Capital Markets Day Transcript - CDLR 2026-08-25

Peter Hansen, Head of Investor Relations

Good morning and welcome to Cadillac's H1 2026 earnings presentation. Presenting today are Mikel Gleirup, Chief Executive Officer, and Peter Brogard, 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 Cadillac's results to differ materially from today's forward-looking statements include those detailed in CADLA'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 CADLA undertakes no obligation to update these statements as a result of new information or future events. This morning's presentation includes both IRFS and certain non-IRFS financial measures. A reconciliation of non-IRFS financial measures to the nearest IRFS equivalent is provided in CADLA's annual report. The annual report and today's earning presentation are available on CADLA's website at cadla.com forward slash investor. We ask that you please hold all questions until the completion of the formal remarks, at which time you'll 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. Mikhail Glerup, you may begin.

Mikkel Gleerup, CEO

Thank you very much and welcome to this half-year presentation from Kedler. Very pleased to be joined by everyone here. Just a disclaimer slide here first, and then our H1 highlight slide. So the first half of 2026 has been really a third half that is defined by very solid financial performance. Adjusting for the last termination fee we had last year, we do see a very strong revenue and it darted out both more than doubling on a year-on-year basis. A new build program continues to be on track. We delivered our second ATARs vessel on the 17th of July, and that vessel is now preparing for its first project with the mobilization of mission equipment in China before coming to Europe for final mobilization. We also successfully acquired MENC, a leading global provider of specialist equipment and technology solutions for offshore accommodation installation a little bit more about that later in the presentation and then we continued solid execution across all key regions where we are currently busy and the ONCE3 execution also continues and I'm very pleased with that and also more about that in the presentation and then we signed firm contract for the two new t-class vessels something we have been working very very hard to achieve and I think it's fair to say that it's been a tough negotiation and very pleased to be at where we are now. In terms of commercial highlights, the acquisition of Mink, we already have gone through the transaction rationale in a separate presentation, but really it is about strengthening the custom offering and the execution capabilities that we have in Caddler. We do see this as one of the key components for a successful Foundation campaign and we do also see that our clients have been increasingly concerned about whether this tool can be sourced to the market at the necessary volume and that is something that we have decided to take an active position in and to make sure that there's enough equipment for what the industry is needing and that really means what our clients are needing, what our peers are needing and also what Caddler is needing. And altogether, we believe that that is a very sound business move for us with having mink under the Caddler umbrella, but still on an arm's length principle, ensuring the proper governance structure that you would expect as a peer in the industry. So I think it's also, as you see on the right side of the slide, it's also about access to really data from thousands of foundations and thought already. And with the acquisition, Ketler and Meng together are the company in the industry that have been driving most piles into the ground and hence also a company now that sits on an enormous amount of data. And that data is something that we expect to use to really improve our customer offering when we go into a bidding round for every single foundation project to have a much better basis to evaluate the program length on a foundation project going forward. So the combined knowledge between the two companies is something that we very much expect will benefit not only our clients, but the industry as a whole. And then, of course, Manga is a solid business. It's a business that is more and more shifting into a rental model, and we believe that the earnings profile of the company is something that is very attractive, and that is something that fits well with how we do business in Kepler and what we want to do on a forward-going business. And then there's just a very strong strategic and industrial fit between the two companies because the models, they are very, very much aligned, so to speak. In terms of what the company is offering, we showed the slide also just on the day of the announcement, but really the hydraulic hammers, that is the main part of the business and also the biggest part in terms of revenue generation. But there is a lot of other things that are very interesting to develop as we now go forward with the company, in particular in lifting and handling, where we also are big clients ourselves for this type of equipment, but also on noise mitigation. Noise mitigation is something that is taking more and more attention in the