A very good morning, everybody, and welcome to the Sif interim results presentation of the half year numbers of 2022. My name is Fred van Beers, CEO of Sif, and with me is Ben Meijer, our CFO. We together try to explain and expect to explain to you what we did in the first half year. Live with us are sell side analysts from the Dutch equity brokers and independent analysts. On the conference call, we have analysts from Norway and the U.K.. If you have any questions or a remark that relates to the presentation, you're invited to use the button, and instructions will follow after this presentation on how exactly to do this all. Let's go to the next page, which is already on the screen I see, at least here. What you see, this page is all about safety. First of all, here in this meeting room, for those of you present here, there is no test foreseen. Whatever you hear, and even if it is a test, the message is follow the green signs to the exit, listen to the employees of this place, and they will guide you to a safe place. Looking at the results of the first half year on safety, we cannot be satisfied. From what you see here on the screen, our lost time injuries were up to five in the first half of this year, leading to a lost time injury frequency of 8.9, which is a running 12 months number, showing clearly that over the last year, we've seen a quite significant increase in the lost time injuries. That, of course, is a big concern to us because we spend a lot of time, effort on cultural change, instructions, training, and what have you. We basically see two reasons here that surface as to why this number is so high. One is the increasing inexperience of people and workforce that we hire and need and hire from the workplace, but it's like in any industry, a big problem to find the right people. We have concluded that we need to invest a lot more time and effort in order to bring people up to a sort of basic level to make them work some sort of safe in our factory, especially in Roermond. Because why am I saying Roermond? The products have increased to such a size that it becomes extremely risky, I should say, or let me put it differently. The risk of running into an accident leading to an injury has increased massively because of big products in quite limited space in Roermond. We are working on this. We're not happy with that because it's something that you don't wanna show as a company active in this business. Secondly, the sickness rate, you see it's 7.2%, first half. That looks high. It is, though, in balance with the industry at this moment, and it's coming down quite rapidly. The reason why it's so high was in the first quarter and so part of the second quarter, high numbers due to COVID. A lot of infections again, and flu, to be honest, which led to a high sickness rate. Let's go to the next page. What did we do from an operational perspective? We worked on quite a number of projects. I think they're all known to you, to most of you. Hollandse Kust Zuid was completed from a production perspective, the painting mainly. As we speak now, we have the last few monopiles at our site, the rest being installed, in the field already. We furthermore worked on the Dogger Bank project. That's on the top right side, where you see the installation of the first monopiles, and transition pieces, at the Dogger Bank by Deme. We are full-fledged busy now with the production of Dogger Bank B, transition pieces and the monopiles. The Hollandse Kust Noord project is fully up and running in our factory. Working on quite some projects simultaneously. Dogger Bank has been, as I already said it in relation to safety, an interesting project so far for us because these are the biggest foundations we've produced so far with weight ranging between 900-1,300 tons per monopile and a diameter close to 9 m already. Furthermore, we have been steadily, I would say, working together with our Siemens on the Hollandse Kust Zuid project. You see that on the bottom left picture. The Wind Osprey, the ship, doing the installation for Hollandse Kust Zuid. The turbines, they're running quite smoothly, I must say, and in good cooperation. We're pretty happy with that order and with this cooperation. The last project we completed and has been finalized nearly by means of the turbine installations itself is the Maasvlakte 2 project. Small project, but at our front door. We're happy to show that to the people visiting us that we actually can supply also nearby monopiles. Everything running smoothly there. Next page is about the future. What did we do from a contract win perspective in the first half year? Basically, two orders for 2023, meaning resulting in the fact that 2023 starts looking quite nice and full with more balanced spread over the production factories, small production lines, and bigger production lines. One is the transition pieces for He Dreiht. We would have loved to deliver the monopiles as well, but unfortunately, we had to step out of the monopile program since we were fully booked already for that period. 64 transition pieces, 36 kilotons, very nicely as an addition to the already booked orders for monopiles. Not yet to be disclosed project also for transition pieces, I can tell you, is for 19 kilotons. Where we have signed a capacity reservation, which has led to some financial commitments from our customers. It's very close to becoming a disclosed project, let me put it that way. These two projects, of course, do not include the 400 kilotons that we are discussing for the new factory. Yeah, that's on top of this still to be finalized. I will come back to that a little bit later, how that is progressing, this total, the new build project. For now, I hand over to Ben to go a bit in-depth through the numbers, and I'll come back to the future a little after him. Thank you, Fred. Indeed, where did this bring us in terms of numbers? Production came in at 89 kilotons, which was almost equal to the first half of last year, slightly better. Equally important is also the number of foundations we produced. In the first half of 2022, we manufactured 74 monopiles and 55 transition pieces, compared to 102 monopiles and three transition pieces in the first half of 2021. For the full year 2022, we expect an output of around 174 kilotons, implying that production for the second half will be close to 85 kilotons, reflecting also the holiday effect, so that you do a little bit less production in the second half compared to the first half. Contribution margin in absolute numbers improved with more than 10% compared to the first half of 2021, and this was mainly related to increased marshaling income and income from other activities, including KCI the Engineers. If we look at important parameter contribution margin per ton, cleaned for the contribution for marshaling and other activities, so that you purely look at the contribution margin per ton for monopiles and transition pieces, we see a number of EUR 612, which is in line with the first half of 2021. EBITDA on an adjusted basis, that's EBITDA cleaned for the one-off impact of costs you have to make in relation to the expansion project, came in at EUR 21.1 million, which is slightly above prior year. As mentioned, the adjustments to come to underlying EBITDA, to adjusted EBITDA, relate to the one-off expenses for the expansion plans of our production facilities. Reported EBITDA, EUR 19.1 million. For the full year, we confirm that our adjusted EBITDA is expected to come in slightly ahead of prior year. Last year, we reported a number of EUR 39.4 million. As mentioned before, working capital is volatile over the quarters and was negative with EUR 42 million. With the exception of IFRS 16 related lease liabilities, we have no external debt, and the cash position was reported