Cadeler A/S (CDLR) Q4 2024 Earnings Conference Call March 25, 2025 9:00 AM ET Company Participants Mikkel Gleerup - CEO Peter Brogaard Hansen - CFO Conference Call Participants Martin Huseby - DNB Jamie Franklin - Jefferies Benjamin Nolan - Stifel Pet Billing - SEB Asne Holsen - ABG Sundal Collier Roald Hartvigsen - Clarksons Operator Good morning, and welcome to Cadeler's 2024 Annual Result Report Presentation. Presenting today are Mikkel Gleerup, Chief Executive Officer; and Peter Brogaard, Chief Financia ...

Currency Risk Exposure - The Cadeler Group's largest currency risk exposure is future instalments for the M-Class and A-Class New Builds, totaling USD 1,112.0 million as of March 25, 2025[235]. - A 10% deterioration in the USD:EUR exchange rate would decrease profits before tax by EUR 1.8 million based on USD cash holdings as of December 31, 2024[236]. - The Cadeler Group has a significant foreign currency risk exposure with future instalments for the M-Class and A-Class New Builds totaling USD 1,112.0 million as of March 25, 2025[272]. Interest Rate Risk - The interest rate under Credit Facilities is based on the 3-month EURIBOR, which was 2.9% and 3.9% at December 31, 2024 and 2023, respectively[240]. - If the EURIBOR increased by 100 basis points, the cost to the Cadeler Group would have increased by EUR 5.9 million for the year ending December 31, 2024[241]. - The Cadeler Group seeks to hedge 50% of its interest rate exposure and evaluates the potential cost and benefits of fixed interest rate borrowings on an ongoing basis[239][242]. - The fair value of interest rate swaps for 2024 includes a notional amount of EUR 355.1 million for between 2 and 5 years[269]. - The fair value of interest rate swaps for 2023 was EUR 555.0 million for between 2 and 5 years[269]. Liquidity Risk Management - The Cadeler Group manages liquidity risk by maintaining sufficient cash and committed credit facilities, with total obligations in EUR of 691 million, 516 million, and 188 million due in less than 1 year, between 1 and 2 years, and between 2 and 5 years, respectively, as of December 31, 2024[254]. - As of December 31, 2024, cash and cash equivalents are considered low credit risk, primarily held in banks with high credit ratings[251]. Credit Risk Management - The maximum exposure to credit risk is the carrying amount of trade receivables and other receivables, with trade receivables from external customers subject to immaterial credit loss[245][250]. - The Cadeler Group uses a provision matrix to measure lifetime expected credit losses for trade receivables, grouping them based on shared credit characteristics and days past due[249]. Hedging Activities - The cumulative fair value change of cash flow hedges at December 31, 2024, was EUR 1.8 million, with interest rate risk hedging at (14.9) million and foreign currency risk hedging at 11.6 million[265]. - The cumulative fair value change in the hedging reserve as of January 1, 2024, was (EUR 11.8 million), compared to EUR 3.2 million in 2023[271]. - The fair value adjustment for the year 2024 resulted in a decrease of EUR 3.3 million, while in 2023, it was a decrease of EUR 14.2 million[271]. - The nominal amount of FX forward contracts for 2024 includes USD 104.5 million for less than 1 year and USD 55.4 million for between 1 and 2 years[274]. - The fair value adjustment for FX forward contracts in 2024 was EUR 12.2 million, compared to a decrease of EUR 3.5 million in 2023[274]. - The fair value adjustment for FX option collars in 2024 was EUR 5.6 million, while in 2023, it was a decrease of EUR 0.8 million[274]. - The total movements in the hedging reserve as of December 31, 2024, showed a net position of EUR 16.7 million, compared to (EUR 9.7 million) in 2023[274]. - The company aims to match critical terms between hedged items and relevant hedge instruments to mitigate hedging ineffectiveness[273].

