Good morning, ladies and gentlemen.
I am Carl Vanden Bussche, Head of Investor Relations at DEME, and it is my pleasure to welcome you to DEME's Half Year Analyst and Investor Earnings Call and Webcast. Joining me today are DEME's Chief Executive.
Mr. Luc Vandenbulcke and our CFO, Mr. Stijn Gaytant. Both Luc and Stijn will take you through the presentation, which will be visible on screen during the webcast and also accessible on DEME's Investor portal. Slide 2 briefly outlines the agenda. Luc will kick off with the executive s ummary, after which both Stijn and Luc will further elaborate on the group financial results for the half year, the performance of our four segments, DEME's progress in t he ESG domain, and then Luc will wrap up with the outlook.
After the presentation, we will open up for the Q&A round, giving you the opportunity to ask questions directly to our management. Without further delay, I'll hand it over to Luc for the executive summary.
Thank you, Carl, and good morning everyone. I'm absolutely proud of our first half of the year performance. Once again, we have achieved record profitability, and that despite the unpredictable and unstable market conditions. These results clearly demonstrate the power of the one DEME team. Every day, our employees work tirelessly to deliver incredibly complex projects to our clients worldwide, and I would like to wholeheartedly thank them for their continuous efforts. It's therefore with great pride that I will now share the key first half highlights with you. The turnover grew by 10%, surpassing the EUR 2 billion mark in another milestone achievement. This growth was mainly driven by the offshore energy segments, where revenue rose 27% year-over-year as a result of strong demand, high fleet utilization, and most of all, effective project execution.
EBITDA for the group climbed to EUR 464 million for an EBITDA margin of almost 22%. That compared to EUR 345 million for an 18% margin in first half of 2024. The group EBITDA margin was also fueled by an outstanding profit performance by the offshore segment. Net profit rose to EUR 179 million, up from EUR 141 million a year ago. The order book was at EUR 7.5 billion, and that is in line with the EUR 7.6 billion level of last year. This is made up from a combination of follow-up owners' orders, maintenance work, smaller projects, and also reflects the addition of Havfram's order book. Because, as I assume most of you will know, DEME has acquired Havfram, a Norwegian offshore wind contractor, and that in April of this year. This acquisition strengthens our offshore wind footprint, particularly when it comes to expanding our turbine and foundation installation capabilities.
The company has two vessels under construction, the first of which is on schedule for delivery at the end of the year and the second one early 2026. Both vessels are already contracted for projects, as you know, in 2026. I believe the Havfram acquisition to be a very nice example of DEME's willingness to invest in its future and targeting the right strategic decisions at the right time, in turn allowing us to deliver sustainable, profitable results like the ones we are presenting today. Based on this solid first half, combined with the robust outlook for the remainder of 2025, management expects full-year turnover to be at least in line with 2024, and we expect the full-year EBITDA margin now to slightly exceed the 20%. Now, before handing over to Stijn, I'd like to share a preview of our new vessel, the Norse Wind.
What you see here is the Havfram vessel during its full jacking test at the shipyard, and that is ahead of its delivery later this year. The vessel is jacked up to an impressive 90 m above the seabed, and we look forward to welcoming it into our fleet at the end, as we said, of this year. Stijn, now over to you to walk us through the financials of the first half.
Thank you. Luc the table on the left visualizes what DEME has delivered in the first half of 2025 and compares it with the results from the previous two half year periods. It clearly demonstrates strong year-over-year improvement across all financial related metrics, backed up by a high quality order book, some items I'd like to highlight. The order book remains strong at EUR 7.5 billion, slightly lower than where it stood this time last year. It's important to keep in mind that DEME delivered EUR 4.3 billion in turnover over the past four quarters. Turnover for the group for the first half year stands at EUR 2.1 billion, up 10% from EUR 1.9 billion at half year 2024. Profitability has continued to improve, outpacing the growth in turnover over the recent period. An EBITDA of EUR 464 million, which is an increase of 35% year on year, represents a margin of 21.9%.
This compared to 18% year-over-year. An EBIT of EUR 223 million, which is an increase of 49% year on year, represents a margin of 10.6%. This compared to 7.8% year on year. The net profit for the first half year stands at EUR 179 million, which is an increase of 27%. This compared to EUR 141 million year on year. The EUR 241 million on depreciation and impairments for the first half year represents, compared to the EUR 195 million year on year, an increase of EUR 46 million. This increase can be attributed to mainly four elements. The Yellowstone, our most recent addition in the fall pipe vessels, was welcomed to the fleet in June last year and started contributing to the depreciation only in Q2 of 2024. Secondly, a reassessment has been made to the useful lifetime of one specific auxiliary equipment for the offshore energy segment.
The remaining useful lifetime has been adjusted to one remaining year, being till end of 2025. This has an additional impact for the first half year of 2025. Thirdly, a higher impact of depreciation related to IFRS 16 leasing and the increase, to top it off, in assets and depreciation related to the Fehmarn belt project, which is a large marine infrastructure project in Denmark. The net financial result that is part of the bridge between the EBIT and the net profit of the group amounts to -EUR 9 million. This compared to a + EUR 30 million in the same period last year. The delta between both is related to the exchange rate differences in the first six months of 2025.
