Good afternoon, to some of you, good morning, good evening, maybe. Welcome to this full year presentation for the results of 2023 of Fugro. We have issued a press release around the full year results this morning, with strong results of 2023, with high growth, improved margin, and a boosted cash flow. I would like to take you a few, a few highlights of the performance, but also of the strategy that we obviously launched end of last year in November, and talk about that a little bit as well. First and foremost, the key highlights of the full year 2023.
We had a strong fourth quarter, a very strong fourth quarter, with eventually an overall result for 2023 of 27.5% growth, 11.5% EBIT, but also a very good cash flow of EUR 230 million. Barbara will give some more details later on in the financial section, but we're very pleased with this result, and also because we have been delivering on all the targets that we have set ourselves in the Path to Profitable Growth strategy, our previous strategy. We're benefiting obviously from the, the good energy markets, the energy transition that is happening in the world, and where a lot of investments are allocated to, renewable energy, but also to the traditional energy that obviously needs to transform into a greener and cleaner situation as well.
We have a strong balance sheet right now, a low net debt, and the cash flow generation is good, and therefore, we also have announced already last year that we will start to pay dividends, and that is EUR 0.40 per share. And also there, Barbara will come back on some more details there. We launched a new strategy towards the full potential, and we have clear targets for 2027. I will touch base on that a little bit later. Also, it's good to mention that we continue to invest in our people, technology, but also the execution excellence, as announced in our strategy towards the full potential.
If we then look at the last few years and what we set ourselves as targets for the Path to Profitable Growth, we launched at the end of 2018, and we can say with the current results of EBIT margin of 11.5%, but also with a return on capital employed of 17.8, that we have delivered on all these targets of the Path to Profitable Growth. Robust cash flow generation, but also the refinancing that we did in 2020 and 2022, makes us a healthy company again, financially, with a strong balance sheet and a net leverage that is now 0.3 times. If we look at the non-financial targets that we set ourselves, we also made great progress. You see that here at the bottom of the slide, number five, there, Women in Leadership.
Last year, we went up to 22%. In two years, a big difference there, a shift from 21%-23%. We're very pleased with that, and we have that target of 25% in 2025, and we're on track to deliver for that. Also, when we talk about sustainability, the environmental sustainability, the CO2 emissions of our vessels, we have made a good progress there for the full year, a -16% for our own vessels, including also the leased assets, and we have a target there for 2025 of -20%. If we then continue, we get to this slide of the diversification, which I always say is one of my favorite slides, because we started 8 years ago to really look at how can we further diversify Fugro?
How can we serve more markets? You see the result of the last eight years that we really diversified. We're now delivering broadly through the spectrum of energy markets, with renewable energy growing very fast in 2023, more than 55%. And basically, that's now more than one third of the company, 35%. Also, oil and gas grew quite steeply, 37%, which is obviously not strange if you follow the news, and we know what caused that. Obviously, the whole situation, the energy trilemma, where we want to have affordable, available, but also clean energy. That creates a conflict, that's a dilemma that we face. Some people want to go very fast towards green, but that obviously also has a result, and we still need traditional energy.
So the growth there came in as well on that front. And then we can say we still do in oil and gas, primarily work on the existing infrastructure. So it's new gas projects, because gas is really the transition fuel of the future. And then we focus on the existing infrastructure in general, oil and gas, to make sure that these assets are still safe and do not start to leak, or platforms are not sinking. So we're not producing anything, not transporting anything, or searching for oil and gas. We don't do that in Fugro. So I think it's a good picture.
If you look at the infrastructure market, we see a reduction of 9%, and that has to do with some subdued markets around the world in some key geographies we are working in. A very good example, and I mentioned that last time as well, for instance, very close by to us in the Netherlands, where we have problems in, yeah, the built and infrastructure environment around the nitrogen situation. So this has an impact on that whole industry, and we see in multiple countries around the world that we have difficulties with some slowdowns. In the short term, that will still have some effect. In the mid to longer term, we see this market also to be very buoyant and will be growing again.
Then water is still a very small market, new market, and that is showing a small growth there. If we move to the next slide, we spoke about this in November at the Capital Markets Day, that we see a demand and a higher demand for geo-data, and that is actually driven by the global trends. No doubt, many of you listening in see many companies and others presenting these trends in the world: population growth, but also urbanization and climate change. It also, you could say, become some buzzwords where we don't really take note of anymore because everybody's talking about it.
But I think it's important to really start to understand what the consequence will be of, for instance, population growth going up to 10 billion in 2050. That will have an enormous impact, 25% more people on this planet, 20%-25%. Then the urbanization that will come out of that will have a major impact in many economies. I think we should realize what that means and what that drives. Therefore, we believe the combination of population growth, but also the climate change situation, drives these situations where we talk about biodiversity, the energy trilemma, but also the tension in the world around the geopolitics. So all these kind of things are coming together and drive the key situations in our key industries: energy, infrastructure, and water.
Because in the end, we all want to have a livable and safe world, and that's what we try to focus on. So if we dive a little bit deeper into these three markets, the energy market, infrastructure, and water market, we can say that all these markets in the short, mid-term, and longer term are quite buoyant, except for the infrastructure market I just mentioned. In the short term, we see still that there's some effect on some slowdown connected to the general economic situation in certain countries. Then you see some postponements of certain projects. It's not cancellation, but it's more postponement in some areas and some governments slowing down in the development here and there. We then first zoom in into energy.
Energy is very buoyant, and I spoke about the energy transition driving this. It's not only the renewable energy that is very buoyant in the years to come. We all spoke about, yeah, the turbulence in Europe and the U.S. in these renewable energy markets, wind at sea, over the last period of time. We have always been quite optimistic about it because we feel that these projects will still continue. There's obviously a slowdown that we have seen in 2023, simply because of the high prices and the high costs and the high interest rates, and there's a lot of renegotiations going on in many of these fields with governments and operators, to make sure that they get to a financial situation that these projects are economically viable again.
So, the research is still ongoing, so we see in Fugro that we still have a high demand for our services there. In some areas, we see some postponements in projects, but we feel that in the upcoming period, this will also slowly fade out again, and that this renewable market will continue to pick up. In Europe alone, more than 40-50 GW are planned and need to be built in the upcoming years, and there's a high wish to really make progress there. Oil and gas, at the same time, is still required, and I think it's important that in the future, we start to split oil and gas a bit more because it's not the same.
Gas is really the transition fuel of the world and will be required for many, many decades or years to come, and I think we will see a slowdown in oil over time in the years to come. We still need to serve this market. We are not producing anything, searching for oil or gas. We're helping the majors, the energy majors for keeping their infrastructure safe and also ensure that it doesn't start to leak and pollute the environment. But we also see new opportunities there around CCUS, carbon storage or hydrogen projects, and these are new areas where we, as Fugro, can also focus on with the knowledge that we have.
Coming down to the infrastructure market, and the figures you see on the board are very similar or the same as we showed them in November, so not any changes there in percentages of growth there. But yeah, if you ask, obviously, these reports for new updates, you will see regular updates. So it's just an indication where these markets are going. Infrastructure market, obviously, very much related to the demographic changes and the energy transition, but also aging assets in the world. And I think this is an important topic. We see in many countries, a lot of infrastructure is aging and needs to be replaced or maintained, and that's not always possible.
It takes a lot of time and many years to get that done, and Fugro can play a role in the intermediate period to keep these assets safe, and basically by starting monitoring services and make sure that these are in the upcoming years, decades, still safe before they are replaced. So this is something that we clearly see is an opportunity for Fugro. Nevertheless, as I said, in the short term, we see some subdued geographies, markets, specifically in some areas where we work. Water is becoming a very important topic in the future. COP28 obviously dictates that there's a lot required around adaptation around climate change.
