, she's working in Taiwan on o and m. The peak continues to install on Sofia. The windmaker is installing on Greater Changwa for and wind pace is also here in The US working for GE VanOver. And the wind keeper is in transit on the way back in or close to South Africa at the moment, expecting to arrive in Northern Europe in October. In terms of our backlog standing at EUR 2,500,000,000.0, I think that what we wanted to highlight on this slide here is really because there's not a great change.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

We have had another project coming in in Taiwan with the Formosa four coming in. We announced that last week. It was part of a reservation agreement, and we signed that contract last week. And and I think that it was a healthy contract economics we saw on that project and a project that will be installed in 2028, which fits really the strategy for what we are doing at the moment. And and 2028 is certainly a focus here, but more to follow on that.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

In terms of US, we are busy on three projects. In in The US, Revolution Sunrise and an O and M job here. But The U. S. In total constitutes less than 10% of our total backlog, and Revolution itself is the smallest part of that U.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

S. Backlog in itself because we are almost done on that project. Next slide, please. In terms of the backlog, I think having increased the backlog, although slightly from the Q1 presentation, I think it is an achievement, especially with the large chunk coming out from the Horn C4. And we still stand at a very, very high level of final investment decisions in our backlog.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

So 97% of the projects in our backlog has final investment decision. And we are focusing on maintaining a solid overview of the projects that we are adding to the backlog, but also ensuring that the quality of projects we are letting into the backlog is something that we do on the same basis as we have always done. Pleased that we have been able to maintain the backlog at its current level after the delay of 1C4. In terms of the newbuilds, I'm pleased to say also that we are on Wind Alley almost complete. We are on sea trials and jagging trials as we speak, and we are ahead of schedule.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Originally, we expect to deliver the Vendela in November year. But according to the current plan, we are looking to take delivery at the September, which is a very, very strong performance both by side team, but also by the yard, and everybody will support that. The ally then has a sequence of jobs to do in terms of mobilizing her for her first project, which will be the Horn c three. But it's it's very good for us that we are delivering as we are because it also means that we are coming on the project as we expect and and and and everything that looks to go according to plan as we see it at the moment. Also on wind mover, we are also looking to deliver the wind mover in this in the fourth quarter of this year.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And at the moment, it also looks like we are slightly ahead of schedule on on wind mover, which is also a positive. The wind mover has a contract also where she will depart the yard and immediately go on that contract. So for us, it's, of course, it has been important to make sure that the the yard and and us have an agreement on when the vessel is delivering and and as early as possible for us was important. The wind days is also in the in production in Kosovo Qigong, and the wind apex is currently at block stage. So I would say that our newbuilds, the fourth remaining the four remaining newbuilds is on or ahead of schedule and also on budget, which is pleasing.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And on the financial results, I will hand it over to Peter so he can walk you through the financial results.

[Peter Hansen, Chief Financial Officer at Cadeler]

Yes. Thank you very much, Will. For Q2, the three months ending, we had revenue of EUR 233,100,000.0. That is, of course, impacted by the termination fees, from the, postponement of the Horn c four. However, if you adjust for that, then, it's still a substantial growth as compared to last year.

[Peter Hansen, Chief Financial Officer at Cadeler]

Next year, we're still at around 50%, I. E, very solid balance sheet going forward. Utilization, adjusted utilization for the three months in q two was 94.1 percent, which is very, very solid as well, and, we are pleased to see that we are above 90% for the the quarter. Market cap, €1,700,000,000. EBITDA also, substantially up, against to, last year, again, of course, impacted by the termination fees on the.

[Peter Hansen, Chief Financial Officer at Cadeler]

We we adjust our outlook for '25, early July. So so we took the range up with your 103,000,000, indicative of this termination fee. But adjusting for that, it is still a substantial growth that we are showing. Cash flow from operating activities also up 50,000,000 in the the quarter. Backlog stands, as Ming said, at €2,500,000,000 And three months daily average turnover on the stock exchanges, €4,900,000,000.