Current taxes and deferred taxes account for - EUR 49 million, which reflects an effective tax rate of 23%, similar to the effective tax rate year on year and lower than the 26% tax rate we had at the end of 2024. The joint ventures and associates as a last contributor to the result of the group realized a profit of EUR 70 million. That's a combination of, on the one hand, positive amounts of the associates, mainly driven by DEME concessions that set offshore wind parks, saw relatively low production in the first half of 2025, which had a soften. On the other hand, we notice continued positive results on most of our operational joint ventures, of which a considerable portion is related to our setup in Taiwan. Now, how do these excellent P&L figures translate into the main balance sheet items?
We present them in comparison to the half year and the end of 2024. The negative working capital of - EUR 870 million half year 2025 reconfirms that DEME's working capital compared to its turnover remains in line with the historical averages. DEME consistently maintains negative working capital largely due to disciplined contract management. The CAPEX investments in the first six months of 2025 amount to EUR 141 million. This is excluding the Havfram acquisition, and there's a decline of EUR 26 million in CAPEX compared to the EUR 167 million year on year. The current CAPEX mainly consists of project-specific investments, lifetime extensions of vessels, and capitalized maintenance cost. Of the approximately EUR 900 million communicated for the Havfram transaction, EUR 537 million were spent in Q2 2025.
Now these expenditures, in combination with the increased profitability, working capital, slightly lower CAPEX compared to the prior year, and paid out dividend in Q2 of EUR 96 million, results in a negative free cash flow of - EUR 440 million. Take an abstraction of the Havfram impact, the free cash flow amounts to a positive EUR 123 million. The cash and cash equivalents as of June 2025 stand at EUR 709 million compared to EUR 509 million year on year and EUR 853 million end of 2024. Taking the earlier mentioned elements into account, the net financial debt currently stands at - EUR 480 million compared to - EUR 352 million year on year and + EUR 91 million end of 2024. As a result, our net financial debt on our EBITDA ratio is now - 0.42 compared to - 0.49 year-over-year and + 0.12 end of 2024.
Moving on to the order book, the comparison on the left graph, the segment breakdown demonstrates a continued balanced and diversified order book for a group order book of EUR 7.5 billion in line with last year's level of EUR 7.6 billion. The order book additions in the first half consist of follow on contracts, several small contracts across all contracting segments, and the addition of the Havfram order book for EUR 530 million. We note that order book intake can be irregular in timing. On the graph in the middle showing the geographical breakdown on the first half of 2024 and 2025, you notice that Europe accounts for 76% of the overall order book, which is an expansion compared to the 62% year-over-year.
Reconfirming the importance of our home market, we see a decrease in Asia, Africa, and the Middle East, all driven by a combination of effective project execution and currently less intake. I highlight as well again the order book evolution in the Americas, which reduced compared to the first half of 2024 from 16% to 10% and reflecting high activity and progress on the projects in the U.S. the last 12 months. This resulting in order book conversion into turnover in combination with limited additions of new U.S. projects to the order book. On the graph on the far right, we provide the order book runoff for the coming years. The runoff supports our guidance for the year with volumes for the second half in line with the same period a year ago.
The order book volumes spread across 2026 and beyond amount to EUR 5.6 billion, similar as compared year-over-year. Next, we like to highlight the trends in DEME's turnover evolution. Two key takeaways I like to share: first of all, a 10% year-over-year growth in turnover as shown on the left graph, and also DEME's half year turnover doubled over the last five years. The segment breakdown in the middle reveals some more insights. An increase in turnover year-over-year for the offshore energy segment well surpassing a billion turnover. More specifically, EUR 1.1 billion or +27%. This was driven by strong demand, high fleet capacity and utilization, and solid execution of projects in the U.S., Taiwan, and Europe.
The dredging and infra segment reaches EUR 950 million turnover, small decline year-over-year mainly due to a strong comparison base in first half of 2024 and some project phasing effects, and the environmental business achieves a turnover of EUR 142 million, also lower compared to last year and also mainly due to project phasing. When examining the geographical breakdown on a year-on-year basis on the right, we observed that Africa remains stable in their relative contribution, while contribution year-on-year from the Americas as well as Asia have been markedly strong, driven by effective project execution in the U.S. and Asia. The turnover breakdown further reaffirms that Europe, with 53%, remains for DEME a key market, which aligns with our earlier conclusion from the order book.
Our profitability is outpacing our turnover growth, with EBITDA going up 35% year-on-year, reaching an EBITDA margin of 21.9% from 18% year-on-year and 15% compared to half year 2023. EBIT increased by 49% to EUR 223 million, so the higher depreciations have not impacted on the EBIT margins, reconfirming that the recent additions also are driving profitability. Net profit ends up at EUR 179 million compared to EUR 141 million year-on-year. This results in earnings per share amounting to EUR 7.08 for the first six months compared to EUR 5.58 in June 2024. While Luc will provide more in-depth business and operational insights, I will share some financial details on the individual segments. The Offshore Energy segment leads with an EBITDA margin of 31% compared to 18% year-over-year. EBIT follows a similar trend with 20% compared to 9% year-over-year.
The segment's profitability has benefited from the high fleet capacity and utilization and also the solid execution of projects. The main projects in the U.S. and Taiwan being in their second campaign in the first half of 2025 helped boost performance levels. In addition, Offshore Energy also recorded a one-time cancellation fee payment in the U.S. and the profit on the sale of the Sea Challenger. For Dredging and Infra, we notice a small reduction year-over-year in turnover, which can be allocated to the temporarily lower current occupation of the Qatar fleet. The EBITDA for Dredging and Infra stands at 12% compared to 19% year-over-year. Similarly, evolution for EBIT at 0% compared to EBITDA 8% year-over-year.