Sea level rise, big problem, flood risks. It's all related to the change in the environment and understanding the oceans better, but also mapping the coastlines or the inland water surfaces, protecting people that live in the countries, basically, not to be flooded and to make sure that all the waterways are well-protected for high water, or sometimes also dry periods form a problem for foundation issues in the world. So there's an opportunity there for Fugro that we also continue to see and want to tap into. And that brings me to our strategy, and that is towards the full potential. I think it's important to repeat this, what we said in November. We have three key priorities, and the first one is simply around our existing business.
It is not business as usual. We feel that we can transform this business as well by bringing in new technologies, by optimizing it, making it more efficient, driving the data faster to to our customers, higher quality, more data, more insights on the Geo-data to really have higher quality projects there. So that's the majority of the value we will create in the upcoming years. But we see two more areas where we can actually also step into and really make a difference, and that's expanding into some developing segments where we can use our existing technology. For instance, around coastal resilience or mapping the ocean health. A great example I will come back on is one of the projects we recently won in Italy.
But also carbon capture, utilization, and storage projects are really asking for our expertise and our services of Fugro. And then last but not least, there's another area, and this is a little bit, yeah, an area where we create more value out of the data that we collect and out of the technology that we have. So we see an opportunity to build a recurring revenue model from Geo-data as a service. This will take time. This is not something for the short term, but we have multiple ideas at the moment that we can launch in the upcoming years. Things that we have developed over time in Fugro that we can actually sell to a wider group of clients. And this is something that we will develop in isolated teams.
It's a little bit a startup in the larger Fugro organization, and multiple startups will get an accelerated business build situation, where we can actually generate revenues from a slightly different type of work, and that is not all project-related. It's more services and hardware and software-related. That's the key of the strategy towards full potential, those three priorities. It's always good to give a few examples, clear examples of projects. The first one, I will zoom in a little bit more, but if you jump to the other three on the page here, we have a great project there on the U.S. East Coast, where we do, yeah, measurements, very early stage for the wind industry.
So we have these, these buoys shown on, on the picture here, and this is a growing market where we actually measure wind, where we measure the oceanographic parameters of the ocean, currents, and the temperature, and those kind of things, really required before they can design, a, a wind farm. So this is very early stage, and this also gives us a good indication what will come up in the future, because without wind measurements, you very often don't get a license to even start building a wind farm. The second or the third, example there is a, is a gas development project in Indonesia, quite a large project. We'll see more of these projects, especially, as I said, around gas, because gas is the transition fuel. This is a project that we were planning to do already some time ago.
It's now kicked off again, and we're really pleased that we can get going with this, which will start actually this month, or has just started, in the Asia Pacific region. And then the last project is in Saudi Arabia. Saudi Arabia is the, economy-wise, the fastest growing country in the world. There's a lot of plans. They want to develop a, yeah, a place to live that is very decent for the people that live there, but also, for travelers, for tourism. So the country is enormously in development, under development, and NEOM is a big development. This is a part of it, and we are playing a role in this new project as well, in the development of NEOM.
If I then come back on the first one, and I have a little bit more information around that. We just announced this two days ago, and why to zoom in in this one? We believe that this is an exemplary project where Fugro can really play a role in our new strategy to develop the water market, to develop this new area, this new market segment of coastal resilience. And seagrass mapping, this is what it's called, is very important to keep the coastlines actually protected, but also to store blue carbon. So, it's an important project. It will be mapping the whole coastline of Italy, which is obviously more than 4,000 km.
We need to scan big areas, and we have 10 different disciplines coming together from Fugro all around the world to actually deliver the quality of the data that the client, the government of Italy, together with a lot of research institutes being involved, that they require to have. This project starts actually now or next month, and it will run up till mid-2026. A fantastic project, great example of what Fugro can do, a large project for us, and it will take a lot of expertise, and Fugro is uniquely positioned to do this kind of work. So we expect also in the future, more of these projects popping up.
Then to summarize what we actually said in November, and also to describe the future of Fugro, we basically have this fantastic strategy canvas. The purpose has not changed. We want to create together with our clients and everybody that helps us as partner, a safe and livable world. And it really resonates with the people that work for us, but it also resonates with everybody that we deliver our service for. The vision is also hardly changed. We want to unlock insights from Geo-data, but we do that through mapping, modeling, and monitoring, not only the built environment, but also the natural environment. And that is a change compared to the past, and the seagrass mapping project in Italy is a great example of that. We have some strong values in Fugro. On the left, they are not new.
We introduced them around 2022 or 2021, 2021, and they're really resonating. It's the way how we want to behave in the company, and people are really starting to live by them. On the right side, the strategy. Once again, we have three markets that we serve: energy, infrastructure, and water. We have three priorities. The first priority, grow and transform the current business, is the one that will create the value in the upcoming years. But we also see opportunities in expanding ourselves in developing segments, as I said, the water segments, climate and nature, CCUS, hydrogen, and then last but not least, building this recurring revenue model. That's a little bit creating more value in the midterm than rather than the short term. Last but not least, we also have a few enablers that are really important for us.
Fugro is really built around the expertise of our people, and we have a fantastic group of people that also created, obviously, this fantastic result of 2023. Technology, combining people and the technology makes us unique, and then if we execute well, the execution excellence is really important. That operationally, commercially, but also financially, that comes really together. That's one thing. It cannot work with one or less, one less. It needs to all be joint forces. And we have some clear goals set for ourselves in 2027. This is not new for the people that have seen the Capital Markets Day, but maybe good to repeat again on the people side, planet side, and the profit side. Some nice steep ambitious targets on the people side. Have an eNPS larger than 30.
By the way, we have done actually quite well in 2023. We want to drive that really above the 30. Everything above 30 is good, beyond good, so to say, and we want to go to that excellent side there, which is more than 50, but that's still a little bit away. The attrition rate needs to come down. We're currently around 10 in 2023. We want to drive that below eight. That's possible. We have been there in the past. And then, as I said, on women in senior leadership, more than 25%. We already want to do 25% in 2025, but if we can be between 25% and 30%, that would be great in 2027.
If we go to the plan, more than EUR 1 billion revenue, clearly more than EUR 1 billion. Some people questioned, "Is that not too low?" We can do more depending on how the growth will develop in the upcoming years. If we look at our guidance, EUR 3 billion-EUR 3.5 billion, if you look at the bottom there, EUR 3 billion, we want to have at least one third in renewables, and that's then EUR 1 billion. So we think that it can be easily more than EUR 1 billion there. And then the carbon footprint is obviously very important. We want to reduce by 25% on our own vessels compared to 2020. If you look at the profitability targets, I think they're quite clear. We want to have a Net Promoter Score more than 50, which is also extremely healthy.
At the moment, we do 54, but that is still a smaller subset than we actually want to get. So we want to have more input from more clients, more feedback, and then still stay above the 50. The financial parameters, I think, are very healthy, between 11%-15%. In fact, we have done that already in 2023, but also the cash flow, we have done that in 2023 with a good fourth quarter again, and also the ROCE, we are in that range. But by growing up to 3%-3.5%, or EUR 3.5 billion, we want to stay in this area, and obviously go to the upper side of those ranges.
With that, I would like to close the section of the presentation from my side and hand over to Barbara Geelen, our CFO, who will present the details on the financial figures.