at EUR 58 million at the end of the first half. As explained before, it's a snapshot situation if you look at working capital, if you look at cash, it's inherent to the business, and depending among others on the status of projects, invoicing and payment behavior. Next slide, please. We have defined three important non-financial KPIs on which we have also requested Ernst & Young to provide limited assurance for full year reporting, so not for the half year numbers. If you look at the CO₂ emission per ton, it's slightly increased, and this is directly related to the product mix. The reason is that in the first half of 2022, we have produced more transition pieces, and this implies more ship movements with our subcontractor, Smulders in Hoboken, to apply secondary steel. Footprint from these extra ship movements was partly compensated by conversion of gas preheating to electrical preheating at seven workstations. If we look at net CO₂, it was 0, which is directly related to the wind turbine at the ship's site in Rotterdam. Second KPI, which we introduced by the end of last year, is related to the contribution or shift to the renewable energy, which increased to 803 MW in the first half of 2022, compared to 476 MW in the first half of 2021. For me, a more real number is if you look at 803 megawatts, it basically reflects 800,000 households. Also in the first half of 2022, our contribution from this perspective was to supply energy for 800,000 households. KPI for safety is LTIF and the number of lost time incidents in relation to every million man hours worked. As explained already by Fred, this number was too high in the first half of 2022, and also measures have been taken to reduce this number. Brief slide regarding the operational situation per today. If you look at today's situation, everybody knows that we are in a more or less confused world, and we can say that steel, both plates and flanges for our order book is secured. The pass-through pricing of steel to Sif is more or less irrelevant. This is, however, different for energy costs. If you look at energy costs, this is indeed directly impacting our bottom line. If we look at the first half of 2022 compared to the first half of 2021, we see a negative impact from energy prices on the bottom line of EUR 2.5 million. Adjusted EBITDA is slightly ahead of prior year, and this negative impact was offset by, amongst others, increased result in the marshaling segment. An actual operating challenge today is the drought and the low water levels in the various rivers. Products, steel plates to Roermond and Kemps to Rotterdam, are transported at the moment in smaller batches. In the short term, we are able to mitigate shortage by buffering, by sufficient stock in Roermond and Rotterdam, but that's for the short term. Also indeed by the end of September, at some time, it needs to start raining again. Tender activity is unchanged, with special attention for sourcing of steel. Recruitment activity is very high. That's the challenge we face at the moment. Also, if you look at staffing, if you look at personnel, to find the right qualified people is an additional challenge to make sure and to secure that we have a flawless operation. Please, to the next slide where I hand back to Fred. Thank you very much, Ben. I think this picture is known to everybody. We've shown it consistently over the years, I think. What basically the message is, and that's unchanged. The step changes have been there in the past, but have been increasingly big, if you look at them individually. I think at this moment, or we know at this moment, we are facing a step change towards the 14-15 MW turbines, if not bigger. The step change we have to make is also the biggest in our history, to be honest. That's why we are very, very carefully working on this. Unfortunately, we had to postpone the FID. We had hoped to be able to give full disclosure before the summer break, but well, we have decided to take our time as needed, and we will come back to you as soon as possible when we know exactly when we can disclose. I think a few things are important here. First of all, this has been, and I'm only echoing, I think, others in the supply chain. The supply chain is tight and all supply chain parties are facing the same challenge of how am I going to earn back my investment. Profit levels throughout the supply chain have to be consistently healthy in order to justify a quite substantial investment that not only us, but others have to take. We've communicated this before, but a three-year earn back, maximum four-year, is definitely a very strict, I would say, condition that we want to fulfill in order to go to an FID moment here. Having said that, we are positive in respect of reaching that point, and not only an earn back period, but also later on, of course, some earnings for the shareholders and the company itself, because earn back is one thing. You, after that, you need to earn your money even more, isn't it? This is one of the elements that we are working on. I said we are still very positive that we can reach this moment, but we're not going to disclose anything before we are sure on this. I think the other element I like to mention is related to permits. We're working on that as well, but we want to be sure that both on the nitrogen, which is in Holland, an interesting debate, has to be secured before we are taking an FID. The same, to a lesser extent, relates to the environmental permit and the building permit, which, from a process point of view, has to be 100% under control. Having said that, I like to move on to the next slide. That shows the market. This is a picture we've shown before. I think two very important things have happened since we last met. That is this announcement from the Dutch, Danish, Belgian and German coalition, so to say, to further increase their ambitions, which has been put in this number, and which we also noticed is putting some extra push on regulatory offices and also the permitting offices, et cetera, to really help the industry now to make sure that all these things, criteria are in place to really boost what's needed for the supply chain. The other one, released two weeks ago in the U.S., where Biden was successful getting his $430 billion program through the Senate, I believe it was, Congress, for the renewable business, and the energy transition in the U.S. has a big impact for us because and I will come back to that later, we are fully working on that area as well, how we can play a role in the U.S.. The gigawatts ambitions are now for 2030, 250-300 GW easily. Let's see how that will be, how that will materialize. There is not a lack of ambition in this business. If you move on to this picture we saw, I think, as well, in previous meetings. Basically, what you see here is a picture on the left side, where we see the number of foundations needed per year. I just discussed it also with Fons n ext time, we will show you a different picture showing that also towards 2030, the ambitions that are now here listed as 1.1,100 foundations, because that's the number we can justify based on projects some time ago, has now increased to something like 1,300, 1,400 already, whereby we can say, yeah, they are having a certain level of certainty that they will be needed. The demand towards 2030 is year-on-year basically increasing. Let's see how the supply chain can react on that. Because if you look at the right side of the picture, the biggest chunk there is the blue part, and the blue part is the equivalent of the number of monopiles foundations between nine and 11.5 m, and that is exactly the area where we are focusing on to build our to align our new factory for. Going to the next page, this is the world, as you can see. We have been discussing