Ladies and gentlemen, welcome to the Ørsted Mads Nipper's Analyst Conference Call. I'm Mello, the call's coordinator. I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session and end at 8:45 A.M. at the latest. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mads Nipper, CEO, and Trond Westlie, CFO. Please go ahead. Thank you very much, and good morning, and thank you for joining this call. As we announced yesterday, adverse developments relating to increases in the U.S. interest rates, valuation of our seabed leases, and the execution of our Sunrise Wind project have led to an impairment as part of our Q4 2024 results. This impairment, and especially the continued construction challenges, are very disappointing. Before going into the details around the impairment, let me start out by highlighting that our operations continue to perform well. Based on our preliminary and unaudited reporting, we expect to deliver a 2024 Group EBITDA, excluding new partnerships and cancellation fees, of DKK 24.8 billion, in line with our guidance. The operational earnings from our offshore and onshore assets were the main contributors and have delivered in line with our expectations. Turning then to the impairment, where I'll go through the different drivers. First, the increase in the long-dated U.S. interest rates during the fourth quarter of 2024 led to a 75 basis points increase in our weighted average cost of capital. This increase has a negative impact on the value and use of our U.S. portfolio and leads to a decrease of the value creation across a number of our U.S. offshore and onshore projects. Secondly, we have substantially reduced the book value of our seabed leases located off the coast of New Jersey, Maryland, and Delaware. The adjustment is based on market-informed valuation indications, which, among other factors, reflect prevailing market uncertainties. Following the reduction in the book value of these seabed leases, we have no material carrying value for our U.S. seabed leases. I want to highlight that we believe the leases continue to hold strategic optionality and value based on the long-term potential of the U.S. offshore market. Thirdly, with regards to Sunrise Wind, a number of execution risks have impacted our current assessment of the projects. As we have communicated on several of our earnings calls during 2024, we have throughout the year managed risks relating to the fabrication and supply of monopile foundations, for instance, by taking the mitigating action to descope part of the procurement to another supplier and extending installation vessel charter. These developments led to significantly increased costs relating to the fabrication, supply, and installation of foundations, which eroded the majority of the project's total contingencies. In terms of the offshore construction work, I want to remind that we had to change our original installation setup as a result of the Jones Act-compliant Charybdis not being constructed in time for our installation work at Revolution Wind and Sunrise Wind. By using an alternative feeder barge solution, which is less efficient and more weather-dependent, we have relied on estimates and assumptions regarding the expected installation rate of turbines of our two projects, where Revolution Wind is currently in the offshore construction phase, and Sunrise Wind will follow. At this point of time, we have accumulated data from the installation and construction of Revolution Wind. This includes, among other things, experience and learnings from the ongoing winter installation window. The installation of Sunrise Wind will cover two separate winter installation windows, and based on our learnings from Revolution Wind, we have decreased the anticipated turbine installation rate at Sunrise Wind. This leads to a later commissioning of Sunrise Wind, driven by an extension of the turbine installation period, as well as higher costs relating to the vessel chartering and turbine installation crew. Our team continues to identify and implement opportunities to accelerate the installation rate, and any such improvement to the revised rate would lead to a reduction in the installation costs and improve the ramp-up generation profile for the project. As we highlighted in our Q2 2024 results, we had identified risks relating to equipment fabrication, installation, and commissioning of the first-ever U.S. offshore HVDC system, which at that point of time resulted in a risk of a project delay. We are working through finalization of the jacket fabrication, which is taking longer than expected due to technical considerations, and we have therefore taken the decision to adjust the relevant contingency level. With regard to the HVDC export cable, a defect was discovered necessitating a cable redesign and remanufacture. The cable is currently undergoing remanufacturing and undergoing its final tests, which we expect will be finalized during Q1 of 2025. The defect redesign and remanufacturing had led to a delay in the loadout and installation and will lead to increased vessel costs. Altogether, these developments have in combination led to a depletion of the project's existing contingencies and a need to reestablish contingencies for the project's execution risks to reflect higher project costs and delayed project commissioning, leading to an impairment of DKK 4.3 billion in Q4 of 2024. We continue to navigate the complexities and uncertainties we face in a nascent offshore industry in the new