Cadeler A/S (CDLR) 2024 Q3 法說會逐字稿

Welcome to Cadeler's Q3 2024 earnings presentation.

Presenting today are Mikkel Gleerup, Chief Executive Officer; and Peter Brogaard, Chief Financial Officer.

Please be reminded that the presenter's remarks today will include forward-looking statements.

Actual results may differ materially from those contemplated.

The risks and uncertainties that could cause Cadeler's results to differ materially from today's forward-looking statements include those detailed in Cadeler's annual report on Form 20-F 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 Cadeler 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 Cadeler's Q3 earnings release.

The Q3 earnings release and today's earnings presentation are available on Cadeler's website at cadeler.com/investor.

We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session.

As a reminder, this call is being recorded today.

If you have any objections, please disconnect at this time.

Mikkel Gleerup, you may begin.

Thank you very much and welcome to this Q3 2024, presentation from Cadeler and good morning to the US audience and good afternoon to the European audience and good evening to the Asian audience.

So, very pleased to be presenting our Q3 highlights and overall performance in Cadeler.

And as of Q3, we can say that our financial performance is in line with our expectation.

We have increased our full year guidance to now be between a EUR243 to EUR253 million and our full year EBITDA guidance, we have narrowed, the range to the upper end of the range.

So it's now EUR115 to EUR125 million.

Our newest vessel, the Wind Peak, has arrived in Europe and is already on higher, which is very positive.

Two significant new projects, including our second foundation projects have been added to the backlog.

And both of these projects that we have added to the backlog, are multi-vessel contracts.

And I think that that really showcases the strength, and the versatility of the Cadeler offering, but also really what the clients are buying in the market at the moment, which we have discussed before, it involves a lot on the redundancy, that can be offered.

We also see, multiple O&M campaigns that are keeping our vessels busy, between the projects and maximize our overall utilization, and that is something we believe that we will continue to see and something that will, eat any available days on the fleet, at least what we see as today.

And then last but not least, we have added complimentary expertise with Thomas Thune Andersen, the former Chairman of Ørsted amongst others, that have joined our board, as an elected as an independent director.

We believe that his skill set and what he knows from many years in the industry is something that Cadeler will benefit from going forward.

In terms of the commercial highlights in the portal, I think that we can say that we have on the wind, we have completed the installation of 14.7 megabit, offshore, wind turbines from Siemens on the Moray West project.

And this is the world's first installation of the 14.7 megabit platform, from Siemens.

And I think that we have learned a lot from that project and really also performed well, and to the expectation of our clients, and have completed the project, on time and on budget, with our client there.

And I think that the good news is also that we have continued from that project on an O&M campaign, that will take this vessel forward to her next installation project.

On the Osprey, we continue to execute on Ørsted's Godewind and Borkum Riffgrund on three projects.

We have done many different things during this project with the client where we, amongst others, have released the vessel in between, installation, on this project where we have, released the vessel for, O&M support, on a project in the Dutch zone, which really benefited both the Cadeler Ørsted as our client, but also the client that had need for O&M services.

And then Ørsted has called an additional 74 days on Golden 3, and securing very strong utilization on Osprey going forward.

On Scylla, we've discussed before, she continues to install in the US and we are very happy with that contract in the US and also, the cooperation with the both the local authorities, but also with the client and how we progress, with our installation, our first installation in the US market.

In terms of Zaratan, she has completed her remaining 46 turbines on the Yunlin project, and I think everybody involved in that project are happy to see that that project is now completed.

And we are now, continuing and on O&M campaign for an undisclosed client.

On the Peak, we have completed the transit from China to Europe.

And, she's currently mobilizing for her first job and O&M can pay for an undisclosed client, but really happy to say that Peak came directly on a contract when she came back to Europe, and that we had multiple clients, looking to be engaged with the Peak, before her first installation project, which is the Sofia project starting, next year.

In terms of the backlog and what we have added to the backlog, and we have added the Baltic II and III project, together with Equinor and Polenergia, PTT installation project in 2027, as we have talked about before 2027 was the focus year for Cadeler to make sure that we have strong utilization in 2027.

But also, we have secured our second foundation project, with an A-class or an O-class deployment on the East Anglia Two project with Scottish Power renewables, where we both will do the foundations and the turbines, and the project is also starting in 2027, and the project that we really believe is a continuation of what we did when we announced the Hornsea 3 project.