Annual Report 2024 For the year ending 31 December 2024 Cadeler A/S. Incorporated in Denmark. Registration Number (CVR no.): 3118 0503 Kalvebod Brygge 43, DK-1560 Copenhagen V, Denmark Contents | | | | .. ESRS G1 - Business conduct . | | --- | | ESRS 2 - Disclosure requirements and incorporation by reference. | | ESRS 2 - Data points that derive from other EU legislation | | Green Financial Report . | | Consolidated Financial Statements. | | Notes to the Consolidated Financial Statements . | | Parent Compan ...

Company Overview - Cadeler (CDLR) is a global leader in offshore wind farm construction, maintenance, and decommissioning [1] - The company is based in Denmark and was established in 2008, being listed on the Oslo stock exchange in late 2020 [1] Industry Position - Cadeler specializes in the offshore wind sector, indicating a strong focus on renewable energy and sustainability [1] - The company has a significant role in the growing offshore wind market, which is expected to expand as global energy demands shift towards greener alternatives [1]

Financial Performance - The Group's revenue for the first nine months of 2024 was EUR 163 million, a 79% increase from EUR 91 million in the same period of 2023[3] - EBITDA for the first nine months of 2024 reached EUR 70 million, up 43% from EUR 49 million in the comparative period of 2023[3] - The Group's profit for the first nine months of 2024 was EUR 28 million, a decrease of 7% compared to EUR 30 million in the same period of 2023[3] - For the nine months ended 30 September 2024, the company reported a profit of €27,816 million, down from €30,199 million in the same period of 2023, representing a decrease of approximately 4.3%[15] - The total comprehensive income for the period, net of tax, is €21,529 million, compared to €38,498 million in the same period of 2023, indicating a decline of approximately 44%[15] - EBITDA for 9M 2024 increased to EUR 70,158,000 from EUR 49,466,000 in 9M 2023, reflecting a growth of approximately 41.8%[24] - Adjusted EBITDA for 9M 2024 was EUR 70,158,000, compared to EUR 53,293,000 in 9M 2023, indicating an increase of about 31.7%[24] - The company reported an operating profit of EUR 31,841,000 for 9M 2024, up from EUR 30,101,000 in 9M 2023[24] Cash Flow and Financing - Net cash flow from operating activities was EUR 45 million, down 15% from EUR 53 million in the first nine months of 2023[3] - Cash flow from operating activities for the nine months ended 30 September 2024 is €44,770 million, compared to €52,848 million for the same period in 2023, reflecting a decrease of approximately 15.3%[18] - Cash flow from investing activities for 9M 2024 was a net outflow of EUR 549,092,000, significantly higher than EUR 23,385,000 in 9M 2023[19] - Net cash provided by financing activities in 9M 2024 was EUR 502,448,000, compared to a net outflow of EUR 9,066,000 in 9M 2023[19] - The company incurred EUR 10,155,000 in interest paid during 9M 2024, an increase from EUR 4,672,000 in 9M 2023[19] - Principal repayment of lease liabilities rose to EUR 1,330,000 in 9M 2024 from EUR 259,000 in 9M 2023[19] Assets and Equity - The Group's total assets increased by 46% to EUR 1,828 million as of 30 September 2024, driven by a EUR 527 million rise in property, plant, and equipment[8] - The Group's equity increased to EUR 1,132 million as of 30 September 2024, up EUR 173 million from EUR 959 million at the beginning of the year[7] - Total assets as of 30 September 2024 amount to €1,827,571 million, an increase from €1,252,560 million as of 31 December 2023[16] - The company’s total equity as of 30 September 2024 is €1,132,400 million, an increase from €959,041 million at the end of 2023[16] - The firm’s total non-current assets increased to €1,641,857 million as of 30 September 2024, compared to €1,105,110 million at the end of 2023[16] - The company’s share capital increased to €47,144 million as of 30 September 2024, up from €41,839 million at the beginning of the year[17] Workforce - The average number of employees increased significantly, with onshore employees rising from 113 to 236 and offshore employees from 182 to 351[9] Contracts and Backlog - The order backlog as of the reporting date amounted to EUR 2,054 million, with EUR 64 million expected to be recognized in 2024[13] - As of 30 September 2024, the total contract backlog is €2,054 million, with €342 million firm contracts and €1,712 million subject to counterparty options[14] Strategic Outlook - The company plans to continue focusing on strategic growth and market expansion, as indicated in their forward-looking statements[20] Depreciation and Expenses - The company reported a significant increase in depreciation and amortization expenses to €32,992 million for the nine months ended 30 September 2024, compared to €13,516 million in the same period of 2023[18]