Thanks, Mark. Thanks, everyone, for being here and dialing in. So of course, just like Mark, I'm very pleased to present the 2023 results. And this slide just shows the highlights, and I will make a couple of brief observations here and then dive more into the details, well, later. So across the globe, we have been very successful in capturing the high client demand for our solutions, and especially this happened in the energy markets, as explained, oil and gas, and renewable, which resulted in higher activity level, so higher revenue growth of 27.5%, but also improved terms and conditions with our customers.
We also realized a big step up in our margins this year, both on the EBITDA side, we grew EBITDA from EUR 230 million to EUR 397 million, and increased the margin, EBITDA margin, to 18.2%, whereas the EBIT margin improved to 11.5%. So it's important to add, and I've said this before, and I noted some of the comments, firing on all cylinders. For us to achieve this result, it had to happen that the contribution was there from all regions, and this is what happened last year. All regions made a step up, and this was an important development for the company. And this was a combination of high growth, of course, but also with the operational efficiencies.
If we look at the cash flow driven by the higher EBITDA and strict working capital, we have achieved a very high cash conversion rate and improved our free cash flow from EUR 24 million- EUR 213 million. Now, you may have seen the slides in the capital market today. We showed it there. Mark just showed this slide as well, but now there's an additional layer on this slide, which is the EBIT margin, and I think it's an important slide to show. It also shows the diversification, where we now have EUR 773 million of renewable energy revenue, which is makes the company more robust and more diversified. There is a growing need for geodata. We continue on this path, as Mark already mentioned, in the strategy of further diversification.
Also in pillar two, priority number two, for the growing and developing segments besides our existing business. So let's look at the quarterly development. As you all know, we are a project business which deals with seasonality, mostly driven by the weather. And on this slide, you can see actually structural improvement every quarter, year-on-year, in our margins, and that we've been able to deliver on, especially in 2023... 10 to 2022 and in 2023. And what made 2023 such a good year? You can see that clearly that was mostly not only driven by Q2 and Q3, as we see traditionally, but we had a really good quarter four. And this was, this is known.
We always try to work as long as we can in the fourth quarter. We had a typically busy season in Q3, and we managed to really also work and execute well, that must be said, in Q4 as well. So that is a combination of more balanced risk sharing with our customers, covering weather conditions, and also better execution on our part. So on the marine side of the business, the increase in revenue was here very strong, 38%, and also driven by energy markets. So it was not only the offshore wind, but also the oil and gas markets. And the vessel utilization was high at 75% versus 72% in 2022.
So in marine, both the asset integrity and the site characterization business lines improved margins, in particular in Europe, as you can see in the bridge. In Americas, the margin also expanded, and this was on the back of improved operational execution compared to a very challenging year in this area in 2022. Both revenue and EBIT, as you can see, the improvement was most significant in site characterization business, and this is where we see the largest growth and continue to see the largest growth, as notably mentioned by Mark in the outlook for the renewable wind market. Then, if you look at land, at land, you can see we're traveling a little bit sideways.
The revenue growth was limited on balance, and I have to say that on balance of 3.2%, as a result of slightly subdued infrastructure market in some key geographies. Mark mentioned the Netherlands, for example, but we should also not forget that in 2022 we sold France and we sold Russia, so we started from a lower base. So there is a combination of factors there. The margin was lower, partly because of the limited revenue growth on one hand, but also we had some issues, and one of them was the downtime on a jack-up platform in the Middle East, which impacted the results.
I want to highlight that even though we're currently faced by slower infrastructure developments and markets, there is an underlying structural improvement, and we remain very confident on the land business in the mid to long term. Then let's look at the bottom of the P&L. To really quickly highlight the big pluses and minuses. There's always the pluses and the minuses. If you look at finance expenses, we benefited from better margin conditions, but those were offset by the higher EURIBOR levels that we've seen and an increase on interest on lease liabilities because we had some new vessel leases.
If you look at the second point that I want to highlight is the FX, the Forex exchange rate variances that is impacted, goes to negative EUR 30 million. That was mostly driven by kwanza and naira developments, but also some impact from intercompany loans in dollars, and we report in euros. So we saw the, and this was compared to the appreciation of the dollar versus last year. So we see that opposite development now. Then if we look at the share of profit of equity accounted investees is EUR 21 million, and that's mostly driven by our joint venture in China, CNOOC, and a EUR 10 million gain on the disposal of our remaining interest in Global Marine Holdings.
The income tax gain is total EUR 39 million. There's a big plus and a minus. It is a current expense on one hand of EUR 31 million, and on the other hand, it was offset by a deferred income tax gain of EUR 70 million, and that was mostly driven by the recognition and utilization of previously unrecognized tax losses and recognition of liquidation losses. Now, if we zoom in on the free cash flow, the free cash flow was boosted by EUR 189 million. That was 94% increase from an operational cash perspective. That was on the back of the strong revenue, but also of the ability of the company to convert this into EBITDA.
Despite the strong growth in activity levels, we've also, as the second block, we've been able to really manage working capital strict, which was a decrease of EUR 28 million, and we spent CapEx of EUR 182 million. And this all results in a free cash flow of EUR 213 million over the year 2023. Now, if we look at the working capital, you've heard me talk more about that, and we're very focused. I'm very focused on keeping working capital under control within a certain bandwidth, which we take 10%-15%. So you can imagine, I'm very pleased that we are able to present 8.9%.
Cash conversion is something that has a very high priority, and we continue to ensure that we have matching cash flows at all levels, especially at the project level, where we, for example, through milestone payments and prepayments, we really try to match and minimize the working capital exposure that we have. Having said that, as you can also see from this, the bar in the bottom, we will always have a seasonal pattern, so the working capital, again, will build up in Q2, Q1, Q2, and then unwind towards year-end. This is indeed what we also saw in the past quarter. We saw an unwind of the high season working capital positions, and at the same time, it was exceptionally low. Why was that low?
We successfully decreased our work in progress. We successfully collected receivables before year-end, and we have improved payment terms with our suppliers. This brings our working capital at year-end below EUR 200 million, and as you can see, the last time we've done that was in Q1 2022. Now, the capital allocation framework, I also talked about in the Capital Markets Day, so I do not gonna spend too much time on it here, but just very high level. First of all, we're investing for sustainable growth. That's a priority, whereby we will make balanced and considered investment decisions in current and future business to achieve the strategic objective and to really achieve the full potential strategy that we have put on the board. On M&A, we will remain selective, as we've communicated.
We've executed the buyback of the remaining stake in SEA-KIT, so we now fully own SEA-KIT. SEA-KIT is our long-term partner in the building of USVs, uncrewed surface vessels, and this further strengthens our leadership in marine robotics solutions. So we now have 100% ownership. Secondly, at the capital allocation, we want to maintain a strong balance sheet. We want to keep the leverage below one and a half times, and we want to keep ample liquidity to really also organically grow the business and to keep the financial flexibility. Thirdly, we target attractive shareholder returns, and we will resume dividend. That's one part of it, and I will get back to that later.
Our capital allocation framework supports creating value by attractive returns on new investments, keeping our risk profile low, and maintaining a strong balance sheet, and providing attractive returns to shareholders. I forgot to click. On the investing for sustainable growth, this is the CapEx slide. CapEx amounted to EUR 184 million. We guided the market for EUR 200 million, so this is slightly below. The increase compared to 2022 was mostly driven by the two platform supply vessels that we have purchased early 2023, and we're currently repurposing the vessels. One vessel was delivered in Q2, and the other vessel was delivered in early Q4 of last year. In addition, also we've completed the unwind of the sale and lease back of the Scout and Voyager.