industry, and I'm also pleased to say that MENC has good technical solution for noise mitigation and something that we will continue to develop together. There's also routing and drilling. Routing and drilling is also, in some cases, necessities on foundation projects, and it's good that there are solid technology bases for both of these components for the future projects as well and something we all together we believe will be positive effects on projects going forward and really increasing efficiency on foundation installation in the industry. For Kettler we have been very open about how we see this it is very much like we we have seen with the vessels we are aiming to build scale so we can offer clients redundancy and I think it's fair to say that we have showed the redundancy we have showed that it works we also get the feedback from the clients that the journey that Kepler have been on is something that is working it's also working for them because if there is delays on projects then we are able to support with additional equipment or different equipment and still make sure that these projects are coming over the finish line and we have done that already several times in the industry and we see that that is something the clients they greatly appreciate and we believe that by merging now the vessel with the hammer in the Kedler case that is also something the clients will appreciate because really we remove one risk interface on their installation campaigns and it's really one of the risk interfaces that they are worried about and also one if it goes wrong that will cost a lot of money for the industry and hence having the ability to merge the two components we believe that that is something that will be sought after by the clients out there. I'd say also the first half of this year has been very much about executing on projects globally. We continue on Vensilla to install in the US. We have been back at Revolution Wind, and we are at Revolution Wind installing the final couple of turbines before we go back to Sunrise again to complete that project. On Orca, we are installing the secondary steel for the Hornsea 3 project for Osprey. On Osprey, we are installing EA3 turbines at a very, very rapid pace. Osprey has done incredibly well on that project. The Windmover is installing on the Baltic Power Project, and the Windmaker has done an O&M campaign in Asia and is currently also operating on O&M out there. We are bringing Wind Saratan into a new era, And we are doing some small upgrades to Gwyn Saratan to make sure that she can support other parts of the business going forward. And we are looking forward to see Gwyn Saratan contributing value to the company as we go forward. Gwyn Base was delivered, as I said, and currently installing mission equipment. Gwyn Ally is on 1C3 installing and very pleased to see what we are doing there. And as you will see in a future slide here, we are now going from proof of concept to really doing it fast and safe. That is really what we are aiming for here. And the team has worked tremendously hard to reach the target that we have. And Winpeak continues on a long-term agreement with Vestas doing various work and very positive as well there. Winpeak has also completed the Sophia project and have subsequently done an O&M campaign for Nexra, ultimately for Siemens, but currently working in the Nexra setup. And Wind Pace is together with Wind Auspray installing turbines on the EA3 project. On Hornsea 3, as we said, it's from first to fast. We are still working on further accelerations and efficiencies on the project because we will be doing many projects in the future and hence the learnings we get now from Hornsea is something that we can really implement into the company on a long-term scale. It has been an incredible learning journey to be on Hornsea, and I think that we are very positive with where we are. We continue to find improvements that we can benefit from and that the client can benefit from, and I think that we are very ambitious in terms of where we want to be. But really, the proof of concept, the fact that Paddler is now installing full-scale foundation projects safely and efficiently that is something that has taken a lot of work in it and a great thank you to the team that is continuing to deliver on that. The monopilot installation continues and the secondary steel installation is also on track. And the logistics around the project that we're also handling is also progressing. We have three heavy transport vessels on charter and we have around 100 monopiles that have been loaded into the marshalling port And really, as I already said, the focus is to continue safe execution on this project while still finding optimizations. And we are working with external people as well to really ensure that we take all the lessons learned in now to benefit this project, but also to benefit future projects, but also the way we build projects going forward. And I'm really pleased to see that the team and how they work with this project and also the interaction we have with the client. It's a very positive interaction with the client, in my opinion, and we are working towards the same target, really safe, on-time, on-budget installation of this