Cadeler - H2 2023
March 26, 2024
Transcript
Mikkel Gleerup (CEO)
Good morning, everyone, and welcome to this Cadeler investor presentation in connection with the annual report for 2023. We are happy to see so many people have interest in the company and have joined this presentation this morning. We have a disclaimer here, and the disclaimer should be read in connection with this presentation. Then we will go through the presentation. The presentation will start with a bit of highlights on 2023, then the financial results, and then at the end of the presentation we have some market outlook and also about the company, what one can expect from Cadeler going forward. In terms of the 2023 key results, we have managed to deliver a EUR 109 million revenue and an adjusted EBITDA of EUR 50 million.
We continue to see a robust market outlook and an improved market sentiment for our services to our clients, and that has only strengthened towards the second half of 2023 and also in the first part of 2024. We see that our backlog continues to grow. Actually, since we listed in Norway in 2020 November, we have seen that the backlog has grown at around about double the pace of the market, and our total backlog today stands at EUR 1.8 billion, with more than 85% already have taken FID on these projects. We continue to have a disciplined growth focus, and we continuously aim to strategically scale our organization. Also, with the merger with Eneti, we believe that we have a very, very strong organization that will be able to deliver the projects going forward.
Also, we are focusing on strong financial bolstering of the company, and that really means that we are securing the debt capital that is needed to deliver our CapEx projects, and hence we consider ourselves as fully financed. In terms of 2023, in brief notes, in April we signed a historic contract for the company because this was really around the Hornsea 3 project that we also spent a lot of time discussing with investors in the second half of 2023. But for us, this was installing all of the foundations for the project in a full T&I setup with Ørsted, and also half of the turbines on the same project.
We also, in June, announced the planned merger with Eneti in a business combination agreement, and as you know, in the second half of 2023, we delivered that merger and listed the company on the New York Stock Exchange on the 21st of December 2023. We also commenced the crane upgrades, new cranes on both vessels. As we said back in 2020 when we ordered the first crane, we said that we would start this project on new cranes on the two existing vessels, and we did that as per the plan. We also revealed the names for the new builds: the Wind Peak, the Wind Pace, the Wind Ally, and the Wind Ace. Finally, names on what was known as the P and the A class. We also announced the signing of a non-secured green loan of EUR 50 million with a non-committed accordion option up to EUR 50 million.
In December, a lot of things happened, obviously, but it was really about announcing the signing of a EUR 550 million senior-secured green loan facility in the company, the merger with Eneti, listing on the New York Stock Exchange, and also the first financing on the new builds for the two P-class vessels with a Sinosure-backed senior-secured green term loan facility of EUR 425 million. Obviously, 2023 has been a lot about executing on projects because, as we grow, we need to remember the fundamentals in the company, and we are known as a company that delivers what we promise, and hence we want to continue to have a very, very strong focus on that. When Orca completed the Seagreen project, we were able to stay longer on that project than what we originally contracted, which was beneficial to Vestas, to SSE, and everybody else involved in that project.
We also signed an O&M contract with Vestas, and after the completion of Seagreen, we took Orca on an O&M campaign with Vestas all the way to the point where we had to take the vessel out of operation for the crane renewal project. On Osprey, we completed the Hollandse Kust Zuid project for Vattenfall, at the moment the biggest single wind farm in the world. After that project was completed, we went straight on to execute some of the Hollandse Kust Noord project. I think in that project, one of the real beauties of that project was we were able to have zero downtime between the projects, despite the fact that we were changing clients on the project and also had different clients demobilizing and mobilizing at the same time.
But everybody worked together to get maximum utilization out of the vessel, and I think that this is an example of what we will also aim to do in the future. The HKN project was originally 85 firm days, but the clients decided to use the vessel up to 134 days. After the completion, Osprey continued on a small job with Siemens before we went into the crane replacement project. On Scylla, we ended the year on F`ecamp de Normandie substation for Damen, and she is now in Brest mobilizing for her next project, where we have decided to take a little bit extra time out on the vessel to ensure that she is fully up to speed for the project that we will be executing in a different region going forward.
On Zaratan, worked on the Yunlin project for Siemens Gamesa until November and was in Singapore for maintenance and surveys, preparing her for the next campaign. She is returning to Yunlin this year and hence will be working in Asia. With these projects, you can say that Cadeler will be working in all major offshore wind regions in the world in 2024. Also, delivering the crane project, we have successfully converted two vessels in parallel with a record-breaking timeline of only six months, and both cranes now have replaced their cranes with new 1,600-ton NOV cranes, future-proving them for the next generation turbines. I think what is remarkable here is that we have done this in parallel. We basically had a vessel on each side of a quay in the Netherlands and a big crane in the middle, and we have done all the work in parallel.
We believe that that has reduced cost and has also minimized the vessel off-hire time in the most unattractive period for the vessels that we could find. Wind Osprey is currently en route to Esbjerg, and Wind Orca is already there for final commissioning and final approvals and project mobilization. Orca is heading out on Moray West, and Osprey will start on an Ørsted project, the Gode Wind and Borkum Riffgrund project. I believe that what we can say on the crane renewal project is that we had a very strong collaboration in Schiedam between many, many different subcontractors making this project possible, and thanks to everybody involved for all the hard work done on this project. A few pictures from the crane upgrade project in Schiedam.