We announced this on the back of the Q3 results, and this resulted in a EUR 76 million reclassification from assets, right of use assets to property, plant, and equipment. That is also featured in the graph that you see on the table. You see also our midterm target CapEx guidance of EUR 200 million-250 million per year, as we also communicated in November, of which half will be maintenance and sustaining. The other half, EUR 100-150 million, will be annual discretionary CapEx, including expansion, transformation, and carbon reduction. We've also guided the market that we would be acquiring additional Geotech vessels. We have actioned that in December by announcing the purchase of the Sea Goldcrest and also the Seagull.
The Seagull is a vessel that we're already leasing. So we are fulfilling the ambition, but also the need and the opportunity to grow the Geotech fleet. Whereas we still, I wanna be explicit about this, keep a balance between leased and owned vessels. Right. So this is important that we keep also there that flexibility towards the future, and at the same time can really make use of the opportunities and the growth that we see in the market. Market leadership is very important to us, to remain also in that position. We think it's the right thing to adjust the fleet to that. So I wanna still stress that it's very important that all the CapEx that we spent is subject to strict capital guideline rules.
So, we're looking at that very seriously. So then, on the balance sheet, as Mark already mentioned, we have cleaned up the balance sheet. That is also because we have been able to generate cash, so the net debt position at year-end of the company is 0.3 x. And that is comfortably within our guidance of 1.5x . And even though this is, we have now a relatively high cash position at year-end, we see a part of the reversal of working capital, and we expect it in the first half next year. We have a CapEx program, and we're gonna pay a dividend, and we will also replenish some of our treasury stock to fund our long-term incentive plans.
We have reviewed, and we continuously review, as you could expect from the company, that we have an appropriate and efficient capital structure in place. As you all are aware, we have sustainability linked KPIs related to that, and that actually, we maximally benefit from this by decreasing the margin that we pay on the loan, because we score on all the KPIs that we've committed ourselves to. Now, attractive return on shareholders was the third one. We are resuming dividends after eight years, which we already announced, the publication of the Q3 results.
We have decided that, we're gonna pay EUR 0.40 per share, and we have amended our dividend policy to 25%-45% of net result, and we will be paying the dividend in 2024, over 2023 in all cash. We will also be offering, a DRIP through the broker, a dividend reinvestment plan. Now, I'm gonna hand back to Mark for the outlook. Thank you.
Yes, thank you, Barbara. Actually, one more slide, and then we go over to Q&A. A little bit about the outlook. Limited information, but obviously, we have presented some details in November at the Capital Markets Day. Then we spoke about a number of targets and also how we get from where we are today to where we want to go on the revenue side, but also how we want to further grow the margin and cash flow. So, and what is important there is, I think to emphasize that we continue to invest, as we said before, in our assets, technology and people, and also the execution excellence. And there's a cost related to that, so that has an effect on your results.
So if you want to optimize your results in the short term, you might not want to do these things. But we want to do these things because we see a benefit of further investing in our business to further grow and also to grow in the midterm, the margins even further. So we guide for continued revenue growth, primarily driven by the energy markets, obviously, in the longer term, also, the water and infrastructure market. The EBIT margin that we have guided for, for the midterm is between 11% and 15%, and we also guide for that, for 2024. We can't be more specific right now. It's early in the year, and we will not give you more indication than what we said here on the board.
CapEx was already explained by Barbara. EUR 250 million we have in the wallet, and that's what we will follow very carefully. If we feel that certain investments do not have a proper return, we will not make the investment. And with that, I close the presentation part of this session, and we open up for questions. Obviously, the questions are for the people here in the room with us. So, if there are people that have questions, please feel free to raise your hand, then we'll answer them. Yes, please. And you will get a microphone, because otherwise the people online cannot hear you. If you can also mention your name and where you're from, then that helps.
Yeah. Thank you very much. It's David Kerstens from Jefferies in London. I've got two questions, please. It seems you have already realized all your financial targets for 2027 and 2023, after an exceptionally strong fourth quarter. To what extent was that quarter exceptional in terms of margins and working capital, or is... Do you expect that that would fall back again? And what have you seen in the first quarter of 2024 in that regard, taking into account the normal seasonality?
Yeah.
That's the first question.
Yeah, very good, good question. Obviously, I think, I will say two words on it, and hand over to Barbara. I think what I just said on the outlook, I think we will continue to build the company, and we'll continue to invest in it. So there's also cost in the future to build a stronger backbone, to make sure that we have the organization really ticking as clockwork, and there are some investment required there. And I will hand over for that to Barbara. Indeed, the fourth quarter was exceptional, and in some ways, so or in multiple ways, and Barbara will give some more insight in that.
Yeah, and we have achieved the targets, yes and no, I would say. The results of 2023 were very good. Now we have to do that four times, and better. So we're working towards that. And I would say that Q4, you can see historically on the performance in Q4, and that is a lot of things need to come together. So this is, in that way, exceptional. Can we do it again? Yes, if it all happens, we can do it again. And I would also like to emphasize that, you know, that we had a lot of uptime also on the vessels, and a lot of vessel availability.
Now, on one hand, of course, we are increasing our fleet, so we have more revenue-generating capacity, so to speak, but we never travel. The energy transition, we have experience, and we know it's not a straight line, and we do need to keep that in mind. We have some big conversions on the board, which we're working on, and that is also one question I got offline from one of the analysts this morning.
What I can say there is that, for example, the Scout and the Voyager conversion, when you wanna minimize downtime, when you do a dry dock, or when you work on a vessel, when you work on a conversion, that will also impact the utilization and the availability of the assets, together with weather, and terms and conditions, and everything else. But we've executed very well. We are getting better at executing very well, but the stars were aligned in Q4.
Thank you. Can I ask a second question, maybe on-
Of course.
On offshore wind? You highlighted the contract awards in Europe alone at least 40 GW. That's a massive step up compared to last year. But when you already realize revenue growth in renewables of 50%, to what extent have you already worked on those contract awards in 2023? And can you continue to grow at that pace, given the enormous amount of new projects coming to the market this year?
Yeah.
I think there's a similar, well, smaller, but also still a substantial amount in the U.S.
Yeah, yeah, very, very good question, because Fugro is very early stage. And I showed you the project where we were involved in the buoys, in measuring the wind and oceanographic parameters of the ocean, that are required to actually design an offshore wind farm. But that's also the case for the site characterization work we do, the geotechnics, the geophysics. It's very early phase, because without that information, you cannot really design anything. So it's critical information for operators that want to build the wind farm, so we're very early. So it is indeed the case that, if you see these graphs of new wind farms coming in and investments, then we are always a little bit one or two years early, or even sometimes earlier.
Now, if you look at the graphs and look at the upcoming years, there's indeed a lot being planned. And we know that the Europe, I think, is close to 300 GW in 2050. And we see already a wish for the Netherlands that is extremely high in 2050, but also 2030 already. It will be tough to meet those targets that they set for themselves, because yeah, there will be also some competition on who gets the resources to actually do it. So there's a lot on the board. As you say, not only Europe, we're already working on wind at sea for more than 25 years in Europe.
Obviously, in the last couple of years, it really accelerated again. But if you look at the U.S., the last three years were very busy in the U.S. We see that now also coming in Asia Pacific-
... Over the last couple of years, it started with Taiwan, Korea, and Japan. Now Australia is coming in as well, but now you see these countries also really ramping up. So, potentially, that's maybe even the largest growth market, excluding China. So there's a lot of potential also there in Asia. It's still further out, and Fugro is on the early, early cycle there. So we still see a lot of growth opportunity, in that field. Does that mean that we, well, that we should be blind and only operate in this, in this area? No, we should not. We really like the diversification we have in Fugro, because it allows us to move, move our assets and people to different markets.