U.S. market. We will continue our dedicated efforts to strengthen the execution and navigate the supply chain challenges, and we are working diligently and in close cooperation with our suppliers to manage the remaining risks impacting the execution of Sunrise Wind and delivering the project to the updated schedule and costs is an absolute top priority for Ørsted. Taking these adverse developments into account, Sunrise Wind continues to be a profitable project with a mid-single-digit life cycle IRR and attractive forward-looking IRR. This assessment does not take into account any potential initiatives of the incoming U.S. administration. With enough offshore wind energy to power nearly 600,000 domestic homes, Sunrise Wind will create hundreds of long-term U.S. jobs and build a statewide clean energy economy that will energize New York for decades to come. Before turning to the Q&A session, let me clarify that the purpose of today's call and the upcoming Q&A session is to answer questions related to the content of yesterday's announcement only. We will address questions on other topics and business updates once we get to the release of our annual report taking place on February 6th. And with that, let's go to questions. Operator, please. Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. In the interest of time, please limit your questions to one. Anyone who has a question may press star and one at this time. One moment for the first question. Our first question comes from Kristian Tornøe from SEB. Go ahead. Yes, thank you. So my question really goes to your ability to execute. So in Europe, you have such a stellar track record in construction of offshore wind, and even in Taiwan, it seems that you did significantly better than competition and execution. So can you in any way try to help us why it is that in the U.S., execution just seems to continue to go wrong almost quarter by quarter? Yes, thank you, Kristian. Obviously, the angle to this question is that it is a very new market with a completely nascent industry and supply chain. And also because the permitting regime, with the time it takes from the award to the FID, just simply introduces by design of the process a greater uncertainty on supply chain and execution due to the extended timeline. And without mentioning any specifics, it is obvious that the few projects in the U.S. market, that there are just inherent execution challenges that come from this. So we are constantly taking these learnings. As I said, it is very disappointing that we are running into these, but it is simply the immature and nascent industry of both the supply chain and the execution setup of the U.S. projects compared to any other place we operate in the world, most notably Europe. Understood. Thank you. Our next question comes from Deepa Venkateswaran from Bernstein. Please go ahead. Thank you for taking my question. I think my main question is, what is the impact of the Sunrise Wind delay and CapEx increase on the divestment program? I'm assuming that there was something included for a farm down, maybe that's got delayed. So could you comment on how this impacts the DKK 70 billion-DKK 80 billion divestment or not, and what is the CapEx increase within that DKK 4.3 billion? I'm sure there's something which is NPV. So when we are revising our models, how much more CapEx should we put in to try and see the impact of these? Thank you. When it comes to the effect of the farm down programs, as Mads said in his first statement, we are only going to comment on the actual impairment elements, and for all the other questions, we'll come back to that on February 6th. Of course, the NPV effect is taking into consideration the tax credits, so I think that's the biggest element that is the change between the gross CapEx increase and the NPV effect. Sorry, so out of the DKK 4.3 billion, should we say that most of it is the CapEx effect, or is there the delay effect? So should we basically assume that CapEx of Sunrise has gone up by DKK 4.3 billion, or is it a different number? It is a different number. So the CapEx number is higher, and it's taking into consideration the tax credit effect. Okay, okay. But the net effect after tax credit is this DKK 4.3 billion? It's not sort of one to one, but yeah, that's the biggest effect. Thank you. Our next question comes from Alberto Gandolfi from Goldman Sachs. Please go ahead. Good morning, and thank you for taking my question. Am I right in thinking that the impairment does not include anything, any provision for the ITC bonus that has not been approved yet or does not take into account any import tariffs on the offshore supply chain? And if we were, I mean, to ask you for a sensitivity to it, would it be possible to provide a sensitivity to these two effects on both Sunrise Wind and Revolution Wind? Just trying to gauge what would be a cleanup trade here if you were to impair everything on all these projects. Thank you so much. Thanks a lot, Alberto. Yes, you're right that we have based this impairment assessment on the current valid Treasury Energy Community Guidance, so including the 10% ITC. And if our projects ultimately cannot qualify for that, we have provided explicit guidance on these risks before. So that is in our accounts. And we have also indicated before that any tariffs, we don't want to speculate at all on any level, but that would not be at a very material level, but of course be a negative impact. Just to allude to the EC element, we did