And we do continue to see very strong demand for our services, both in the turbine and the foundation space.

And hence, very positive in the outlook for these spaces.

And as I already said, O&M basically vacuums the rest of the utilization we have available at the moment because there's also a very strong demand there.

We continue to have reservation agreements that we have not put in the backlog from various discussions with clients and still ongoing contract negotiations.

And as and when they are coming, as to a final contract, and we, of course, will add them to the backlog.

And as I said, also at the half-year mark, we continue to see a backlog that continue, that consists of both work in Europe, in Asia, and in the US, and we believe that that will continue, going forward.

In terms of how the contract backlog now stands at just sort of EUR2.4 billion so, a strong addition, in this quarter, to the backlog compared to what we announced at the half-year mark.

And this is a development that we expect to continue to see, at least, in the coming period, due to the reservation agreements we have, with clients, and that we believe we will be able to convert into backlog.

But really, what has been adding to the backlog here, as I said already, the East Anglia Two and the Baltyk II and III, but also these multiple contracts on O&M services that are between the projects.

So, really filling in the gaps between the installation projects, ensuring very, tightly knit string of pearls of projects and different O&M work, that will secure a very high utilization on our vessels.

And as we have already said at the half year mark, but I've repeated just for the sake of good order that the O-class vessels were out of operation in the first quarter of this year due to new cranes.

And we also had the Zaratan out for maintenance work before, going back to the Yunlin and that of course, impacts the overall year utilization on the vessel, but I think if you look at the quarter alone, then we see very strong utilization.

Yeah.

In terms of the progress on the new bills, we continue to see very strong progress.

So when Peak delivered on time and on budget, on August 15, 2024, where we had the name giving ceremony out in Qidong in China and the vessel in Rotterdam in November, this year.

On Wind Maker, we expect delivery in Q1 2025.

The overall construction completion sits at 83%.

She's launched from the dry on June 3, and commissioning of the vessel is in progress around 50% completed, and jacking trials and main crane load test planned, to commence in December 2024.

So we continue to push very hard, on the yard and also, with the performance we see out there, because we are eager to get the maker delivered and get her out to work.

And I think that we have a good cooperation with the yard to make that happen.

So confident in our plan and our progress, at the moment, and we track it on a weekly basis on the maker and ensure that we deliver, the weekly progress we need in order to secure the delivery schedule.

On the wind pace, we expect delivery to Q2 2025.

The overall construction completion is at 99%, and yeah, I might add that the way that different yards are counting this number is slightly different.

So it's not an apple comparison Between the 83% on maker and the 99% on Pace.

But Pace was launched from the dry-out on June 25, 2024, and the commission and preparation for sea trials are ongoing, and the sea trials are planned for December 2024, as with the maker.

And I think that we can overall say that the performance we see from COSCO continues to be very strong.

And we will see, vessels in general delivering slightly earlier, than what we originally expected, from the yard.

On Mover, not diving so much into the detail, but delivering Q4 '25 on i delivering in Q4 '25, and then on Ace delivering Q3 '26 and Apex on Q2 on '27.

So overall, a very busy year in 2025 where we will see, the delivery of up to four vessels.

And that is something that, of course, have meant that we have been planning, for that and also ensuring that we have the capabilities the resources, and everything, the systems in place to make sure that these vessels, they come out and that they, as soon as possible, get into work and start generating revenue like we saw with Peak.

But I think that the lessons learned we have from the Peak delivery now is something that we are baking into all these four vessels and believe that we are in a very good place on the whole CapEx program.

Now we are heading into the financial highlights for Q3 '24 and I'll hand over to Peter.

Yeah, so Peter, please take it away.

Thank you, Mikkel.

Yeah, first, the financial highlights for Q3 for the three months, in Q3.

And that reflects, of course, the web of in activity that we have had in this quarter as compared to the first half.

We now have four vessels on water in operation and when Peak being delivered but not on contract yet in Q3 so.

Revenue significantly up as compared to last year, EUR80.6 billion.

As compared to the EUR23.4 million last year.

This year, of course, it includes in any financials on the vessels, whereas last time, we only had the two O-class vessels hence the increase in revenue.

Equity ratio, 62% still a solid balance sheet we have.

Utilization also picking up as planned, now 86.5%.

The market cap is at EUR2 billion.

We have seen that higher.

But I think there has been a negative sentiment in the market, so probably not due to company-specific news.

