Cadeler A/S (CDLR) Q2 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to Cadeler's H1 2026 Earnings Presentation. Presenting today are Mikkel Gleerup, Chief Executive Officer; and Peter Brogaard, Chief Financial Officer. Please be reminded that the presenters' remarks today will include forward-looking statements. Actual results may differ materially from those contemplated. The risks and uncertainties that could cause Cadeler's results to differ materially from today's forward-looking statements include those detailed in Cadeler's annual report on Form 20-F on file with the United States Securities and Exchange Commission. Any forward-looking statements made this morning are based on assumptions as of today, and Cadeler undertakes no obligation to update these statements as a result of new information or future events. This morning's presentation includes both IFRS and certain non-IFRS financial measures. A reconciliation of non-IFRS financial measures to the nearest IFRS equivalent is provided in Cadeler's annual report. The annual report and today's earnings presentation are available on Cadeler's website at cadeler.com/investor. [Operator Instructions] As a reminder, this call is being recorded today. If you have any objections, please disconnect at this time. Mikkel Gleerup, you may begin.

Thank you very much, and welcome to this half year presentation from Cadeler. Very pleased to be joined by everyone here. Just a disclaimer slide here first and then our H1 highlights slide. So first half of 2026 has been really a first half that is defined by a very solid financial performance. Adjusting for the large termination fee we had last year, we do see a very strong revenue and EBITDA that are both more than doubling on a year-on-year basis. Our newbuild program continues to be on track. We delivered our second A-class 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 Menck, a leading global provider of specialist equipment and technology solutions for offshore foundation installation, a little bit more about that later in the presentation. And then we continue solid execution across all key regions where we are currently busy and the Hornsea 3 execution also continues, and I'm very pleased with that and also more about that in the presentation. And then we signed firm contracts 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 where we are now. In terms of commercial highlights, the acquisition of Menck, we already have gone through the transaction rationale in a separate presentation. But really, it is about strengthening the customer offering and the execution capabilities that we have in Cadeler. 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 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 Cadeler is needing. And altogether, we believe that, that is a very sound business move for us with having Menck under the Cadeler umbrella, but still on an arm's length principle, ensuring the proper governance structure that we 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 installed already. And with the acquisition, Cadeler and Menck together are the company in the industry that have been driving most pilots 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, maybe it's 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 Cadeler and what we want to do on a forward-going basis. And then that's just a very strong strategic and industrial fit between the 2 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 Menck has good technical solution for noise mitigation and something that we will continue to develop together. There is 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 basis for both of these components for the future project as well and something we altogether, we believe will be positive effects on projects going forward and really increasing efficiency on foundation installation in the industry. For Cadeler, we have been very open about how we see this. It's very much like 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 Cadeler has 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 that the clients they greatly appreciate. And we believe that by merging now the vessel with the hammer, in the Cadeler 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, it will cost a lot of money for the industry. And hence, having the ability to merge the 2 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, it has been very much about executing on projects globally. We continue on Wind Scylla to install in the U.S. 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 Hornsea 3 project for Ørsted. On Osprey, we are installing EA3 turbines at a very, very rapid pace. Osprey has done incredibly well on that project. The Wind Mover is installing on the Baltic Power project, and the Wind Maker has done O&M campaign in Asia and is currently also operating on O&M out there. We are bringing Wind Zaratan into a new era, and we are doing some small upgrades to Wind Zaratan to make sure that she can support other parts of the business going forward, and we are looking forward to see Wind Zaratan contributing value to the company as we go forward. Wind Ace was delivered, as I said, and currently installing equipment. Wind Ally is on Hornsea 3 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 targets that we have. And Wind Keeper continues on a long-term agreement with Vestas, doing various work and very positive as well there. Wind Peak has also completed the Sofia project and has subsequently done O&M campaign for Nexra, ultimately for Siemens, but currently working in the Nexra setup. And Wind Pace is together with Wind Osprey installing turbines on the EA3 project. On Hornsea 3, as we said, it's from first to first, 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 Cadeler is now installing full-scale foundation projects safely and efficiently, that is something that has taken a lot of work and a great thank you to the team that is continuing to deliver on that. The monopile 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 Marseille-Fos 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 then I'm really pleased to see that, and 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 Nexra, I'm also pleased to say that Nexra has seen a pickup in commercial performance, and we have had 3 vessels working in the Nexra space. Wind Zaratan, Wind Maker, and Wind Peak that have performed the O&M scopes in Europe and APAC, and we have had more than 230 vessel days that has been working with service. And also that the team in Nexra 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 Cadeler want to play a role in the Nexra setup. So we continue full speed ahead on Nexra and are also very, very positive with what we have seen in the latest months from the clients. And on the backlog standing at EUR 2.5 billion, as we always say, it's providing very solid earnings visibility. I think that what we are saying on this slide today here is also that we are bringing 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 supplier agreements that are not currently in the backlog. We have three WTG 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/preferred supply agreements into firm at 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 foundation -- sorry, our turbine installation vessels to ensure a very, very efficient installation campaign. And with the acquisition of Menck, 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, yes, as I said, around EUR 2.5 billion, 77% of that has reached 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 agreement status, they're not included in the backlog, but we do expect that these projects are on route to be converted to backlog and to projects that we can announce in the not-so-distant future. So I would 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 in 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 COSCO, and that is really to deliver towards the project that you saw in the preferred supplier category. We have seen that Wind Apex has achieved a significant time optimization compared to the first vessel that was delivered. And I think that our collaboration with COSCO 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 T-Class new builds 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. Wind Ace also delivered ahead of schedule and on budget. Again, a very strong performance. That's now the 11th vessel that has 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 fleet 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 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 turbine installation for the first period of time. Coming into the financial items, I hand over to Peter. So please take it with you.