That is, I think, the power that we have seen over the last period of time, that we can actually very flexibly move from one project to another project, and that might be also different markets. That is, I think, the power that we see. Yeah, next question.
Yeah. Luuk van Beek of Petercam. I have a question about what you mentioned regarding the risk sharing with customers in Q4 on the weather risk. Can you explain how that works, and to what extent you had exceptionally good weather this quarter, or it was just more the risk sharing that benefited you?
Well, it's a combination of both. I mean, it differs per geography, per contract. But what I can say is that, you know, given the position we have in the market, and I talked about this before, is that, if we take on all the risk and the weather is bad, and you don't get compensated for that, then there is, you know, your contract in the end will not be very profitable. If there is a fairer risk sharing, and this goes actually further, my point is also further in the entire supply chain, and we have seen this, this of the entire supply chain of offshore wind, there needs to be appropriate risk sharing. So everyone needs to make, be able to make, money.
That is the point. So it's not fair if we would take all the weather risk, for example, if we do work in a Q4 season, and that has shifted, and there is more appreciation also from the customers and better relationships, I would say. And we're working very hard on that via strategic sales and marketing with key account management, to really have that more deeper partnership, where you really, where it's more balanced give and take. That is what I was referring to. So people understand that, you know, we have cost, they have cost, and we try to match that better. And that is what I meant by risk sharing.
Okay, that's clear. Another question about the tax, which was obviously a big plus this year because of the unrecognized tax losses. Can you discuss if you, we should expect any further movement in that in 2024, and what would be the underlying rate going forward?
Yeah, that in on the eighth of March, we're gonna publish our annual report, so there's a lot of reading text reading material in there. But one of the main topics are Seabed. We sold Seabed in 2021. For many years, the you know we generated a lot of losses from that. So we have been able to you know to benefit from that now. And what you also see, one of the things I wanna highlight is, for example, the U.S.
The improved performance in the U.S. has now, you know, enabled us to actually make use of the losses that we have gotten and or created in the past. So that is really, you know, some of the examples that are in the recovery of losses that we now can recognize, and actually not only recognize, but also use partially already.
Okay, thank you.
Good afternoon, everyone. Quirijn Mulder from ING. Congratulations with the results. I think, it's justified. I have a couple of questions. With regard to these results and with regard to the supersonic development of AI, what can you tell us about geodata consultancy, where AI will be integrated someday? Maybe, are you going to accelerate what you have said already, let me say, in mid of November? That's my first question. My second question is about asset integrity business in marine. When do you think, or is there any possibility that's going to take off more seriously, given the fact that the site characterization is moving very hard now, and that mostly is followed by asset integrity?
Then to follow up on the tax, can you give an indication what has happened on the balance sheet with regard to the tax? As you know, there is, you have a recognized, let me say, on the left side of the balance sheet, but you have also unrecognized. So are, are we going to see a move from unrecognized, assets on the balance sheet towards a recognized, part, that we have still a lot of, taxes to, to be compensated? And my final question is with regard to the convertible bond. If you look at the share price of today, what are your plans with the remaining convertible bond, which expires in October 2024? That were my questions.
... Yeah, thank you, Quirijn. I will answer the first two questions, and then I'll hand over to Barbara for the tax and the convertible bonds. So first and foremost, AI. I think, if you talk about AI, first and foremost, you should always know what you're talking about. And many people are not necessarily very good experts when they talk about AI, because everybody's talking about generative AI nowadays. AI is already there for many, many years, and we're using it already many, many years. Machine learning is there for many, many years, and we have it in our systems also for quite a few years. So, if you talk about generative AI, it's primarily the large language models. Can we use that in our situation in Fugro as well? Yes, we can.
Are we looking at it? Absolutely. So, we should be, like every company, look at, and experiment in what is possible there. Is there anything possible with the generic large language models around, geo-data? No, that's not necessarily the case. Can you ask questions? Of course, you can ask questions, to a model like that, and you will get interesting answers. You don't know if they will be right, because that's another problem, but at least you can do things with it. But if you look at generative AI models that are very specific towards, certain datasets or datasets that you start to build in-house yourself, that's where the value really lies. So this is something that we will start, experimenting more, with more and more, and we have already plans for that.
And as you say, and have seen also in November, we are looking at, the package VirGeo, where we actually store, more, Geo-data, and then see what is possible, analyzing that data, and we will also use Gen AI routines, for that. I hope that answers your question. Then, on the MAI side, can we see a growth in MAI? I think if you look at the industry, then you see a lot of industry partners, partners or, similar companies in our field, already growing very fast in the, in the, asset integrity sphere. So this is already, partly happening. However, Fugro has, made, very specific choices on what we want to do and don't want to do in this, in this area.
We don't want to be in heavy construction or even light construction work anymore. So the light, the larger vessels we have said goodbye to over the last, well, decade, and we don't want to be in the crane business, in doing heavy lifts or, or specific subsea installations or so on. Also, not moving forward in the heavier ROV business, where we have obviously, players in the industry that really build these, these heavy ROVs to do, yeah, construction support where work. We are not going to accelerate or build or expand in that area as well.
We need ROVs, and we need robots in general, more and more electric, with less maintenance and less TLC that is required on all these hydraulic systems, because they require a lot of maintenance. We want to have electric systems that we actually can operate from remotely controlled platforms, so USVs. Are those USVs picking up in the future? We still believe that this is the future for this business element, not only here, also in the marine site characterization business. We expect that this can further pick up and grow faster. So we're really on top of that. The industry will probably see another pick-up.
I think that's my personal opinion, if you look at the general market of asset integrity. But you already see that the companies really in this area with the heavier and lighter construction work will also have busy work and busy periods ahead of them. For the tax, Barbara.
Yes. So on tax, yes, we have a lot of unrecognized tax losses. Some of them we're recognizing now. If you're going to recognize or not is determined by many factors, and one of them is also the future outlook on if is it likely, more likely than not, that you would actually be consuming those losses going forward. Now, we have unrecognized tax losses in very many different jurisdictions, so it's not one size fits all. It's different legislation, different situation, also of future potential cash flows, and if you can actually at all recognize them.
So these are strict fiscal rules and regulations that that we're carefully looking into while making sure that where we can reasonably can, we will move them from unrecognized to recognized and then actually move to use them. On the bond, it's right that with the current share price, the convert is in the money. So that means that at the option of the convert holders, they can exercise that. Now, there's also a coupon of 4% on the convertible bond. There's two more coupon payment dates in May and November, and then it's at the option of the holder to convert or not, or to clip the coupon. We are carefully following it and considering what...
But I think it's what has happened to date is an indication of, you know, it's now at the option of the holders because it's in the money.
... Now we go to the next question. Sorry. We can come back, yeah.
That's Thijs Berkelder, ABN AMRO ODDO BHF. Let's start with the simple questions. Backlog at year-end was not that much higher than a year ago. Can you maybe provide us with not only outlook for the whole group, but maybe separate marine and land? Do you expect revenues in marine to grow next year, land to grow, and in both segments, that margins will grow next year?
Yeah. So, the question on the backlog, the first simple question. So, yeah, the backlog growth compared to last year is lower than what we have seen over the last period of time, because we had very high backlog growth. And now we're below 10%, and that is something that, yeah, the fourth quarter of last year was also lower high as well, the fourth quarter. So if you compare the fourth quarters with each other, then you see there were certain projects in there Barbara already spoke about that we don't have this year.