a lot about the investment plan for Europe, but we're not sitting still, so to say. That's not English, but it's good Dutch on developing and looking into the Asian area and the Americas as well. You have seen probably our announcement that we have put up a partnership with GS EnTec, an industrial conglomerate in South Korea, whereby we will grant them a license. It's a license agreement to initially convert an existing factory to be able to make monopiles on a relatively short notice. Depending on the market development and how the cooperation is developing, in a second phase, look at setting up a complete dedicated monopile production facility under the responsibility of GS EnTec, but with the support of Sif, which gives us a local partner in that area also for our customers, because a lot of our customers are developing also in the Asian area. This structure we choose because it gives us a right balance between the limited people we have available to actually help support this sort of partners in balance with the expansion needs in the supply chain outside Europe, in this case, in Asia. For the U.S., we are in discussion with a very strong local partner. We cannot disclose yet because we need to formalize a few things, but I can tell you that it's going in a really promising direction, whereby we are looking at a sort of joint venture set up for setting up a local production facility at the East Coast of the U.S. for production of the bigger diameters even than those needed in Europe. What we see is that the East Coast of the U.S. requires, due to the soil conditions and the bigger water depths and the wave behavior, for even bigger diameters than the 11.5 meters. We are looking at that area, what we can do there together with a local partner. Besides, again, in summary, we are not only looking at Europe at the moment, we're definitely also putting a lot of effort in the expanding to those two areas. To next page, we are not the only one active in this business, which actually I said it, I think, before, is an underpinning the fact that monopiles are definitely also in the future, the foundation of choice. Basically, all these parties are developing as planned for, and that's also how we calculate their capacity and the dates that they are coming up to stream with their monopiles. Even with all the capacity being successfully implemented, we still see that the ever-increasing ambitions are higher than what this supply chain can actually deliver to the market. Basically, what my message is, every one of these parties has to be successful in order to sort of come to the ambition level that is required by the local governments. Yeah. Going to the next sheet. Here, again, the picture you've seen before, it hasn't changed. It will change a little bit here and there because we're constantly modifying, and I think that's the other message on the expansion plan. Although we haven't taken FID, we are full-fledged working towards going on with the discussion with suppliers, with building parties to go to final design of the factory, make sure that suppliers can deliver equipment when we need it in order to be up and running early 2025, full-fledged. That remains unchanged. Despite the fact that we have delayed our FID a bit, we are in such a dialogue and have made such commitments to all parties who require, the critical parties, that we do not need to delay the final starting date of the new factory. That's important also, of course, for the discussion with our launching customers that we're now in exclusive discussions with. We need to be able to supply or deliver monopiles for those projects in time. I think another important thing to mention is, it said here it's 400 kilotons. From a kiloton perspective, it goes up quite a lot, but from a total number of monopiles, we stay at around the 200 monopiles per year number. Per week, it's said here, but basically it's 200 a year. Meaning 200 a year, meaning 11 meters to around 2,500 tons each as a reference monopile. Next page. This picture hasn't changed in that sense. The one maybe missing here is permits, but it's included, you could say, in the financing aspect. Financing, in order to get financing solidly secured, permits is an important part of that. Having security on that, I mentioned it already before, on the nitrogen, environmental and the building permit. That's where we are also still working on. The human resources development remains a concern for us, like any other industry, I could say, at the moment. We have a good plan in place. We have the right people in place to actually do the recruiting. Also we're working now, we're building our. Expanding, I must say, our own training facility, not only for the safety part of it, but also in order to be able to really educate and train people from basically scratch to the level that we require for this, our present factory, but also our future factory layout. That brings me to the last sheet to thank you for your attention so far, and I'm pretty sure there are a few questions that you wanna ask, and I think we get an explanation on how the process works. Open the floor for the people around the table. Yeah. I think Stefano should open the call. Stefano, are you there? As a reminder, if you would like to ask a question via phone, please press star one. Stefano? Yes, first question comes from Turner Holm from Clarkson. Please go ahead. Hey. Good morning, gentlemen. You hear me okay? Fred, Ben, do you hear me? Yes, we can hear you. Hi, gentlemen. Sorry. I can hear you. Okay. Yeah, sure. Thank you. I guess I just wanted to touch on the expansion project to begin with. I think, I mean, if you look around at the steel prices in Europe have come down a little bit, and I guess it might suggest that, maybe the ultimate CapEx for the project at least maybe isn't getting worse. I guess, you know, I just really wanted to understand a little bit about what are the challenges that you're facing in terms of the expansion that kind of makes you rethink? I mean, you pointed to very strong market conditions. You know, offshore wind has had a great year really so far in 2022, and I think you pointed to how it's accelerating the demand picture. What are sort of key items that you're trying to secure or nail down or understand better before you take FID on the project? Basically a lot of hard work, but what I try to mention, Turner, in the presentation is it's related to making sure that the permits are granted in time. Secondly, that we can be sufficiently sure that the earn back of our CapEx in time is solid enough and also leads to some longer term profits that justifies this investment. That basically means that in our discussions with the market, with customers, in relation also to the discussion with financiers, we want to really lock in that when we push the button, that we are close to certain that we can earn and realize our business plan as we put it forward. That's basically, I think, the core of the discussion that we're having at this moment. In that process, we are not, so to say, putting the pressure on ourselves to sort of come back with a disclosure without having these items clocked out according to what we feel is required. Just to follow up on the comment that you had earlier in your prepared remarks. You said that you still are targeting the beginning of 2025. I guess I'm just wondering how much time do you have if you're gonna be able to meet that target? Well- [audio distortion] Obviously, we cannot delay this for another year or so. That doesn't work. The thing is though, we do believe we have to come out with this decision this year, and or have to. In parallel, as said before, we are in constant dialogue and also actually committing to some, for example, to pre-engineering, committing