Then we have an EBITDA of EUR48.4 million where we could see the magnitude of what the vessels can perform of EBITDA in the quarter as compared to EUR8 million last year.

Cash flow from operating activities from EUR27.5 million.

The backlog, as explained by Mikkel is at a record EUR2.4 billion, three months daily average turnover of EUR4.8 million.

If we look at the P&L for the three months in Q3, we can see that revenue, of course, up due to the merger, but also due to higher utilization.

With the O-class out in operation and in legacy Eneti, as I said and Zaratan.

So four vessels operating as compared to Q2 last year.

Cost of sales, of course, goes up with the volume.

SG&A and other expenses reflects, the buildup that we have done of the resources in the company in order to execute on the projects that we have now and but also to execute on the projects that we have in the future especially on the foundations.

So it is partly investment in the future.

And then, of course, due to the merger with Eneti.

We are reaping the synergies that we expected when we announced the merger.

So this is really a ramp up for a bigger activity in the company.

EBITDA at EUR48.4 million as compared to EUR7.9 million last year.

We have listed here OpEx per day where we have excluded project cost and fuel just to have apple-to-apple comparison for EUR35,927 for the quarter.

If we look at year-to-date for nine months, of course, the numbers are impacted what we showed at half year that Q1 was a quarter with lower activity due to crane upgrades and Zaratan maintenance.

So somewhat lower for the nine months as compared to what we generated in the four months, but it is really going according to plan.

And how we can see when we get more vessels in operations then our results will increase accordingly, we see the same in the future for with Peak coming into operations in Q4 this year and then with the four vessels coming in next year, as is explained by Mikkel.

Vessel OpEx per day is in line with last year.

So under control.

We see the same ramp-up on the SG&A expenses, as we explained in the quarter.

We have now a headcount of 236 onshore in averages as compared to 102 last year, and it is investment in being able to operate a company with that many projects and then many risks as we have.

Balance sheet equity goes up due to the private placement that we did.

This is as compared to end of year '23.

Equity goes up with the private placement that we did and the noncurrent assets is, of course, the vessel that goes up with the delivery of Peak and also investment in new buildings.

But still a healthy equity ratio of 62%.

If we look at the project program and the financing, then we have secured our signed and committed financing for the P-class and M-class and we have also an undrawn facility on the RCF as we have disclosed before, that is with the collateral in the legacy assets on water, the vessels on water, that is signed and committed.

Then the A-class facility, then we have divided into two, EUR455 million on the two first A-class vessels, and that is, that deal has been launched into the syndicate recently on a term sheet basis, so we are very confident that can be committed first half of '25.

And then it follows with the third A-class vessel or the EUR240 million subsequently decided to divide it into two because it's a 27 delivery of the third A-class so paying commitment fees in such a long period will not be beneficial.

And then we have put on top EUR70 million, and that requires a little bit of explanation.

It is not that the vessels has become more expensive or there is a change in the yard price, it is simply because in the finance and we have included also financing of mission equipment on the vessels when they are delivered for the first project.

So when you see in the earnings release, the debt financing that we expect, that is including this mission equipment and is only related to that we are able to improve the terms in the facility, so it also covers missing equipment, improving the liquidity and the cash flow of the company.

The contract price is still the same and see the financing of the installments still the same, EUR1.5 billion in total and then you can see what is outstanding of CapEx.

It's on the second P-class vessel, it's on the M-class vessel to be delivered next year.

And then it's on the A-class vessels.

So conclusion here is that we have the funding in place.

We are not depending on issuing new shares, we can fund the CapEx program with our current and expected financing that are in advanced stages.

Still, we have a hedging policy of hedging 50% of the US dollar exposure and 50% of the interest rates, and we follow that guideline continuously.

Financing overview shows what is committed at EUR1.4 billion and what we have utilized as of end of September.

And then you can see the uncommitted financing that is the A-class where we are in very progressed stage with the lenders.

If we look at the full year outlook, we have narrowed the EBITDA guidance to the upper level of the range and increase the revenue as compared to previously communicated.

And this is due to, as said recent threefold and it is that we have seen customers calling more options, we have seen that we are able to fill these gaps between projects with the O&M contracts as we have been communicating throughout the year.

We see a very strong market for that, and that is what we can do now filling in the gaps, which is the foundation for this upwards narrowing.

And then we have termination fee from a terminated, legacy contract.

That was the update on the financials.

So, back to you, Mikkel.