project. In terms of Nextra, I'm also pleased to say that Nextra has seen a pickup in commercial performance, and we have had three vessels working in the Nextra space, WinSaritan, WinMaker and WinPeak that have performed the O&M spokes in Europe and APEC and we have had more than 230 vessel days that have been working with service and also that the team in Nextra is working incredibly hard with our clients to secure long-term commitments on the O&M side. We maintain our view on the O&M side, we maintain that this is very, very interesting for us and also a very solid business and a place that capital very much want to play a role in the Nextra setup So we continue full speed ahead on Nextra and are also very, very positive with what we have seen in the latest months from the client. And on the backlog, standing at $2.5 billion, as we always say, it's providing a very solid earnings visibility. I think that what we are saying on this slide today here is also that we are bringing you a little bit behind the curtains in terms of what is happening out there and also part of why we are positive around what we are seeing for the future because at the moment we in the category vessel reservation agreement and preferred supply agreements that are not currently in the backlog, we have three BTG projects for 27, 28 and 2031. We have a foundation project for 2028. We have also a project for 2031 on both foundation and turbines and also a long-term O&M agreement. So a lot of work is at the moment going on to convert these vessel reservation agreements, let's prefer supply agreements, into firm contract backlog. And I think that the team is fair to say that they are negotiating at full speed while we actually see a lot more coming at the moment. Especially for the beginning of the next decade, we see an enormous appetite from the clients. And especially with the announcement of the T-class vessels, we have been in a very, let's say, positive momentum with the clients who would like to understand the capabilities of the T-class vessels and how we can work together with the A-class and the T-class vessels and our turbine installation vessels to ensure a very, very efficient installation campaign. And with the acquisition of mink, I think it's also fair to say that we have had very positive conversations with our clients on the combination of the hammer and the vessel, but also with our peers, where several of our peers have reached out to say that they would like to discuss availability of hammers on an ongoing basis. And we have also made it very, very clear that that is very, very much our ambition. And we will prove it to the market that that is something that we are going to do. In terms of the backlog, yeah, as I said, around 2.5 billion euro, 77% of that has released FID, and there are projects that are currently in the FID process now, and also, as I said, the projects that we see on the right side of this slide that are currently in the preferred supplier agreements status, they're not included in the backlog, but we do expect that these projects are en route to be converted to backlog and to projects that we can announce in the not so distant future. So I will say all in all, a very, very strong commercial momentum in the business at the moment as well, and everybody is working full speed on those opportunities out there together with our clients. In terms of progress on the new builds, now it's new build and singular before we are starting the T-class vessels, but we are expecting delivery on wind apex in the second quarter of 2027. This represents an acceleration that we have agreed with Costco, and that is really to deliver towards the project that you saw in the preferred supplier category. We have seen that Wind Apex have achieved significant time optimization compared to the first vessel that was delivered. And I think that our collaboration with Colpo is really a fantastic collaboration where we do understand each other and we can speak about the various things that are going on. And that is also why that it was a natural next step for us to award COSCO with the TPLAT new bills that will be delivered in 2030 and 2031 and we are looking forward to see them coming to the market as well together with our partners from COSCO. When they also delivered ahead of schedule and on budget again a very strong performance this is now the 11th vessel that has been been delivered and the second of the three A-class new builds. And as we now start to take delivery of the A-class vessels, we will also start to have a feed of these vessels that can support each other. It is going straight into mobilization with the mission equipment and having soon two vessels that are fully mobilized for foundation installation in a very flexible setup. We believe that that is something that will give us a very, very significant flexibility to support potential delays in the industry and also So our clients really to ensure that we get these foundations installed on time on budget. And the next vessel coming next year will also be able to do that, although she will start with the turbine installation for the first period of time. Coming into the financial line, I'll hand over to Peter. So take it away, Peter.