I think it shows the technical complexity of what we did because the vessels really were elevated to the maximum height, with the biggest PTC crane in the world lifting the components up so we didn't have any interface issues with the legs, and hence also did not have to do any structural change to the legs while we installed these new cranes. This is really a testament to the engineering power that is both in Cadeler and in the companies that we have worked with for this project. I think also the fact that we already, in December 2020 set when we ordered this first crane, that we would deliver this project in Q1 2024, and we have done so, is also a very, very good testament to our execution capabilities and also how we work on projects internally in Cadeler.
In terms of the P- and A-Class new builds, the first new build is getting close, and we are really excited to take that vessel online. We are delivering the Wind Peak in Q3 2024, as we have said before. We launched the vessel from the dry dock at COSCO Shipyard on the 3rd of January, and the crane was mounted on the 1st of February. The construction is 89% completed, and you see the S-curve on the right side of the slide, and you can see that we are tracking as per the plan. The sea trials are planned to start mid-June this year, with delivery in August of this year as well. Wind Pace is delivering in Q2 2025. The keel laying was done on the 15th of February 2024, and the sea trials are planned for Q1 2025. The construction at the moment is 65% completed.
Wind Ally delivery in Q4 2025. Steel cutting was done on the 8th of September 2023, and the block fabrication completion level is currently at 33%. We do have some opportunity to deliver this vessel slightly early, but at the moment we keep Q4 in here, but it could also be a Q3 delivery finally on this vessel. In terms of Wind Ace, we are saying delivery on the second half of 2026, and the basic and the detailed design has been completed. We have a small few tweaks in the design on this vessel, and that's why we have done a bit of work on the detailed design on this vessel as well. Steel cutting is planned for July 2024. In general, what we can say on the P&A class is that we are on track both when it comes to budget and when it comes to timeline.
Also, a sneak peek from China, where you can see our site team in China. We have passed three million man-hours without an LTI out there, and that's something that we are very, very proud of because, obviously, building at this pace requires a lot of man-hours on site, and we want to make sure that we build these vessels for the future safely. You can also see that the Wind Peak has been floated out. The crane is currently installed on the vessel, and we can see that this is a remarkable unit that we will be delivering. Also, pictures from the keel laying of the first unit, where people from the Cadeler head office also participated. In terms of the M-class new builds, we currently have 22 Cadelers on site in Korea, closely monitoring the progress of the new builds.
We are delayed on the M-class vessels, what was formerly known as the Nessie and the Siren. We are expecting to deliver the first M-class vessel in Q1 2025 before the project that this vessel is booked for, and currently we are confident that we will deliver on time for that project. But we, of course, keep a very, very close eye on this because any slippage would mean that we would have to look into a Plan B, and that is something that we will be able to do, also make a bigger vessel fleet able to support our clients. We are looking at the next milestone, which is launching of the vessel, which is currently scheduled for the 30th of May, and all megablocks are completed except the forecastle section.
All the equipment has been delivered to the yard, and most of it has already been installed in the blocks. On the Wind Mover, we are looking at a delivery around Q4 2025, so also a slight delay there, but nothing that really impacts us at the moment because we are looking at the first year of project work for Wind Mover being in 2026. We have cut the steel. The keel will be laid this year in August, and all blocks are under construction in China and Korea. I believe that we are on track on all equipment for timely delivery to the yard. Just a fun fact that we have the same amount of cable in each vessel on the Korean yard as the flight distance between Copenhagen and Oslo.
It is really complicated units that we are delivering, and it is something that requires a lot of on-site attendance. Also, a sneak peek from Korea, where you can see that both legs and racks and pinions, megablocks are in construction. You see the aft part of the vessel up in the upper right corner, and we are in a good place with these vessels. We believe that these vessels will be very capable and also of very high quality when they are delivered and joining the Cadeler fleet. We also merged with Eneti, the biggest milestone in 2023, something that we worked extremely hard on from January to December. We really combined decades of operating track record and strong fleets to accelerate the growth for the company. We do still believe very much in the strong deal rationale.
There's a very strong demand outlook, and there's a lot of demand for what we can deliver in Cadeler as the combined company. We will see continued value change bottlenecks, both in our area of the business but also in other areas of the business, and there we believe that larger and more versatile fleets will be able to deliver the redundancy that the clients are asking for when they need it. When they have a problem on scopes that is unrelated to Cadeler scopes, they will be coming to Cadeler for support, and we are looking to be able to support that because we believe that this is where a real win-win is created. Two industry-leading incumbents, we have built scale competencies and commercial flexibility, and we already start to see that.
We can also see that the synergies that we discussed with the market and our investors when we did the announcement of the merger, we are more confident today about delivering these synergies. We believe in meaningful value creation, as I said, and also the synergy potential is very much still evident. As of the 21st of December, we now have a dual listing with a listing on the New York Stock Exchange, and we believe that that will drive a lot of opportunity for the company. We have added a few pictures from the big day. It was a big day for everybody in Cadeler. In terms of the post-merger integration process, because merging the companies on paper is easy, integrating them is where the real work starts.