[Peter Hansen, Chief Financial Officer at Cadeler]

If we look at the p and l for q two, the '25, and still bearing in mind, of course, this termination fee which inflate the the the the numbers, we we we see very, very solid growth in in q two. Of course, now we have eight vessels on water as compared to four last year when people coming in very late in the quarter and not operational yet. However, we see that our operational model is functioning very well. Cost of sales is following the the increase of versus OpEx also even a little bit low lower than compared to last year and the s t and a, which is a number that we have talked a little bit about in the past where we have increased that number in the past to be able to to operate a bigger fleet and the foundation versus now also showing that that with the base that we have, we can operate a bigger fleet and also foundations versus a more projects. As said, utilization was at 76% and adjusted utilization, 94.

[Peter Hansen, Chief Financial Officer at Cadeler]

And the cost of sales is, of course, increasing with the delivery which is then will peak delivered in August, so not in the in the comparable numbers with major, and with pace. And EBITDA also have a very solid growth from 32,000,000 to 188 €189,000,000. The p and l for the first half is, of course, impacted by, again, by the the the termination fees that we have received on the on t four. Adjusted utilization for six months is 89%, also a very, very good number. Revenue increases with the, of course, but also with the more more projects and, more vessels and projects we also see at a higher rate than historically.

[Peter Hansen, Chief Financial Officer at Cadeler]

So so, again, it shows the operational business model is working as planned. If we look at the the the quarter and the first half, it is as we have expected and and and planned, I think, on all lines. So I think development under very good control, costs under very good control, revenue, as expected or above. So it is a really, really strong, quarter. No doubt about it.

[Peter Hansen, Chief Financial Officer at Cadeler]

The balance sheet is, of course, increasing with the delivery of vessels. Also, CapEx for the quarter was as expected. You can find more flavor on it in the in the notes to the first half accounts, but it is growing with the with the with Baker installments It is, it is on the m class vessel of which one was delivered, and it's on the windkeeper, that came in late June with a significant amount. But, again, as planned, other current assets is increasing, and that is, of course, again, the the termination fees.

[Peter Hansen, Chief Financial Officer at Cadeler]

We are sitting in the balance as contract assets. We issued the invoices early July. We got the termination very late in June, hence, it's sitting as a contract assets, but it's not a reflection of it. Less certain. It is only a reflection of that we received the termination, the June 30.

[Peter Hansen, Chief Financial Officer at Cadeler]

So then invoiced in early July. Termination fees are due here in in q three. So we expect to have a cash inflow from our other current assets in q three. Still a solid balance sheet, actually, ratio of 50% as compared to 64%. Of course, it goes down as the balance sheet is a little bit more leveraged, but we will not see we will not expect the actual rate to go below 45% around that level.

[Peter Hansen, Chief Financial Officer at Cadeler]

Is expected to be fully funded. What is outstanding now is is only the the third a class vessel, the apex coming in in '27. It's a bit early for us to start that. We have started the, you could say, dependent threats in on on starting up a facility discussion on that one, but it's not being delivered until twenty seventh. So it's too early to start paying commitment fees, but there is a strong interest from banks who also support the funding of that business.

[Peter Hansen, Chief Financial Officer at Cadeler]

We have a cash of 51, but, of course, we are not taking in the termination fees here. So all in all, the conclusion on this slide is that we have a very, very solid financial situation with cash and available cash, substantially available cash also after payment of the K PICS program. As we have elaborated on in in the past, we our hedging policy is that we hedge 50% of the US dollar exposure on the installments to the yards. And we hit 50 of the interest exposure. And that is a strict policy that stick to what I think has served us very well in the past.

[Peter Hansen, Chief Financial Officer at Cadeler]

Financing overview, it it is we have two we have 2,000,000,000, 2,100,000,000.0 of committed facilities, And then the the APEX is is uncommitted as of now, but we are in dialogue with the banks to also get that financing committed. And we expect to close it approximately a year before delivery. We had the Windkeep or bridge facility in q two, which formed a part of a a very attractive business case where we were able to to buy the WinKeyvo at an attractive price, get a attractive contract on it, and fully finance it. We are we have to sign the takeout facility of 125,000,000. The remaining part of purchase price and CapEx, we can finance from the operational cash flow and the already available cash we we have in place.