Thank you, Peter.

So just a little bit of a commercial outlook for how we see the year ending and but also how, kind of like what we are seeing going forward in general.

In terms of this slide here, we have received a lot of questions, since, the elections in the US, so what is the impact of the election result in the US?

And I think that the left side of this slide here shows that, at least our view and maybe we are even more, let's say conservative on our view on the US market, but the light blue color here on top of the graph on the left side is really how the US market is seen by the people that collect market data and the ones that we use.

So it's really the US market for a long time has been the peel on the orange more than anything else.

And it's a market that we still believe that it will grow over time but also a market where we have said from a long time back that we are more positive on it, but we are still taking an approach where we are looking at the projects in the US on a case-by-case basis.

So it's not just saying that we are just diving full into the US market just because we are executing a project there.

We take a balanced approach, and we are looking at it, whether it's the right thing for Cadeler to do.

At the same time, where you have two other markets that are growing significantly faster.

And that is, of course, the European market that is growing very, very fast and where we also see the commitments, especially in the UK being very significant, but also in countries like Denmark, Germany, Poland, very, very strong commitment as well.

But also in Asia, where we have also signed a reservation agreement, we see a very strong commitment to the market and to the general outbuild of industry.

And I would say that at the moment, we are trying to balance, let's say, our focus, but we still have a focus on the US market because we believe that there are projects in the US that can be very accretive to what we do.

But when we sign up to a project in the US, we have also said that before, both to investors, to analysts and to our clients.

If you want Cadeler to work on a project in the US, then it has to be a very strong, let's say, risk mitigation on the projects because we need to make sure that the vessels are working when they are booked to work, and that is really how we approach that market.

We still see that the turbines, they continue to grow in size, and we have seen first project in Europe now with an 18.5 megawatt turbine.

So that is at least validated by that.

It supports the overall Cadeler case because our vessels are really designed to do the bigger equipment.

And hence, we feel comfortable around these fundamentals in the market where we see projects going further offshore and deeper waters with bigger equipment.

And that's something we see across different markets, and we see different complexities in different markets where probably we can say that Asia is governed by soil complexity, US by water depth and Europe by a mixture of all of the components at the moment.

But really, we feel well prepared for that and in a very, very good place.

And I think that recent market development have confirmed that to us, and we will also be pushing out these news to the market as and when we are at a firm contract stage.

In terms of the overall picture in the industry, how that looks like, we continue to be the largest contractor in the industry with 11 vessels at fully delivered stage.

And in terms of presence, we have been asked in the past, will there be more consolidation and all of that or potential newbuild orders?

We have not seen any of that.

And in general, we see that there's not a lot of that going on at the moment.

Of course, can some of that happen?

We still believe that the consolidation in the industry makes sense.

So can that happen, of course, it can.

But at the moment, we haven't seen anything.

I think that we, in general with our fleet can say that we are being approached a lot by clients for our free spaces in the fleet and to support clients on various projects.

As we also hinted to in our backlog slide, we are seeing that these in between gaps that we have between budgets, they are being vacuumed at the moment by the clients.

And in many cases, there are several times taking a position for these periods and trying to talk to Cadeler about how can we get particularly their project executed in one of those gaps.

We work with our clients, all of them, we are still very, very relationship-driven as a company, and we try to create value both for our clients and for our industry, and that's really how we balance this off when we have several clients asking for the same period of time together with, of course, the value we want to return to our investors.

The strategy on having vessels that are similar, we see that, is also something that is working for us because we are now more and more in a situation where we're offering clients, a capable vessel and not a specific vessel, and that really also means that we can drive the utilization slightly stronger, and that is one of the benefits of having a bigger fleet compared to where we were just a few years back where we were operating two vessels.

We already see now with the five vessels we have on the water that, is giving us certain advantages in terms of how we can drive the utilization.

And then we continue to say that the overall market outlook and what we see from the end of this decade and the beginning of the next, so we can basically say from the mid to the end of the decade.

And so in the beginning of the next, at least the first half of the next decade, we do see a very, very strong demand for our services.

And in a market where the shipyard capacity is very, very short and also time to delivery.

If you order vessel is significantly extended compared to what would be normal.

And we believe that we have ordered the vessels at the right price, at the right time and are ready to launch them into the market to the benefits of both us, our investors and our clients, and we believe that is really a win-win.