The decrease in margins for the first six months is largely due to further adverse results on a large offshore marine infrastructure project in front of the Belgium coast, the same project that was mentioned under EIS 37 at the year end. While the impact of this project on the DEME Group results is absorbed by the other activities, it had a notable impact on the Dredging and Infra segment figures for the first half. The environmental segment maintained solid execution, delivering another half year of strong results in 2025 with EBITDA of 15% compared to 13% year-over-year and EBIT of 11% compared to 10% year-over-year. On the concession segment, we see that the contracting revenue generated as well as the value of the projects mentioned indicate the overall contribution of the concessions to DEME in the last years and till date.
The own equity invested and loans granted now stands at EUR 242 million. The combination of the above initiatives both on offshore wind farms and infrastructure generated a recurring income in the first half of 2025 of EUR 5 million compared to the EUR 11 million a year ago, mainly due to very soft wind production in first half of 2025. That concludes for now the main financial highlights, which I believe we can summarize as titled in the first half press release: strong with record profitability, and I now kindly hand over to Luc again.
Thank you very much for that Stijn and for this comprehensive overview of the financials. Now I would like to go together with you and outline some of the highlights of our four segments. I will start with Offshore Energy before we jump into more details. We have here a beautiful view of our Green Jade vessel at work during the golden hour installing jackets on one of our projects in the Taiwanese region. I think it's the works and the picture are a real work of art. Without a doubt, Offshore Energy was really the star performer. In the first six months of this year the order book reached EUR 4.1 billion, rising from EUR 4 billion. This includes the addition of Havfram's order book of EUR 530 million. It includes project add-ons and the addition of new contracts.
Revenue exceeded EUR 1 billion for the second consecutive semester and profitability outpaced revenue with EBITDA climbing to EUR 358 million, representing 31.4% of turnover and up from 18.3% in the first half of 2024. In nominal EBITDA, it's even more incredible. It is a 118% increase. A number of elements have led to this remarkable performance. First of all, effective execution of the projects, very efficient vessel utilization and strong project planning as well as several ongoing projects now in the second installation season and some one-offs. Also, as indicated by Stijn, vessel occupancy reached 23 weeks in the first half year and that is in line with last year. As I touched on in the executive summary, in the second quarter we completed the acquisition of Havfram. The integration is progressing smoothly.
It's marked by strong team alignment, encouraging commercial contract developments and the on-schedule construction of the two new next generation wind turbine installation vessels. Additionally, although on a much smaller scale, we acquired a 50% stake in BAUER Offshore Technologies and that in the second quarter of this year. BAUER Offshore Technologies is a supplier of offshore drilling services. This investment is intended to further expand our drilling and installation expertise for offshore wind foundations. I'll just mention a couple of our main projects in 2025. In the U.S., Offshore Energy made steady progress at the Coastal Virginia Offshore Wind project and this included the installation of the first offshore substation and the second monopile installation campaign. Meanwhile, we also began the export cable installations for the same project, and those will continue through 2026. We had our fall pipe vessel carrying out rock placement activities on the project.
The U.S. team continued work on Vineyard Wind 1, including the turbine installation, and we're also preparing to start the cable installation works for the Empire Wind 1 project in the third quarter of this year. In non-renewables, the segment carried out dredging activities for the West White Rose project in Newfoundland, leveraging DEME 's dredging capabilities. In Europe, we were mainly busy in France, the UK, and Poland. We completed the installation of 61 monopile foundations and the transition pieces at the Île d’Yeu and Noirmoutier offshore wind project, demonstrating DEME Group's capability when it comes to successfully installing wind farms in very challenging locations. Additionally, we made solid progress on the Dieppe Le Tréport project, installing there the offshore substation and the pinpiles.
In the UK, we completed the cabling works for the Neart na Gaoithe and the Dogger Bank A and B project, and the last one, the Dogger Bank C project, is scheduled to begin in the second half of the year. The segment completed the four directional landfall drills for the Baltic Power project in Poland with the inter-array and export cables. Works are due to start in the second half of this year. The team also began preparation for cabling works for offshore wind farms in the Netherlands. In Asia, our Taiwan team installed the pinpiles for the Hailong project and began the second installation phase for the jacket foundation installations. The first turbines and the second offshore substation were successfully installed, and I can add with our vessel Green Jade. We completed all 73 jacket foundations for this 1 gigawatt project already last week.
Preparatory works have now begun on the Greater Changhua project and the Feng Miao offshore wind farm in Taiwan. Elsewhere in the APAC region, the team successfully completed the Darwin pipeline duplication projects, and that is in Australia. Now we're on to our dredging and infra segment. The financial results were already presented by Stijn, but my takeaways on this are that the turnover, I would say, is largely in line with last year. The order book shows a slight decrease but still at a very healthy level of more than EUR 3 billion. Also noting that we continue to see a strong tender activity and we are also tendering as always, I would say some compelling opportunities. Now EBITDA is indeed lower. That's right, with the EBITDA margin standing at 12%, but that is largely due to these unfavorable results. On a marine infrastructure project.
As described by Stijn, the segment's hopper fleet had a lower utilization rate, which was mainly due to a lot of scheduled dockings, and the Qatar fleet's occupancy also dipped, but that's, let's say, largely due to a temporary reduction in demand for specialized Qatar work. In the first half of the year, our infra team achieved several important milestones. The Princess Elizabeth Island project in Belgium progressed with, now, status of last week, nine out of the 23 caissons being placed at their final offshore location. Additionally, in Belgium, the tunnel elements were completed and by now, three out of eight tunnel elements have successfully been immersed for the Oosterweel connection. Here, nearby our office in Denmark, the Fehmarn Belt Fixed Link advanced with the first tunnel elements successfully floated.
