Capital Markets Day Transcript - CDLR 2026-08-11

Operator

I mean, I could do it. from those contemplated.

Operator

The risks and uncertainties that could cause the combined group's results to differ materially from today's forward-looking statements include those detailed in Cadillac's annual report on Form 20F, on file with the United States Securities and Exchange Commission. Any forward-looking statements made this morning are based on assumptions as of today, and Cadillac undertakes no obligation to update these statements as a result of new information or future events. 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. This call is being recorded. If you have any objections, please disconnect at this time. Mikhail Glirup, you may begin.

Mikkel Gleerup, CEO

Thank you very much, and thank you to everyone who is joining us here on short notice today. We are very, very pleased to inform everyone around the acquisition of MENC that we have been working on over the past month. I'm apologizing for a little bit the setup here because we are sitting in Kaltenkirchen at the moment in a meeting room and don't have the best light but we are here and ready to present to our investors. Let's kick off the slide deck please. Next slide please. Yeah please read the disclaimer yourself. So today we will give you a transaction overview and we will also give you an introduction to what is it that we have acquired the main business and also what is our rationale how do we see that this business is developing and why is this important to cadler next slide please so what is it we have done we have entered into a deal with a value of 501 million euro to acquire Menk is a business that works with pile driving, primarily with the hydraulic hammers, but also with grouting, drilling, tooling and other things that is important to the Kettler business and to our clients and our competitors as well. It's a very diverse portfolio, and it's a portfolio that is growing still and something that is in high demand in the market. We believe that the acquisition really strengthens Catler's offshore installation capabilities and also the ambition that we have as a company in the foundation space. As you have seen from yesterday's message and notification to the market, we now have a firm order with Costco for the two T-class vessels that we raised equity for earlier during the year. And as such, we are expecting that we will be operating up to five foundation projects in parallel per year. And in order to do that, we are depending on having this equipment available, as are our competitors and our clients as well. And hence, we believe that this is a very important strategic acquisition that we have entered into. It represents a step change for Kattler. And we are already doing successful transport and installation on the Horn C3 project. But it is a more complete and integrated approach that we are targeting here, where the client can reduce one further risk interface in a project and also have the knowledge that when one has a transaction with CATLAR on a foundation project, if you have the vessel, you also have the hammer. And that is something that we would like to connect and give the same redundancy to our clients as we have seen on the vessels, which I believe have been a very successful journey for us in that space. And we expect that this acquisition will be accredited to CATLAR's EBDA multiples on a fully delivered hydraulic hammer on a lot of basis. And I will say that this is the basis we have been buying this company on. That is really what we can see that this business will be able to do in the midterm, where we also know our own demands to this business. And hence, there's a very strong strategic rationale for this, but it's also something we expect to grow in a market that grows very solidly on the foundation side as well. Next slide, please. In terms of the transaction rationale, why are Caddler doing this? It is really about strengthening the customer offering and the execution capabilities across the whole foundation value chain. I think if we start on the right side of the slide, Caddler in combination with Mink will be the company in the industry that have by far installed the most piles in the world. And that is, of course, knowledge that we are going to use as a company and as a combined company to benefit our clients and the industry to ensure that we can ensure better, more efficient, on-time pile driving for the industry. It's a broadened solution where we deliver a complete and integrated approach to project execution and offshore foundations and something that has been discussed with clients. I can say on the projects we are currently discussing with clients for both A and T class in the future, there are, I would say, two big concerns amongst the clients. One is access to the vessel and the other one is access to the pile driving technology. Piles become bigger and