Cadeler A/S American Depositary Share (each representing four (4) Ordinary Shares) M&A announcement
Review the key takeaways and the transcript of this earnings call.
- Cadeler has entered into a €501 million deal to acquire Menk, a company specializing in pile driving with hydraulic hammers, grouting, drilling, tooling, and other related services.
- Menk has installed more than 2,500 piles globally and operates a diverse portfolio with a strong presence in Europe, Asia, and the Americas.
- The acquisition strengthens Cadeler's offshore installation capabilities and supports the company's ambition to operate up to five foundation projects in parallel per year.
- Menk is a technology leader with a 150-year history, known for its hydraulic hammers including the 6000 W model, the largest currently available.
- Menk operates a rental business model similar to Cadeler's, generating attractive EBITDA margins with limited maintenance CapEx.
- Financial KPIs for Menk show average total revenue of €113 million (2023-2025), with equipment rental revenue at 43%, contribution margin at 60%, and EBITDA margin at 28%.
- Projected 2026 figures include total revenue of €133 million, rental revenue growth, contribution margin of 63%, and EBITDA margin of 33%.
- Medium-term financial objectives (2027-2029) include a 20% CAGR, 70% equipment rental revenue share, 70% contribution margin, 50-55% EBITDA margin, and average CapEx of €22 million.
- Menk currently operates a fleet of three large hammers, with seven large hammers ordered and in advanced stages of delivery and assembly.
- Menk has access to scarce forging capacity for hammer anvils, with production and cooling times extending over a year, limiting supply availability.
- Menk's rental contracts for hammers typically align with vessel rental periods, providing integrated project execution solutions.
- Menk's clients are primarily external; none of Menk's 2025 revenues currently come from Cadeler.
- Menk will continue operating as a standalone company under Cadeler, maintaining client relationships and competitive neutrality.
- Menk is innovating on noise reduction technologies and other equipment improvements to meet evolving offshore wind project requirements.
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Transcript
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Good morning, and welcome to Cadeler's investor presentation on its acquisition of Menck. Presenting today are Mikkel Gleerup, Chief Executive Officer, and Peter Brogaard Hansen, Chief Financial Officer. Please be reminded that the presenters' remarks today will include forward-looking statements. Actual results may differ materially from those contemplated. The risks and uncertainties that could cause the combined group's results to differ materially from today's forward-looking statements include those detailed in Cadeler's annual report on Form 20-F, on file with the United States Securities and Exchange Commission. Any forward-looking statements made this morning are based on assumptions as of today, and Cadeler undertakes no obligation to update these statements as a result of new information or future events. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. This call is being recorded.
If you have any objections, please disconnect at this time. Mikkel Gleerup, you may begin.
Thank you very much, and thank you to everyone who is joining us here on short notice today. We are very, very pleased to inform everyone around the acquisition of Menck that we have been working on over the past month. I'm apologizing for a little bit the setup here, because we are sitting in Kalundborg at the moment in a meeting room and don't have the best light, but we are here and ready to present to our investors. Let's kick off the slide deck, please. Next slide, please. Yeah. Please read the disclaimer yourself. Today, we will give you a transaction overview, and we will also give you an introduction to what is it that we have acquired, the Menck business, and also what is our rationale, how do we see that this business is developing, and why is this important to Cadeler. Next slide, please. What is it we have done?
We have entered into a deal with a value of EUR 501 million to acquire Menck. Menck is a business that works with pile driving, primarily with the hydraulic hammers, but also with grouting, drilling, tooling, and other things that is important to the Cadeler business and to our clients and our competitors as well. It's a very diverse portfolio, and it's a portfolio that is growing still, and something that is in high demand in the market. We believe that the acquisition really strengthens Cadeler's offshore installation capabilities, and also the ambition that we have as a company in the foundation space. As you have seen from yesterday's message and notification to the market, we now have a firm order with COSCO for the two T-class vessels that we raised equity for earlier during the year.
As such, we are expecting that we will be operating up to 5 foundation projects in parallel per year. In order to do that, we are depending on having this equipment available, as are our competitors and our clients as well, hence, we believe that this is a very important strategic acquisition that we have entered into. It represents a step change for Cadeler, and we are already doing successful transport and installation on the Hornsea 3 project. It is a more complete and integrated approach that we are targeting here, where the client can reduce one further risk interface in a project, and also have the knowledge that when one has a transaction with Cadeler on a foundation project, if you have the vessel, you also have the hammer.
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