[Peter Hansen, Chief Financial Officer at Cadeler]

Full year outlook, I said it was it was increased early July on the back of the termination of. Projects zone now, it is an outlook of revenue between EUR $588,000,000 to $628,000,000 and an EBITDA EUR $381,000,000 to EUR $421,000,000. It's, of course, the full year that was is impacted by termination fees and timely investment deliveries and execution on projects. Windbreaker and Windpace, which was delivered in q one twenty five, and it's already employed in APAC and in in US. And then there is two additional vessels deliveries coming in q three, q four with Ally and with Mova, and as Mel said, it is on time and budget.

[Peter Hansen, Chief Financial Officer at Cadeler]

And then we also start to see the revenue and cost from foundation project starts to be recognized. So it's the two foundation projects that we have, Haunting three and EA two. I would like to also elaborate a little bit on how we show revenue in our numbers in there there there's two lines. There's a line from a time chart of revenue and and and foundation work, installation work. That is what is coming from our our vessels and and the contracts on the vessels.

[Peter Hansen, Chief Financial Officer at Cadeler]

Then we have another line, which is our other revenue for the for this first half. It's €120,000,000. That is where the termination fees sits. But the €120,000,000 is not equal to the termination fees as there's also other services in other revenue in there. It's what you would call SunDry income.

[Peter Hansen, Chief Financial Officer at Cadeler]

So it's income from accommodation and catering on the business, and that can also be all all the small smaller revenue streams. And you can see in the comparable numbers, there's also €13,000,000 in for for six months in in '24. So it's it's not a correct conclusion then to say that the termination fees from Horn c four was 100 and and and €20,000,000. Then I will give the word to Miguel on sustainability.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Yes. Just a slide on sustainability update as well. We believe that that is important to update you guys as well on on what is being done. I we can say that the team has been expanded both in terms of in competencies, but also raw muscle to to to to develop what we need to develop. We have had several investors over the the years asking us to be better than and certified on the different schemes, and and this is something that our sustainability team is also working on to to make sure that that that we are where we need to be in terms of of of that.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

But also in terms of really broad decarbonization on what we do, we have our own targets, we are trying to be ambitious. And the road map has been defined also the with the larger fleet that is coming in. And the gaps that are that are needed to be bridged, so to speak, they are being modeled and what to do for to to reach our targets. We also have ongoing shore power upgrades for the O Class vessels with on wind Osprey being finalized in Q1. In terms of equipment efficiency upgrades, we're also looking at that on your class vessels after the energy audit we did there, and we are execution we are planning the execution for the end of Q3.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

In terms of biofuel, this is also a strategy we're looking at. The the the legacy vessels will not be able to to sail on on the new fuel types, and and there, can play a role. And we are we have been testing with with blending biofuels into the fuel mix to also have that as a as a as an asset on the sustainability beta for us and something that we can we can work with our clients to to to procure and to to deliver on projects as well. Then last but certainly not least, we are also developing a road map for implementation of a human rights strategy, and that is something we have based on the the old one and to be presented to the board for final approval and then roll out across the company as well. In terms of commercial outlook, I think that our view of the market is that there is a calibration in the market, but there is also a continued momentum.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Recognize that there are things that are happening in the market that is outside anyone's control at the moment. But we think that there is a period of recalibration. There has also been targets in in every market, basically, that were not achievable with the supply chain we have. So things are being recalibrated. There are also companies that are recalibrating their their road maps due to local auctions and auctions that didn't go as they planned.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Denmark is an example. Germany is an example. UK had an example of that in the round five. But also due to company specific events, that that means that companies have to recalibrate what they can do and when they can do it. So I think that what we can say is that we are you know, I think the market caution is is exercised and is prudent.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And but I think also that we said we think that conditions and policy improvements are expected, and we have seen some of that in in the markets that are that have redone their tenders and have gotten them right. And I think we have seen improved conditions both in Denmark, but also in The UK. And and as many others, we expect that the The UK round seven will be a solid round. We saw also the British government coming back with with the the approval of even projects without permits allowed to be participating in the round, and I think that that's certainly a new thing for that round for those auctions. So we are seeing that the governments are also trying to play a role in achieving as much as possible by 02/1930.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