So there was a very large project, for instance, in the Middle East, in the Lower Zakum, which we almost worked the majority of the year on, and a few others around the world, also in the U.S. And that is different now. Do we expect similar types of work in the upcoming period? Yes, we do. We also see those, and we have them in the pipeline, bid on them, and start to further develop backlog in the near future. So it's a moment at the end of the year that you basically look at, "Okay, what is it right now?" But I can tell you already today, it's different than it was at year-end.
So, we are definitely not concerned about the number being lower than before. We see, as we said as well, continued growth for the company, not in the same area as we have seen before, because we obviously had a stellar growth of 27.5%. But, if you then look at the Land and Marine in particular, Barbara already described that 2022 was slightly different, not an apple-to-apple comparison.
So we need to take that into account, that we stopped operating in Russia, but also we sold the France business there on the LSC side, and we had an incident in the Middle East we already spoke about on a jack-up which prevented us to actually have revenues on that jack-up, but also had additional cost to get the maintenance done again. So in general, I think land also progressed quite nicely in 2023. With these caveats taken out, you could see that. And that is on top of some of the subdued markets, as we spoke about, because there were still markets that actually slowed down somewhat, and the infrastructure market coming down.
So, that is what we have seen. So in the future, we expect land to grow as well as marine will grow, marine probably faster than land. Also, there are heavier assets involved. There's obviously additional capacity coming in, so the steps will be quicker in the marine area than in the land area. So, so we see that, and we also have the aim to grow margin in general, moving forward towards 2027. We are maybe in the range of 11%-15%, but that's a pretty wide range, and 11.5% is just above 11%. And also in November, I said, "If we end up with 11% in 2027, are we happy? We're certainly not happy.
A follow-up question, can you also provide the regional outlooks? How the different regions compare 2024 versus 2023?
Yeah, maybe a generic comment, because I won't, I don't want to be too specific about the regions. But if we look at and start in the Americas. The Americas has shown also steep growth in 2023. We do expect the Americas having lots of opportunities, but you see also swing. For instance, we had a lot of geophysical work in the Americas in 2023. There will be less geophysical work or large projects in the geophysical side in 2024. However, on the Geotech side, it's the other way around.
So you see some changes, and then maybe if you look at the total, yeah, package of a business, a region, then you don't see maybe a difference, but we see the big swings within the business lines, as well. So that's maybe good to take note of. We saw, obviously, two years ago, enormous growth in the Americas on the LNG side, supplying gas to Europe. Obviously, actually, they're one of the bigger suppliers nowadays to Europe on the gas side. So there's quite a shift also looking at where the energy comes from nowadays. But yeah, that activity faded out in 2023. So you see really shifts moving from one side to the other.
So that's a little bit to say on the Americas, where you also see that South America will be coming back in there. So there's opportunities in South America, and also in North America. But it's always more the timing, because, yeah, you look at our quarterly results, and we can't really plan it on a quarter-by-quarter basis. So in general, we see that also these markets there will continue, and America is offering lots of opportunity. Especially also with the Inflation Reduction Act, there's a real boost and incentive for companies to further grow, especially on the renewable side. Europe, Europe also offers lots of opportunity. We have, obviously, the largest fleet operating in Europe.
We have a very, a nice step up also in performance in 2023 of, of the Europe business. A very decent margin that they have made, as you have seen in the reports. We had some issues on the land side in Europe because we had some countries, obviously, we stopped operating in Russia, and we sold a part of the France business. But also on top of that, we had some subdued markets. I spoke about the Netherlands, but there are some others in Europe as well that are maybe not growing as fast as they could. There's a lot on the board, also still on the renewable side, so capacity is very important for us.
That's why we acquired these, these additional vessels, and when they come on stream in the end of second quarter this year, the two, the two vessels, Resolve and Resilience, that will help to, to actually serve the market even better. So, so that's, Europe. And Africa, we see opportunities coming back in, obviously, part of the Europe-Africa region. But Africa also has a very particular areas where we see growth again, coming in on the energy side, naming countries like Namibia, for instance, Mozambique again, starting up with, with the big development there, but there are other countries there as well. If you then move to, the Middle East, Middle East, did not have a, a very easy, year last year, but primarily because of the breakdown of that jack-up.
If that didn't happen, then, actually, steep growth on the revenue side as well, and we see lots of opportunities there moving forward. Also, with the new technology we spoke about, the USVs. There's options for USVs in that region, there as well. And Saudi Arabia is further developing, but also the UAE, Qatar, there, there are opportunities there. Asia Pacific, we're also optimistic about, especially because the wind business will further develop. You see some energy projects like the traditional energy, the gas project in Indonesia coming in, and, that's also a sign of this market also starting to pick up again on the traditional energy side, combined with what is on the board, yeah, in Taiwan, Korea, Japan, and Australia at the moment.
Later on, we will have Vietnam and Philippines also coming in with offshore wind activities. So, yeah, in principle, all the areas in the world have potential. When it will come in, I cannot say. So, it might shift half a year here or there, but there is good potential.
Okay, then, yeah, maybe partly for Barbara and partly for Mark. Cash flow, free cash flow is coming up rapidly in big amounts. Balance sheet already very strong. So then you... Then investors start to wonder, well, will that be reflected in higher payout levels, share buyback schemes, or maybe further investments, huh? There may be other potential mega markets, in my view, for you available. You yourself mentioned water, but I think the defense market is a huge market for Fugro or Fugro-alike companies. Subsea harvesting, another market. Offshore wind asset integrity, is there a market? Are you already active there? Seabed mapping, but well discussed, and of course, the hottest topic maybe for the next decade, space market.
Okay. Fantastic. Yeah, obviously, all these markets are known to us, and we look at all these elements, and some are in a very nascent state and don't grow that fast, but they all come in. And in that sense, we're looking at all of them, but sometimes they are too small to actually report on for us. But we... For instance, if you look at the subsea infrastructure and the risk that you now see and everything that's happening in the world with cables and pipelines being pulled from the seafloor by sabotaging basically the infrastructure. It's a big topic, or even in the last couple of days in the news in many areas there.
So this is an area where we can help, because Fugro has the expertise to do the inspections, to see what, where everything is, to also map it, to maybe create maps for governments. And we have questions on our plate from various governments in Europe, for instance, to support there. And that is sometimes adjacent to defense activities, where they say, "Well, hey, defense also wants to look at USVs, for instance, what can you do, and how can you help to move faster?" And then there could be parts or elements of the technology that Fugro could provide. We're obviously not in an area where we build weapons or so for the defense industry.
We're not going to do that as well, to be very clear there. But here and there, there are specific technologies that we can provide because it has to do with mapping or with inspection or visual solutions. So that's one example for around defense subsea infrastructure. We're very active, actively talking also to the Dutch government and other governments in the world. So there are opportunities there. You spoke about seabed mapping, we have already many examples, and that is... That's a given. If you talk about space, yeah, obviously, everything in space is planned for decades. For instance, we already announced two years ago that we have-...
A satellite positioning system on one of the satellites to experiment with, doing positioning in space, so to say. But, that's a program, a pilot program that takes multiple years before you actually start to deliver maybe positioning. We can already provide positioning to low-orbit satellites, and a lot of low-orbit satellites coming in the world as well are being launched, thousands of them. Also what you recently maybe picked up in the news, we have supported with our remote control center out of Perth, which is very sophisticated control center, and we have some experts that are very good and well connected with the Australian Space Agency.
They have, again, agreements, partnership agreements with NASA to basically do things around, for instance, the Odysseus moon lander, and we also played a small role there out of Perth to be a backup situation or to connect with sensors on the moon lander. We have a subsidy program to actually help designing the moon rover for the future. So that's another mission coming up, and then that moon rover needs to grab a little bit of soil. So that's real Fugro work, grab soil from the moon and put it in a NASA box, so to say, to analyze the soil on the moon. So there are opportunities.