We will continue to work on our global footprint and work in the regions where it makes sense for Cadeler and we believe that this model of offering our services to the clients in many different ways with several vessels on a project or, let's say, the commitment to deliver a speed of vessel if needed, that is something that will continue to drive more value.

And in an industry where there's other supply chain issues than just the vessels, we also believe that there will be further win-win scenarios where Cadeler can help our clients and, in return, have stronger utilization and stronger financial fundamentals in the company to the benefit of our investors.

So in terms of investment highlights, we have been through some of it in the past, but just that reiterating really in Cadeler, we have the largest and most capable most versatile fleet in the industry and it's very strong in terms of its complementarity, and that really enables us to do growth utilization, more efficiency and de-risking of projects, both for Cadeler and for our clients.

We have a very, very strong team.

And as Peter said, we are growing the team as expected and also as we explained at the midyear mark, where we have different scenarios for what we are doing, and with the strong, let's say, demand we see at the moment for the foundation projects on all three A-class vessels.

We are in a situation also where a continuous strengthening of the team is really a focus for us.

And I'm happy to say that we are seeing very, very strong willingness from the market to work for Cadeler, both on and offshore.

And that is, of course, making us confident that we are able to deliver what we are also planning to deliver here.

And it really has -- means that we also have the clinical know how, but also these commercial relationships with our clients that are super important in our industry.

We believe that we have a global growth platform.

And our presence in all major wind markets is something I'm confident will continue.

So even today, with the election in the US, I do see still a demand from the American market, for example, for the services that we are delivering.

And at the moment, we are collecting knowledge in the US on what I would call a very low risk contract and that will be beneficial to Cadeler and Cadeler's investors in the future.

We still anticipate an undersupply of capable turbine and foundation vessels from 2027 and onwards.

And we see also that the way we work with clients is shifting slightly and also driving the whole case as we have expected and also as we have explained on previous occasions, and overall, still very, very positive on how we see the market developing.

Strong track record in the capital markets as well.

And I think that our backlog that we continue to increase and grow at very, very accretive rates is something that is both liked by the investors but also by the banks where we secure our financing.

And that is also why we are still confident in the overall plan in terms of our capital allocation policy and strategy and we remain to have a focus of being a good custodian of capital and really delivering what we promised to you guys when you listen to us.

That is the end of our presentation.

And from here, we are very, very happy to take questions from the audience.

(Operator Instructions)

Ben Nolan, Stifel.

Thank you and good afternoon.

I wanted to ask a little bit on the multivessel business that you're doing.

Obviously, the last number of contracts that you won have been multivessel.

And I think very clearly, there's the synergies associated with that and perhaps you as the largest operator have a competitive advantage there.

Do you think that's the way of the industry going forward?

And do you think that it might make it more challenging for those companies that might have only one or two or a limited number of assets available to be able to compete on that basis?

So yes, we do believe that will be the model that is going forward, especially for the bigger projects and the more complicated projects.

And that I think that the answer to the second question is also, yes, it will make it more complicated because if you have two vessels, and that is what you asked to deliver, then that is really what you're delivering, right?

And it means also that you have to either you need to, let's say, a lot more confidence in your own project completion capability or you need to take risk on the next project or simply to open up gaps between your projects and hope for the best and I think that is the benefit for a multivessel strategy that is having more of a fleet, so to speak.

And that is that we are basically able to cover that risk internally ourself compared to a two vessel company.

And that's why I've also argued in the past that it becomes more binary if you have two vessels because you are either working or you're not.

And this is where we can flex around a little bit.

And the various models, they overlap differently, meaning also that if we are speeding up, for example, on one project, then we can release a vessel.

It's not necessarily that these two vessels will work at the exact same period for the exact same duration on a project.

It can be that one of them can release earlier at our discretion.

And then we can put it on another project to speed up or to support or to do a multivessel on a different project.

And I think that flexibility is something that can generate a lot of value and a lot of utilization.

Yeah.

Sort of sticking with that theme a little bit.

Obviously, I would imagine that it speeds the process a bit to have two vessels and working.

But is there any risk of creating supply chain challenges, both in terms of the equipment or maybe the land side of the business?

Yes, if you don't do this in the right way, then you can, for sure, but I think that is one of the things that we're also trying to mitigate because we also don't have an interest in kind of like creating and let's say, how should I phrase this, let's say, a bigger bottleneck than there actually is by giving more capacity to our client, that's not something we're interested in.