I think that we decided to be ready from day one, and we have added some pictures on the right side of the slide where you can see that the Cadeler logos were up on the same day as we listed in New York. That was important for us. It was important to send a message to everybody that now we are one team, one unit, and we want to work together as one unit and one team. In 2024, we will continue to have a fully strong focus on the integrating of the units so we create a one Cadeler team spirit and also deliver and capitalize on all the key synergies. We did a post-merger integration program already when we announced the deal, and we have been working across all the workstreams since then.
I believe that we are in a very, very solid position at the moment with progress across all workstreams and with all planning finalized to secure a full integration of the companies. We have also defined a new organization, and we have representation from both the old Eneti company and the old Cadeler company in the new Cadeler company on all levels of the business from the most senior management and across the company. Initial focus is, of course, to align key areas like new build management, project approach, ensuring that we are delivering on time, branding, and the organization.
Looking ahead, we are very much focusing on safety culture, maintaining safe and efficient operation while we further streamline and harvest synergies for the benefit of the company, our investors, and our clients, and of course, preparing for the significant fleet growth that we are looking into in 2024, 2025, 2026, and 2027. In terms of the merger synergies, as I already mentioned, we have already started to materialize those. In terms of the transaction execution, we have already delivered more than we promised to the market in terms of the financial and SG&A synergies, and currently we have achieved around EUR 25 million of annual synergies in that space from refinancing the company with better terms and conditions, more attractive rates, but also discontinuing part of the management team from the old Eneti organization.
We have an operational and commercial plan for the mid-term where we expect to deliver between EUR 25 million and EUR 50 million in synergies, and that is coming while we start to deliver the new build vessels but also working together on the vessels we already have on the fleet. We have already started to see some of this, and we will be communicating to the market these synergies as we progress over the next couple of years. Then, of course, in the long term, around about EUR 100 million that we discussed when we announced the deal that we believed very much in our ability to deliver.
The full effect of the synergies will, of course, be when we have delivered the last new build vessel, where we can really see what it means both for us, for our investors, and for our clients to have a large and versatile fleet in the market. In terms of the timeline for the fully delivered fleet, we have this slide here where you can see four vessels on the water, and then in 2025, we have five vessels delivering. Sorry, four vessels delivering. We have Wind Peak delivering in 2024 and four vessels delivering in 2025. Then we have Wind Ace delivering in 2026. As we have said also to the market, we raised capital for a third A-class vessel, which is expected to deliver in the first half of 2027.
We are currently in progress with the negotiations with the yard, and we expect to be at a conclusion on this project very soon. All in all, when the last project is signed, a total fleet of 11 jack-ups. The fully delivered fleet, as it looks, except the last one that we haven't signed yet, I think that that really is the most versatile, comprehensive, and capable fleet in the industry in terms of jack-ups. Several milestones have been achieved since we listed the company on the 27th of November 2020.
We have done private placements in the market when we thought it was the right thing to do to grow the company in a controlled manner and deliver value to our investors, but also adding scopes on a horizontal level in the industry as the foundation T&I scope, installing new cranes, securing capital for that in the IPO, and also listing on the New York Stock Exchange. All meaningful growth initiatives that have made us one of the leading actors in this industry today. There are several milestones ahead of us, and all of these milestones are positive impacts on our financial performance because when we deliver new vessels, we are able to just do more. Peter will discuss that a little bit more in his section of the presentation.
We started with an IPO, and you can say it's a humble start with a presence in Europe and a small sales office in Taipei. We had 2 vessels on the water, and we discussed at that point in time delivering 1 new build with the IPO. We had a total office headcount of 47 people and a total offshore headcount of 158 people. If we fast forward to today, where we are today, then we are becoming a leading pure-play T&I company. We are now 4 vessels on the water. We have 6 on order and 1 in negotiation. We have offices in two locations in Denmark, in the U.K., in the U.S., in Taipei, and in Tokyo. We have a total office headcount of 233 people and a total offshore headcount of 363 people.
Numbers will grow going forward because when we deliver vessels, more offshore people will be added. We have installed 11.5 gigawatts of offshore wind, and we are powering more than 11.8 million households. We have a track record that is both located in Europe and in APEC. We have more than 850 foundations installed and 375 planned. We have more than 1,300 turbines installed and more than 600 planned. All in all, a real transformation of the company. We do continue seeing growth also in the commercial side.
We have done a slight difference to this slide this time around, but we have kept the legacy slide on the right side of the slide where you can see, starting from the gray boxes, how many projects we were bidding when we were looking at the first investor meetings in 2020 when we discussed the IPO with the investors, to the dark blue boxes that are the projects we are bidding today. If we look at where we are bidding projects at the moment, the listeners and the people on the call today will see that we have projects all over the globe at the moment. 29% of the pipeline projects are located outside Europe. 43% of the commercial pipeline are made up of long-term agreements.