Group 1 - Cadeler is currently ranked 2 (Buy) in the Zacks Rank system, indicating a strong potential for outperforming the market in the near term [3] - The Zacks Consensus Estimate for Cadeler's full-year earnings has increased by 8% over the past quarter, reflecting improved analyst sentiment and a stronger earnings outlook [4] - Year-to-date, Cadeler has returned approximately 43.7%, significantly outperforming the Transportation sector, which has returned an average of -2.1% [4] Group 2 - Cadeler belongs to the Transportation - Shipping industry, which includes 43 stocks and is currently ranked 142 in the Zacks Industry Rank, with an average gain of 23.2% this year [6] - In contrast, DSV, another Transportation stock, is part of the Transportation - Services industry, which has 27 stocks and is ranked 149, with a year-to-date decline of -8.1% [6] - Both Cadeler and DSV are showing solid performance, making them noteworthy for investors interested in Transportation stocks [7]

Financial Position and Performance - The interim condensed consolidated financial statements for Cadeler A/S for H1 2024 show an operating loss of EUR (1,363,000), compared to a profit of EUR 29,439,000 in H1 2023[120]. - EBITDA for H1 2024 is reported at EUR 21,727,000, a decrease of 47.6% from EUR 41,504,000 in H1 2023[120]. - Adjusted EBITDA for H1 2024, after accounting for transactional costs, is EUR 21,727,000, down from EUR 44,087,000 in H1 2023[120]. - The financial position of the Group at June 30, 2024, is deemed to provide a true and fair view of its operations and cash flows for the first half of the year[110]. Debt and Financing - As of June 30, 2024, the Group's debt to credit institutions increased to EUR 339.4 million from EUR 115.4 million in the previous year[90]. - The Group's total new debt facility amounts to EUR 550 million, with EUR 326 million utilized and EUR 224 million unused as of June 30, 2024[89]. - The Group raised EUR 155 million from a private placement completed on February 15, 2024, to finance the equity portion of a new vessel contract[97]. - The Group's Holdco Facility was increased from EUR 50 million to EUR 80 million to support wind installation activities[92]. - The Group successfully renegotiated the USD 436 million M-Class Facility on improved terms, securing up to EUR 420 million in post-delivery financing[108]. Currency and Liquidity Management - The Group's largest currency exposure is USD 1.6 billion related to future instalments for new P, A, and M-class vessels[86]. - The Group's liquidity risk is managed by maintaining sufficient cash and available funding through committed credit facilities[88]. - The fair value of derivative assets increased to EUR 5.47 million as of June 30, 2024, compared to EUR 0.34 million in the previous year[93]. - The Group's lease commitments decreased from EUR 6.07 million at the end of 2023 to EUR 0.30 million as of June 30, 2024[102]. Business Operations and Risks - The total contract amount for the new A-Class vessel is approximately EUR 373 million, with EUR 94 million paid in H1 2024[105]. - The contract backlog as of the reporting date includes all customer contracts not yet recognized as revenue, assuming 100% of counterparty options are exercised[123]. - The management review highlights material risks and uncertainties faced by the Group, although specific figures are not disclosed[111]. - Forward-looking statements in the report are subject to risks and uncertainties that may cause actual results to differ materially from forecasts[113]. - The company does not guarantee the accuracy of forward-looking statements and assumes no obligation to update them unless required by law[114]. Transactional Costs - The company incurred transactional costs of EUR 2,583,000 related to the business combination with Eneti, which closed on December 19, 2023[121]. - The company emphasizes the use of non-IFRS measures like EBITDA to provide greater transparency regarding its financial condition[119].