requires more sophisticated pile driving solution, more sophisticated noise reduction solutions. And this is all something that MENC is supplying. We are improving execution certainty for ourselves and for our clients, and that is something we believe will have a very, very strong importance for the clients going forward. And it is something that will differentiate us in tenders because we will be able to have an end-to-end solution for our clients. It is also the improved access to mission-critical equipment and strengthening execution resilience. We know that every foundation, every monopile that goes into the ground in the offshore environment requires a dedicated hydraulic hammer. And hence, with an ambition of operating five vessels in parallel, we will have a certain own demand of this type of technology. and with our own demand alone, we believe that we are doing a deal here that is an attractive deal for us and for our investors and for the industry and our clients. We are enhancing execution certainty for the larger and the more complex offshore wind projects and also the more complex foundations that we see more and more of. And I think that it is really around deploying a more efficient equipment across our projects. We believe that the company has a compelling earnings profile and there's significant synergy potential by combining the companies. Meng sits on 50 million data points on pile driving collected over its long history. It's a company that has more than 150 years of history. And with this data, we will also be able to have a much stronger offering altogether as a combined team. so it is around also capturing a larger share of the project economics across the vessels and equipment improving utilization and project execution through greater equipment control and access but also unlocking commercial and operational synergies across engineering procurement and project delivery and then we believe it's a very strong and strategic and also an industrial fit and I would say that just seeing what I've received on my phone over the last couple of minutes. It is something that I think is also very much echoed by what the clients in the industry are seeing. Having access to this equipment and having enough of this equipment will be fundamentally important for the future journey of offshore wind and the steep growth and project that we are seeing as soon as we enter the next decade. Next slide, please. and into the introduction to MENC. So what is MENC? As I said already, MENC is a plus 150-year-old company with a lot of engineering expertise. They have installed more than 2,500 piles, and they have a global presence in Europe, Asia, and the Americas. And the largest hammer that is currently coming into deployment is the hammer that is called the 6000W, which uses the biggest anvil, the biggest equipment sitting inside the hammer that is currently available in the market. It's a German technology leader in offshore wind foundation equipment and a very diverse portfolio across other things as well, including drilling, routing, and lifting and handling tools, which Kettler is also a potential client for. It's a technology leadership company, and that is something that has been generated through continuous innovation. And I think it's fair to say that during our management interaction and team interaction with the company during the due diligence phase, we have been incredibly positive with what we have seen in the company and from the company in terms of how they think about engineering and innovation. it's a very cash generative business model that is centered on rental so in many ways the business model is similar to to catalyst model where we use a very sophisticated equipment and we rent it out to our clients and and we we pool it together to create a value for our clients in in project execution we believe that that is something that will be generating very very attractive EBITDA margins and also something that will require limited maintenance capex across the years. And we believe that what is really interesting about the company is really the growth ahead. I think it's fair to say that the company has been on a slow growth path in its former ownership. And with the Catler as an owner, we believe that we know the market and what the market requires. We know our own demand. We also are offering these products to our clients and to our competitors. And we can see what is out there in the market. And we believe that the growth for the company will be a very strong growth over the coming years. And also a very robust market position and reputation. The company has a good reputation. We are currently working with MENC on the Horn C3 project, where they're delivering the 4,400 hammer to hammer the almost 200 foundations into the ground on the Horn C3 project. So all in all, a very, very strong technology-driven company that has a very strong reputation in the market.