So some projects are facing delays, time lines are shifting on some projects closer to 02/1930, where on the other hand, we see a pretty significant pickup again in projects. As I said already, there are important auctions ahead. The AR7 is probably the most significant one. But also, we see several new early stage markets beginning to emerge. And just this morning, there were news about offshore wind in Vietnam again, where one of the larger developers is taking now a share in one of those projects.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

We see more of that. We see also test projects in Brazil starting to emerge and have been in context as well with partners in these markets, although this is also, again, for the longer term and probably more into the next decade. We still have a positive outlook on the long term in the market, but and we believe that offshore wind will play a crucial role in the future energy mix for many different reasons, but but also that we are seeing that probably '27 and '28 are more challenging now than they were a year ago. Because when one of these bigger projects goes out of the market, then it's for sure that that is playing a role. But what so our strategy has always been to work on projects that are our primary projects, but also always to have backup.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And we believe that with the strength of the fleet and the strength of the assets that we will be able to also play a strong role for our clients in the market even in those years as well. And as we see it currently, we have been developing this slide here from last time as well. We see that there is still an undersupply of vessels expected coming towards the end of the decade. And it starts first on the foundation vessels, where we see an undersupply in 'twenty nine based on the projects that needs to go into the water. We also see that clients are engaging early with these projects with us and with others to ensure the right capacity for installation.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

But also for O and M and one of the reasons that we announced Nexra in our last call with you guys is, of course, because we have seen that the the o and m market is something where we see the clients really asking for support and and and and supply of of capacity. And that is across regions where some regions have more access to to O and M supply, where other regions find it very difficult due to complex sites, deep water, complex soil conditions, and the biggest turbines out there. And we do believe that Nexra and and our fleet strength can play a strong role in both these spaces. And if we are to look at what is really an efficient vessel, we have talked a lot about this supply and we have shown you how we believe that the supply situation looks in the market, but more on an overall, what is in there in total. But I think that here, we are trying to say how we look at the situation in terms of efficiency.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And efficiency in offshore wind is really days. How many days do you take to install a project? And here, have just said a theoretical project that we have evaluated and and tried to program how long time would it take for two different vessels to install this project. We have said it's a 100 turbines of 15 megawatt class. It's 100 nautical 140 nautical miles from the site that we are installing, and it's in the North Sea.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

If we look at the p class vessel that can transit with six BTGs per per round trip, then we need 17 round trips and two point fourteen days per turbine. If we compare that to another standard vessel in the industry, the Gusto engine and 9,000, then they can transit with two turbines. They need 50 round trips, they need two point six nine days per turbine installed. If you look at the raw numbers, the raw program, then we would need two hundred and fourteen days to install such a project, and they would need two hundred and sixty nine days. But on top of that comes project related delays.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And the longer you take to install no matter where you start and where you end, you will have longer time in in, let's say, a less favorable season. So waiting on weather, waiting on pilot, waiting on tide, and stuff like that, that is something that is increasing on the less capable vessel. And we do believe that that is converted into money and the value calculation at the clients as well. And hence, we believe that the stronger assets will be the first ones to be taken in the market because they simply drive a better value proposition to the clients. So trying to take that into the next slide, where we show you the slide we have shown you before, what is the total supply in the market?

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

What is the total supply of newbuild vessels since 2020? And what is the total supply of legacy vessels? This is a slide that you all should be familiar with because we have shown it before. Catalyst on the left side here with 12 vessels and currently the market leader in terms of number of vessels. If we then try to say, okay, what what is is the inefficient vessels that are out there?

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And then we are looking at if we look at what vessels can install wind turbines, then we believe the number looks quite different. If we say what vessels can efficiently install the 15 megawatt class of turbines, then the numbers look very, very different. And at Kettler, we we are discounting a number of vessels here in terms of efficient installation, but we believe that we have nine, Deemu with two, Fanon with one, Seaway 7 with one, Yangonu with one, Penta Ocean with one, Maersk with one, Shimitsu with one, and Dominion with one. But it's a significant reduction from the overall numbers. If we then look at the foundation installation, then it's it's it's a it's an even more dramatic number we are looking into.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Because in terms of efficient installation, we're looking at seven at Petla. We're looking at four at Beamen. Two of those are only for foundations. We're looking at two at Fanon, one of those only for foundations, and I would say primarily foundations in the Baltic Sea due to limited weather capability. Three at Herama, one at Sea Bay seven, two at Jan Denul, two at Boscales, one at PENSE Ocean, and one at Saipem.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