At the same time, in France, civil works for the Port-La-Nouvelle project continued, including the construction of the quay walls and the jetties. Our dredging team also performed maintenance works for several multi-year contracts and started a number of new projects. In Germany, preparatory works began for the offshore terminal at the Port of Cuxhaven, and that following the completion of the widening of the Kiel Canal. In Le Havre, the La Chatière project kicked off with the soil investigation and UXO detection campaign. In Italy, there was solid progress on several projects, including the modernization and extension works, amongst others. At the Port of Livorno in the UK, dredging and reclamation work progressed well at the Ardersier Energy Transition facility, where we are deepening and widening the harbor and the access channel. The segment also maintained a high level of activity in the Middle East.
We continued work at Aboukir 2 in Egypt, deploying several dredgers from our fleet, and we are busy with the dry yard moving activities for the Oxagon Phase 2 project in Saudi Arabia, preparing for the Qatar phase of the project, and that will be later this year. In Asia, dredging and infra strengthened its presence both through ongoing port maintenance projects and by securing new contracts as well as additional scopes for existing projects like in Taiwan, the project where the team completed dredging works in the port of Taichung. It also deepened the access channel of Patimban, and that is in Indonesia. It won a new contract for maintenance dredging at ports along Australia's west coast. In Africa, maintenance dredging and land reclamation projects were carried out at several locations, mostly along the West African coast.
In Latin America, maintenance dredging works for the access channel and bird pockets of the Atlantic terminal in Port of Moyne in Costa Rica were successfully completed. Meanwhile, in Uruguay, maintenance dredging for the canal Martin Garcia was ongoing. Moving to the environmental segment, we see here the performance dashboard. The order book of our environmental segment remains stable, standing at EUR 322 million, demonstrating the team's strength in the Benelux and their efforts to proactively target environmental opportunities. In the UK and Italy, among others, solid progress on several long-term and complex remediation and high water protection works in Belgium and the Netherlands delivered a turnover of EUR 142 million and an EBITDA of EUR 22 million. The EBITDA margin increased to 15%, up from 13% in the same period last year.
The environmental team also made good progress in expanding and upgrading capacity at our treatment centers in Belgium and in the Netherlands. Meanwhile, Kargen, which is DEME's environmental joint venture specializing in activated carbon treatment and remediation solutions and that was established last year, is making steady progress and has begun deploying its innovative filter technologies at some selected projects. I would also like to spotlight DEME Environment, which is a cornerstone subsidiary of the environmental segment and our pioneering soil remediation and brownfield redevelopment specialist in Belgium and France, as they recently celebrated their 35th anniversary. Here you can see the main projects our environmental segment has been busy with. In the first six months of this year, the team successfully completed the complex three-year remediation project in Bergen, and that is in Norway.
In line with DEME's focus on creating a better, more livable world, the site is now fully prepared for new infrastructure. In Belgium, we have several longer-term projects underway, including the Oosterweel in Antwerp, a remediation project for VDP in Willebroek, the complete transformation of the Blue Gate site here in Antwerp, the VV project, and the redevelopment of the former ArcelorMittal site near Liège, as well as maintenance, dredging, and restoring the ecosystem along the River Maas in the Netherlands. The team continued work on two major projects which are part of the Netherlands flood protection program: the Gorinchem-Waardenburg dike reinforcement project and Marken, where the dike is being strengthened to ensure long-term protection. Finally, we come to our fourth segment, concessions, with here on the picture, Port-La Nouvelle in the background, showcasing a successful infrastructure concession project.
The net result of our concession segment saw a bit of a decline to EUR 5 million. This was mainly due to much lower wind production when compared to the same period in 2024. In offshore wind, we continue to operate wind farms in Belgium, and we are making progress with the ScotWind concession and preparing for some selected upcoming tenders for dredging and infrastructure concessions focused on projects in its portfolio, such as Port-La Nouvelle in France and the port of Duqm in Oman. Additionally, the team is working on the deepwater terminal at the port of Świnoujście in Poland. As part of DEME's long-term growth with regards to its concession activities, we continued laying the groundwork for green hydrogen projects.
Currently, these efforts are primarily focused on the Hyport Duqm project in Oman, where together with our strategic partners, we are working on a project roadmap targeted to develop a dedicated and suitable end market. In deep sea mining, the Global Sea Mineral Resources team continues to monitor the developments around deep sea mining. Moving on from our segments section, I would like to highlight some of our ESG achievements in the period. Firstly, environmental: in line with our strategy, we are playing a significant role in advancing and accelerating the clean energy transition, particularly by contributing to offshore wind farm projects worldwide. Earlier on I already spoke about offshore energy's stellar performance, and with most of its activity focused on renewable offshore wind, it increased its contribution to the group's turnover and is now accounting for 51% of DEME's total turnover.
At the same time, in dredging and infra, we support the climate transition through major projects such as the Fehmarn Belt Fixed Link and the Princess Elizabeth Island. As we continue apace with our mission to have the most efficient fleet in the sector, we have taken again several important steps. I highlight the acquisition of Havfram here, as the addition of these two new offshore wind vessels will significantly boost our sustainable operations capacity. These not only directly support the energy transition in their operational purpose, but they also have advanced energy management shore power capabilities, reducing fuel consumption, and they feature hybrid power systems. They are also designed to be able to adopt future cleaner fuels such as methanol.