Peter Brogaard Hansen, CFO

Yeah, thank you very much, Michael. Yeah, Corpus on Q2, standing on our three months, ending 13th of June, 26th. we have adjusted for the comparable figures from 25 for the termination fee that we received last year in order to be able to compare on an average to average basis on the main activity of cattle. So we have adjusted here for revenue EBITDA and net profit for 111 million euro. So So, the revenue for Q2 was 282.8 million euro, that was a plus as compared to last year, of 132%, L2 ratio was a solid 50%, utilization at a very satisfactory level nearly 91%, and also up from the adjusted number from last year. market gap around 2 billion euro. EBITDA was 160.6 million euro, and that is an increase of 106 as compared to last year. Let profit 95 million, which is plus 73% as compared to last year, as explained by Emil, backlog stands at 2.5 billion. And that is compared to same period last year is up 23%, three months daily average turnover of 6.9 million euro. If we look at the Q2 numbers, the full P&L, again we see that revenue is up and if we just for the termination fee last year, it is significantly up and doubled, more than doubled. Fleet utilization increased to 85% as compared to 76% last year, and that is up from the 48% we had in Q1 this year as a result of the delivered missions and they have been now mobilized and are on contract. The adjusted utilization is 91% compared to last year comparable number. Cost of sales has increased by euro 93 million. And that is of course given by the full quarter operating cost base of three additional vessels. It's allied with room and keeper. So we have now 10 vessels operating as compared to seven last year. SDMA is increased by 7 million euro, which reflects the continued scaling of our offices in order to, as we have explained many times, to be able to operate the bigger fleet, but also the foundation projects. Basal OPEX is 39.871 thousand euro per day, which is above the level that we have seen in previous quarters, recently around or just below 40 thousand euro per day. If you look for the six months ending, the 13th of June revenue again more than doubled to the Euro 480 million, when we adjust for the Euro 111 million in termination fees, and approximately the same unadjusted availability or utilization for 26 as compared to the first half of 25 and again adjusted utilization 85% for the six months. Again, the same goes behind the increase in OPEX, the cost of sales, and then driven by the three additional vessels. And again, the SG&A has increased by 9 million as compared to last year, and again, due to the same reason of having a bigger pipe office to be able to handle the additional vessels, and the foundation scope. And again the EBITDA more than doubled when we adjust for the determination fee, which is now the current income. Financially, now we have an equity of 1.8 billion euro, which is of course a function of the capital increase that we made in the 25th of March this year, and then the positive result of equity ratio stands at 50%, which is a solid balance. This slide is the same slide as we have shown before, with the CapEx on the new Pentebond, But now we have also included the MENC acquisition in this to illustrate that we are not in need of any capital increase to be able to take over MENC and go through this acquisition. has at the end of June of $206 million. We have all the own facility on the RCFs A and B of $180. Then in July, we made an additional whole-core facility with Santander of $40 million, which adds, of course, to available liquidity. Made transaction, we got a bid facility of $380 million from D&B and Ravo Bank, which was then used for the payment of the bank, around the 500 million euro. So then we are having the new bill still. We have the A-Class Finance, 510 And then we are going to make a down payment from the ordering of the T-class of 1,121, actually. It's not stated here, but it's 121 million euro. Oh, it's 120, it says in the call-up. So, the liquidity leaves us with 280 and then the event facility needs to be repaid at some point of time. We will have on a tertiary basis a negotiating of an additional or a temp-up facility of 250, i.e. we will finance the rest of the 380 that we have in British facility by the cash that we have available on hand. that leaves us with 150. This is, you know, a point of time, a snapshot, and if it doesn't include the operational cash flow that will be running in the coming months, it will also contribute to the repayment of the main facility. And it also includes, of course, the first down payments at ordering on the T-class basis is 15% because the rest of the installments will come in 28 and 29 and for the majority will be within one year of delivery. So this should hopefully make it clear for everybody that we will not have to do a capture This is the financing overview. What has happened since last quarter is that we have signed the APEX facility on 10th of July was syndicated and ECA backed by Iphone. We have extended the RCFB until December 2027 and then we have upsized the Hong Kong facility with the center there. That is the financing of the US full year outlook This has to be said, it's without MEG acquisition, so it cannot stand alone. We will communicate on the impact for MEG later in the coming months when we have the full overview of the impact. we maintain the outlook for 26, so revenue in the rate of 854 to 944, and EBITDA still in the level of 420 to 510. So that was the financials. Over to you, Lenny.