Financial Performance - The Group reported a loss of EUR 21 million in Q1 2024, down from a profit of EUR 2 million in Q1 2023[2] - EBITDA for Q1 2024 showed a loss of EUR 10 million, compared to a gain of EUR 8 million in Q1 2023[4] - Gross loss for Q1 2024 was €(7,916,000), compared to a gross profit of €6,755,000 in Q1 2023, indicating a significant decline[31] - Operating loss for Q1 2024 was €(20,093,000), a decrease from an operating profit of €2,060,000 in Q1 2023[31] - The company reported a loss for the period of €(20,793,000) in Q1 2024, compared to a profit of €1,948,000 in Q1 2023[31] - EBITDA for Q1 2024 was €(10,060,000), down from €8,019,000 in Q1 2023, reflecting a decline in operational performance[54] Revenue and Projections - Revenue for Q1 2024 was EUR 19 million, consistent with the same period in 2023, aligning with the projected revenue range for the fiscal year 2024[3] - Revenue for Q1 2024 increased to €19,063,000 from €18,905,000 in Q1 2023, representing a growth of 0.83%[31] - The Group expects revenue for 2024 to range between EUR 225 million and EUR 245 million, with EBITDA projected between EUR 105 million and EUR 125 million[5] Costs and Expenses - Cost of sales in Q1 2024 was EUR 27 million, doubling compared to Q1 2023, primarily due to the business combination with Eneti and the addition of new vessels[4] Cash Flow and Equity - Net cash flow from operating activities was EUR 13 million in Q1 2024, an increase of EUR 8 million compared to Q1 2023[6] - Net cash provided by operating activities for Q1 2024 was €13,139,000, up from €4,746,000 in Q1 2023[37] - Cash and cash equivalents at the end of Q1 2024 were €209,130,000, a significant increase from €96,608,000 at the beginning of the period[40] - The Group's equity increased to EUR 1,115 million in Q1 2024, up EUR 156 million from EUR 959 million at the beginning of the period[10] - Total equity increased to €1,115,135,000 as of March 31, 2024, compared to €959,041,000 at the end of December 2023[33] Assets and Backlog - The total assets as of 31 March 2024 amounted to EUR 1,484 million, reflecting a EUR 232 million increase during the reporting period[17] - Total assets increased to €1,484,291,000 as of March 31, 2024, compared to €1,252,560,000 at the end of December 2023[33] - The contract backlog as of 28 May 2024 totaled EUR 1,818 million, with EUR 263 million expected within one year[27] Market Developments - Cadeler signed a contract with Ørsted and PGE for the transport and installation of wind turbines, marking its entry into the Polish market[30] Other Comprehensive Income - Other comprehensive income for Q1 2024 was €24,222,000, a recovery from a loss of €(6,696,000) in Q1 2023[31]

Currency Exposure - As of December 31, 2023, the Cadeler Group's largest currency exposure is future instalments for new builds amounting to USD 1.3 million[233]. - A 10% deterioration in the USD:EUR exchange rate would decrease profits before tax by EUR 4.6 million, while a similar change in the GBP:EUR exchange rate would decrease profits by EUR 1.4 million[234]. - As of December 31, 2023, the total coverage of foreign currency risk for upcoming USD instalments is effectively mitigating around 50% of the Cadeler Group's exposure[280]. - The average USD:EUR rate secured for foreign currency hedging is between 0.8695 and 0.9466 for an additional USD 300 million of notional amount[280]. - The fair value adjustment for the year related to foreign currency hedging resulted in a loss of EUR (3.5) million[283]. Debt Facilities - The Cadeler Group's Debt Facility was amended in 2023, increasing the guarantee facility to EUR 60 million and the committed revolving credit facility to EUR 250 million, totaling EUR 310 million[250]. - The New Debt Facility entered on December 7, 2023, will be used to repay USD 59.4 million under the Eneti Credit Facility and EUR 115 million under the existing Debt Facility[251]. - The Cadeler