They're very often, yeah, further out, small and experimenting and see what is happening. Some might pick up a little bit faster. Defense is obviously an area or at least protecting ourselves. Security-
Yeah
... Of assets at sea is a bigger topic, and that moves faster. Yeah. And then the cash. Yeah, you had a question on the cash flow. Barbara was trying to avoid it, but just remind.
No, I think it's actually a good position to be in. What I would say is that, we're resuming dividend after eight years. Yes, you're right to say that we're generating a lot of cash. I also, wanna, maybe add to what Mark has said and also to, reiterate before people think we're going big in space. This is, mostly, ground business, and, and we're really strict on that. I mean, capital discipline we hold in high regard, so this is very well managed. But what this also, this, space gives us, is also to really remain at the forefront of the developments on Earth, on, on cloud technologies that we, we are developing.
So there's really this cross-fertilization that takes place, and we have a lot of opportunities there. We've also changed the dividend payout to 25%-45%. Then you say, "Why only... Why you only pay EUR 0.40?" Maybe you had that question. Because at that point in time, we wanted to provide also clarity, exact clarity. We wanted to announce it at Q3. We believed that was the right thing to do, and we wanna be very clear to the market, in terms of managing expectations. Can you expect from us next year that we will pay out in the range that we have now set? Yes. So...
In the meantime, we have a lot of investment opportunities, and we will review them carefully on how we're gonna monetize them, and some will be further down the road, as Mark says, but also some will be investing in the existing business, which we also need to sustain that business. And there's also opportunities for today, not only tomorrow and the day after tomorrow, but also today.
Thank you. Jeremy Kincaid from Van Lanschot Kempen. First question, just on the backlog and lead times for each of your business units. Can you just give a breakdown of which business unit has the longest lead times, renewables versus land, et cetera?
Yeah, so obviously, there is a big difference between the land and the marine business, also duration of projects, so the size and the duration and the assets involved. So it's always very difficult to compare these things with each other, but on the land side, we might have projects of a week, whereas, yeah, projects of a week on the marine side is not very likely, although it's maybe possible, very small projects, but it's more a month or two months or multiple months in a row. Not necessarily multiple years, but very often the programs are done in a season.
We might have projects that have maybe worked for multiple fields, where we have maybe three seasons in a row in the upcoming years to do some work for the German government, the Dutch government, or maybe even anywhere in the world. Or we have a call-off contract in the MAI world, the marine asset integrity, multiple years like we have in Australia with Woodside, that actually have call-off solutions like, "Okay, there's a boat. We can call off the boat, and we want you to do some inspection work or some USV inspection work." So there's big differences. And the lead time for a large contract that is multiple years is obviously a lot longer.
They might work for a year on the contract, but it's not like an EPC contract that might work for a year to two years on designing all sorts of things. So it's very often we're not in that same area. If you talk about land, that could be that we even do projects that are asked for maybe a month ago, that we start to execute them already a month later. On the marine side, it's probably more months to half a year to a year... something like that.
Great. Thank you. And next question, just so it sounds like, the fourth quarter is obviously very strong. It sounds like you might have brought forward some revenues that would have occurred in the first quarter into the fourth quarter, because of good operational execution. Does that mean you've also had to shift some projects forward from the second quarter into the first quarter? And have you been able to do that? You know, I'm just wondering, should we expect any negative surprises in the first quarter if you haven't been able to do that?
To be honest, it has been a busy fourth quarter, but we didn't shift projects from the first quarter into the fourth quarter. It's just, it's more like a rollover of the busy season, and then the season is extending because, yeah, a lot of people are asking for solutions, and you can't do it anymore in September or in August, so it will be October. And then the next person comes in and say, "Well, yeah, that will be November." So eventually, it will dry up the work somewhat to a certain extent. Obviously, certain assets will continue to work the whole year. But we will always dry up at some point in time on some assets, and therefore, you always see a dip in the first quarter, revenue-wise, but also on the return.
I think that is maybe also the right moment to say, don't underestimate the seasonality. It's winter period, and we might have had a great fourth quarter, but it will come down because it is drying up then in January, because you cannot simply do the measurements when the wave height is too high and we have rough seas. Then you don't get high quality data, and the client simply doesn't want to do the project in those months. There is a big impact there, but it will come back in the second quarter and in the third quarter.
If you then busy in the season again, yeah, then you have to see and wonder, "Okay, how is the fourth quarter going to be?" We have seen now a very good quarter with good execution, less breakdowns, reducing the leakage, weather was favorable, or we had a compensation for the weather in the contracts to a certain extent, and that helped us to generate a really good fourth quarter. As Barbara said, "Can we do it again?" Absolutely. Have we done it in the past? Also. So will it happen again this year? I cannot tell you.
And then just one final one on the acquisition of SEA-KIT. Was that completed this year, or does the cash flow hit the cash flow statement next year? And if so, is it material?
It's closed, and I would say it's immaterial.
Okay, great. Thank you.
Yeah, please.
Just a few follow-up questions, please. In terms of utilization, I think you indicated you are at 75%. How much room do you still have in your fleet, to further increase, utilization? And, and what is the impact of the capacity expansion you talked about on, on the utilization rate or on the total capacity?
Yeah. Yeah, very, very good question, and we always get questions around utilization. And as I said before, probably 80% utilization is the absolute max, we believe, for total fleet of- for Fugro globally. I mentioned many times before, 78%-80% or something like that. We're getting very close to that. But you can be unlucky to have one asset on the wrong side of the world. You cannot operate that asset, and it will really affect your overall utilization figure because, yeah, that will drive it down. So there's also a little bit of...
You should not only focus on that because we sometimes hear, "Oh, the utilization is 74% or 73%, it should be higher." But then if I look at Europe, for instance, in that season, yeah, they were generating 100% utilization, 99%, 98%. They're always busy. But yeah, I had one vessel potentially on the other side of the world not doing any work. Yeah, if you average out, then the whole utilization comes down. So and you can only have a certain amount of days squeezed out of these vessels because they also need maintenance. They need to go into dry docks every three years, five years, every three years in intermediate survey.
So you see that you have, basically, the vessels need to go out and cannot work then in an operational area, so to say. So I think 75% is a very nice and good utilization. Can we squeeze out a little bit more? For sure, it's possible, a couple %. We can even be, in a very busy year, lower because we had a vessel on the wrong side of the world or two vessels. If you talk about two additional assets that we will bring in end of the second quarter, basically that will mean that we will place them for additional work in the, initially in Europe.
Then we'll see how that works because there's always a starting up period, but we have enough work for them. So that means that it will generate extra revenue. It will generate some additional income in a particular region. We will also, over time, and now and then, let go of leased assets.
So it's not always the case that you say, "Oh, you bought two assets, so we need to see two more assets will generate so much more." Well, we will also plan letting go of some leased assets over time because they're becoming more expensive, they need to be extended, and then we say, "Okay, we'll let go of this one, and we'll do it with our own asset." So we have also announced the other two vessels that we bought end of last year, and one of the vessels we already lease, so that's not additional capacity. It's already on our books. It will be just owned probably end of 2024 or beginning of 2025.
... Thank you. And then there's a big, difference in margins, geographically, right? With margins in Europe already, more than 15% ahead of your strategic target range. And that means that probably in, in marine they are even higher, as they are much lower in, in land. Does that, does that mean that the large works you're currently doing in offshore wind, the survey work in offshore wind, is substantially more profitable than historically the work you did in oil and gas, and the last time you made margins of 15%, let's say 10, 15 years ago?