Mikkel Gleerup, CEO

Yeah. Back to the commercial outlook, where I think that we're getting a lot of questions on how we see the market developing and what is it we are talking to our clients about. And I think, as I already said, we are seeing a lot of activity at the moment. And we see also that our clients are really coming to us now for projects that are starting. Some of them are starting in 29. Some of them are starting in 2030, 2031, 2032. But overall, we do see a very very, let's say, sharper uptick in client activity at the moment for these years. I think it's also clear from what we in general discuss that there will be a lot of need for electricity. And one of the solutions for that will be offshore wind, and we believe it will be a firm part of that. But we have also seen that with some of the recent geopolitical tensions that the importation of fossil fuels is not as straightforward as it maybe once was. And hence, there is really a focus on energy security at the moment that is also building a stronger momentum for renewable energy sources that are locally produced electrons in, for example, Europe. And that is something we do see having an impact both from a political point of view, but also in general with amongst our clients that are being strongly incentivized to do that. And we see that by auctions that are being adapted to be more developer friendly. And we think that that is the right direction to go in. And we saw that Denmark had successful auctions now after having shifted over to a CFD scheme. and I think that the successful auctions were also, let's say, aggressively prized and that is something that we have also discussed quite a lot. But one thing I would like to note is that in terms of projects being awarded in the market, we have already seen in 26 more projects awarded than what we saw in 25 on a gigabit basis and with more to come. And we do expect also that 2027 will be a very, very strong year as well. So after a slightly, let's say, downward trend, especially for the years we have already discussed, 28 and the first half of 29, where Canada's position still is that we are confident on 28 and the first half of 29, we have done good work to make sure that we have a very strong baseline there. But now we are seeing an uptick that will especially impact the second half of 29 and 2030, 2031, and so on. In terms of supply and demand, we maintain also our view that on the foundation vessel demand, there is a very, very strong demand for efficient vessels. This is what we hear again and again and again from the clients, is that efficiency really matters. And if a solution is efficient, then that is the preferred solution. There's still somewhat of a gap between what is required and what is in supply, and the efficient vessels will be taken away from the market first and they will be taken away first as well. We have also included the hammer demand in the slide here to give a view on what we are seeing because the hammers are not exactly following the same as the vessel, although a vessel installing a foundation project needs a hammer, but there are also hammers that need to transit between regions and have downtime for maintenance and stuff like that, And that is why we believe that there will be a need for a serious re-evaluation of the needs in this space to ensure that the efficient vessels can work efficiency for the clients. Because there has been a real risk that vessels potentially would not be able to work simply due to inability of equipment to install foundations. And why is that so? That is simply because the ownership structure of these companies have not been focusing on aggressive outbuild of the equipment needed, but maybe more on harvesting the cash in these businesses. And hence, we need to make sure that there is enough equipment ready for what we are coming with in the beginning of the next decade with five vessels potentially operating side by side. And also our peers that definitely have demand and a demand that we would very, very much like to help them to supply. As you have seen a couple of times before on the vessel market and how it looks just in total numbers, not having any opinion about how these vessels are performing and how efficient they are, Kattler now stands at 14 vessels with the two T-classes now being firmly added with firm orders with the shipyard. And I think that, as we have said in the past, but it really gives us the flexibility, the redundancy, and for the clients, really the reduced risks that they really appreciate and what we're also getting very positive, let's say, credit for from the clients at the moment. If we do look at what are efficient inflation vessels, then the picture looks slightly different, and that is why we do maintain the view that there is still a very, very high demand for these vessels that are efficient and dollars in the industry, because we do see, as we come into the next decade, that a lot of the vessels will simply not be able to install efficiently or simply just hitting the 25-year mark and hence having to look at retirement from the industry. In terms of our growth journey, I think it's evident to anyone that that is what we have been focusing on to be able to deliver a very strong customer offering and also a very, very strong, let's say, value back to our investors with what we are doing. And I think that today's numbers also show that the growth journey is our plan and it is working, what we are trying to do. but really you know focus have been that the vertical and horizontal expansion and here we really are deepening our foundation offering with the mink acquisition but also with the O&M offering and we do start to see the effects of the O&M offering and as you saw from the backlog slide we also now are preferred to buy one of these long-term O&M agreements which we believe will be very uh accretive to the to the whole uh cattle story and organic and inorganic growth i