Yes. Thank you very much. Focus on the Q2 stand-alone, our three months ending 13th of June '26. 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 a year-on-year basis and the main activity of Cadeler. So we have adjusted here for revenue, EBITDA, and net profit for EUR 111 million. So revenue for Q2 was EUR [ 282.8 ] million. That was a plus, as compared to last year, 432%. Industry rate was a solid 50% and utilization at a very satisfactory level, nearly 91%, and also up from the adjusted number from last year. Market cap around EUR 2 billion. EBITDA was EUR 160.6 million, and that is an increase of 106% as compared to last year. Net profit, EUR 95 million, which is +73% as compared to last year, as explained by Mikkel, backlog stands at EUR 2.5 billion, and that is compared to the same period last year is up 23%. Three months daily average turnover of EUR 6.9 million. If we look at the Q2 numbers, the full P&L, again, we see that revenue is up, and if we adjust 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 vessels, and they have been now mobilized and are on contract. The adjusted utilization is at 91% compared to last year comparable number. Cost of sales, it has increased by EUR 93 million, and that is, of course, driven by the full quarter operating cost base of 3 additional vessels. It is the Wind Ally, Wind Mover, and Wind Keeper. So, we have now 10 vessels operating as compared to 7 last year. SG&A is increased by EUR 7 million, which reflects the continued scaling of our offices in order to, as we have explained many times, [indiscernible] to be able to operate the bigger fleet, but also the foundation projects. Vessel OpEx is EUR 39,871 per day, which is above the level that we have seen in previous quarters, recently around or just below EUR 40,000 per day. If you look for the 6 months ending June 13, revenue again more than doubled to EUR 480 million when we adjust for the EUR 111 million in termination fees and approximately the same unadjusted availability or utilization for 2026 as compared to the first half of '25, and again, adjusted utilization 85% for the 6 months. Again, the same drives behind the increase in OpEx, costs of sales, and then driven by the 3 additional vessels. And again, the SG&A has increased by EUR 9 million as compared to last year, and again, due to the same reason of having a [ bigger ] back 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 termination fee, which is non-recurring income. Balance sheet. Now we have an equity of EUR 1.8 billion, which is, of course, a function of the capital increase that we made on 25th of March of this year, and then the positive result. Equity ratio stands as 50%, which is a solid balance sheet that [indiscernible]. This slide is the same slide as we have shown before with the CapEx on the new builds, but now we have also included the Menck acquisition in this to illustrate that we are not in need of any capital increase to be able to take over Menck and go through this acquisition. Cash at the end of June was EUR 206 million. We have all on-loan facility on the RCFs, A and B, of EUR 180 million. Then in July, we made an additional HoldCo facility with Santander of EUR 40 million, which adds, of course, to available liquidity. Menck transaction, we got a bridge facility of EUR 380 million from DNB and ABN AMRO Bank, which was then used for the payment of Menck, around the EUR 500 million. So, then we are having the newbuilds still. We have the A-class finance of EUR 510 million and A-class OpEx. Our CapEx is EUR 425 million. And then, we are going to make a down payment from the ordering of the T-class [ vessels ] of EUR [ 112 ] million or EUR 121 million, actually. It is not stated here, but it is EUR 121 million or it is EUR 120 million, it says in the call-out. So, that liquidity leaves us with EUR 280 million, and then the Menck facility needs to be repaid at some point of time. We have, on a term sheet basis, negotiating of an additional or a take-out facility of EUR 250 million, i.e., we will finance the rest of the EUR 380 million where we have a bridge facility by the cash that we have available on hand. That leaves us with EUR 150 million. This is to know at a point of time, a snapshot, and it does not include the operational cash flow that will be running in the coming months and will also contribute to the repayment of the Menck facility. And it also only includes, of course, the first down payments at ordering on the T-class, which is at least 15%, because the rest of the installments will come in [ 2028 ] and 2029, 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 capital increase from the Menck facility. This is the financing overview. What has happened since last quarter is that we have signed it with Wind Apex facility was signed 10th of July, was syndicated and ECA backed by EIFO. We have extended the RCF-B until December 2027, and then we have upsized the HoldCo facility, which is Santander. So, that is the financing overview as of [ June ]. Full year outlook. This has to be said, it is without Menck acquisition, so it is a Cadeler standalone. We will communicate on the impact from Menck later in the coming months when we have the full overview of the impact. We maintain the outlook for '26, so revenue in the range of EUR 854 million to EUR 944 million. EBITDA still in the level of EUR 420 million to EUR 510 million. So, that was the financials. Over to you, Mikkel.