to some long lead items, that we now secure already for specific equipment in order to make sure that we are not running into the trap of delaying the FID for a certain while, and then actually having a cascading of problems with our supply chain, which leads then to a problem of making that or what is it? 25 target. It's a bit fluid, but I think it's fair to say that if we don't have an FID this year, we'll run into trouble. In order to make the dates, so to say. Just on the market picture, because I guess, you know, it just sounds like you're trying to get your returns right, and some of that is the cost, the CapEx. In terms of the pricing that you're seeing in the market now, I mean, obviously, the demand picture is very strong. At the same time, you have competitors that you show on the slide. Are these plants typically launching with launch customers like you're planning to do? How is the sort of entrance of these new players affecting pricing from what you've been seeing so far? Well, there's a few questions here, I think. First of all, I think we said it before, the pricing levels that we are discussing at the moment with our customers are to our satisfaction for this business case. It's more the repeat factor that we're looking for here as well. It's launching customers is one thing, but we're also looking, we also need to make the right profits in the years after the startup. That's one item that we are discussing with market parties. On the competition, yes, we have seen some. I think we all have seen some communication on a developer supporting some of these startups with partly orders or ambitions or what have you. To what extent, I mean, that's the basic question you should ask them. I think we only know what we've seen from the press. In our discussions with the market, we clearly notice that price is one thing, but that reliability of supply and quality of supply is another element that is highly valued by the market. Not to forget, of course, to mention the security of capacity. Securing capacity with a supplier that has a track record and has a proven track record from a quality and timing perspective is maybe at least equally important than prices. That makes sense. Last one from me, I can turn it back. With the U.S. market, I mean, you touched on obviously the new law that has been passed in the U.S.. I mean, obviously that strengthens the demand case in terms of providing incentives for community offshore wind farms. I guess it's a lot more than that, right? It's also about supporting local supply chain. At least to my understanding, there are some significant tax incentives for, I guess, what they call clean energy manufacturing. It could support up to 30% of the project. Is that something that you expect this potential JV in the U.S. could qualify for in terms of helping to finance that kind of project? It's an area that we want to maximize in our exploring, and of course, we would be silly if we wouldn't be able to make use of that. I think this is one of the elements where we believe a very strong local partner is essential because they, not only from a tax help perspective, let's put it that way, but also in finding the right labor and the right setup of how you work with labor, yes or no, with unionized labor, et cetera. Support from state governments, because that differs from state to state, are all elements that we know are important, but where we also know our own position and our own experience as a thorough Dutch manufacturing company that we need the right partner locally. It has to be a really well embedded, so to say, partner that has a bit of history and has a bit of a track record, in our opinion, with whom we want to cooperate and where we want to make sure that they are on board in the right way. Well, we feel we are on the right track there, but we're not there yet. Okay. Thank you, Fred. Thank you, Ben. All right. I hope you could hear me well. The connection was a bit wobbly, but I think I hope I answered your questions, Ben. Yeah, loud and clear. I mean, I have a few more. I can circle back after others have had a chance, but, thank you. Yeah, they stare at me here in, with eagerness to sort of ask the question. Floor is open, gents. Martijn. Martijn den Drjver. First, to get back to the FID, you mentioned more on permits and financing. Once you have the permits, building and environmental, then it's no problem for you to automatically get financing in place? It goes hand in hand. I think the financing is related to when do we get the permits, yeah. That's how these things work. I'm not necessarily saying that we have to have the permits in place before. That's ideal, but we need to have a commitment on when do we get the permit, and will that not jeopardize our planning process. Since financing would be in place, you can't predict what stock market's gonna do. Will you be dependent of the stock market for your financing plans? i.e. Do you expect to raise equity to finance these plans? Good question. I'm a bit boring you, I guess, but that's, a question will be answered when we have the whole thing in place. The U.S. partnership you mentioned is a bit different than the one in Asia. You talk about a JV, when talking about the JV, it also means equity is involved, much more money involved than a partnership you have in Asia. Could you say something about that, what you think that's gonna cost? I understand the question. Probably I shouldn't have mentioned the word so that would have taken away from the question, but I think that's too early to say. What is important, I think, is to get the message that we are very seriously working on setting up something in the U.S., which has a different setup indeed, as you say, from compared to Korea. How that works out, you know as well as I that you can have various structures on how you finance and set up a JV, and that was what we are looking at at the moment. I can tell you one thing, whatever that structure will be, it never, ever can dilute the structure that we are working on for Europe. Our first priority is and will remain the Dutch or European facility. Martijn, to add on that one of the first steps also together with this potential partner is to jointly work out a business plan. Yeah ... also for the North America market. That's one of the first key steps, and also based on that one, indeed also look at the financing implications. When I look at your throughput output for year, that has been lowered somewhat compared to the start of the year. Is there a particular reason for that? Yeah. One of the factors is if you look at the challenges in the labor market, how difficult it is indeed to find good and qualified people. This is impacting our production output also, which you see in the first half of the year. It has been a little bit lower than we were anticipating. We were able to mitigate this impact, for example, by better results in the marshaling segment. This is a challenge we are currently operating with. You just mentioned it, a challenge to get qualified people. You also said that you want to improve the skill set of your employees. What kind of implications would it have for your wage bill going forward? Good question. What we have decided is that in general, our wage level should be competitive to the market. The question is what market? We believe that for many functions, we have to compete with oil and gas, which is kind of our market, and that's the sort of level we're looking at. I think what we have evaluated, the wage component is important, but what is even more important is the quality of the people and the knowledge of the people. Especially when you start looking at this new setup where you start maybe looking more at process management instead of welding