In addition, we are investing in shore power connections in Flushing, the Netherlands, to enable our vessels to switch off onboard generators while docked and to further reduce our emissions. For social and safety, we are continually investing in attracting and retaining top talent, and this commitment was also externally recognized when the HR team received this prestigious HR Ambassador Award. You can see that on the picture here on the right. Of course, we remain committed to achieving the very highest standards of safety, focusing on key safety performance indicators, incident reporting, inspections, and investigations. Our ongoing initiatives such as Safety Week, Safety Success Stories, and Safety Moment Day all help to support this, embedding safety awareness in our organization. As an example, the focus theme for this year being Think Before You Lift.
Now you see a beautiful picture here, and I can tell you that for the third year in a row DEME is a proud and committed partner of the Innoptus Solar Team, and that is the Solar Car Team initiative of the KU Leuven. These brilliant students are taking on the challenge of defending their world title at the Bridgestone World Solar Challenge that is in Australia with their brand new solar car. We're very proud to be a partner as the team's commitment to promoting renewable energy, sparking interest in science and technology among young people, and encouraging entrepreneurship and advanced technologies aligns perfectly with DEME's D&A. The race has just kicked off as we speak in Darwin, and the team has embarked on an exciting chase to get back in contention for victory. All eyes on Australia and on the finish line in Adelaide next week.
I wish them very good luck. Now we come to the last part, important part of course, the outlook. Despite the global macroeconomic turbulence and the current uncertainties regarding geopolitical issues, DEME's operations remain robust. We continue to deliver sustainable, profitable results while at the same time taking timely investment decisions to support our businesses for the decades to come. Based on this solid first half year performance and taking into account the outlook for the second half, we expect full year turnover to at least be in line with that of 2024. Additionally, DEME's management now anticipates that the full year EBITDA margin will slightly exceed 20%. Full year CAPEX remains forecasted at approximately EUR 300 million, which excludes the Havfram acquisition and completion and delivery of the two Havfram vessels. I think with that, that concludes my part of the presentation.
I thank you and I will hand you over back to Carl so he can run through the financial calendar and start the Q and A session.
Thank you, Luc and Stijn. We will indeed now begin the question and answer session. There are two ways to ask questions. For participants in the webcast, which is most of you, you can use the chat forum to submit your questions or you can raise your hand, after which we will assign when ready for your question. For participants on the conference call line, please dial Key 5 on your telephone keypad to enter the queue. If you wish to withdraw, from our side, we will manage the flow and do our best to field questions from different angles. For all participants, please limit yourself to one or maximum two questions at a time, and if you have additional questions, please queue again. This approach will enable us to cover questions from various participants effectively. We are now ready for the first question.
Please go ahead, and I see that people are already queuing up for questions. First in line is Mr. David Kerstens from Jefferies. David, the floor is yours.
Thank you, Carl. Good morning, gentlemen. Congrats on the strong results in an uncertain world. It seems that uncertainty maybe is so far only limited to your order backlog and order intake. I was wondering if you can comment on the order intake and the pipeline that you see in relation to your previous medium-term guidance for revenues to be broadly in line with 2024. I have a second question, which is regarding your profitability. Great to see that now 20% is no longer the maximum EBITDA margin as reflected in your previous midterm objectives. I was wondering if you could please quantify the one-offs in offshore energy and in dredging in the first half of the year and whether you see 20% now as sustainable. I think your guidance implies you will drop below 20% again in the second half of the year.
Any more color would be much appreciated. Thanks very much.
Okay, David, thanks. I think two very good questions. We'll kick it off on the order book. A bit of color, Luc?
Yeah, I think the first question as I interpreted, David, was on the outlook versus 2024 and the order book. The order book stands as you have seen at EUR 7.5 billion compared to EUR 7.6 billion a year ago. Now, I must say we personally as management don't see that as a point of concern. There's still a healthy order book. We have seen that for 2026 we have an order book which corresponds to, if you take last year's turnover for a comparison, already 2/3. Of course, we acknowledge that it includes the Havfram order book, but still we don't see the order book as too much of a point of concern if we look at it a bit more granular. You can also see that within dredging and infra there we see a healthy tendering activity ongoing.
There's a number of projects in tendering in the pipeline and the same is happening within the offshore energy segment. That is for me something which I see currently and everything that is ongoing as a point of attention. We continue to see the good tender activity and we expect even some deals to close in the next weeks and months. I can say, and I hand over maybe to Stijn for the second question.
David, on your question on profitability and the one offs, we've identified in the offshore energy segment the surplus on the sale of the Sea Challenger. You will have noticed in the half year report that the net on the sale of assets is determined at EUR 16 million, which the majority is related indeed to the Sea Challenger. On the second part on the cancellation fee on the reservation agreement, you will understand that on individual contracts we never disclose the exact amount, but it is sufficient enough to have mentioned it next to the surplus value on the Sea Challenger. I presume you refer on your questions on the dredging and infra on the additional loss that we have mentioned on the large offshore infrastructure work in front of the Belgium coast. This is indeed the same project that we refer to end of 2024 under ES 37.
The difference is that we are six months further down the line, we have a better insight, and we have deemed it necessary to adjust the loss to completion. Also there, unfortunately, we cannot really disclose the amount. What we can say, it is sufficient enough to visualize it in the EBITDA figures of dredging and infra. I think it's also important to mention that it is not visible actually in the entire results of DEME seeing the excellent results that we have had the first six months, so I hope that.