think it's it's we have done both just a couple of weeks ago so i think it's it's it's self-explanatory but but but that is where our goals have been to ensure that we we maintain the position we have achieved with our clients where we are asked for basically everything in the industry and that is coming up because they know that at any given time we likely will have capacity available. And I think we have had many good examples this year of discussions with clients on potential things that they would like to use us for. And I think that that is something we will see continuing both in the short, the mid and the long term with, as you saw in previous slides, a very strong focus on securing some of these huge projects out in the future. On regional expansion, we are constantly focusing on being present. We see lots of expansion in the Asian market and basically we are bidding in every single market that is expanding in Asia at the moment and are very positive with these developments out there where we are working very much together with our key clients but also with new clients and the commercial team has done remarkably well in getting us into the right position in these new markets. Then there's also a very strong focus in the company at the moment on monitoring and applying new technologies We are actively starting to work with AI on some of our data handling to ensure that we are more efficient in how we analyze these thousands of data points that we have from projects and pre-project to ensure that we have a better view of how the vessels were performing on the program. And this is something that we will communicate more about in the future, but also something that we will be starting to use on a more integrated basis in the company. We do see the value of this and we have been dipping our toes into it, but I think that it's fair to say that we now see really the first real steps into using AI in our whole structuring of bits and programming with analyzing these many, many data points. And it also goes with our main acquisition, where we will be sitting on 50 million data points on pile driving, which we would like to also have to build a model around so we can ensure that both Mink and Kettler can deliver a very, very high value to our clients on their projects. And then, of course, continuing what we have always done, focusing on strategic partnership with our clients and also after the MENGAT position with a new group of clients, which is our peers. We have worked together with our peers for many years in many different ways. And I've always said that the beauty in Catalyst is that we basically can work with anyone. And that is more evident than ever after the MENGAT position. And we will do our part to really make sure that not only can our peers get the equipment that they need, but hopefully they can also get a better service going forward in the combined structure compared to what they had in the future and in the past. So that is very much our ambition and also what we are currently discussing with our peers. And we will be also coming out with a very strong governance model to give them the feel-good feeling around that as they rightly would expect from us. And just in terms of executing on-growth in 2026, I think we have ordered the two new T-class vessels. It has been a very, very tough negotiation, one of the toughest ever. I think the yards are in a situation where they're basically fully booked. There's a lot of activity in the yards. There's a lot of competition from other industries. and to have the two T-class vessels now signed and ready for delivery in 2030 and 2031 is a real milestone for everybody that's worked on this in catalog. It has not been easy. The positive thing is that it will also not be easy for our competitors. And I think that we will see that it, that will be displayed going forward, I think. And I think that it will be very, very hard to order additional capacity. Scar protection, we have announced that and we are still working full speed on that, building the team at the moment. and we will be announcing also on the assets side of that business as soon as we are ready to do that. And then last but certainly not least, welcome to all our new colleagues from MENG. We are very, very pleased with this acquisition. We believe that the combined value proposition of the two companies will be better together than it would have been on a standalone basis. And from the conversation we have had so far with the MENG team, we are also incredibly positive by how motivated they are with this new journey. And yeah, we will continue to visit locations and come around and speak to all of you. And it's been really good. So last but not least, in terms of the key investment highlights, we maintain the largest and most capable and versatile fleet and mission, critical equipment. And what does that mean? It really means redundancy for the clients. We focus on relationships and partnerships. And we do that from an industry leading position where we will continue to create value for everyone. We have a global reach and experience, and we are now the company that has installed most foundations by any company in the industry. We continue to see a structural undersupply and an increasing market demand demonstrated also by the amount of preferred supply agreements and resolution agreements that we are talking about today. So we are in a very solid position. And then, as we also discussed a little bit previously, we are now also seeing an increased, let's say, drive on the technology, not only on AI, but also on technology for tooling and stuff like that, where we will be using what we are sitting on in terms of data points to really ensure that we can combine that and create value for our clients and really ensure that we are first with next generation installation technology. you. So with that said, I think that we move into the Q&A. So can you please take over?