provide that information in the third quarter report. So you will find that in the notes. In third quarter, it was DKK 4.7 billion, the NPV effect of that one. Thank you once more. Our next question comes from Peter Bisztyga from Bank of America. Please go ahead. Yeah, hi. Thanks for taking my question. Can I just get a quick clarification first? I'm not sure I understood from Deepa's question or from your answer how much of the DKK 4.3 billion in total is cash effective and how much is just non-cash NPV effect. So if you can just clarify that, please. And then can you just sort of comment on the extended timeline here? It's another six months delay at sort of six plus months delay at Sunrise Wind. How does that potentially start to sort of impact your window vis-à-vis vessel availability and any other kind of timelines that you have to stick to to avoid another kind of Ocean Wind kind of scenario where suddenly everything kind of snowballs because of delays? So if you could comment on that, please. On the cash effect, of course, most of the effect of the NPV effect of DKK 4.3 billion is cash over the time until COD. Yeah, so we don't give a specific percentage, but the majority as cash as Trond says. Under delays, that is what you are asking, and the concern you are asking for, Peter, is exactly one of the key drivers of the additional costs. So there's nothing here in these delays that trigger an increased risk of a situation where we run out of vessel scope. We have secured all the necessary vessel scope for this delay, but that is part of what triggers the additional cost. But we do not see an increased risk of a scenario where the project is not buildable. So we are fully continuing with secured scopes towards COD. Our next question comes from Mark Freshney from UBS. Hello, thank you for taking my question. Just regarding the executive order, which I understand has been drafted and which no doubt you would have seen or your lobbyists would have communicated back to you what's in there. Can you remind us what you expect in relation to Sunrise and Revolution and whether that is informing the impairments in any way? Yes, thank you, Marc. We, of course, have taken note of the executive order issued on offshore wind late Monday evening. So you will understand that because it was issued late last night, we are in the process of reviewing it to assess the impact on our portfolio. That's all we have to say at this stage. Our next question comes from Harry Wyburd from Exane BNP Paribas. Your line is open. Hi, good morning, everyone. So just coming back to Sunrise, some understanding from your answer to Alberto's question is you are still assuming that you get the 10% ITC bonus adders. If you didn't, I know, John, thanks for reminding us of the sensitivity of the DKK 5 billion, but what would the through cycle IRR be? Because you mentioned it's mid-single digits now, but I presume that's with the bonus adders. So I wondered if you could help us what the through cycle IRR would be if you lost the bonus adders. And how far are we, or would you be happy to completely rule out the risk of the project being canceled? Because I guess obviously we've eaten into a bit more of your buffer here. So at what point do you consider cancellation? Would you say that you would still definitely go ahead if you lost the bonuses on the ITCs? Thank you. Thank you for that. As I said, the amount of the NPV effect of the ITC of the 10% level is DKK 4.7 billion as we disclosed in the third quarter. It is, of course, marginally affected by the interest rate as well. So there will be minor changes to that number at the fourth quarter. But having said that, that amount does not get us close to any cancellation discussions in our mind. The forward-looking IRR is good. The life cycle IRR as of now is mid-single digit. And that's basically what we're able to disclose as of this moment. The DKK 4.7 billion is, of course, some elements of sensitivity to the returns, but not major. Okay, thank you. The next question comes from Daniel Haugland from ABG Sundal Collier. Yes, good morning, everyone. So I just wanted to touch a bit back on the vessel availability because that was the key reason that Ocean Wind was completely cancelled in 2023. So my question is, how confident are you now that your extended vessel charter for both Revolution Wind and Sunrise Wind will be enough this time? Yes, thank you. As I mentioned to the previous question, with the knowledge we have today, we have a very good confidence that we can complete the project. We have built in the plans that reflect our current knowledge. We have taken a thorough assessment of the installation rates, and right now, we have also secured that the installation of monopiles, which is not the feeder barge solution that we talk about, which is now the critical project. Monopiles is the manufacturing still goes to plan. That has come at a cost, and we have also secured the necessary vessel scope, so at this point, we are not concerned that there is a risk of vessels becoming a critical factor for the execution of the project. Okay, thank you. Thanks. And our next question comes from Jenny Ping from Citi. Your line is open. Hi, morning. Just a quick question around the seabed. Can I check two things, effectively? One, what triggered the write-down for the seabed? I presume, as you tried to sell the assets and that triggered it. And then, secondly, just to confirm, the $600 million or circa $600 million that