Europe continues to stay at the forefront with a massive demand, and APEC and US are increasing significantly with positive news from both regions almost on a daily basis. Only yesterday, the U.S. had more incentives also to support offshore wind, and we do believe that the U.S. will be a meaningful region to play a role in going forward. We already are starting to work in the U.S. from this year. As you see from this slide, we have several projects there and also an LTA. The difference between the regions and the globe here is that some of these projects that are on the globe do have a cross-regional scope, and hence we have decided to list it like this. Really, a positive development, and we see a total increase of 102% in our commercial pipeline from June 2023.
In less than a year, we have seen that the pipeline of commercial bidding activity has doubled. On projects that we are looking into, obviously, a lot of projects, I will not go through all of them, but also a record strong order backlog of EUR 1.8 billion, and this is a backlog that will grow significantly in 2024. Financial results, Peter. I'll be heading over to my partner here. Please go ahead, Peter.
Peter Brogaard Hansen (CFO)
Thank you, Mikkel. This is P&L, profit and loss for 2023. As you can see, very, very strong result. Revenue of EUR 109 million and EBITDA adjusted of EUR 50 million. What we have adjusted for in the EBITDA is EUR 8 million in transaction cost that was incurred in the Eneti transaction. What is important to notice here is that Eneti is included only with 12 days from the 19th of December, the day we closed the transaction with Eneti, and then we have consolidated 12 days of P&L in for Eneti. A very small portion is coming from Eneti, our previous Eneti. On revenue, it's EUR 3.4 million, and on EBITDA adjusted, it is a loss of EUR 600,000. Very, very small impact from previous Eneti in 2023 when we look at the profit and loss.
If we look at how we realized our results as compared to the outlook, we were in the upper end. Our outlook for revenue was 100-105, and obviously, subtracting the EUR 3.4 million from Eneti, former Eneti, we are on the higher end of the range. The same goes for EBITDA adjusted to 50. We guided 47-52, so a very, very strong result. I think it's also worth noticing that utilization for the vessels was 75% for the total year with two O-class vessels having the crane upgrades in Q4. Hence, it corresponds to a 100% utilization in 2023, which is a very, very strong result from the whole Cadeler team, the project organizations, and the vessels. SG&A obviously goes up, and that is impacted with these EUR 8 million in transaction cost.
As Mikkel says, we have realized the synergies that we guided from the business combination with Eneti. If we combined the two standalone companies, SG&A, from the past and inflated it into 2023, 2024 numbers, that would be above the EUR 70 million, and we see that we going forward will have SG&A to the tune of EUR 50 million. That is all already realized synergies. That was the P&L. When we look at the balances, that is, of course, full-blown consolidation of Eneti, so that is the full balance sheet of the combined two companies as of the end of December.
What we can say is that we have recorded EUR 17 million goodwill from the business combination, and that is basically calculated as the difference between the purchase price calculated at the share price of Cadeler NOK 44.10 at closing the 19th of December, and then the net assets taking over from Eneti. The vessels, we have recorded those at EUR 296 million, and that is around EUR 70 million below what they were recorded to in Eneti as the book value. In the PPA, we adjusted the value of those vessels, and then it all resulted into a goodwill of EUR 17 million. As of the end of December 31st, 2023, we have paid all transaction costs and change in control costs, so we will not carry anything into 2024 of those costs. Of course, there will be additional costs in the integration, but not significant expenses.
If we look at the CapEx program and the financing, Mikkel have already talked into this, but we continue to be fully financed with the current plans. As you can see here, in December, we managed to sign EUR 1.1 billion of financing, and we are in the process of securing also the financing on the A-class vessels, and that more than covers the outstanding CapEx program that we have. We are fully financed now. We were also fully financed before we did the private placement in connection with the 11th vessel. That is a continuation of our strategy of always being fully funded, so we do not need to go to the market to increase capital. This is the financing overview. As you can see, we have total committed financing of EUR 1.4 billion. We have utilized as of the end of December. We have drawn down 212 of those.
The O-class is, of course, in the existing fleet and a term loan on the cranes of EUR 100 million. Then we have syndicated the P-class and the M-class, the former Eneti vessels. There is a signed agreement on those. On the M-class, we are negotiating with the group of lenders to align terms and conditions and pricing with what we see in Cadeler. That is one of the synergies that we have been talking about, and we are in advanced stages of negotiating that to what we are used to see in Cadeler, benefiting from the bigger balance sheet with the two combined companies together. If we look at the full year outlook for 2024, that is, of course, with the combined group, full year, we guide revenue in the range of EUR 225 million-EUR 245 million and an EBITDA of EUR 105 million-EUR 125 million. What is important to say?
What is the basic assumptions behind that? That is timely vessel deliveries and execution on projects. We have already seen the O-class vessels leaving Scylla in Rotterdam with the new cranes. Then the Scylla is in dry dock before entering into contract in May. Then we assume when Peak delivery in Q3, as said by Mikkel, we are also on track on that to do that. The first M-class vessels, we do not expect to see any revenue from that in 2024, so that is not built into this forecast. As Mikkel said, this is the first step in what we see is a strong development in our financial results going forward. As we deliver a vessel, for example, the first P-class vessel here in August 2024, then we will see increased revenue from that vessel.