skills, as such, traditional vakmanschap. We have to be careful to not be too Dutch with the salaries in comparison to what you actually require. We feel that we should be able to compete with oil and gas. The last question for the moment. You mentioned that the energy price, the gas price has hit your bottom line by approximately EUR 2.5 million in the first half. Gas prices are currently at a record level. What's your best estimate for H2? This might be a little bit higher than the EUR 2.5 million, but also for the second half of the year, the majority of the prices have been fixed. Till when does this fix runs? When will you be open to the market? When do you have to renegotiate your contract in gas? At the moment the majority is fixed indeed until the end of this year. For 2023, the majority is still open, so it impacted by the energy prices. Okay. Thijs Berkelder, ABN AMRO ODDO BHF. First question on the new contracts, the undisclosed one. Is that a contract which originally was scheduled or still is scheduled to be done by a competitor? Or is it Basically, all the contracts are scheduled to be done by completion, but we won. Yeah, but it's- No. It is a normal contract. It's just a normal contract. It's not a shift from one- No, that's. No, like the Vineyard one, for example. Yeah. Yeah, yeah. No, no. Oh, okay. Clear. Slide five in your presentation pack, you show the contribution margins per ton. In this half, it's more or less equal year on year, but this half you clearly had a high mix of TPs versus MPs, while last year vice versa. Can you roughly indicate what the difference is between contribution margins, TPs versus MPs? Not the exact number, but normally indeed, what you see is the contribution margin on TPs is a little bit lower compared to MPs. The big impact, if you compare with prior year, mix indeed is one factor. Another important factor, Thijs, is last year we were having a lot of subcontracted work in our scope, where we make a low margin on it, but it's still contributing to the contribution margin in absolute numbers. This scope was less in the first half of 2022. This is having a negative impact. Also the mix is indeed also having a negative impact. On the other hand, a positive impact came from more storage-related activities. From certain clients, monopiles were on our location longer than anticipated in the contracts, and we were able indeed to have an additional benefit from that part. Just to add on to that, I think, I guess you understand, because if we would give a split, then we give also quite substantial information to the competition and 'cause the only transition pieces we made were for Dogger Bank. Yeah. Clear. A question on LTIR. A gas explosion happened in Roermond. What exactly happened? Yeah. That was quite a event, to be honest. What happened is that during a production stop over the weekend, a gas leakage occurred that filled some bottom pits. We had the heavy gas. We have different gases, huh? Natural gas, but we had this specific gas for preheating, which we are, by the way, now phasing out by means of induction heating. We want to get rid of that as a whole. The startup of the production caused, by means of a grinding spark, cause this explosion. That's what happened. Luckily, we had no physical injuries whatsoever. One guy was taken to hospital for 48 hours observation, to be sure that nothing later on happened. Of course, it created quite some mental damage you could say. We have people that we are now giving professional help to help them to overcome this event longer term. The material part of damage caused by this was solved quite quickly. I must say, with a big thank you to not only our own maintenance team, but also our sub-suppliers that were really helpful in starting us up quite quickly here. Okay. Does it or has it brought, let's say, extra costs for our Q3 forecast? No. Not material. Also, the cost directly related to the property need. We have sufficient insurance in place to cover these costs. Okay. Clear. Coming back on Korea and the U.S.. Okay. In the expansion plan in the Netherlands, you're very clear. You're targeting a payback of 3-4 years on the investment. That's totally clear to me. What kind of financial returns or dynamics can we expect for Korea and the U.S.? What is the precondition to- The principles are the same. Yeah As for Europe. To put it very simple. The structure though is completely different. I think we're not going to disclose all these numbers. Also, for I think obvious reasons and also in agreement with our partner. You have to think of a license fee kind of structure for Korea. There's a completely different setup. No as such investment or CapEx related to that for us. Related to the question of Martijn, the U.S., I think, we. You have to bear with me and a bit of patience, but we will not dilute on our cornerstone, so to say, for the U.S. in relation to the Europe case. Clear. European case. Yeah. Yeah. Yeah. Yeah. Thijs Geijer, ING. Yeah, on that last remark, because indeed, the FID for the initial capacity expansion, I mean, the U.S. is on top, so does not disturb. No Let's say, the negotiation. No, I can be very clear on that. It will not disturb and has no effect on the European one. Yeah. Your local U.S. partner, that is a big industrial U.S. company. It's a big one, yeah. Active in which industry? I'm not gonna tell you. Yes. It's an experienced, financially healthy. Yeah. We agreed with them to not disclose until we have the business plan, as Ben was saying, is ready. Not Frank. Google, yeah. Yeah. Okay. Who? Thank you. Google. Yeah. We discussed most of it, but I'm kind of checking your ability to provide the outlook, which has been kind of a thing for the stock price in the past years. If I understand correctly, you had indeed, let's say, difficulty in finding labor as a kind of a negative. The sickness rate was quite high because of COVID, as a negative. Gas prices, which you specifically mentioned. Marshaling services were on the positive balancing that. Also you remarked that the current projects in operation in the first half went smoothly. That I think is a big help, hence you are able to provide, let's say, or reiterate the full year guidance. I think that's a correct summary, yeah, Thijs. Yeah. Also you're building some conservatism in the outlook. Yeah ...which gives you a lot of leeway, I guess, because you have indeed a lot of depth, continuation of the gas. There's some reasons for being a bit cautious, I think. Yeah. Overall, taking all circumstances into account these days. Yeah, okay. The current forecast is. It's a realistic one. Yeah. Indeed, we still expect, based on the information currently at hand, that it's going to be slightly ahead of prior year. Yeah. Yeah, because so many unpredictable things happen, that's it for me. I also understand it's quite difficult for you guys to give that outlook, yeah, which you gave already a couple of months ago. I picked up the remark on next year. What you say, a balanced spread on the portfolio. Basically back to more back-to-back production of different projects than you had, I think, in the past year. That tells me that profitability, let alone the unexpected things, can be quite- Yeah Quite good. In an ideal world, that's definitely Yeah. All things equal. Good conclusion. All things equal, if you only look at that. Yeah that would have Yeah a meaningful impact on your EBITDA you could make in 2023. I don't want to get too excited. No, but you're excited. Yeah, you. That's why we mentioned also at least 200 kilotons to be delivered. Yeah. That's a firm statement. How much of that was, let's say, your planning? Or was it kind of coincidentally happening? Nothing happens coincidentally except for the unwanted unknowns. No, we've