Martin Carlson, Analyst — DNB

Next slide, please.

Mikkel Gleerup, CEO

For Kattler, a lot about strengthening our foundation T&I capabilities. is it is around scale and engineering complexity. We in MENG see up to 40,000 specially engineered components. The hammers are very, very large pieces of equipment that are having incredibly long lead times. So if you don't have access to this equipment, you cannot just get it tomorrow. And projects that are not having long enough reservation for the hammering technology can lose the hammers and then the project stops because without the hammer, the vessel can't continue to install. MENC has a proven track record. There are decades of reference projects and, as I said, access to 50 million data points on pile driving across different regions in the world, which we believe has a very, very high value both to us and our clients. And as we have done in the past in Kedler with data points collected on the vessels, This is also data that we are going to put at play together with our clients to ensure that we have the best solutions for on-time, on-budget delivery of future foundation projects. It's a global rental fleet and service infrastructure that we are looking into. Developers, they demand immediate access to hammers that are operating spare parts, teams, service technicians. and it is really about having that equipment across the various projects and ready for deployment to the projects that the equipment is working on. And that journey is something that we are looking forward to embark on together with MENC to ensure that we get the best value for our clients and for our investors with having these equipments working together as a robust, redundant package that ensures that value that the clients are expecting. It's about continuous innovation. The company has innovated a lot on its future equipment, both in terms of noise reduction, which is something we are seeing across projects in the world, but also on the hammering technology itself. And also other technologies that we see more and more being requested by clients in tenders that we are involved in. So having all of this technology in one also means that we can do much, much sharper programs for our clients and much, much stronger commercial offerings to our clients. And we believe that that will result in a bigger than fair share of market in the combination with Kettler. Also by having the knowledge about the vessel and the hammer and integrating that, lowering mobilization, demobilization times and all of that, and really ensuring super high utilization in the combination, which we also believe will support the continued growth in both revenue and EBITDA of the company. and then of course also the deep customer relationship the company has very very long-standing relationship also with competitors of competitors of ours and clients of ours and we are targeting to continue to service both categories as it has happened over the years in it's very important for us that we take part in ensuring that the equipment that is required in order to fulfill the ambitions of offshore wind is available and that is one of the reasons that we're saying here we are taking a strategic decision because we believe the company will be very if it are accredited but also it is something that needs to be available for us in order to have the best utilization of our vessels but also for the industry and for our competitors as well next slide please a slide that looks at where are we seeing the the business in mink so it is about broadening the overall Kettler umbrella in foundation installation offering. And hydraulic hammers is the majority of what the company is offering today in terms of revenue generation. But if we look at lifting and handling and noise mitigation, these are areas that we believe will have very strong growth together with the hammering technology. These three areas will be very strong growth areas. We see more and more noise reduction requirements on projects across the world. we see from our own experience a lot of lifting and handling requirements from clients and we also see that the clients are starting to shift this from owning that equipment themselves to shifting that to contractors and also of course as I have already explained on the hammers themselves there are other areas as well grouting and also drilling and drilling is one of these areas that we do see on certain projects where there is a requirement for a certain amount of drilling and And this is something that we will also, in collaboration with clients, discuss whether that is something that is necessary to bring to market to ensure successful pile driving across projects all over the world. Next slide, please. The industry's most advanced piling equipment, you can say there are two different brackets of equipment in Meng today. There are the smaller equipment and then there are the larger equipment. The equipment on the right side, the 3500, the 4400, and the 6000W, these are equipments that are mainly used in the offshore wind segment. And this is where our clear focus lies. What is important to say about this type of equipment is that from ordering a hammer or having a slot to deliver the anvil inside the hammer that we just discussed, then there will be a more than three-year period before the hammer delivers. And that is also why it's important for us that there has to be a certain, let's say, cross-thinking between the vessel and the hammers, because we are seeing a massive uptick in projects that are requiring this type of technology in combination with the vessel as we enter into the new decade. And hence, we believe that having access to this equipment is very, very fundamentally important for the journey that we are on. There is very, very scarce forging capacity in the world, of this quality the anvil for the biggest hammers they take a year to produce they take four to six months just to cool down after the forging process so it is very very complicated equipment and it is around capacity we see clients are asking us for projects already out in the next decade how do we secure the vessel but also how do we secure the hammering technology and the noise mitigation technology and that is something that we now can work very very closely with our clients to deliver. So very, very strong strategic rationale behind this deal today. Next slide, please. And you have seen this slide before in a different format, but as we have done from the beginning in CADLOG, we have always looked at how can we create vessel models that fit the reality of the industry. Not the perfect projects necessarily, but the reality of the industry. The reality of the industry is that there are things that go exactly to plan and there are also things that doesn't go exactly to plan. There are also projects that are delayed due to supply chain constraints. There are projects that are delayed due to many different factors. We have been successful in Cadlock by offering a redundant vessel model where clients can count on Cadlock to continue to supply the vessel as long as the project goes on. We have done that successfully across several projects this year where we have shifted the vessel from one to another and supported our clients by doing so. The ambition of the deal we have done today is to integrate the hammer into that model and ensuring the client that as long as you have a Kettler vessel, you also have a hammer. And that is the model that Kettler will be going forward offering to our clients and also ensuring that we have on-time, on-budget delivery of these projects going forward because we believe that that is fundamentally what the offshore wind industry needs.

Martin Carlson, Analyst — DNB

Next slide, please.