So I think that that is our view on what is efficient vessels, and it it it changes the supply equation slightly. And hence, also why we do believe that, especially in 2019, we see an undersupply of vessels that can do efficient foundation installation compared to the number of projects that will be installed. So we have been asked for it many times what is our view on efficient installation on across the two components turbines and foundations, and this is our view. I know that if you compound the numbers, we have more than the total number of vessels, and that's because some of our vessels can be converted to both to either foundations or turbines, and hence, they are counted in both spaces. But, obviously, they can only work in one space.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

So if one is counting them for installing foundations, then one has to discount them from the turbine installation and hence make that space slightly tighter. If we look at the the demand for O and M, the reason we entered into that market is pretty simple. We see a steady growth in the O and M market due to a larger installed fleet. And we also see that our clients are asking us for more services in this space and the support on the bigger assets that can handle more complex sites because this is really where the bigger turbines are installed. And we have seen situations where our clients have have have only had one or two vessels to select from to do particular service for for their turbines.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

We are here to try to help our clients and and and provide them with with what they need to do the work. And that's why NexTra is believed to have a good strong demand outlook across the years ahead of us. And as we said, the the vessels on our side where we believe that there will be there will be, in the beginning, at least, an o and m future. We are looking at Vincerox and Vincilla and Vinciva. Vincilla and Vincilla will will will also have some installations scope to do Vincilla in The US, Keeper probably primarily in Europe and then on to a future of O and M.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And then the installation vessels will have patches of O and M in between installation work. We believe that the market opportunity, as I said already, is growing and it's growing significantly. We are working to strengthen the Nexford team. And I think with the Vestas contract that we now have, not only is that a proof of concept, but also it is really also now the point in time where we can start to build the NexTra team and make sure that we are able to to deliver what what our o and m clients they are requesting. We have gotten the question from a lot why why NexTra?

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Why not just under the Catal umbrella? It is still under the Ketla umbrella, but but the reason that it's NextRow is really because we want someone we want a team that can speak the same language as the O and M clients on on the other side, and that is something that where I think that the first three months of NextRow has shown that that is something that is appreciated by the clients as well, and and also good conversations have come from that. We believe that we are deepening the client engagement not only across the the O and M, but also into the installation space by having more touch points with our clients. And then, of course, the strategic fleet expansion with the Keeper, I think we already knew that there was a future for that asset. Bitbusters and And hence, we believe that both the price we could acquire, but also what we could agree with our client was both attractive enough to make this decision, and hence, we did it.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

We believe that, that will add value to the overall case for our investors. In terms of what the future is for Catalent, what we are focusing on at the moment, we are really focusing on building a resilient business with a clear and consistent focus on our core competencies, also so we can handle when things don't go to plan. And I think that we are we're talking about, you know, the the the expansion. We have talked about that for a long time, and I think that the NexTra expansion was an expansion that really not only is it something that is asked for by our clients, but it's also something that stabilizes the whole cattle feed due to an expected utilization stream from Nexra into the installation fleet as well. And I think, as I already talked about, the latest acquisition of Kiva is one where we had the opportunity to look at an attractive price for an asset and an attractive client with a client sorry, an attractive contract with a client we know.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And those things together, we discussed with our Board and both we and the management team and the Board agreed that, that was attractive enough to go ahead with it. But we are, of course, also looking at what is good growth and what is not good growth. And I would say that, at the moment, we are very, very happy with where we are on fleet size and what we can, both across O and M turbine installation and foundation installation. We are working in all the major regions, and we are also being asked to be a partner in the emerging markets, which is positive. That has been a strategy for us to be having early looks so we know what is coming, not in the near or midterm, but really in the long term.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