So I think we're also trying to play this in a mature way and say, because a client in the past wanted to only book 85% of their requirements.

And now they want to book 130% of their requirements doesn't mean that they're getting 130% of their requirements.

It might be that they get 112% of their requirements.

And that's a little bit, let's say, the tension that can be between us and the client in that contract negotiation phase, how much actually do we allow them to take.

But we definitely see a trend for our clients, they would like to take much more than in the past.

That's for sure.

Great.

Thank you so much.

Mark Wilson, Jefferies.

Excellent, thank you.

Good morning, gentlemen.

Even good afternoon.

New narrowed guidance range for 2024 of EBITDA, the EUR115 million to EUR125 million.

Could you speak to what needs to happen to reach the top end of that?

What are the moving parts?

Is it further spot work for Wind Peak to come?

That would be interested to know the variables there.

There is very little, let's say, gaps available, of course, but we have every single gap filled out and the costs are at the bottom end of the expectation, then of course, we can be towards the upper end of that range.

But at the moment, we say that this is the range, and we will work incredibly hard to make it as good as possible within that range.

Okay.

Very good.

We did notice also there's, I think termination fee was mentioned in terms of some of the guidance increases.

Is there any color you can give on termination fee that is included?

We are not allowed to give guidance on the size of the termination fee, unfortunately.

But what I can say is that it's a legacy, Eneti project that has been terminated because the product execution has shifted one year.

It's a Korean project that has shifted one year and that is what happens.

I think it's also fair to say that we are not out of that project necessarily, but there's a potential to still execute that project.

But this is how the termination fees works as well that if the clients are not able to execute in the year that they said they would and they shift the project one year.

We have had this question many times from investors because I think there's been a concern that the clients can just shift as they want.

And I think we're demonstrating here they cannot.

And it will cost them money if they are shifting the execution year.

And we are basically then in a situation where we can say, okay, now again, we are in the open market, and we can decide as the conditions changed also because I can say that at the moment, things are changing rapidly also on the contract fundamentals from year-to-year due to the tightness in the market, especially towards the end of the decade.

And that's also why we -- that's an understanding even amongst the clients as well that we need to play this pretty strict and cannot just give favors away when there is these termination clauses there.

I think it's also fair to say that, in today's world, we would probably, let's say, sign up to this in a different way.

And if we are being involved in this project again going forward, then we would probably sign up to it in a different way.

Okay.

And if I may have one more.

Obviously, congratulations on Wind Peak, joining the fleet.

And as regards to tight market immediately being deployed on ops and maintenance work.

Is there any kind of view you can give us to the market of that O&M.

I have this idea that there must be a percentage of turbines that at any one time are just not working out there requiring maintenance.

I mean, do you think we could get to the stage where you may have one of your vessels deployed purely on that basis?

Yes.

I think that could be the case.

I think that we are seeing that the O&M market is really shaping every time we install a turbine, the installed base grows, right?

And so the logic is also that the whole O&M market grows rapidly.

There are certain reasons behind that, we can say very limited about these O&M jobs because O&M is a wide range of different things it could also be support the completion of a project, but where it's not actually installation, but maybe where it's even fixing something before it's handed over to the client.

And that's why it's commercially very, very sensitive for our clients.

What we are doing and that's why we cannot say much about it.

But what I can say for sure is that at the moment, we see several clients lining up for every piece of available capacity we have at the moment.

And I have even been pretty shocked by the demand that we have seen in some of these smaller periods of time that we have available, especially on the more capable assets.

Where the client sees this as a great opportunity to get a lot fixed in one go and just take the capacity when it's there.

And going forward, we would likely also see potentially some of the smaller installation projects being tied together with O&M to make them in overall a bigger project because the client and the O&M in partnership is happy to take that risk basically to say, we know we will have some O&M, let's say, need at the end of the project.

And we are happy to sign up to maybe instead of four months of installation to a year of installation, but we can use the remainder for O&M but then really, it's a mix, and we do see that the O&M rates today, they are exactly the same as the installation rates.

And that is certainly a new normal we have talked about in the past that the O&M rates have gone up significantly, and they are continuing to do that.

Thank you very much.

I'll hand it over.

Thank you.

[Roald Harvison] from Clarkson.

Mikkel and Peter, congratulations on another strong report.

Both you and Peter like Hansen from have over the last quarter or so, announced preferred supplier agreements or reservations with commencements first in 2029, which highlights, at least in our opinion, the longevity of the supply, demand tightness that we're seeing in the market.