Mikkel Gleerup, CEO

I think that this is a slide where I will hand over to Peter quickly for some financial numbers that you can have an insight in as well. So over to you, Peter.

Speaker 1

Thank you, Michael. Yeah, we are giving you here some of the KPIs, important financial KPIs for Mink. You can see here 23 to 25, the average total revenue have been 113 million euro. equipment, rental revenue have been 43% of that. Contribution margin have been 60%. On rental, the contribution margin is higher, 73%. And the EBITDA margin have been 28%. Maintenance CapEx has been 0.5 million euro per year and growth CapEx 13 million per year. In 26, the estimate is that bank will come out for the full year, 12 months, with a total revenue of 133. The share of rental revenue is planned to increase, and that is a decision taken by the existing bank organization and something that we will build on for the future years. Hence, the contribution market will also go up to 63% for 26 because of the higher contribution amount of 74% on rental. EBITDA margin projected to be 33% and 0.8 million euro for maintenance CapEx and 25 million euro in growth CapEx. I think the important number here is also that But if we look at medium-term financials objectives, as we have here on the right side of the slide, when we have delivered the ordered larger hammers, so we are up on a fleet of seven large hammers as compared today to three in 1929. We see a 20% CAG over this period with 70% equipment rental revenue share, 70% contribution margin and 75% rental contribution margin. That gives around 50% to 55% of the EBITDA margin, and the average CAPEX in 27 to 29% estimated at $22 million. And it's a very solid plan that supports this development, because these hammers have already been ordered, ordered, and some are very well advanced in being delivered and assembled. So if you look at the enterprise value to the projected midterm, it will be below five times, which we find very attractive.

Mikkel Gleerup, CEO

Next slide, please.

Speaker 1

I think it is a Q&A.

Mikkel Gleerup, CEO

Next slide, please.

Operator

That is the last slide.

Speaker 1

Okay.

Mikkel Gleerup, CEO

I thought there was a Q&A slide, but I think it's also important to say, as Peter just said, that since these hammers have been ordered and are delivering, that also means that the forging slots for those hammers are occupied. And that means that you cannot get a forging slot in the same time period out there. So that is also important in the case for delivering these hammers.

Operator

And on that note, I think we are opening up for Q&A. 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 wait a moment and once you have been promoted you may unmute yourself and ask your question we encourage you to turn on your video as well. We will wait one moment to allow the queue to form. Our first question comes from Jamie Franklin from Jefferies. Please unmute your line and ask your question.

Jamie Franklin, Analyst — Jefferies

Oh, hey there guys. Hopefully you can hear me. Okay, congratulations on the transaction. So we just wanted to go back on that EBITDA margin expected around sort of 33% in 26 and you're targeting 50 to 55 in the medium term can you just give us a sense of kind of what is going to primarily drive that it sounds like it is uh largely going to be the the hydraulic hammers given they are sort of 84 of the revenue contribution um but yeah any any sort of color there would be helpful um and then also just uh if you could give us a sense of the kind of competitive landscape for menk in the hammer side of the business but also in the the other areas uh that it operates as well please

Speaker 1

if you take the numbers i can take the landscape yeah uh jamie uh thank you for the question uh we we think it's a really strong business case because uh of uh it will explain a little bit more about the competitive landscape but we all know that there's basically two providers of these hammers where Mink is one of them and the inside of the hammer, the anvil and the forged steel is produced at one supplier and Mink has the available slots on these orders going into 29. so they cannot be produced from that supplier more hammers so we believe very very strong in the demand of these hammers and given that there are a few suppliers only two and MENG is sitting on the available slots in that period we think it's a very very strong business case it is basically as we have seen for Kattler The same dynamics also for the finances, when they come in a new vessel or they come in a new hammer, then you can contract that out and get a revenue and a healthy EBITDA on that. And that drives, you know, also together with the higher share of rental, instead of selling the hammers, it drives this development, positive development in revenue, but also in the margins. So we believe it's more correct to look at, you know, how will this look like in medium term than, you know, focus only on the 26 numbers. I would also like to say that we cannot consolidate the full numbers in for MENG this year. That goes without saying. I think everybody knows. But, of course, we can only consolidate in the P&L from today and on to 31st of December, 26.