But that is a positive sign that we can see that these markets that we expected to come online, they are also coming online as expected. And focusing on strategic partnerships has always been a focus for Catline. I think that the latest addition of the long term contract with Vestas is a further substantiation of that and also enabled us to maintain our backlog despite the fact that Hornsi four was delayed and, hence, taken out of the backlog. And then really also monitor and apply new technologies. Here, we are mentioning the developing and testing of biofuel and having a strategy for that to really drive down our carbon footprint, but it also is something that will be very relevant for the whole NexTra entity in terms of having, let's say, more strategy on tooling and and and and tools used for for O and M to really make the O and M journey as efficient as possible for us and our clients.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And we already are in discussions with large clients in the industry to co develop certain tools and assets for that that could and when I say assets, mean, you know, the things that we need on the jackups to efficiently do the maintenance, which can, for example, be a a flexible c fast thing that can range across different turbine types, for example, so we can service different components as fast as possible and as efficient as possible. So in terms of investment highlights, still sitting on the largest and most capable and versatile fleet in the industry, and we believe that the complementarity on the fleet really enables to cause utilization, efficiency and project derisking across the three different legs that KETLA stands on today. Very experienced team. And as Peter said, we are now where we would like to be in terms of being able to execute across different things. And I think also the team has shown its flexibility and its versatility by also enabling the the the onboarding of Kibo at record pace and and still also having it manned at record pace and and and getting it back to Europe, strong technical plan for the upgrades and getting it to work in the early part of next year.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

A resilient global platform that can handle these shifts in the market that we see, Some of them are really unfortunate, and we are trying the best possible way to support our clients with stabilizing as much as we can, and that is what the Kettler fleet can do, but also what our team can do. We can think out of the box when things go not to plan, and we are looking forward to continue to support our clients when things don't go to plan. As I said, an undersupply of especially foundation vessels from 2019 and onwards, and we see an increasing market demand, especially to the beginning of end of this decade and beginning of next decade. So still, I believe, in the long term story for offshore wind and for O and M in general also in the market with a larger need for electricity in the market. That is something that we still stand firm on.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

We have a strong track record in the capital markets and a record high backlog, and we believe that, that creates earnings visibility for our investors. And we continue to focus on being a good custodian of capital. So with those words, thank you for listening in, and now we open up for for the q and a.

[Operator]

Thank you. At this time, we invite those analysts wishing to ask a question to click on the raise hand button, which can be found on the black bar at the bottom of your screen. You may remove yourself from the queue at any time by lowering your hand. When it is your turn, you will hear your name called and receive a prompt to be promoted. Please accept.

[Operator]

Wait a moment, and once you have been promoted, you may unmute yourself and ask your question. We encourage you to turn your video on as well. We will wait one moment to allow the queue to form. We will take our first question from James Franklin with Jefferies. If you could unmute your audio and ask your question.

[Jamie Franklin, Equity Analyst at Jefferies]

Hey, guys. Hope you can hear me okay?

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Yes. Yes. We can hear you, Jamie.

[Jamie Franklin, Equity Analyst at Jefferies]

Hey. So so firstly, I've got to ask on Revolution Wind. So I know, obviously, it's only a very small part of your backlog now, but just wanted to get a bit of color on what the potential impact could be to Kadala if this project remains halted, for example, if it stays halted for a month, or what would ultimately happen if the contract is canceled. So do you have any contractual protection in place? Firstly, on Revolution Wind, and then secondly, on Sunrise Wind, please.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Yeah. I think what we can say is that, contractually, we are as well protected as you can be. And that has been discussed before because the fact that the market here is difficult at the moment is not a surprise, I guess, for anybody. So so the contract we have on both Sunrise and Revolution are contracts where I would say there's a lot of protection in them. At the moment, what we can say about Revolution Wind is that we are in dialogue with our client.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

The only reference point we have is Empire that was halted for around about a month or so, and then it was restarted again. The question is, will will the same happen here? Nobody knows at the moment. So I think that that that we are we are here, and we we have said to our client that we are we are we are looking to to support them to the degree we can with with the installation of the project. That's the only logical outcome of this.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

This is that revolution is completed and providing clean energy to to the citizens of the of The US. And but I think that nobody really knows today what is happening. So we have been told that we should stop working on revolution wind and comply with the stop order and that we will hear more. That is what we know today.

[Jamie Franklin, Equity Analyst at Jefferies]

Okay. Got it. Thank you. That's helpful. And then secondly, just wanted to talk about Windkeeper.