Thank you. Thank you Stijn . If you have follow-on questions, please get in the line again and we'll move on to Mr. Thijs Berkelder from ABN-Amro ODDO . Good morning. Floor is yours.
Yeah, good morning all. Congratulations from H1 performance. I want to start with two remarks. First, given the complexity of your segment reporting and the way you're exceeding or falling far below analysts' expectations again, please next time give this analyst call later in the day as we really can prepare for this. Second, can you please next time better indicate one-off effects in the reporting as we at this moment all are only puzzling on what really happens underlying, so we, like David, have to start with further fact finding on what we now really read in this press release. Let's say my first question is on your full-year 2025 guidance. When you exclude all these one-offs you've talked about, would you still see a lift in your margin guidance for the full year and by how much? Then the organic backlog is down 15% from year end.
Can you maybe quantify how large contract cancellations impacted the backlog? Also, because I see also the Havfram backlog is EUR 70 million lower than what you reported three months ago, so probably also there you expect to see a settlement fee.
Okay, thank you, Thais. We'll take your first comments on the timing of the conference call perhaps of light, but we'll switch to the questions. First of all, on the full year guidance and the EBITDA margin full year guidance, Stijn, do you feel well?
I think on the previous questions we gave some further insight already on the one-off of the sale of the Sea Challenger. That being said, in the previous years we also had minus OP values as well the guidance. First of all, we have increased the guidance for the EBITDA where we say above 20% taking into account, of course, the visibility we have for the second part of the year where we still believe that the drivers that have made sure that the first half had excellent results are still there. Meaning we still have the strength of the team and the fleet. The resilience of the business model has really proven to work on the first half, and we still have a very strong financial balance sheet as a company. Our portfolio is also very diversified and has a set of activities also geographically.
With that in mind, we feel confident that we are able to increase the guidance on the EBITDA. As you know, we are a project-related business and we do that based on best estimates and what we see today. That is why we can fully defend the guidance that we have given for the remaining of 2025. Maybe briefly on your question on the drop-off backlog of Havfram from EUR 600 million- EUR 530 million, I can actually share that there is actually no loss of contracts compared to when we identified the EUR 600 million. Actually, it proves the very rigid rules internally. We have to take elements into an order book of DEME. The only difference of EUR 70 million is that each contract has optional days where the vessels could be employed by the client.
We have chosen, as we have always done in the past, high-quality order book and for the time being we have omitted them. There is certainly not a loss of any contracts related to the Havfram works in the last three months.
Yep.
Thank you, Stijn. We'll move on to the next in line, which is Mr. Luuk Van Beek from the Degroof Petercam. Luc, floor is yours.
Yes, good morning. Thank you for taking my questions. First of all, a question about the U.S. project. We have seen that the Trump administration also sometimes holds projects in full execution. Can you comment if you see the risk for the projects they are executing and to what extent you're covered from a complex point of view as the customer has to pay any compensation in case you cannot execute the work? Second, a question about the customer stance in general. You hear lots of stories about companies being more uncertain and more hesitant to take big decisions. Do you see that in the conversion of your pipeline into actual orders as well?
Sorry, Luuk, the first question did not really come through.
I had the first question.
It was not super clear.
We think the second one. I will reply to the first question and then maybe you can repeat the second one. I understood it as the risk on our projects currently ongoing in the U.S. For the moment, indeed, Revolution came as a bit of a surprise to many people. We are not active on the Revolution project today. We are in almost finalization of the Vineyard project. We are well advanced on the Virginia, what we call the CVOW Project, and we are preparing for the cabling on the Empire Wind Project. We see at this moment no indications, and neither do our clients, that these projects could be hampered by any executive orders. I think that was the first part of your question. The second part is if that would happen. Of course, we have contractual arrangements in place to compensate and protect our contracts. That's sure, yes.
The second question you have to repeat.
Would you mind to perhaps rephrase the second question once again, please.
Yeah. The question is basically, with all the uncertainty that we hear around us, do you see any hesitance of customers to take a decision on the projects that are in the pipeline? Are they being delayed or is the normal progress of those?
Okay, of course, on the U.S., I think already the timing, I'm not 100% sure, but I think in one of the previous calls, we already indicated that we are not counting on, let's say, new lease and subsidy rounds in the short term. On the other hand, we have, of course, the two big bases are Europe and Asia Pacific. In Europe, what you have seen together with us, a couple of experiments of tenders which was either too low CFDs floors or no CFDs. That is not the way to go. I think many, many people and also the governments agree they have been rearranging the tenders now, and we see currently a healthy pipeline of projects getting new CFD awards and the same in Asia Pacific.
I think once the project have their awards under a healthy system, they are not so much hesitating or impacted by the transatlantic decisions. Yeah.
Yeah.
Thank you, Luc. Thank you. Also Luuk Van Beek. We'll move on to next in line from KBC Securities, we have Guy Sips. Guy, floor is yours.
Yes, thank you for taking my questions. I have two questions. First is on the Havfram projects. Can you give us some magnitude of the projects and the timing of these projects? When are they expected to be executed? The second one is on the Sea Challenger. What's the reasoning behind the shift of this vessel? Thank you.
Yeah, no, very, very concrete questions. Thank you, Guy. Luc, perhaps on the new.