Mikkel Gleerup, CEO

And I think that that was the competitive landscape. I think it's pretty clear, as Peter said, you know, that there's one place you can forge this internal equipment. And Meng sits on the slots. And there are two suppliers of the hammers in Europe. and we believe that that is why we believe on the case but also we can of course benchmark the case we saw when we looked at the company with our own demand and then look at that, so that gives us a very high degree of confidence.

Jamie Franklin, Analyst — Jefferies

Great, thank you and just one follow up so obviously yesterday you announced the order for the two T-class vessels which were originally, you announced your intention for those back in March alongside of private placement at that time you also spoke about adding scour protection capabilities which would would expand your your foundation scope so just wondering is that still on the table as well or is this a sort of instead of oh no that's still the plans and the equity race is still intact it has nothing to do with the deal that we are doing today this is a fully financed deal that we have done that it sits outside the equity race and hence

Mikkel Gleerup, CEO

very very pleased to be unable to announce the T-classes yesterday because we also knew that we would get that question if the sequence hadn't been different but I can say on the T-class vessels that these ranks are the most difficult negotiations I've been in my life the yards are at absolute full capacity and I can say that any competitor that wants to add a vessel they will be struggling with the same situation that we have it is very very very difficult to order vessels that today. So a very strong outcome that took a lot of energy.

Jamie Franklin, Analyst — Jefferies

Well, congrats, guys. I'll hand it over. Thanks, Jamie.

Operator

Thank you. Our next question is from Martin Carlson from DMB. Please unmute your line and ask your question.

Martin Carlson, Analyst — DNB

Thank you. You did a good job in terms of explaining the rationale behind the transaction from a strategic perspective, so not many questions on that. But a quick one on the medium term outlook and the growth you expect there. Have you assumed a similar type of growth in the non-offshore wind business of MENC?

Mikkel Gleerup, CEO

No, we have not.

Speaker 1

No. We have assumed flat development in that, and then the growth coming from the growth where there's invested in.

Mikkel Gleerup, CEO

Yeah, which is also our clear focus for the business.

Martin Carlson, Analyst — DNB

Yeah. So then should we basically think about the growth numbers you've put up on the screen as already being secured through those larger hammers that are to be delivered? And also had the question on the future hammer deliveries of MENG that are in the large category, is this all rental business or is some of those straight out sale of hammers?

Mikkel Gleerup, CEO

That will all be rental business.

Speaker 1

Yeah, and the growth is coming from these hammers plus noise mitigation.

Mikkel Gleerup, CEO

But, and it's important to say that it is rental business because this is also why MENG to some degree looks like Kettler, that we are renting out sophisticated equipment to create this value on the projects. And that is also why we think that this is in our space, it's in offshore wind, and it is a model that we know very, very well. It's not about assembling a hammer and then selling it to the market.

Martin Carlson, Analyst — DNB

Good. And in terms of duration on these rental contracts that have been entered into, can I talk a little bit through how a rental contract for a contractor typically works on a hammer? Is it a project specific or is it based on a longer time period?

Mikkel Gleerup, CEO

I think it's fair to say that the hammer rental follows exactly the vessel rental. So when you have a vessel, you need a hammer and that's how it is. But what we have seen in the Kettler standalone business without Mink, we have seen discussions with clients around how can we couple the things together and look at portfolios across different projects in different countries to ensure that we have the technology that is needed and also to reduce this mop-demop time that nobody benefits from where the vessel is just sitting in port, taking off equipment, they're readying to take on different equipment in another port. And we see clients more and more looking at optimizing and making that more efficient. And we believe there's a lot of value to capture in that. And hence, that will also be part of our strategy to try to optimize this integration of the technology with the vessel. So I think it's fair to believe that there will be clients out there that will be taking hammers on hire for a portfolio of projects going forward.

Martin Carlson, Analyst — DNB

And last question in terms of hammer, noise mitigation and other services you would have to rent in today. can you give us a number on a whole large portion of those services that is now covered through the MENC offering?