Group expects to require approximately EUR 450 million of additional funding for the A-Class New Builds starting in 2025[253]. - The Cadeler Group entered into a new senior secured credit facility of up to EUR 550 million on December 7, 2023, in connection with a Business Combination[270]. - The Holdco Facility was increased from EUR 50 million to EUR 80 million on March 7, 2024, to support wind installation activities[269]. Interest Rate Exposure - The Cadeler Group's interest rate exposure is primarily related to the New Debt Facility, which is based on a 3-month EURIBOR interest rate plus a margin, with the EURIBOR rate at 3.9% as of December 31, 2023[237]. - If the EURIBOR interest rate increased by 100 basis points, the cost would have increased by EUR 24.1 million over the last twelve months[238]. - The Cadeler Group's exposure to changes in the 3-month EURIBOR rate has expanded due to new credit facilities[273]. - The average fixed rate of interest rate swaps is 2.82%, which will be effective until October 5, 2027[268]. - The Cadeler Group's interest rate swap liability at December 31, 2023, is EUR (11.83) million, compared to EUR (0.3) million in 2022[277]. Cash Management - The Cadeler Group's cash and cash equivalents are primarily held in banks with high credit ratings, resulting in immaterial credit loss as of December 31, 2023[249]. - The cumulative fair value change of cash flow hedges at December 31, 2023, is EUR (21.6) million, compared to EUR 1.3 million in 2022[266]. - The Cadeler Group uses forward exchange contracts and interest rate swaps as cash flow hedges to mitigate currency and interest rate risks[263].

Currency Exposure and Exchange Rates - The Group's largest currency exposure is related to future installments for new vessels in USD, amounting to USD 1.3 billion[797]. - A 10% deterioration in the USD:EUR exchange rate would decrease the result before tax by EUR 4.6 million based on USD cash holdings as of December 31, 2023[798]. - A 10% deterioration in the GBP:EUR exchange rate would decrease the result before tax by EUR 1.4 million based on GBP cash holdings as of December 31, 2023[799]. - The Group has hedged approximately 50% of its foreign exchange risk for upcoming USD instalments related to new P- and A-class vessels contracts, securing an average USD:EUR rate between 0.8695 and 0.9466 for USD 500 million of notional amount[844]. Interest Rates and Financial Obligations - The EURIBOR interest rate was 3.9% at the end of 2023, up from 2.0% in 2022[801]. - If the EURIBOR interest rate increased by 100bps, the cost would increase by EUR 2.1 million for 2023[802]. - The Group's total obligations in EUR for 2023 amount to EUR 261.3 million, with significant portions due in less than one year[814]. - The debt to credit institutions increased to EUR 205.6 million by December 31, 2023, from EUR 115.0 million in 2022[816]. - The Group's lease liabilities at the end of 2023 were EUR 993,000, up from EUR 279,000 in 2022[815]. - The Group's exposure to changes in the 3M EURIBOR rate has increased due to new credit facilities established in 2023[836]. Financial Performance - The Group's revenue for 2023 was EUR 108.81 million, a slight increase of 0.34% from EUR 108.44 million in 2022[892]. - Gross profit for 2023 was EUR 51.73 million, up from EUR 48.17 million in 2022, reflecting a growth of 7.9%[892]. - Operating profit decreased to EUR 18.07 million in 2023 from EUR 32.88 million in 2022, a decline of 45%[892]. - The company reported a profit for the year of EUR 11,348,000 in 2023, compared to EUR 27,254,000 in 2022, indicating a decrease of approximately 58%[901]. - Total cost of sales for 2023 was EUR 57,077,000, a decrease of approximately 5% from EUR 60,269,000 in 2022[931]. - Administrative expenses rose significantly to EUR 33,666,000 in 2023, compared to EUR 15,291,000 in 2022, marking an increase of approximately 120%[931]. Capital Management and