We have calculated on an illustrative basis before, it could be to the tune of EUR 70 million of EBITDA, and then on top of that, there will be a T&I scope on the foundation vessels once they are delivered. What we will see is this will be the first year where we see a vessel being delivered, increased revenues, increased earnings, and then it will tick in as the fleet are delivered as per schedule. That was the outlook.
Mikkel Gleerup (CEO)
Yes. In terms of market outlook, I think it's important that we discuss that as well. Obviously, in 2023, I think arguably there was a negative sentiment in offshore wind, at least in the second half of 2023. For us, we have a longer information runway, so to speak. We already started to see some of the clouds leave the sky towards Q4, the early part of Q4, and hence, we could see already that coming into 2024, it would be a really, really busy period. I think what is important to say is that we do actually discount some of the projects for installation by 2030 away. We can see that the supply chain doesn't have the capacity to deliver it, and hence, we have a view that there will be a lot of installation, but not so much as the stated policy targets.
It will be across regions, but of course, Europe will be the strongest region, and we believe that there will be so much work that the current supply chains will be under pressure into 2030 and beyond. At the moment, as we have said before, we see that the second half of the decade here will be very busy, but also, we already start to see signs of the first part of the next decade also being incredibly busy, the first half part of the next decade, actually. We are in a situation where for our own part, there is a very, very significant lack of yard capacity out there, and that is evident for everybody in the industry, and that will not start to free up before the end of the decade.
Hence, with the building time, the design time, and all of that, it is not easy to just put a lot of capacity online. We also see that from orders not being made and for conversions being, let's say, the go-to for some of the companies. In terms of what we see, I think that the capacity growth is enabled by the next generation turbines, and although the turbine growth has slowed down, we expected that we would see a 20-megawatt turbine in this decade. At the moment, we see that that comes after 2030 sometime. We do believe in the company in Cadeler that we will see a bigger turbine than the 15-megawatt turbine in this decade. How big it is, we say that it's probably around 18 megawatts, but that is to be seen.
The bigger turbines are good for the industry because we do see that it reduces the levelized cost of energy. We see CapEx savings on the balance of plant and also operational savings due to fewer turbine units. Also, let's say we have a fleet now that is prepared for it, so for Cadeler, turbine growth is positive. We also see that if anybody ever thought that floating wind was a threat to bottom-fixed turbines, then at least they are much more depending on a bigger turbine than bottom-fixed is because the substructure is so expensive that they need a bigger turbine much more than bottom-fixed does. We don't see floating wind as a threat. We actually think that this is a market Cadeler will play a role in, but it has been delayed at least with 5 years to the right, where we earlier predicted something around 2031, 2032.
We believe that it's at least five years delayed for that at utility scale mass outbuilt. In terms of delivering on key market challenges, we have mentioned a few here that turbines will continue to grow in size and complexity. Complexity really is around weight and how we load them on the vessel, so payload is something that is very important to keep an eye on. New regions that are looking towards offshore wind, Europe will face pressure on its supply chain because many of the new regions are considered to be export markets, and also, they will be harvesting from the same supply chain. Hence, we will see lower utilization because we have to transit between regions, but also, vessels can only be in one region at the time.
We believe that bottom-fixed will remain significantly ahead of floating continued in this decade, and there will be continued value chain bottlenecks and project delays. For Cadeler, the answer to some of this is really the partnership-driven approach that supports our clients. We try to early on engage in conversations with our clients. What is it that they need us to do for them to be successful? Because we need successes in offshore wind so we can all come out on the other side as winners. We want to work across all regions and key markets to support our clients there. We want to support the outbuild in new regions. We believe in a large and experienced team, both on and offshore, that is required to deliver these projects, especially the more complicated T&I projects and foundations.
Having a large and more capable and more versatile fleet is supporting our clients very much, and we do see that that is something that the clients are willing to go for, both in terms of the price they're willing to pay, but also that we are invited to every single tender out there at the moment. We see our vessels are optimized with longer legs, higher carrying capacity, and the payload is something that I would argue that is one of the key parameters, especially when the turbines grow. Of course, also being able to install on deeper waters that we will see. We do see that continued innovation in processes and equipment is something that Cadeler will focus on in our R&D department, and this is all about optimizing efficiency.
As I said before, the biggest difference between oil and gas and wind is that efficiency really matters in offshore wind. Strategic focus and abilities to seize opportunities and achieve continued profitable growth is a focus for us. We will be there when the clients need us, and that is why we go into these partnership-driven approaches to understand what is it that could go wrong and where is it that our client might need us so we can create these win-wins. Our clients, they get their equipment installed on time, on budget, and our investors, they can benefit from that. In terms of continuing the growth journey, Cadeler is a growth company, and we will continue to be a growth company.