[Jamie Franklin, Equity Analyst at Jefferies]

So you gave a bit of commentary on your CapEx in the first half of the year, which included various construction payments for the newbuilds. But talking about 2Q specifically, is it fair to assume that the majority of that CapEx related to Windkeeper and there's no sort of other major construction payments? And then second part on Wingkeeper is if you can just give us a bit of color on the upgrades that you're expecting to make on the vessels and not just in terms of the value, but if you can give us a sort of picture of what the physical upgrades are likely to be. Thanks.

[Peter Hansen, Chief Financial Officer at Cadeler]

Let me thank you, Jamie. Let me answer the first part of the question, and then maybe you can can answer the second part of the question. Yes. It's fair to assume that the q two CapEx is is with Kiva. There's no you know, unplanned CapEx in q two or first half.

[Peter Hansen, Chief Financial Officer at Cadeler]

It is really the installments that is in the contracts with the yards. And then the WinKeeper, of course, came in with a big number in Q2. So your assumption is correct.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And in terms of the upgrades, upgrades we are doing on Keeper is upgrades that will enable the Windkeeper to work in in in European waters like what we see on other vessels. So the Windkeeper has been built by by by a company in China that that had an ambition of working in Chinese water and also in international waters. But there are things that they have done in the design that we would have done differently if we had started the design, so to speak. And we are trying to to rectify some of those. I cannot give you all the details, but some of the things that we are doing is that we are, for example, putting a new auxiliary crane on the vessel because the current auxiliary crane is in the way of the way we do a deck layout for efficient O and M, but also for potentially installation work.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

We're also adding a new bow thruster to improve the DP bow for North Sea operation, and we are also working on the leg guides to get more capacity out of the the very nicely long legs that this vessel has that enables her to work on very, very deep water depth and very complicated soil conditions. We're also recertifying the main crane under an international classification society, which means that we can do a better lifting curve with the crane and then a general accommodation upgrade that will make her similar to our other vessel standards and also to what our clients can fairly expect from a Kettler vessel. So in highlight, those are the upgrades we are looking at.

[Jamie Franklin, Equity Analyst at Jefferies]

That's great. And then final question then. With regards to Windkeeper, were you actually sort of actively looking for an O and M vessel? Or was this basically just an opportunity that came up at a good price and you went for it? And have you seen sort of other similar vessels in the market in Asia? Thanks.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Last question first. We we don't see similar vessels. And and I think the Windkeeper is pretty unique in terms of how it's been built. It's been built with a lot of international components. So there's a lot of, let's say, read across to other spare parts in the Ketla fleet, for example, on the Husebin crane and so on and so forth.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

So so we have looked at other Chinese assets, mainly due to the fact that we got the questions from investors a lot. What if these Chinese vessels are coming to Europe, start suddenly starting to compete? That actually made us look into all these vessels. What is out there? How can it be done?

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

How would it look if they came? And and what would need to happen to them if they had to be upgraded? And the conclusion was clear. It's very, very hard to upgrade the vessels that have been built particular for the domestic market in China because they have been built for for a different installation methodology that that almost would make it easier just to build a new vessel rather than to try to retrofit to to Europe with one of these assets. The exception was Keeper, but it's been offered to us for a long while, more than two years, but the price started a different in a different area.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

I think that our interest in Kiva started really when we were contacted by the the lenders of the vessel, and and we could see that we could acquire the vessel at a price point where we believe that we could also build an O and M business case on the vessel. And at the same time, we had a dialogue with a couple of clients that were in need of that O and M supply already starting next year. And hence, since there's very, very limited availability this year and next year in the market, we had a dialogue with some of these clients and said this could be an option. Is that something you would go for? And if you wanted to go for it, how would you do it?

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And that is what led to the decision. So that is very transparently sharing how the decision was made.

[Operator]

Our next question will come from Ruwal Hartvagen with Clarkson. Please go ahead and ask your question.

[Peter Hansen, Chief Financial Officer at Cadeler]

So, Dana, can you Thank you.

[Roald Hartvigsen, VP - Equity Research at Clarksons Securities]

Hi, Mikkel. Hi, Peter. Congratulations on another strong quarter. So first, just to follow a bit up on the first question that came in on revolution in Chile. And I know it's still early, so probably no firm plans yet as you alluded to.