Peter Hansen, Head of Investor Relations

Thank you. At this time, we invite those analysts wishing to ask a question to click on the raised 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 you will receive a prompt to be promoted. Please accept this prompt, wait a moment and once you've been promoted you may unmute yourself and ask your question we encourage you to turn your video on as well we'll wait one moment to allow the queue to form our first question today will come from jamie franklin at jeffrey's jamie you may now unmute your line and ask your question thank you hey guys thanks for uh taking my question so great to see obviously uh second second quarter uh utilization uh really kind of stepped up um just wanted to uh your help with kind of how to think about vessel utilization through the remainder of the

Jamie Franklin, Analyst — Jefferies

year could we expect a kind of similar level in 3q and 4q or based on you know current scheduling is there any reason that utilization may be any lower in the third and fourth quarters and then thinking more specifically about Horn C3 clearly everything is very much on track so far how should we think about the contribution from that project through the remainder of the year clearly good progress on the monopiles I would expect that is continuing through the third quarter and then is it right to to think about the turbine installation kicking off at the start of the fourth quarter thank you.

Mikkel Gleerup, CEO

I think that we can say that we expect strong utilization for the rest of the year. We were building up in Q1 and I think that we will continue to see strong utilization for the rest of 26. There's a lot of activity going on and that's clearly our expectation. On Horns C3 the program on Horns C3 is what we basically have discussed already and has not changed as such. we are, as I said, focusing on speeding up and where we end exactly with the speed, that is still a little bit a question mark but we are very positive with what we have achieved, of course, in the beginning on such a project when you are learning there are some big low-hanging fruits that you are picking and then the fruits become smaller and smaller, but we continue because we are ambitious in this space also because it is something that we will continue to learn for the next project. We are starting EA2 in the not-so-distant future we have other projects that are being started you know in the not so distant future and hence the learnings that we capture now from Hornsea that is something that we can really bring into the company and it is a mindset change you know because we are really talking about production here it is a much more production mentality on a product on a project like that and hence we are very ambitious in terms of what we want to achieve still having a safe performance so again it is from first to fast that we are looking at here now. And we are already pretty fast, but we want to potentially be even faster on that project. And in terms of the turbine installation, turbine installation remains on track. That is also the ambition of everyone that we are starting the turbine installation as per what has already been contracted.

Jamie Franklin, Analyst — Jefferies

Okay, very helpful. Thank you. And then secondly, just thinking ahead to 2028. So you mentioned, obviously, the preferred supplier agreement, which hopefully will convert to a firm contract. And then also there's a turbine project for 27, 28 that could convert as well. Just wondering if there's much else you are working on and any other sort of potential additions for 2028 at this point. Thank you.

Mikkel Gleerup, CEO

I think the short answer is yes, but I think that they will be slightly later. And I think also there are extensions on current projects that are running into 28, which is not something that we include in this, But we have seen extension on current projects also running further into 28 than was previously expected. So I think all in all, I maintain what I said. We believe that the baseline is strong and there are more to achieve in 28. But as we have said before, we believe that there will be additional work up for grabs as we get closer to 28.

Jamie Franklin, Analyst — Jefferies

OK, very clear. Thanks. That's all from me. I'll turn it over. Thank you. Thanks, Tim.

Peter Hansen, Head of Investor Relations

Thank you. Our next question today comes from Anders Roseland at CERB. You may now unmute your line and ask your question.