We are one of the leading suppliers in the offshore wind industry, and as I said already, we have achieved significant milestones there and now have more than 550 employees on and offshore, a market cap of EUR 1.5 billion and a backlog of EUR 1.8 billion. The revenue will continue to go up. As Peter said, it will be like going up a staircase. Whenever you take a step, there's a new vessel being delivered, and that will impact our revenues, our EBITDA, and our net profits every time a vessel is delivered. We can see that where there are gaps currently between first project and delivery of vessels, clients are out there really, really keen to take that time from us on the vessels, hence giving us utilization on the vessels straight out of the yard.
The leadership team that will deliver this is a team that has solid industry know-how. The team is led by Peter and myself. We form the executives in the company, and then we have decided post-merger to separate the executive team into two teams, so the executive leadership team and a senior leadership team. The executive leadership team is Rikke, our Chief People and Culture Officer, and Alexander, our Chief Legal Officer, who joined us here the 1st of March. He was one of the advisors on the Eneti merger and joined us from Davis Polk, a US law firm, and we're very happy to have Alexander joining the team. We have Jacob, our Chief Operations Officer, who is our safe pair of hands on everything we do out there with our clients. Then Sarah, who used to be employed in Eneti and now our Chief Sales Officer.
It was evident from the very first moment we met Sarah that she had to form part of our executive leadership team. She is a very, very strong person in addition to that strong team. In our senior leadership team, we have Jacob Gregersen, our well-known Chief Commercial Officer. He is the partnership guy of the company, and he ensures the relationship with all of our clients, and I think that he will continue to do a fantastic job for Cadeler. Peter Kragh, our Chief Technical Officer, he knows everything about these vessels and other vessel types and has done this job for many years, and he's also our safe pair of hands in terms of delivering. His team has delivered the P40 project, the new cranes on the two O-classes, on time and on budget. Pernille, our General Counsel, continuing to be in our senior leadership team.
We're very proud to have Pernille there. Pernille is also ensuring the company from the outside world, basically in terms of liabilities, insurance, and so on and so forth. Then John Weigner, who also joined us from the Eneti side, he has the position as General Manager for the U.K., which is our biggest regional office, and we believe that it's very important that we have a culture person and a culture driver who knows the business in and out over there to be the Cadeler voice on site. We're very proud also to have John in this team. Our new headquarters, where Peter and I are currently standing in our canteen, in our new headquarters, has been inaugurated. We had a celebration with our partners on the 15th of March, Friday the 15th of March here in our office.
We had the ribbon-cutting ceremony just here in front of us where we decided that Annette Steffensen, once again, will cut the ribbon to a Cadeler office. She also cut the ribbon in our previous office, and this time, she was joined by eight children from Cadeler employees. It was a magnificent day with our partners, and we are very happy to have had that day. A few pictures from the boardroom as well and also from the party we had with the team after having celebrated with the partners on the day. In terms of what is it that Cadeler is looking for, we are looking for strong partnership because we do believe that that is a key enabler for continued success.
We can see that it works because we can see that our clients, they are communicating openly with us in terms of what they need from Cadeler, what it is we have to deliver, and what they are willing to do for us. That is also why we went out this year in February and raised capital for a third A-class vessel. It's really based on what we talk to the clients about, and hence, we have very, very high confidence on utilization on also this vessel. We will continue to look at long-term view on strategic partnership, growing with the partners, taking strong ownerships and being accountable, delivering on time and budget, solution-oriented, flexibility, and willingness to go the extra mile for the clients because this is how we build successes into an industry that really needs successes.
We are really equipped to deliver this, and we can also see that that is the response we get from the clients and partners in the industry, and we are trying to do it in both directions. It's easy to be nice to the clients that pay us money, but we are also looking to do it in the other direction to the ones that supply us with equipment that enables us to be a solid contractor for our clients. Hence, we are also into deep discussions with our suppliers in terms of what they can expect from Cadeler going forward, but we are focused on the relationship with everybody in the Cadeler ecosystem. In terms of empowering the Green Horizon, Cadeler is committed to leading the way in sustainability, and the targets and the key levers are in place.
We have set a target of being net zero operating by 2035 and a 50% reduction in Scope one and two emissions intensity by 2030. This is simply what is required for a company of our sort that is operating in a renewable industry. In terms of decarbonization, we have objectives. We want to improve energy efficiency. We want to enable electrification with shore power connections. This will reduce our carbon footprint with more than 15% and also an adaptation to green fuels. Green fuels, I think there we have an answer to that as well, not just reservation of space on the vessel. We are doing actual work on the vessels being delivered into the market.
Sustainable practices, whereas reduction from operations by 50% in 2030, garbage management plans, minimize the use of hazardous substances, requirement for biodegradable grease and oil where risk of discharge into the environment is present, and minimize the environmental impact on a full life cycle analysis on everything we do, including the vessels. As I said, I think in the industry at the moment, a lot of people are talking about that the vessels are prepared for green fuels. They have space allocated for that. We have gone the next step. We have decided we want to do actual installation, making us ready to take these fuels on board when the fuels are ready to supply to us. One of the pictures you see here is the methanol tank that will go on the P-class and the A-class vessels in China, and that means that we are ready.
