Fugro Aktie

Okay. Welcome, everyone. Good morning, good afternoon, good evening to some of you with the Half Year Results Presentation for 2026, first half of this year. This year will be slightly different as we're still in the full process of recruiting our new next CFO. So I will present the whole deck today, and I'm very much supported here by our Interim CFO, Cees den Ouden, who is here, but also our Group Controller, Marijn Feddes. So if there are questions that are going in a bit more depth that I cannot answer, then I always have these support lines. But I will do the presentation myself.

So, if we start with looking at the first half of the year, we have an EBIT margin that was 4.1% higher than last year. However, we have to also say that we are looking at a challenging second half of the year. So improvements on the EBIT line as well as the cash flow for the first half of the year, but I'll come back to talk about the second part of the year as we see in the backlog, a development that we feel that needs to get some attention.

The volatility in general of the current market conditions has reduced the near-term visibility beyond of what we would normally expect at this stage of the year, making the earlier expected margin improvement for the full year unlikely. And we continue to focus on what we can control ourselves, including the rationalization of our fleet to rightsize our cost base to the current market conditions. Targeting also an annualized saving on top of the earlier savings of EUR 50 million with obviously a continued focus and emphasis on cash generation.

We will remain committed to our execution of the Towards Full Potential strategy to benefit from the structural demands that underpin our markets, while also obviously adapting to the operational current environment. And I will share a few examples later in this presentation to give you an idea of what we're working on.

Maybe one of the first reasons that the first half of the year is affected is the impact of the war in the Middle East. We have been explicit about that. That impact is on the bottom line, EUR 15 million, and that is partly split in the direct impact in the region as well as for the rest of the organization. The impact in the region was 2/3 of this EUR 50 million and relates to, yes, spoofing, jamming of our GPS signals, GNSS, Global Navigation Satellite Systems. Those are blocked in war zones and then you cannot work because you cannot position your assets, your vessels. And this had impact primarily in the UAE and Qatar and obviously limited our operational days.

And there are several knock-on effects, as I said, as well for the rest of the organization in the rest of the world with higher costs, specifically around fuel. And obviously, we can recharge clients for our fuel cost, but there's always a bit of a bandwidth and some of it will end up in our own cost and own risk. So we do see that this conflict is continuing. Unfortunately, nobody knows where this is going over time. We do expect this effect to also continue to impact us. However, we have also installed some different equipment, so having less effect on the jamming and spoofing of our navigation signals. And we also know a little bit better how to work and operate in this environment currently, but the effect will still be there, and we will have to follow that very closely.

If we look at the markets, and I will first talk about offshore wind. And obviously, a lot of people will have questions around what is happening in the offshore wind environment. One of the key reasons why Fugro is also affected in general in this current environment. We do in the first half of the year, EUR 213 million of wind work. That is, yes, for a large part covered by Europe, Africa and a small part is covered by Asia Pacific. And these are the regions, obviously, you also see colors of Africa. We don't do wind work in Africa or in China, but these are simply representing the regions. And then the Americas has no wind work whatsoever at the moment, which is no surprise to anyone.

If you look at the bottom left picture, and I think that is a very clear picture of what is happening in the market right now, you see '26, '27 being down. And this is actually common knowledge that there is currently a phase in this market where there is a reset ongoing, especially in Europe, but also in Asia. But in Europe, they're looking at different contract setups, contract for difference. We spoke about that before. And this takes time before these new contracts are brought to the market.

There are good signals, as we spoke about in the past. So most of the markets in Europe and countries -- key countries there are developing these new licenses and the new license rounds. And you see a few things listed here. In France, there is, yes, a lot happening at the moment. It's coming to the market, several blocks there for 10 gigawatts, but also in Denmark, in the Netherlands, they're talking about bringing this large area 6, 7 to the market. And this is for, yes, more than 20 gigawatts of wind power in the years to come. But if this tender comes to the market, let's say, in September or in the latter part of this year, it will take 6 to 8 months with the European tender before the first vessels go out to the market to do some survey work or geotechnical work as we do in Fugro.

So this is basically the situation. We cannot change that. Most of the governments are very aware of the fact that, yes, there is a gap for most of the companies. They're trying to accelerate things. We do see the activity really coming up and increasing, but it's not happening right now. As we said before, it will take time. In Asia Pacific, we see in several countries developments. There's still ongoing developments in South Korea, Taiwan and some in Japan, but we also see new opportunities coming through in Australia, Philippines and Vietnam, as we spoke about in the past, but it is very slow, and it's not moving very fast.

The Americas, as I said, in the United States, nothing is happening. Canada and Brazil are definitely looking at something. I spoke about a pilot project in Brazil, which is starting up in the second part of this year for us and will also generate some work in the nearshore environment. So this is the wind business. This is really affecting us, and I will come back on what it has happened for the full year and for the first half of this year.

If we then move to oil and gas, we saw a growth in oil and gas in the first half of the year of 22%, and we'll talk a little bit more about that. We do EUR 424 million in oil and gas. This is obviously split around the world in the following blocks. You can see it there in the picture at the bottom there. The traditional energy oil and gas is, yes, you could say, back on the board. It's a more buoyant market. We have seen growth, as I said, 22% in the first half of the year. However, I will come back to the backlog. We see also a small decline in the backlog in oil and gas, which is, I think -- or that is fully attributed to the large project that we have done and executing on in Indonesia, as we spoke about before. So the underlying oil and gas business is still continuing to grow.