Financing - The Group's capital management strategy includes potential adjustments to dividends, issuance of new shares, or asset sales to maintain an optimal capital structure[820]. - The Group entered into a new senior secured credit and guarantee facility of up to EUR 550 million on December 7, 2023, to finance the purchase of P-Class newbuilds[835]. - A senior secured green term loan facility of up to USD 436 million was acquired to finance approximately 65% of the purchase cost of the M-Class newbuilding[857]. - The P-Class Facility of up to EUR 425 million was established to finance the purchase of P-Class newbuilds, with an expected additional funding requirement of approximately EUR 450 million for A-Class New Builds[858]. - A successful private placement raised approximately EUR 154 million (USD 166 million) to finance a new wind foundation installation vessel and acquire mission equipment[886]. Shareholder and Related Party Transactions - BW Altor owns 19.57% of Cadeler shares, while Scorpio Holdings Limited owns 12.09% and Swire Pacific owns 8.51%[867]. - The Group has entered into a share lending agreement with BW Altor, with compensation amounting to EUR 85,000 for share lending services[869]. - Related party transactions primarily involved guarantee fees from BW Group Limited, totaling EUR 7.58 million in 2023, compared to EUR 5.31 million in 2022[879]. - Revenue from related parties increased to EUR 3.6 million in 2023, up from EUR 2 million in 2022, representing an 80% growth[927]. - Related party transactions include revenue from subsidiaries of EUR 3.6 million and operating lease expenses of EUR 29.5 million related to vessels during on-hire periods[978]. Assets and Investments - The Group's total assets increased significantly to EUR 1.31 billion in 2023, compared to EUR 722.67 million in 2022, marking an increase of 81.5%[895]. - The total equity of the Group rose to EUR 952.79 million in 2023, up from EUR 524.63 million in 2022, representing an increase of 81.5%[898]. - The company made additions to property, plant, and equipment totaling EUR 48,105 thousand in 2023, with significant down payments of EUR 19.2 million for new P-Class installation vessels[952]. - The company acquired 100% of shares in Eneti for EUR 496 million through a share exchange, with acquisition-related expenses amounting to EUR 15 million[959]. - The company has contracts with COSCO SHIPPING Heavy Industry for the construction of two new P-Class WTIVs, with a total contract sum of approximately EUR 572 million[969]. Employee and Management Compensation - The average number of full-time employees increased to 272 in 2023, up from 232 in 2022, indicating a growth of about 17%[939]. - Total management compensation for 2023 is EUR 2,831 thousand, which includes wages, salaries, and board fees of EUR 1,033 thousand, cash bonuses of EUR 1,155 thousand, and share-based payments of EUR 588 thousand[946]. - Share-based payment expenses increased to EUR 1,134,000 in 2023, compared to EUR 352,000 in 2022, representing a rise of approximately 223%[937]. Hedging and Financial Instruments - The Group's total financial liabilities at fair value through the consolidated statement of profit and loss for 2023 include derivative liabilities of EUR (403,000) and cash flow hedges with derivative liabilities of EUR (17,937,000)[827]. - The cumulative fair value change for cash flow hedges at the end of 2023 is EUR (21,559,000), compared to EUR 1,343,000 at the beginning of the year[831]. - The Group's interest rate swap contracts for 2023 have a notional amount of EUR 555 million, with a fair value liability of EUR (11,790,000)[839]. - The Group's cash flow hedges for interest rate risk hedging show a cumulative fair value change of EUR (11,790,000) at the end of 2023, compared to EUR 3,163,000 in 2022[840]. - The company reported a value adjustment of hedging instruments amounting to EUR (19,281,000) in 2023[901].