Yeah. No, that, that conclusion, I would not draw. So basically, and we have said that over the last couple of years, always the same. How is the margin? I think most of the people were worried that wind was much lower than oil and gas. We always said, "It's the same." And why it's the same? Because we supply the same team, the same asset, and if this client wants it or that client wants it, it doesn't really matter to us. Well, it either goes there or there, but you have to pay the same amount for it. So if both markets are growing, yeah, then they're competing with each other. So that, that's basically what we see there.
What you see on the margin on Europe, Africa, I think you also need to realize that Europe, Africa, has also some businesses in there, more, subscription-based businesses, the satellite positioning business that we have in there, different margin schemes, so that has also an influence on the margin there in Europe, Africa. So if we look at isolated, these business lines, Europe is doing really well because they're more mature. Can the others do it as well? Yes. On the other hand, certainly America is climbing up already. We always have seen a difference with Asia Pacific and the Middle East as well. But we also have to look at the mix of the business and the services that we have in the particular region.
Thank you.
Yeah.
Thijs Berkelder here again, ABN AMRO ODDO BHF. Barbara, can you maybe give a rough indication on the cost savings you will reach by having these vessels on your own book instead of leasing them? And another question, follow-up on SEA-KIT. You're now full owner. What is roughly the rollout scheme for them in terms of how, how many vessels for you, how many vessels for third parties, capacity expansions, et cetera?
Yeah. So maybe start with the last there. So, first and foremost, we're not going to give any exact numbers there, A, because it is changing all the time, and secondly, because we feel that's competitively also sensitive. So, so we don't do that. What I can say is that SEA-KIT is a good building block. Will we build all our USVs in the U.K. by SEA-KIT ? Probably not. Will we use the expertise that we have there in the U.K.? Absolutely. So, it might be that we have a manufacturing going on in another region because it's either required of that region or potentially because it's a better setup for us to actually build or finalize them in a particular area.
So, SEA-KIT is a building block for us, brings in certain expertise, and also has the opportunity to sell externally, and we have some leads there, and we'll continue to develop that. So in that sense, it might be a larger in the future, but this is clearly something that you should see in the third priority area, more midterm potential, rather than in real, real short term.
On the cost savings question, it's partially, I would say it's monetary, but it's also the opportunity. So if you, for example, look at the Scout and the Voyager, now we're not paying the interest on the loan anymore, so that is a real cost saving. Not gonna disclose that those amounts, but it was way above our own cost of debt, and even above our cost of equity.
So, there is definitely a cost saving there, and, the additional benefit is that if you need to do a major overhaul, like the conversions we're gonna do for both those two vessels, then, you know, it's better to be the owner because you get a lot of additional terms and conditions from the owner that you lease from, in terms of who owns then the investment, and what benefits you get from actually doing a conversion, whereas you are actually putting in the cash. So it is, that is not so much a cost saving perhaps, but more an efficiency gain, as I would describe it.
Now, what it also does is, if you, for example, look at the Seagull, which we bought in a package deal with the Sea Goldcrest, we were already leasing the Seagull. But as we've explained before, there's a shortage of assets in the market. So we see a decreasing willingness of the vessel owners to lease for a longer period of time, and especially in the Geotech area, where we need to have a moon pool to put a drill rig on. You need a payback, and the payback is, you know, you need at least actually three years, and then after that, it becomes attractive. And if you then get a lease only for two years, it... you kind of get stuck.
You take a big risk on the market that you can really get the day rates that you want, and you need to recover your investment, even if it's a leased asset. So these are all considerations that we take, and of course, we also look at, as I mentioned, we run a portfolio of assets, so there needs to continuously be a balance between owned and lease. So we will continue to lease, but for some assets, we've decided differently.
... One follow-up question on SEA-KIT. Is it still part of your CapEx guidance, the SEA-KIT vessels? Because it will be more or less internal accounting if you now order vessels as SEA-KIT.
Oh, it is CapEx because everything you buy and you start to depreciate we will have to report as CapEx, so even if it's internal. So, and we were already ordering obviously from SEA-KIT, and half of it was owned by Fugro. So now we own it fully, but it doesn't really change because we used to have and we still have development groups that build in-house equipment that we also buy. So but it is. So it is CapEx, it's not all money that goes out of the door to third parties. That's true. Yeah, absolutely. Another question there?
Maybe questions on land. Are you still restructuring there, and what are the plans to, let me say, to upgrade, let me say, the margins there? Because it looks like it's not growing, and is there anything you can say more about what you have said before? And then especially on the Middle East, we understand that there are some delays in projects, et cetera, especially at North and other names. Does it affect you or not?
Yeah. Thank you, Quirijn. Maybe on the land side, I think, if you look at the numbers like we present them in the press release, it's difficult to judge what is really happening in that business. So, and we don't want to become too complex because the land business is obviously multiple countries, with every country having different dynamics. And then on top of that, we see a few very specific elements that happened, and therefore, we mentioned these larger building blocks, specifically in the press release. So in 2022, as Barbara said, we had France, we had a sale in France, that is not in there anymore.
So that reduces the revenue as well as the EBIT, including shutting down and stop operations in Russia, had an impact on the revenue as well as the EBIT. So, so that's, that's one thing. That was in 2022. Now, if you look at the issue that we had on the Jackup, we already reported very early in 2023, because it happened literally in the first day of the year or around that time. Yeah, we didn't have any income anymore on that project because we didn't have the asset to do the work, so that had an impact on the revenues. The work was there.
It had an impact on the revenues as well as on the EBIT, and there were obviously costs to rectify the problem. So if you take those three elements, to keep it relatively simple, if you would unwind that or have an apple-to-apple comparison, then you see land growing more, and you will see also an increase in EBIT compared to the year before. So in that sense, I think we're moving in the right direction also on the land side. There's lots of opportunities on the land side, also with new technologies. We're looking at geophysics on land, getting parameters out that help to reduce the amount of boreholes that we need to do on land.
So there are lots of opportunities there as well, and we want to continue to pursue them. Are we still restructuring? No, there are no restructuring programs, ongoing as such. Having said that, and we said that many times before, business requires always attention, and there will always be areas where you say, "Now I step in because this needs to change," or, "We should maybe stop this service line in this particular area," or, "We should maybe close down an office in a particular area." So that will still continue, and that will always be the case because Barbara and I are looking at the numbers on a monthly basis, and we will step in on a monthly basis if that's required. With the general view that everybody needs to obviously contribute to the bottom line result of Fugro.
Let that be very clear. Yeah.
Middle East, the second question?
Yeah, the Middle East, you asked that there are postponements of projects, particular clients that delay things. Yeah, you saw in the news a lot of noise around, for instance, Saudi Arabia saying, "Well, hey, we're not ramping up on a particular production rate," because they wanted to increase by 1% production in the future, huh? So this was not like we do that tomorrow. But it actually had a specific immediate effect on one of the projects that we were going to start on that is now canceled or postponed. It's not happening. Will that be the case all the time? No, I don't think so. I think these projects are still on the board.
They might be delayed and come back again. It's difficult to predict. There is work out there, and it is slow sometimes in that area. That's what we see, where yeah, you see things on the horizon, and it might not come in exactly where you initially thought it would come in. So there is impact to a certain extent, as well. And we reported on that also a little bit earlier with the conflict in the Middle East. We also had some impact, especially in projects in Egypt, where these were not continuing. Okay, with that, I would like to close the session of our presentation around the 2023 numbers of Fugro.
I thank everybody for dialing in. Thank you very much. Thank you also here for the questions, and have a nice day. Thank you very much.
Thank you.