you spent buying the 50% seabed from Eversource back in 2023, that is obviously in Massachusetts, and that's not included in the impairment that you've announced today. Thank you. As you rightly say, the way we have done the evaluation as of now is, of course, a market anticipation on the value of the seabeds and also the elements of a discussion we have had in the Ocean Wind seabed, so the element is, of course, an aspect of the recoverable amount that has been the basis, and when it comes to the total book value of all our seabeds in the U.S., it's sort of an immaterial amount residing in our balance sheet. Sorry, so are you confirming that the Eversource $600 million is included in this write-off? What I'm saying is that, well, in essence, what I'm saying is that that has been considered previously, and as a result, the sum of our seabeds in the U.S. is not material in our balance sheet. Thank you. Thanks. And the next question comes from Lars Heindorff from Nordea. Your line is open. Yes, morning. Thank you for taking my question. Sorry, if I going back to the Sunrise CapEx, it was a late release yesterday evening and also early this morning, but still don't really understand the impact here. So when will that, the DKK 4.3 billion, when will that have an impact on your CapEx? Will it be 2025, 2026, or will it be 2027, or maybe all of the years? And also to what extent, going back to some of the previous questions, is in terms of the overall CapEx for Sunrise, how much should we increase our estimates and our estimated CapEx for Sunrise in order sort of to reflect the amount now? Yeah, so it is. The The construction period lasts from this year through 2027. And we don't have the specific split on that, but it would be in these three years with a majority in the latter two years expected. And I mean, like as Trond said, the actual CapEx is a bit higher due to the tax credit impact. And we don't give the specific percentage increase due to this. But if you can calculate the number, if you take that the majority of the DKK 4.3 billion is the cash or the CapEx part, and then if you take into consideration the tax credit, you can make a qualified estimate to what that additional CapEx is. Thank you. Our next question comes from Casper Blom from Danske Bank. Please go ahead. Thank you very much. Just a brief one here. A year ago, when you came with your capital markets update, you set an EBITDA target for 2026 of DKK 30 billion-DKK 34 billion. Given that you have not updated that, should we still take that as valid despite the delays that you've seen across the portfolio over the last 12 months? Yeah, thanks a lot, Casper. As we said, the purpose of today's call is about the preliminary earnings and the anticipated impairments only, and given the nature of these adverse developments related to interest rates, seabed, and Sunrise, we deemed it necessary to give this information now, and any other topics will be addressed as part of the full year earnings call in the beginning of February. And our next question comes from Olly Jeffery from Deutsche Bank. Your line is open. Thank you. Good morning. A few questions, please. The first one is just coming back to the likely impact of Trump potentially introducing import tariffs. My understanding previously was that although Revolution Wind is pretty well installed and that we see limited potential impact there, you saw more of a risk on Sunrise Wind from import tariffs. So can you talk about your latest view on that? And then the second question is just coming back to the issue you mentioned with the cable that needs replacing. Can you give a bit more detail about how that's come about, what the cost of replacing that will be, and how you hope to avoid a similar issue happening in the future? Thank you. Yeah, thank you, Olly. I mean, as mentioned, we're not commenting in detail on this now. We don't want to speculate on any tariffs. But I can say, as we've said before, even on Sunrise, it is a less material impact than, for example, the ITC sensitivity. That's as far as we can go at this stage. But we really don't want to speculate on any levels given the lacking clarity. And on the cable cost, we also don't break down the totality of this impairment impact, but we can say that the foundation and the turbine installation scope are by far the bigger scopes. So consider both the jacket and the cable issue of smaller impact compared to the other two deviations. Thank you. Our next question comes from Ahmed Farman from Jefferies. Please go ahead. Yes, thank you. Just a very quick question. I think from your comment earlier, I understood that you do not have any meaningful amount of seabed leases on the books now, including the Eversource. Could you just maybe also give us an updated figure of the recoverable amount of the offshore wind farms? I think at the third quarter, you had DKK 15 billion. Presumably, we can just directly apply the non-seabed impairment to it to get a sense of where that figure is. Thank you. When it comes to the recoverable amounts, as I've said, it's not a material amount left in our balance sheet. And we're not going to be more specific on the residual amount. So I'm sorry, I won't be more specific on that, but we have reduced the value to the recoverable amount, and that is, as I said, not material anymore. Okay, thank you. We have a follow-up question from Deepa Venkateswaran from Bernstein. Your line is open. Thank you for my follow-up. I just wanted to