always said that we have certain room, of course, in our production because of this balancing unbalancing factor. Whatever we can do to fill those holes, we have taken into our planning. We're not successful on everything, but so far so good. Yeah, what is your take on, let's say, that the low river water depths influence production maybe in the fourth quarter, and then you have to produce in next year? Is that something you No. Is that? You know, for example. not a real risk? It's something we monitor on a daily basis. I mean, next week, as you have read this probably as well, the level goes up again a little bit. Now that is also for us an opportunity to maximize the feed of Roermond with steel plates. Giving probably an extra one or two weeks leeway on this whole thing. Also, what we see is that water management is taking care to maximize the levels in the rivers, also in Germany. We monitor that. We know now that we are safe at least till the end of September at Roermond. Longer at Maasvlakte, because from Roermond to Maasvlakte is a bit easier, although there is a lot of struggles there with weirs, locks and what have you. There's more lock, yeah. It takes longer, it's more effort, it's a bit more costly for our transport, but we get the stuff. That's basically the window we're looking at. If no rain falls within the coming four weeks and the rivers go down even further, we're in trouble. That's clear. I just got an idea for that. One final question. Where is it? On slide 12. Fons, you can find. Well, there was EEW together with Ørsted is indeed making a similar expansion as you have announced. Is that solely happening in the U.S. because they're building together a new facility for $250 million? Yeah. Is that the complete? I think it was a blue bar. Yeah, that's the blue bar. Yeah. Like in the, I have the sheet in front of me. Yeah, yeah. Yeah, yeah. Exactly. I mean. That's the one they're building in New Jersey or have built in New Jersey. Yeah. In relation to your capacity plan, because that is, of course, a completely from scratch facility. Yeah. What I know. Be careful in comparing these numbers and capacities from what we do. I think it shows that it's not a cheap one thing to do. Yeah. That is kind of a good indication. It's an indication, but related to the U.S. market, the whole piling, for example, foundation systems in the U.S. are slightly different from us. There are some elements that could make it different. But... Yeah. Huh? Yeah. I will not ask you this one. It gives you a direction. to finance it. It gives you a direction. Thank you. Use your own. This is mine. Andre Mulder, Kepler. Let's start with the $1,000 question. You said you're not going to accept any dilution to the profits, let's say the returns or so. Looking at the ferment of the market, it looks more a question that you have to accept, otherwise the market is running away from you if you don't participate. Good question. There is always an alternative. It's not an alternative we like, but what we are not going to do is, with a knife on the throat and with the back against the wall, accept levels that bring us into financial problems later on. We have the alternative, if you really play it down to something to zero, is either we delay the whole process and wait maybe one or two years because we are filled to 2024. We can do a partial move or we simply make a strategic change towards a logistics center and a sub-supplier of transition pieces and top parts of monopiles to others. Is it a strategy we want? No. We're not, as you say, going to let ourselves be pushed into a corner we don't want to maneuver in. I think there's also no reason for doing that, given the discussions we have with the customers and the market financials that we have at this moment. We only need to make sure that when we push the button, we are sure that we are not regretting two, three years from now. I think this is a very important one given how this whole industry is developing. It's very nice that there's a lot of ambition, but if the supply chain isn't making the right amount of money in order to materialize that, I think you will not find anybody willing to go into this business. It's too big at the moment, and the impact is too big for companies on their own and the oil industry as such to not take this position. You cannot gamble, so to say, anymore in this business. I think that's an important one to remember. Yeah. Looking at the expansion, it seems that you said pricing is on your side. It seems more a question of can you secure a large enough pipeline going forward? That's a very important element, indeed. Yeah. Yeah. Yeah. On the U.S., South Korea. South Korea struck a license agreement. Why is there not one for the U.S.? Because that could be an option to start with still. It's not the direction we're taking at this moment, but it could be an option. The other one is picking your choices from a market perspective point of view, because I think the Asian market is longer active but has some challenges in how steady they are in their development plans, et cetera. These are sort of reasons why we constantly make a judgment what model we take. Okay. On the U.S., can you mention the area where you're talking about? Yeah. Maine. East. I said East Coast of the U.S.. Yeah. Maine is a state that doesn't want offshore wind, so it's not there. Is it north? Is it south? It's. It's the East Coast of the U.S. East Coast. Yeah. East Coast, and it's close to the water. On the gas side, you mentioned you're mostly covered for this year. If you look at current prices, what's the extra for next year? If you look at the current price levels, and indeed the last week it again increased, then also for next year it will be a couple of million. I do not have the exact number at the moment. Higher. Also for next year, what we have been doing the last, well, 12 months is in a phase-based hedging the prices. So based on the latest input, say, okay, partly we're going to lock in. Then later on, indeed, if the moment seems right, again, lock in an additional part. So in a phase where we are hedging the prices. Ceteris paribus, if you take the current price levels, Andre, and if you compare it to the current estimate, what I was saying for the full year 2022, that you will be roughly EUR 5 million. It might be a little bit higher compared to 2021. If you take the new level of 2022 as a basis, based on the current prices also for next year, you will be a couple of million EUR, you will be behind. Could be another EUR 5 million higher or something. I do not know if it is EUR 5 million. At the moment I say a couple of millions. I do not know the exact number. Okay. 5.3. Maybe a last question so far. Have you seen any life coming into the oil and gas side? Yes. Because we've seen, of course, the U.K., Norway pushing events so. There's definitely life. Yeah. We see it through KCI the Engineers. That is filling up quite and nicely the tender pipeline, et cetera, for designs, which is for us also an indication, say, in the production, that there is something happening. We're having some discussions there, serious discussions on potential tonnages. Tenders for production. Tenders for that. Yeah. That could materialize for even 2023, even a few maybe, or 2024. Any volumes to be mentioned there? No. to expect? It's you know how it goes with it. There's not that many of these projects. It can be pin piles. It can be structural legs. It varies from 5 to maybe 20 kilotons. Well, if you go from 0-10, it would already be quite an improvement. Exactly. We do have production of some pin piles for the substations for wind farms in production at the moment, but that's numbers of eight, 4 + 4. Eight pin piles, you know? It's not material, but it helps. Okay. Next