[Roald Hartvigsen, VP - Equity Research at Clarksons Securities]

But do you see the potential for alternative work scopes for the mess vessel amid the stop order? And, I guess, more specifically, Sunrise of Wayne is in the same area still progressing. Do you think there is a scenario where Shilla moves over to help out with work there while awaiting clarity on the stop order, or are there roadblocks making that prohibitively challenging?

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

I think first and foremost, our client don't wish that. So so the the this the the best is mobilized for the installation of revolution and sunrise. And hence, if we work on something else, we have to demobilize from these projects because we are working with the with the with the Jones Act compliant bots that is landing the equipment on the jackup, and then we install from the jackup. So so it is not so easy to just go and work somewhere else. So I think it's fair to say that our client don't wish us to go and work somewhere else now.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

But that is certainly something we would have considered if it was possible also to minimize the the impact for our client. I can say that after this news came out on Friday, we have been we have been called up by by by some clients that is that is interested to hear whether that vessel then becomes available because there is, at the moment, today, a shortage in in the market on capacity in projects also in Europe that is already in installation. And hence, I I believe that if the vessel comes free, which I don't believe or hope today, I would like to make that clear, then I think that it could be repurposed to another project.

[Roald Hartvigsen, VP - Equity Research at Clarksons Securities]

Thank you for the the color. Furthermore, we have over the last year or so seen a number of contract terminations for turbine installation vessels where the turbine installation vessel operator have benefited significantly from large termination fees. And I guess many would also place you in in that category. My question is, in that context, do you see more pushback from developers to sort of lower termination fees on the contracts being signed and negotiated now and in the time ahead, or are you still of the impression that the levels for termination fees in the contracts remain fairly stable from the contracts that were signed one, two, three years ago and yeah.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

I I I don't see that at the moment, but I would also say that the the backdrop is very short still. So if it's coming, it's it's probably gonna be a problem. I've seen it yet, but but I don't I think that the the flip side to that coin is also that for us as a as a vessel provider to log in the vessel and not being able to do anything else with the vessel, it comes with a cost. It's an option, and an option has a price right. So it's something that you can calculate the the value of an option.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And and and I think that that is how we we we are looking at it as well because we can also say to our clients that projects have been delayed, and hence, we need to protect ourselves if that happens. We cannot just sit with nothing if it happens because then we become the losers in the grand of play, so to speak. So I think that we are we are we still have very fruitful dialogues on this, but and it it it it's a it's a two sided sword almost, you can say, because one thing is, of course, to have the protection and the termination fee. The other side to that is also to try to really bet on the projects you believe on as well. And and and so so there there's there's work on our side to be to be rightly placed for the right projects, and then, of course, also to to not always look for the last dollar, but also look for the right conditions and the contracts, I would say.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

And I think that that's something that that that is still working fairly well for for for all parties in the industry. And and I would like to say that termination fees as a contractor, you you you are happy there there, but you really don't want to have them. You would like to do the project instead. The same goes for on C 4. We would have loved to do on C 4.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

We will still love to do on C 4 when it comes back.

[Roald Hartvigsen, VP - Equity Research at Clarksons Securities]

Yeah. Makes sense. Thanks for your time, guys. That's it from my side. I'll leave the floor to the next

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Thanks, everyone.

[Operator]

We have no further questions at this time. Thank you for your participation. I will now hand the floor back to Mikael Gierup for any closing remarks.

[Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler]

Just thank you for everybody listening in. Good to speak to you again, and reach out to us separately, Alexander Pieder and myself, if there's any additional questions. I'm sorry we cannot give more detail on Revolution, but I think everybody can understand that it's it's very new for everyone and and that we are working with our client as much as we can in in this sad situation that that our client is currently in. So we will update you as soon as we know something that we that we can share. But thanks for listening in now, and have a good day ahead.

Participants

Analysts

• Mikkel Gleerup, CEO & Member of the Executive Board at Cadeler
• Peter Hansen, Chief Financial Officer at Cadeler
• Jamie Franklin, Equity Analyst at Jefferies
• Roald Hartvigsen, VP - Equity Research at Clarksons Securities