On the Havfram project, we are. The first ship will be delivered end of this year. The second ship is being delivered early 2026, and both of them will start being operational and contributing in 2026. They have an order book running over 2026, 2027, till 2029, until even into 2029, 2030. The magnitude, I think we haven't given any specific details on that sub part. That's, let's say, the timeline for contribution of the Havfram vessels. Now, on the Sea Challenger, the Sea Challenger has been brought into our Japanese joint venture. We think that, first of all, Japan is one of the upcoming markets where experienced vessels will be needed. We also think, like we saw in our model in Taiwan, that having a common asset is, I would say, an asset is really a plus. You have a shared interest, you can develop the business together.
That's why we have brought in the vessel into the joint venture. Mind you also that Japanese regulation is complex. The vessel has to be adapted to the Japanese rules and regulation, and that supports having the vessel in a permanent situation under the joint venture. Yep.
No, thank you. Thank you, Luc. Thank you, Guy. Moving on to Mr. Tijs Hollestelle from ING. You have a question?
Yeah. Thanks, Carl. Morning, gentlemen. If I run the numbers in the offshore energy division, taking out the disclosed one, or assume kind of an all-time high EBITDA margin, I would say that the cancellation fee was above EUR 55 million. When exactly did you learn about the positive EBITDA contribution from this cancellation fee? The date.
Perhaps I can take that myself. We already made reference as a subsequent event to the cancellation fee. When we disclosed the full year results of 2024, we did not disclose the amount of the cancellation fee days.
Yeah, you can indeed. I think you can run the numbers yourself. Okay, so the Q1 outlook statement was basically repeating the outlook given earlier, that had to relate with the uncertainty to the Belgium infrastructure project. Is that the correct assumption?
The question is whether Q1 comments on uncertainties was referring to the marine infrastructure project in Belgium. Is that a question, Tijs?
Yeah, when did you learn about the loss location on there?
Okay, yeah, that is not an exact moment. That's progressively, and of course, over the winter season we had less marine activities. On that, I'm talking about that particular project. As you progress, you see what the results become. You gradually know until you then finalize the figures for the second quarter.
Yeah, the loss provision isn't a specific amount.
Yes. Maybe to take a step back. The project you're referring to was already end of 2024, was under ES 37. That means it was already a lost project. As Luc has mentioned, you have the phasing of these specific projects, which means that at certain moments in time, in those six months you have other activities. This is a project that had a lot of activities in the second part of the year. Based on that information, unfortunately we need to adjust our loss to completion, which means it's something that happens with the figures of end of June, if that is a bit what you are referring to.
Yeah, okay. More or less. One additional to that, are the other large infra projects in the dredging division which are currently in execution, do they have positive EBIT margins?
You're asking us to split up the dredging and infra segment figures. Historically, we don't do that because they are quite interlinked, and a lot of these infrastructure marine waves also have a component of dredging related to it. We prefer not to artificially break them up, and we look at that as one whole. There is a combination because on these projects also there's a lot of dredging activity as well.
Okay.
Okay, yeah.
Thank you, Stijn. Thank you, Tijs, for the questions. We have one more person in the queue for questions. If others have more questions, feel free to queue again. Christoph Greulich from Berenberg. Christoph, welcome and open. The floor is open for you.
Yeah, thanks a lot Carl and good morning, and yeah, thank you for taking my question. Firstly, I follow up on the loss making project in Belgium. I'm just wondering how you see the risk and further a chance that loss to completion basically over the coming quarters, and if you have anything implied, any buffer in your full year guidance for that. Secondly, on the D&A line, I mean the jumble somewhat is unexpectedly high in H1, and you already mentioned some of the moving part of contributing factors for that. I was just wondering, that EUR 25 million impact that you mentioned from the accelerated depreciation, will that be repeated in H2? After that, Ethan will be fully depreciated and we don't see the impact anymore next year.
If you could just provide a bit of guidance, what we should expect for the D&A line in H2, and then also once the Havfram vessels have joined the fleet, what will be the impact of that for the group's D&A last year?
Yeah, okay, thank you Christoph. We'll start with your first question. One other question on the project with losses in the books now, Luc.
Referring to that, of course we have now had already an indication of losses on the project in the full year results. In 2024 we have a further deterioration we can say, Stijn, and now in June 2025, you can imagine that we have very, very, very carefully studied the results. I can tell you that from an operational point of view, the project has now experienced, I would say, all or almost all phases of the project. We have gone through all cycles already a number of times now, which was not the case before. We hadn't been installing caissons and etc. We do think that today's provisions are the correct ones. Yeah.
The question on the depreciation, the accelerated depreciation.
Yes, thanks for that question. It is not uncommon in our line of business that at regular times we do reassessments of supporting tools. This has been done in this case as well. Most others also a bit also triggered with the Havfram transactions because there are similar tools available over there. We have come to a conclusion that useful lifetime should be shortened, which means specifically to answer your question, the depreciation will be taken fully and will stop end of 2020. You are right by saying we have now an impact in the first half year. You will have a similar impact in the second half of year, after which that item is fully depreciated and you will not see an impact anymore in 2026 and 2027 going forward.
Thank you, Stijn. I see some additional.
Okay, Christoph, go ahead.
Yeah, I was just wondering once the job completes, how it will impact the group's D&A.
Sorry, can you repeat because the line is not really clear.
Okay, so the Havfram vessels, once they join the fleet, how much will that increase the group's D&A?
is the impact on D&A?