question, Frank Kevenaar. Frank? Frank Kevenaar, are you on the call? Hello? No. Martijn first. Yeah. Steel is always passed on to the client. Are there more costs which you can pass on to the client, or when they change over time, that you can bill them that incremental cost? Well, directly pass-through is indeed the direct steel and the flanges we are using. It's a direct pass-through. Also if you look at the longer term, so not for the firm orders in place at the moment, for the firm production orders. What we have been doing, of course, also for the new tenders we are working on, is increase our price levels that you also factor in, just to make sure that taking into account the higher energy price, but also the higher wage inflation, that this is indeed covered when we bring out our new pricing quotes. Yeah. I think we here also have to be careful not to exaggerate because it's now working against us. There's also times when it works in favor. You have to be careful not to sort of. Do you need to take that risk, shouldn't it be better that once you have secured an order that back to back you secure your Gas and et cetera, et cetera, that you lock that in. If you look at the overall, it could be the case indeed, Maarten, but if you look at the overall size of the business, and if you look at the impact of energy prices on Sif, of course, it's for this year, EUR 5 million is a significant impact. If you look at the overall cost structure of a project, it's still it's a minor part. I think the key items indeed we are securing via a back-to-back mechanism. And this one indeed a smaller item. If it is becoming very material, more material than it currently is, it's something to think through. I agree. We do. Yeah. Thijs Berkelder again, ABN AMRO ODDO BHF. Of course, low water levels is more transport movements, extra costs roughly in Q3 for transport. What should No, we have contracts with our transport partners and the steel for the steel. It's for Dillinger, for a supplier. In between Roermond and Maasvlakte, it's also for our transport company. Yes, we have a bit of a fee that we pay, but that's not material. No. Clear. Then coming back on, let's say, shortage in FTEs. In recent weeks, of course, several big plants have been closing down in the Netherlands. Is there already a first signal that you now can benefit from the misery of others? Not yet. It's a bit. We thought, for example, that the closing down of this, what is it, energy plant at Maasvlakte. We were in contact to see if we could benefit from that. Now that's revamped again, and due to the. I think what we do see the last couple of weeks, if you look at the number of outstanding vacancies, especially in production, it's decreasing. Yeah. We are closing the gap. We are closing the gap at the cost of doing also extra training, extra, what have you, before they are up and running. That's the effect. Coming back on this slide we see on the screen here again, your Maasvlakte or your new expansion plan is to be produced in, let's say, early 2025. Korea and the U.S., should we assume more like 2027, 2028-ish? Korea will be faster because we will license existing technology. Well, it's a two-phase plan. The first phase is licensing of existing knowledge, and they should be able to produce also in end 2023, beginning 2024. Okay. Providing they have an order. The U.S., still too early to state, but it will not be before our Maasvlakte plant is up and running. Okay. Thanks. Yeah. Oh. [audio distortion] Frank Kevenaar? Yes. Frank, can you come through? Well, can you hear me? Oh, yes. Yes. Okay, perfect. Good morning, all. I experienced some technical difficulties. They're solved. Nick, I go online, by the way. Okay, let me just start. Give it your all. First question on the return hurdle that is being discussed previously of 3-4 years. You mentioned earlier that the pricing you are discussing with clients is in your satisfaction, let's say. At the same time, the long-term demand, we all see the graphs, looks quite strong for the monopiles that you will be able to produce in the new outlay. What exactly is then threatening this 3-4 year earn back hurdle? Is it just the investment outlay that is threatening that sort of hurdle, or are there any other factors in play? No, the element here is more the longer pipeline. It's really cool and good that we have these commitments from customers now popping up for the startup, but we are also looking at volumes for later on in order to be more on the safe side there for this earn back. As simple as that. The conclusion is that for, let's say, the first 3-4 years, you'll be able to, let's say, at least earn back your investment as you- No, no. What I'm saying is for the startup, for the first maybe one and a half year, and which is also very important, by the way. We know that we can be satisfied, and we're pretty confident, but we also are looking for 2026, 2027, and 2028 at some sort more robustness on commitments. In whatever form. This payback period of 3-4 years, I think we also discussed it in the previous call, but what kind of like production utilization scenario is it based upon? Because also in the first half of this year, you sort of had to deal with a lot of operational difficulties. In our business planning. To also track in that hurdle. In our business planning, Henk, what we are forecasting is that you start up indeed not at the full utilization rate. In the long run, we are working with utilization rates of roughly 80%. Taking into account, again, a certain design of monopile, we call it the reference monopile. You do not forecast or factor in more than 80% utilization. Also the first year, in 2025, you do not factor in the full 80%, you work with a lower number. Okay. This 3-4 year earn back hurdle is in your view, let's say, based upon a realistic base case production scenario? Yes. Yes. Is it conservative in your view? It's realistic, and it's based on the 80% utilization in the longer term. Okay, clear. On the license agreement that you signed with GS EnTec, am I correct to assume that it consists of a lump sum payment in combination then with a, let's say, a license fee for each monopile produced? Yes. The follow-up is when will this license sort of lump sum fee come in? Is it in two years? Is it perhaps longer or shorter? No. Your assumption is quite close to reality, and if you're gonna ask me to disclose the numbers, I hope you bear with me that I'm not going to do that. We basically are looking like with our projects at a cash neutral, as such, or cash positive program. It will be quite a bit upfront. When exactly, that's what we're going to agree now with them in the coming months. Okay. Last question In the end, Fred, to add on that one. Frank, sorry. In the end, of course, it will not be cash neutral. In the end it will be cash positive and more. Yes, it will be. In the end it will be. Yeah, but before we spend cash, we will have some money. Yeah. The cost per shift will be- Sorry. Yeah. Yeah. Yeah, yeah. Frank, please continue. The other question is on a new agreement that you state that you are that you intend to sign with Dillinger and also alternative suppliers because of the very volatile steel markets. Could you give some more color on how the alternative suppliers part of that of those agreements, how that works, how that looks? Will the new Dillinger contract be materially different from Sif's perspective in terms of the P&L, or will it look quite similar to the contract already in place? At the moment, I'm not in a situation to disclose details about the new contract. What I can mention also for the future is Dillinger is already our trusted steel partner for a long period and will also be the case for the future. At the same time, if you look at the