Anders Roseland, Analyst — Carnegie

Thank you. Can you hear me now? I had some problems with the technical solution. But anyhow, can you break down the backlog for the years 2026, 27 and 28?

Mikkel Gleerup, CEO

Yes, I can, but we don't.

Anders Roseland, Analyst — Carnegie

Okay. Then I have a question on the financials. Depreciation was up meaningfully in the second quarter. And I assume that it's partly explained by the A-class vessel having a full quarter of depreciation in Q2. Is the depreciation level that we saw in Q2, is that the run rate we should expect going forward, save for additional vessels being delivered?

Peter Brogaard Hansen, CFO

Yes, you should expect that. There can be also coming something from project equipment that is capitalized and then depreciated over the lifetime of the asset. But yes, we can expect the same levels, but then adjusted for full year impact and age coming in next year.

Anders Roseland, Analyst — Carnegie

There are no impairments in the second quarter impacting appreciation?

Peter Brogaard Hansen, CFO

Sorry?

Anders Roseland, Analyst — Carnegie

There are no impairments in the second quarter?

Peter Brogaard Hansen, CFO

No, no impairments at all. We have not done any.

Peter Hansen, Head of Investor Relations

Thank you very much. thank you thank you thank you so as a reminder today to ask a question you can click on the raised hand button which can be found on the black bar at the bottom of your zoom screen and our next question today comes from audrey zong at china securities audrey you may now unmute your line and ask your question thank you hi good afternoon this is audrey from china Securities, and thank you for taking my question.

Audrey Zong, Analyst — China Securities

Actually, my question is, we observed that Kepler is trying to become a comprehensive platform rather than just a wind turbine installation company. We observed that you still have approximately like 425 million euros of remaining commitment for the A-class vessels and you has recently ordered two T-class vessels for euro like 805 million and also you acquired mink at an enterprise value of euro like 500 million and has confirmed that the scale protection investment plan remains intact. So actually my question is, is it necessary to pursue all of this investment at the same time? What minimum IRR or ROIC hurdle do you apply to each investment? And from which year do you expect each of them to generate returns above the cost of capital? Thank you.

Peter Brogaard Hansen, CFO

Yeah, it doesn't come at the same time, so to speak, because we have already paid the acquisition price, but on the new buildings, it follows a certain schedule. So, as said under the presentation, we have taken the delivery of ACE now and paid the final installment for that. So, rank and ACE is done. Then, some remaining capex on Apex coming next year. On the T-class, yes, we will down pay now at ordering 120 million euros, but then next installments or substantial installments is in 2030 and 2031 when they are delivered. And also somehow answers the same question. Your follow-up on this is when will they start to generate revenue? Ace will start to generate revenue early. 27 when you go to a project that it's mobilized for, at the moment, Link is generating positive income and cash flow from operations from 11th of August. So already kicking in. And then the T-class versus the majority of the capex is in 2030 and 2031, and then they will start to generate cash 16 to 9 months after delivery. So it is a little bit more nuanced picture, and some of the cost is also deferred. We do not disclose what is the requirement for return of cash, but we find that all these persistence very attractive when we look at the IIR on these projects.

Mikkel Gleerup, CEO

Yeah, I think we can say we are beyond the target on every investment and one of the things in particular on the T-class vessels that we achieved was a very back-ended payment schedule and that was very important for us. So not only do we have a lower upfront payment than we have had in the past, but also we have managed to back-end the payments on the T-Class vessels a lot.

Audrey Zong, Analyst — China Securities

Great, thank you. It's very clear and very helpful. Thank you very much.

Peter Hansen, Head of Investor Relations

Thank you. So we have no further questions at this time. Thank you for your participation and I will now hand the floor back to Mikhail Glirup for any closing remarks. Thank you.

Mikkel Gleerup, CEO

Yes, thank you to everyone for listening in. Thank you for your support. And yeah, we will continue to work hard to deliver on our targets. Thank you very much. Have a fantastic day ahead. Bye-bye.