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 that we are talking to our clients about. And I think we -- 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, sharp uptick in client activity at the moment for these years. I think it's also clear from what we, in general, discussed 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. 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 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 priced. And that is something that we have also discussed quite a lot. But one thing I would like to know 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 gigawatt 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 year we have already discussed '28 and first half of '29, where capital 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 uptake 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 the solution is efficient, then that is the preferred solution. And that'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 fast 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 the downtime for maintenance and stuff like that. And that is why we believe that there will be a need for a serious reevaluation of the needs in this space to ensure that the efficient vessels can work efficiently for the clients because there has been a real risk that vessels potentially would not be able to work simply due to unavailability 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 5 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, Cadeler 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 that 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 installation 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 installers 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 on plan and it is working what we are trying to do. But really focus has been that vertical and horizontal expansion. And here, we really are deepening our foundation offering with the Menck 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 supplier for one of these long-term O&M agreements, which we believe will be very accretive to the whole Cadeler story. And organic and inorganic growth, I think we have done both just a couple of weeks ago. So I think it's self-explanatory, but that is where our focus has been to ensure that we maintain the position we have achieved with our clients where we are for basically everything in the industry 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 to mid and the long term with, as you saw in the previous slide, 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-projects to ensure that we have a better view of how the vessels will be 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 3 steps into using AI in our whole structuring of bids and programming with analyzing these many, many data points. And it also goes with our Menck 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 Menck and Cadeler 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 Menck acquisition 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 Cadeler is that we basically can work with anyone. And that is more evident than ever after the Menck acquisition. And we will do our part to really make sure that not only can they -- 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 have in the future -- and in the past, sorry. 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 2 new T-class vessels has been a very, very tough negotiation, one of the toughest ever. I think the yards are in a situation where they basically fully booked. There's a lot of activity in the yards, that's a lot of competition from other industries and to have the 2 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 Cadeler. 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 will be displayed going forward, I think. And I think that it will be very, very hard to order additional capacity. Carbon section, 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 asset 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 Menck. We are very pleased with this acquisition. We believe that the combined value proposition of the 2 companies will be better together than it would have been on a stand-alone basis. And from the conversations we have had so far with the Menck team, we are also incredibly positive by how motivated they are with this new journey. And yes, 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 feed 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 supplier agreements and vessel reservation 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 insulation technology. So with that said, I think that we move into the Q&A. So, [ Daniel ], please take over.