The bunker stations will be installed. The pipe systems will be installed because it is way too costly to do this when the vessel is in operation. These low flashpoint fuel types require cofferdam, covered tanks, pipes, bunker stations, and a very special piping system in the engine room. For that to be installed when the vessel is in operation will be a complete nightmare. Hence, we have decided to do it now where the cost is lower and also the impact to operation in a very busy period of time is not present anymore. We believe that we have taken a leading position in this.
We will be ready for this both on the engine types, and we will actually be running a test project together with one of our key suppliers to try out low flashpoint fuels on one of the new builds and more to follow on that when we are ready to communicate it in full public. Continuous improvement for current O-Class vessels will also be there. We have installed a few monitoring systems to measure and improve operational efficiency. We do believe that a lot of efficiency can be harvested in educating the team on board in terms of what is actually the operational impacts of what you do out on board. Now, we can really monitor that on a case-by-case basis. Equipment upgrades to improve fuel efficiency and biofuel capacity and shore power connection expected in the first quarter of 2025, also lowering the total carbon footprint on the vessels.
It's important for us to say that biofuels for us come from a non-food source because we do not believe in taking food and putting it into the tanks of a vessel, so it has to come from a non-food source. In terms of being the go-to provider of T&I solutions, we have the largest and the most versatile fleet of next-generation offshore wind turbine and foundation installation vessels, and we believe that we are in a very solid position to support our clients. We have a global footprint and a very versatile fleet. We can right-size the vessel for the project and for the turbine type or the foundation type, and we believe that we have the ability also from a human resource to deliver to our clients larger scopes and project sizes on a global basis.
All in all, we believe that we are in a very, very solid position as a company in the industry. We have talked about where are the synergies coming from, and examples of this are really improving efficiency to reduce cost and improve utilization because when you can reduce cost and improve utilization, you basically have a double benefit. You don't spend money, and you make more at the same time. That is one of the things that we're looking for, and hence, we will try to not promise the specific vessel to the client but promise a capable vessel, and then we will deliver a vessel that is already pre-mobilized for that project if at all possible. That is something we can already start to look into now and see that there are significant benefits in that.
We will communicate openly about it, what it is we are delivering, and when we are delivering it, when we are ready to really talk about it and have the full overview of how much we can gain from that. Also, in terms of accelerating projects, when we raised capital in February, we discussed this need to have extra capital ready for spare capacity. We have been in contact, as I said, with our supply chain to enable us to really be ready on a project in record time. We have two different timelines here. One that is what we would call the typical timeline for being prepared for, for example, a foundation project, and then the bottom one, which is the Cadeler timeline.
That is really by integrating deeply with our suppliers and ensuring that we have the right agreements, the right terms and conditions, the right pricing, and also the right designs to enable us to be ready on very short time when something is needed by our clients. We do believe that that will also harvest significant value for our investors and our clients. In terms of utilizing the fleets in different ways, we have shown the slide before. One can say that there can be a standard installation with only one vessel on the project. You can have two vessels. You can change the vessel as you go ahead because one vessel maybe needs to go to another project, and one comes off a different project and can go on this project.
That could be one way to do it, or you can have a more capable vessel coming in, speeding up the project. You can also have an additional second vessel to speed up if the client is late on the start so we can deliver on time, on budget. Also, you can have two vessels just as a plan to really speed up for late starts. All of these things are currently being discussed with our clients, and we do see that this is something that the clients really like because it's flexibility that they cannot get with any other supplier at the moment, and it has a lot of value for the clients to enable them to install when they have promised to install.
I think we have also seen the larger utilities and the larger clients and partners out there already communicating publicly around taking less risk in the supply chain, and we do believe that this year is an example of taking less risk by increasing the redundancy for them and their projects. What can be expected from Cadeler? We will continue to focus within the red dotted line on the slide at the transport and installation and the operations and maintenance spaces. There are still other areas that are not a Cadeler scope at the moment, but we will not be, for example, delivering crew transfer vessels or starting to invest in wind farms. That is not what Cadeler is about.
We want to be a leading contractor in the installation, transport, and installation business for foundations and turbines, and we also want to play a role in the operations and maintenance. There are other T&I scopes that could be of interest to Cadeler in this bracket, and we continue to have an open mind and looking into this as we go ahead. We will also be open to vertical and horizontal expansion, organic and non-organic growth, regional expansion. We are currently very interested in the South American region. We see a lot of activity down there, and Cadeler will play a role in the South American region when that market is ready for installation. We do continue to focus on strategic partnerships, as I already said. Then, also floating wind. Floating wind for us is an opportunity, not a threat.
When the market is ready for utility scale, mass outbuild, Cadeler will be there to support our clients because it is the same equipment. It happens offshore, and it is really same client, same equipment happens offshore. The only thing that is different is the installation method, and there we will have a solution when we are at a market of significant size. That's taken us to the Q&A, and I think that this picture is an important story as well, and I just want to spend two seconds on saying what it is. It is really Wind Orca departing from Schiedam with its new crane, and you have Wind Osprey in the background being almost ready for departing, but that has already taken place.