check whether the amended timeline means that you may require any fresh federal permits, or is the current permit still valid? Could you just confirm that you don't need any fresh federal permits? Thank you. Yes, thank you, Deepa. I can confirm that both Sunrise Wind and Revolution Wind have all federal permits in place, including key permits such as Record of Decision and Operations Plan, and this is not impacted by this delay. Okay, thank you very much. And another follow-up question from Alberto Gandolfi from Goldman Sachs. Your line is open. Thank you for taking my follow-up. I know that in February we're going to address all of these, but I was going to ask just about the implication of the impairments from today. Given how much is cash, non-cash, given the delays, can you comment on the expected FFO to net debt for this year? And if you require on this basis any incremental balance sheet funding and how you're thinking about filling that potential gap on the balance sheet? Thank you so much. Thank you for the follow-up, Alberto. The answer is going to be the same as previous. When it comes to other issues other than the impairment issues, we will follow that up on our conference call on the 6th of February. Clear, understood. Thank you. The next question is a follow-up question from Mark Freshney from UBS. Please go ahead. Hello, thanks for taking my question. Mads, presumably there is absolutely nothing for any recoverable amounts from the supply chain, and I know that it can take years following completion, as you've seen on some of your earlier projects, to fix out costs with the supply chain. Would you rule out being able to recover any additional costs, say, or from previous overruns from the supply chain? And what do you think the probability is? Yeah, thank you, Mark. I mean, we cannot go into any kind of detail of the supplier contracts we have. But as I believe we have also said before, sort of the liquidated damages cap is typically around the contract value. And in many cases, also in some of these, the total impact to the project due to delay and need to secure additional vessels is typically quite a lot larger than that. But of course, if there are deliveries that are not happening to the contracts, then there is a recovery of that. I think the agreement we have made and the settlement we have made with Dominion on the Charybdis vessel is a good example of that. So of course, yes, there are these types of settlements. Yes, they do contribute, but as mentioned, typically with a meaningfully lower amount than the total impact on the project due to schedule impacts and ripple effects. Thanks. Our next question comes from [Aude Carrier] from Pictet. Your line is open. Great. Thank you very much for taking the call. The first question was, have you spoken to the rating agencies prior to making this release, and what was their reaction? Because obviously, they're looking at the debt at the moment. And to follow on from that, I know you said you won't discuss it, but the charges are large. Can you confirm if you generated positive or negative free cash flow in the fourth quarter, please? As previously said in this call, we are only going to comment on the impairment issues on this call. And we're happy to answer any other questions relating to this or other topics when it comes to our announcement of the annual report and the fourth quarter on the 6th of February. Did you preview the impairments with the agencies or not? I can only repeat the answer I just gave you, that we will answer those questions on the 6th of February when we come out with the fourth quarter report. Okay, thank you. The next question comes from Pierre-Alexandre Ramondenc from AlphaValue. Your line is open. Hi, good morning. Thank you for taking my question. I wonder about the first point you mentioned when you mentioned an increased long-dated U.S. interest rate that affected the U.S. portfolio. I'm trying to better understand the reason behind, because correct me if I'm wrong, but it means your existing projects are accounted for at amortized cost and not at fair value. So if rates decrease, you won't reverse impairments, right? And the second point is, is it because you fear to face some certain financing or purchasing issues that are not yet secured? So could you please elaborate around the elements, please? Thank you. The basis for your question is that, of course, the assets or the projects are accounted for in historical costs. But when we come into impairment territory, the IFRS rules, not the U.S. GAAP rules, require us to have a net present value on these projects. And as a result of that, the projects or assets that or the cash-generating unit, as the IFRS defines it, makes it necessary for us to actually have a net present value assumption on the assets that are coming into impairment territory. And so for those assets, and that is really Sunrise Wind and Revolution Wind and some of our U.S. onshore assets, which is in this impairment territory, they are then written down or impaired up and down depending on this interest rate. It is the increase of this interest rate that makes the charges in total of DKK 4.3 billion in this quarter. Many thanks. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mads Nipper for any closing remarks. Yes, and thank you very much for your time to join this call. We look forward to reporting our full year results on the 6th of February. And in the meantime, take care and stay safe. Thank you.