Mikkel Gleerup, CEO

On the Kettler side alone?

Martin Carlson, Analyst — DNB

Yeah, let's say if you should do a project without having MENC in-house, you would have to rent the hammer, you would have to rent the noise mitigation and a couple of other services as well. And I was just curious to try to understand how a large portion of those add-on services that now is brought in-house.

Mikkel Gleerup, CEO

It's a large part, but today we don't buy lifting and handling tools from MENG. But I think that that is, of course, something that we will be investigating together with MENG when we bring the engineering capacities together to look at how can we use this engineering and innovation hub here to become more efficient as caddler to also develop this for ourselves, basically. We are a big buyer of equipment. If we look at a project like Horn C3, for example, where we are buying a lot of equipment to handle the equipment, but also across O&M projects and stuff like that. And we believe that there is a significant synergy in the combination as well. But we are still to uncover how big the synergy is and how we best bring it to market for the benefit of the industry, our clients and Kattler.

Martin Carlson, Analyst — DNB

Thank you. I'll turn it back. Thank you.

Operator

Thank you. Our next question is from Thys Bekelda from ABN AMRO. Please unmute your line and ask a question.

Mikkel Gleerup, CEO

We can't hear you, Thais. Sorry, we can't hear you. I don't know what's wrong, but Thais, you are more than welcome to give us a ring after this call if you want to, so then we can hear each other but uh sorry but i can't hear you i think we should take next question we are not able to hear this it's not better oh no we can hear you now yeah i switched to the webcam uh mike now sorry for that first question is uh on the main revenues

Thys Bekkerda, Analyst — ABN AMRO

in 2025? What part of these revenues has been coming from Cadler and what from other clients?

Mikkel Gleerup, CEO

That's simple. All of it is coming from other clients. None of it is coming from Cadler.

Thys Bekkerda, Analyst — ABN AMRO

No. And from a Mank perspective, how will you prevent clients walking away from Mank because of the ownership by competitor Cadler and simply moving to the main competitor who is two times as large and generating three times as much EBITDA?

Mikkel Gleerup, CEO

The other competitor is also owned by a competitor. So I think that that is exactly the same situation. And hence, we think that we have to document that we can handle that and that we can create watertight bulkheads between the businesses. Menk will continue to run as a standalone company under the Catla umbrella, but we believe that that is something we can do. We believe Menk has strong client relationships already and that it will be the offering of the product to the market that will determine where you are shopping.

Thys Bekkerda, Analyst — ABN AMRO

Yeah, well, Haltres is the owner of Boscalas, indeed. But Boscalas and Iquip are completely separate and Boskalis is typically not pitching for monopile contracts. They are typically focused on the jacket market.

Mikkel Gleerup, CEO

That's the fact that you're not correct, Thais, but they have just installed Sunrise Wind and they have installed Baltic Power Foundations as well, which are both monopiles. So that's the fact that you're not correct. But I know in the industry, the industry considers iQIP as part of Boskalis.

Thys Bekkerda, Analyst — ABN AMRO

Yeah, then a technological question. I see in the main product lineup only or more or less only hydraulic hammers, not yet fibro equipment, fibro hammers coming in quite rapidly in my view. And of course, iQIP recently introduced this now, big time testing with the new innovating IQ drilling technique. What is Meng doing to counter these two technologies which take much less noise than your current technology?

Mikkel Gleerup, CEO

Meng is working on that and noise reduction is some of the things that we have to look at, especially in certain jurisdictions. And we believe that there are good innovations on track here in Meng as well to deliver that. so we have confidence in the fact that that is part of the journey. It is also part of the bigger hammers because bigger doesn't mean more noisy necessarily and it's a different technology spectrum it's also a different way that they protect from noise but yes it is something that we together with the team here we continue to look at for these jurisdictions that require those noise levels yes Okay thanks those were my questions thank you we have no further questions at this time thank you for your participation I want to hand the floor back to Mikel for any closing remarks and just thanks for everybody for joining on short notice and yeah we are of course open to follow up questions from all of you if there's anything you would like to discuss on a one-to-one basis so thanks for that, have a good day