overall demand for steel, we want to have also backups in place. Dillinger at the moment, and also the discussions we're having is number one, trusted partner. If you look at the alternatives, looking at various alternatives and also the overall qualification process, it will take another couple of months that you also have something as a backup plan in case required. The main reason for now signing this agreement relates to the quite substantial increase of tonnage that we need on a yearly basis. For us and for them, it's good to have a mutual commitment written down in an agreement on the volumes, basically. I mean, the pricing mechanism and the way we cooperate will not change because we're pretty satisfied with it, altogether. When you say alternative suppliers, is that similar to, because I remember historically you had this alternative scenario where you would ship from Korea, if I'm not mistaken. Is that still the alternative route or are there also other alternatives today? There are a few in Europe, but they have their limitations on volume and plate size. Yes, there is the supplier from Korea, POSCO, you may refer to. They are a possible supplier, but we, as a company and also looking at the whole European policymaking, are having a lot of preference for European steel suppliers, given the CO2 footprint, CO2 penalties, and also our role in actually meeting the environmental impact goals. This remains. The base case scenario is still that you will be fully dependent on Dillinger, also in the new- We're not dependent on them. manufacturing layout. No, we're not dependent. Well- We actually want to cooperate with Dillinger because we know them, they know us, and especially the quality of their steel is second to none compared to others. That's not to be underestimated, because as I said it before, quality is one of our main competitive edges in the market, and we are not giving in on not a millimeter on that one. Whoever wants to become a second supplier to us has to really qualify on all these items. Steel for us, in all honesty, is, or price, in all honesty, is the least of our priority on that list. Because it will be completely outweighed by hiccups in the production process if you have quality issues. Right. That's appreciated. I mean, with the problems we're facing today, being the low water levels in the Rhine, with the new manufacturing setup, you would need roughly twice, if not more, as much steel plates. The scenario that we face today, would that sort of create additional problems when you would be required to produce more than twice as much tonnage in the new manufacturing layout? That's a very valid question. There's a few things that we do there to mitigate. First of all, the storage capacity for the new facility on steel will be excessively bigger and higher than what we have today. We have a lot more buffer. Secondly, we are not dependent on Dillinger here. Should there come a serious situation, we can also get steel from abroad, yeah? Not being a Dillinger Saarland. The third part is Dillinger also has a factory and does supply steel plates from their Dunkirk facility. That, as you know, is not limited due to the rivers. Also from Dunkirk, it's often forgotten, but that's also a Dillinger site, and they also produce the steel plates that we use. Okay, thank you. Much appreciated. Apologize for the technical difficulties. Thank you. Thank you very much, Frank. Turner. Turner, I understand you have a question. I have one more for you, Fred. On 2023, you talked about a quite strong order book. I think you said at least 200 tons of production, which I guess all else equal looks very strong and positive from a financial perspective. But for 2024, I guess it's less. Yeah, I think you said the order book is 263 kilotons, and over 200 goes to 2023. 2024 looks a bit thin at this point. I mean, what's sort of the status on tendering to fill 2024 capacity? You are. Yeah. Also regarding 2024, we have also the volumes from the launching customers of 400 kilotons. Part of this can be produced also in 2024, and also part of it in our existing production facilities. Yeah. Besides that, we are working on a few projects still, also for 2024, Turner. There is something still in the market out there that we are working on. As in relation to what Ben just said, we have to be damn careful here that we're not putting ourselves in a corner because we are also working on the launching customers and we. Although we've communicated first of January, fully up and running, we want to start producing in our planning from mid-2024 onwards already with tests. We like to do the tests with actual orders. Otherwise, we have to explain to you why we have 100 kilotons test material in our factory. I guess operationally, is there any challenge to 2024 to have, you know, let's say a relatively full level of production compared to your current capacity? Is there something about the potential startup of the factory that could mean that your 2024 production is lower? Or is it otherwise just a normal year in terms of, you know, your work scheduling and your ability to produce? It will be an interesting year, 2024 for sure. I cannot deny that. The way we set it up is that we are building a complete new factory next to the existing operation. Meaning that we have a few weeks, we know maybe two months, that we have some interference between the new and the existing factory, and that will cause some hiccup. It will not be substantial or material enough to actually expect us to have a big deficit there. Okay, all right. Thank you very much. All right. Any more questions? Thijs? Andre first. Andre Mulder, Kepler. Three more questions. Launching customers, does that also mean discount? No discount? No. Normally, launching customers get a discount. Get a discount. No, it's. No. No? Secondly on again the expansion. Will this windmill also cover the electricity needs of the expanded project? Yes. If it's running. Okay. Yeah. Last question. To what extent does the expansion impair the marshaling services? Absolutely. Fully? Yes. The marshaling, we are in discussion with the Port of Rotterdam to find alternative plots and see if there's. It's not easy, given the way it's set up and the fact that north of our facility there was a plot, but that has been now rented out long-term by another company, not being active in this business. Yeah, we need, especially during the build phase, but also later on, we do expect that we have to limit our marshaling and logistics services unless we find another plot. Which is a pity, by the way. Thijs. Thijs Berkelder again, ABN AMRO ODDO BHF. M&A, you've included KCI, some other activities. Are there more companies you are in talks with slash looking at Dillinger? I recall, I think, some 10 years ago, Dillinger was interested in acquiring Sif and well. Didn't all do it. Gotten no answer and so decided to set up Steelwind Nordenham. Is that part of any part of the discussions with Dillinger? No. I mean, to be honest, no. We're quite busy with what we're doing today, and setting up and making sure that we are ready for the future. At this point, there's nothing in that area that we can mention yet. No more. Martijn? Andre? The people around this table are ready with their questions, officially at least. Are there more questions from the people online? No? Well, then I think I have to thank you for a very interactive and good questions during this session. I'm looking forward to the next one, where we hopefully will tell more about our investment plan. We'll be excited. That's your words. We've seen the announcement already in the press or what? No. Okay, thank you very much. I'll come to the end of this meeting, official meeting, and want to close the lines. Thank you. Thank you.