[Operator Instructions] And our first question comes from Anders Rosenlund at SEB. You may now unmute your line and ask your question. Our first question today will come from Jamie Franklin rather at Jefferies.

So great to see, obviously, second quarter utilization really kind of stepped up. Just wanted to your help with kind of how to think about vessel utilization through the remainder of the year. Could we expect a kind of similar level in 3Q and 4Q or based on current scheduling, is there any reason that utilization may be any lower in the third and fourth quarters? And then thinking more specifically about Hornsea 3, 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 think about the turbine installation kicking off at the start of the fourth quarter?

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 yes, that's clearly our expectation. On Hornsea 3, the program on Hornsea 3 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 of such a project when you are learning, there are some big low-hanging fruits that you're 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 in the not-so-distant future. And hence, the learnings that we kept on off on Hornsea, that is something that we can really bring into the company. And it is a mindset change because we are really talking about production here. It is a much more production mentality on a project like that. And hence, we are very ambitious in terms of what we want to achieve, still having safe performance. So again, it is from first to fast that we are looking at here now, and then, 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.

Okay. Very helpful. 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?

I think the short answer is yes, but I think that they will be slightly later. And I think also there are extension 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 what 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 progress as we get closer to '28.

Our next question today comes from Anders Rosenlund at SEB.

Can you hear me now?

Yes. Now, we can hear you, Anders. Yes.

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

Yes, I can. But we don't.

Okay. And then I have a question on the financials. Depreciation was up meaningfully in the second quarter. And I assume that is partly explained by the A-class vessel having a full year -- 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, say, for additional vessels being delivered?

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 could expect the same level, but then adjusted for full year impact and Wind Ace coming in now at A-class next year.

There is no impairments in the second quarter impacting depreciation and amortization?

Sorry.

There are no impairments in the second quarter.

No impairments at the moment. No. We have not done any.

[Operator Instructions] And our next question today comes from Audrey Zhong at China Securities.

This is Audrey from China Securities. Actually, my question is we observed that Cadeler is trying to become a comprehensive platform rather than just a wind turbine installation company. And we observed that you still have approximately like EUR 425 million of remaining commitments for the A-class vessels. And you have recently ordered two T-class vessels for like EUR 805 million. And also, you acquired Menck at an enterprise value of like EUR 500 million and has confirmed that the scour protection investment plan remains intact. So actually, my question is, is it necessary to pursue all of these investments 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?

Yes, it doesn't come at the same time, so to speak, because at Menck, of course, we have already paid the acquisition price and on the new buildings, it follows a certain schedule. So as said under the presentation, we have taken a delivery of Wind Ace now and paid the final installment for that. So Wind Ace is done. Then there are some remaining CapEx on Wind Apex coming next year. On the T-class basis, we will down pay now and ordering EUR 120 million. But then next installment is in, or substantial installment is in 2030 and 2031 when they are delivered. 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 on project that is mobilized for. At the moment, Menck is generating positive income and cash flow from operations from 11th of August. So, already kicking in. And then, T-class vessels, the majority of the CapEx is in 2030 and in 2031, and then they will start to generate cash 6-9 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 capital, but we find all these positions very attractive when we look at the IRR on these projects.

Yes. And I think you can say 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.

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

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