That's of course part of finalizing the PPA, which will be done by the end of 2025. We'll be able to give you a more specific figure on that at that time.
Yeah, okay, thank you, Stijn.
Thank you.
Thank you, Christoph. I'll just take a couple of questions from the chat and then move back to the people in the queue. In the chat, a question on the order book and the runoff of the order book. Order book 2026 looks to be approximately 14% down year-over-year. However, it doesn't sound like you expect a revenue decline. Do you see significant ongoing tendering activities which you believe can fill the gap to get the revenue growth 2026 versus 2025? How has the sentiment amongst clients improved and to what extent are you concerned about the 2026 revenue outlook? I think, Luc, you already gave a bit of color, but.
Yeah, I think. I concur with the first conclusion that you see that we don't see that very much as a point of concern for the moment being, so we have secured projects. You have seen that for around EUR 5.5 billion and that is for 2026 and beyond. For 2026, I mentioned before we have EUR 2.5 billion turnover, so 2/3. We're further building out that. I also mentioned the strong tender activities. Of course, we have in both of them dredging and infra is normally a bit shorter in lead times, but there's also opportunities in the offshore energy. We are today, as I mentioned already in one of the former questions, discussing a number of tenders and contracts at various stages on which we hope to be able to come back in the coming weeks. To conclude, I do think that the earlier forecasts remain valid.
Yeah.
We have two topics or two questions on a topic which we haven't touched upon. It's on the occupancy of both the cutters and the hoppers. I'll just read the questions. The cutters utilization saw a significant drop in the first half and follows a relatively weak H2 2024. Do you have visibility around an improvement in cutter utilization in H2, back to the H2 2024 levels? I'll combine it with the follow-on question on hoppers. Although impacted by scheduled dockings, those dockings at least partially scheduled at that time, owing to lower activity levels, do you expect the hopper utilization in the second half of the year to rebound to last year's levels? I think, Luc, you already gave a bit of color during the presentation.
I think it's very clear that the lower utilization during first half of 2025 is a correct observation. Especially for the cutters we saw, because it depends also a little bit in the regions that you are a temporarily softer demand for the cutters. I see that coming back towards rather the end of the year. We have also used the periods to do some heavy maintenance on some of the very large cutters, which usually contribute more, and then the same on the hoppers. On the hoppers, of course, you saw from memory 19 weeks versus 22 weeks. I see an ongoing quite typical second half of, or I expect a quite typical second half of the year there. Yes.
Thank you, Luc. Thank you also for the questions. We move on back to a question online from Thijs Berkelder . Thijs, the floor is welcome again and the floor is yours.
Yeah. I want to come back on the initial question by David on your 2026 expectations. As David indeed mentioned, you previously expected 2026 turnover and margins to be roughly equal to 2024. Of course, that was still before Havfram. On margins, is it logical and normal to expect margins in 2026 to be at 2024 levels, or is that the other option? Is the 20% for now the more logical direction? Then related to that, how should we account for Havfram in 2026, your PPA accounting, how will it roughly look like? I don't think many have, let's say, models already. It's in a PPA accounting style. Finally, small question, I'm reading in your report now that you're about to sell your stake in the Blankenburg Tunnel. What kind of book profits could that give and is that already included in your guidance?
Okay, that's a couple of questions. Let's take them one by one. The first question was about the EBITDA margins going forward. EBITDA margin, bracket. I don't know, Stijn or Luc. Yeah, yeah.
Look, I think with your question, Thijs, you're asking me for a specific guidance on 2026. I think what I can say is that first of all, I mentioned it a couple of times. I do not see a big concern in the order book. I see a healthy tendering activity for the period and beyond. That's my first take on it. Secondly, the order book that we have, including for 2026, that we have been securing that over the past period, which has, to my opinion, healthy margins. I think based on that, I think we can only reiterate our guidance for this year and point you again to my general remarks for next year. Of course, the Havfram integration will slightly in general change a little bit the margin profile.
We have a preference, as I say, because of the general situation, not to have a more concrete outlook on 2026 at this stage.
Yeah.
Thank you, Luc. I think I perhaps missed the second question, the last one.
How should we look at the PPE.
Indeed.
We've made, of course, significant progress already on finalizing the PPE test, that is looking at the value of the order book, looking at the vessels and potential, if any, goodwill. Of course, the vessels are still being finalized and completed. As we always do within DEME, we still keep looking if we can still find some benefits or maybe additions to be done. That's the reason why we have not yet finalized that exercise. As mentioned, it's a bit difficult to give you already specific ideas on the values of the vessels. For sure, by end of the year, also with the wrapping up then of the building of the vessels, we will be in a good position to give a very clear and decisive indication on that.
On your last question on the sale of Blankenberg, indeed it has been mentioned as assets held for sale, which we need to do if that is foreseen within a period of 12 months. Not really able to give you a specific figure, but it's not going to be a figure that will give a substantial impact on the overall figures of DEME. Certainly not. I hope that gives a bit.
An answer to your question.
No, no, no.
Guidance.
No, no, no.
I think with that we answered your questions. Thank you. I don't see any more questions in the queue. I think we have reached the conclusion of Earnings Call.
If you happen to have further questions or wish to provide feedback, you know where to find me. Against the backdrop of our financial calendar, I'm going to display this one on slide. Just a minute. On one of the last slides of the presentation, I'd like to thank you all for your participation and Stijn and Luc, also for your insightful presentation and for addressing all these questions. We look forward to meeting many of you during our roadshows and conferences in the coming weeks.