And I guess you briefly hinted at it, Mikkel.

But in that context, maybe you can give some more comments on what kind of delivery times you would be looking at if you went to yards for incremental newbuilds today?

And how would your established relationship with the yard play into, say how long it would take from placing a newbuild order to delivery?

I think any answer to that question, I'm happy to give it a try later.

But let's say, I think any answer to that question will be measuring the length of elastics and meters, as we say in Denmark, because it depends so much on which yard are you asking.

Are you able to get the yard slot.

And where are you trying to deliver from and all of that?

There are so many variables in the question.

But let's say, if you can get a yard slot.

And if you have a completed design of a vessel.

So basically, drawings ready, the detailed engineering done and all of that, which very, very few companies have today in the draw, then I think you're lucky if you can deliver in four to five years.

But I think that the complexity starts before that because I think getting a yard slot today is incredibly difficult.

And to the second part of your question, does relationship help there?

Yes, it does.

And I think that we have said before that we have been working on a model with a shipyard where we are in a position where we would be able to, let's say, do more with that shipyard on different conditions.

And I think that is a deal that we did back in 2022, and I think that deal still works in Cadeler's favor very, very strongly and something that we are very, very happy with.

Perfect.

That's it from my side today.

Andreas Nygaard from Nordea.

Now, a quick question from me regarding the O&M work you're signing now and, you're looking to do.

Could we say that 2025 is now more or less covered with O&M work in combination with the contracts you already have for vessels in 2025?

I think we are in a very good place for 2025.

Some of it is still on reservation basis.

But I think that 2025, if you ask me whether that keeps either Peter or me awake at night, then I would say no, it does not.

Okay.

I'm happy to hear that, and it won't keep me awake at night either.

And have you also signed contracts beyond 2025 for O&M work like '26.

So we're quite far out in time also doing O&M work?

So when you say signed contracts, I think we have reservations for potential O&M that stretches into 2026 as well.

Yes, I think we are actively working.

We have a vessel that is delivering next year and we have discussed it in the past also that the first project for this vessel that is in the pipeline that you know of is the East Anglia Three project that starts in 2026.

But if you ask me whether I'm concerned about the period from delivery, which is now earlier than it was originally expected to be because the yard is just performing so incredibly strongly then we are not concerned about that.

I think it's fair to say that there are several clients lining up to take that capacity.

For us, we are really evaluating at the moment, what is the best for Cadeler and for our investors and for our clients.

Okay.

That sounds good.

And lastly, how do you consider, how do you weigh the risks on doing O&M work in front of a large project in terms of having the vessel available for the project and also in terms of potential incidents?

That is a great question.

I think that in terms of the operational risk, I think that we are fine with that.

I think that is similar to what we are doing.

So that is, the O&M work is, let's say, less heavy duty than installation work.

So if we are happy to do installation work before another installation project, then the O&M from an operational point of view is less risky, so to speak.

But I think that what one should not underestimate is what it requires from the shore-based organization, especially, but also for the offshore organization.

O&M is different from installation because on installation, you basically, you do 200 turbines, for example, on one project, you go through a learning curve and then you basically continue same port, same location in and out, in and out, in and out, in and out.

That's why we argue that efficiency is so important.

O&M is slightly different because in the O&M space, you have different ports, you have different sites, have different clients, you have different equipment.

And so what it requires from the onshore and the offshore organization in terms of preparing for the digital sites and ports and equipment is a lot more.

But we can just see that O&M component in between makes so much sense in terms of value creation that is also something that we need to build the organization for.

So we are also on a journey where we're not only building for delivering the vessels and for doing the foundation work.

We are also delivering from having a slightly more flexible organization to handle these O&M jobs where you have to prepare for one site in the middle of the night between two different locations, so to speak.

Okay, that makes perfect sense.

So that's it for me.

Thank you.

We have no further questions at this time.

Thank you for your participation.

I will now hand the floor back to Mikkel Gleerup for any closing remarks.

So just wanted to say thank you for everybody to listen in.

It was a pleasure to present again to you guys.

And, yeah, you know that we are here if you need any more information from us, always on short notice, if there's anything, we're looking forward to close 2024 on a storm and are preparing for an incredibly strong 2025 as well.

So, looking forward to that and to share that with you when we are ready to do so.

So thank you very much for joining us here and have a great day ahead.