I think an important testament to our execution capability. We promised this back in December 2020 when we ordered the first crane, and we have delivered according to our promise. Thank you.
Operator (participant)
Thank you, Mikkel. We have a few questions lined up here for the remainder of the presentation. First question will be, in which markets do you see potential, and will Asia be as big a market for Cadeler as Europe is today?
Mikkel Gleerup (CEO)
We see potential in Europe, Asia, U.S., and South America at the moment, and the picture is changing fast. I think Europe will remain the biggest market for some time, and I think also, let's say, the bottlenecks will be different in the different markets because of supply and demand, let's say, imbalances that are different in the different markets. We do see that Asia is a market that now has the ability to build pipelines of work with more markets being online. We see Korea growing pretty fast. Taiwan has more a clear pathway to offshore wind. Japan is also having a clearer pathway. Vietnam is still a difficult market and a market that might be, let's say, mostly supported by the Chinese and then Australia.
We do see that the region, even excluding Vietnam, is a region where there is an ability to build up a pipeline, and hence, we believe very much in Asia. The Philippines are also growing as we speak, but it's still some years out, and they will certainly not use the Chinese supply chain. In the US, I think it's an undisputable fact that the US will be a big market, Trump or no Trump, I would almost say. That is a market that we keep, let's say, a focus on as well. We said more than two years ago that we took a backseat approach to the US market, and I think it was the right decision. Now, working in the US, I think that on a case-by-case basis, we will work there if the risk and the reward is balanced.
I think that this is the discussion that we have with our clients at the moment, and I think that we are also at an aligned level in terms of how to do these markets. I think Europe first, Asia second, U.S. third, and South America fourth.
Operator (participant)
Thank you very much for that. Could you go through your assumptions for the upper and high end of your 2024 guidance interval in more detail when it comes to options being exercised and potential additional working days on top of the options?
Peter Brogaard Hansen (CFO)
We do not guide that detailed or granular, but of course, it is the lower end of the ranges where we see the firm contracts and the already executed options, whereas in the upper end, there is where we fill in some spaces and some more options are utilized. That is the dynamic in the range of revenue and thereby also EBITDA.
Operator (participant)
Thank you, Peter. Another question here is, do you aim for organic growth or new mergers as you see it?
Mikkel Gleerup (CEO)
I think we are open to both. We know there will be organic growth just by adding so many seafarers for the new builds, but we are open to both. I want to make it very, very clear. Eneti was all about that it ticked all the boxes. We believed very much in that merger, and we have to believe in a merger in order to go down that route. We have looked at many things, and we have also said no to many things. We are not deal-hungry. We want it to make sense for us as a company, for our investors, and for our clients because this is where true value is built, and that is how we want to build the company. We don't want to make it, let's say, a less attractive company by doing mergers.
That is not our interest at all or in the interest of the investors, the clients, or anybody else.
Operator (participant)
Thank you, Miguel. Could you, in broad terms, point out what are the future potential business risks as you see them?
Mikkel Gleerup (CEO)
I think that we are a company that does projects, so we have project risks. We have the safety risks. We are lifting ginormous equipment on the vessels, big in size, big in scale, big in weight, and it is complicated. I think that what has defined Cadeler is our execution ability, sorry. I think that also the fact that we are delivering the crane renewal on time, on budget, is a testament to that, and we are also on track with the new builds that were Cadeler legacy projects. We are focusing on this. We will also be running a safety culture program on the legacy Eneti vessels during 2024.
We have just gone through the same process in the last year and a half on the Cadeler vessels to really ensure that we are at the best place where we can be because safety is really what should keep management awake at night. If our operations are not able to get our people home safe, that is not acceptable, and hence, we want to ensure that we have done everything possible to ensure that our people get home safe to their families.
Operator (participant)
Thank you very much. One last question here. You mentioned floating wind, but is there any other potential business areas that you're looking into?
Mikkel Gleerup (CEO)
I think we have discussed it publicly in the past also that the cable laying for us is an interesting space. The reason that we like cable laying is that it actually builds on some of the fundamentals that Cadeler is built on, strong engineering capabilities, strong project execution capabilities, but also there's a strong synergy with the foundation installation. We do see some of our clients have a preference for scoping these two scopes into one scope, and hence, we are looking at it, but we will not go into this speculatively. It's a different market, and rightly, I would say that it has to be in a partnership with a client or in some sort of partnership with somebody who already does this.
It's a market that we are keeping an eye on, and if an attractive opportunity comes, then we will, of course, be discussing with our investors.
Operator (participant)
Thank you very much, Miguel. I think this concludes the questions for now. Thank you for your answers, and thank you for the questions held there.
Mikkel Gleerup (CEO)
That's perfect. Right on time. Thanks to everybody who listened in for this hour. I hope that you benefited from this. As always, we want to run a very transparent operation here, so Peter and I are, of course, available if there's anything that was not properly answered in this presentation. Thanks for the support. Thanks for the continued support to every single investor from one share and to big holdings of the company. We are really, really pleased with the support that you give Cadeler. Thanks a lot.
Peter Brogaard Hansen (CFO)
Thank you.