What you can see there on the graph is a small growth in the CapEx and the OpEx graphs there. It's slightly higher than what we showed you before because, yes, if we go back 2 quarters or so, it was more hovering around 0. And now we see this slightly increasing already. If we go through the various regions, then Europe, Africa. In Europe, there is very limited developments ongoing in oil and gas. Obviously, the U.K. is looking at it.

Again, as we picked up in the news, Norway is a pretty steady development with exploration activity there. But yes, in general, Europe, you could say, is pretty slow in developing oil and gas work. But for Africa, we see many things on the board. It takes time. It's primarily deepwater developments in Angola, Nigeria, Mozambique, the fields are developing there, but also the East Mediterranean gas development. So the north part of Africa is still on the board and has a priority there.

In Americas, it's really focused on South America. There, we see lots of development in Guyana, but also in Brazil and in Suriname, as we spoke about before. Asia Pacific, as I said, we are executing on this large project in Indonesia. There are multiple roll-on projects coming out there as well. We see other developments. You probably picked up the news for Timor-Leste, where we have also picked up the first project. This is a large development, and there might be some additional work that we'll do there also on other activities. So we do see blocks coming back in Asia Pacific, a region that is developing quite nicely for Fugro.

Middle East and India, there's a lot on the board. There are a lot of opportunities, obviously, somewhat stalled by the current situation, primarily affecting the UAE and Qatar. As I said, because of the jamming and the spoofing, the work is there, but we can't have every day operational because at some days, we do not have navigation signals. Obviously, yes, the blockage of the Strait of Hormuz is an issue. We don't have to go through the Strait of Hormuz all the time. In actual fact, we want to go through with one vessel one time, that will be great. So we're following that very closely. And as soon as we see an opening, then we'll make this move. In the meantime, we'll look also for other opportunities for the vessel that we have on standby there. Other markets, Azerbaijan, Iraq are actually developing quite well for us. And then we also see some deepwater work coming up in India.

If we then look at the infrastructure market, again, bottom right, you see the split there between the various regions. I will click through them. Obviously, large in Europe, Africa, but also in the Americas, Asia Pacific and Middle East, India are splitting the rest there. So lots of opportunities there. They are obviously affected by the general economic situation in the world. Infrastructure is always affected by that. So geopolitical situation in the Middle East is affecting the general developments for infrastructure in the Middle East.

If you look broader in the world, then we see new developments coming up, especially around nuclear, quite a few projects worldwide on the board. We see that in Europe coming up, obviously, very actively in the Americas, but also the rest of the world is talking about nuclear. And those are smaller reactors, so the small modular reactors, the SMRs, but also full-blown larger nuclear developments are on the board. Data centers is another development that we see coming up, huge ambition there, and this is obviously happening also in Europe, Americas, and we'll expect that to be there in the rest of the world as well.

Middle East and India, we primarily focus on ports and harbors, which has a lot of development and also our capabilities are really well tailored for that. And you see a CAGR that is now for the upcoming years around 6%. That hasn't really changed over the last few quarters. It's always hovering around 6%, 7%, something like that. So that's the infrastructure market will still be a good market for Fugro, and we have also new technologies that we can deploy there, and I will say a few more words about that a little bit later.

If we then look at the development markets, these are markets that we have listed in our strategy in Pillar 2, yes, basically adjacent markets that we can serve with our current expertise, and we can basically do similar work than we do in our traditional markets. Coastal resilience and ocean health, it's captured in water. This is in one way, a little bit affected by sustainability being not highest on the list anymore in the last year or so. However, there is tightening regulations, in particular areas, especially around developments in Europe, also the wind developments where they have really high demands around biodiversity, ecology surveys, and this is driving basically also this part of ocean health, so to say, and the biodiversity.

And then we have a lot of coastal protection surveys that are popping up that are quite important with the changes in the climate. And I think everybody is following the news. This is very visible, obviously, here in Europe with the temperature rising, but it has a lot of effect, basically risking situations with harsher weather patterns, but also risk for floods and hurricanes and all these kind of things. So this is a market that is still a developing market. So it's still small. It's a future growth market we called it before, but it's something that we continue to focus on.

Then in the middle, critical minerals, obviously, something that is really needed for everything we want to do, the electrification of the world, the battery power that we need, but also many other things. If we want to build wind mills, yes, you need also the minerals and the metals for that. So those kind of things are really important because there's almost a battle in the world who has control of the critical minerals imported for chips and so on. So there are multiple jurisdictions with the U.S., obviously very high on the list, but also the Middle East really looking at taking more control of finding the critical minerals.

We see that with a change in the Middle East, especially in Saudi Arabia, where they have in their Vision 2030 now a full push for critical mineral developments. And one of the things that we're doing in Saudi Arabia is really tilting the business also towards that diversing it and we'll pick up the first projects there, which really helps us to basically recover that market as well. After, for instance, a project like NEOM is now in the doldrums and is not happening anymore. So also in the Americas, in Canada, U.S., but also South America, this is high on the list, and there are a lot of developments ongoing, and we see opportunities to further grow this market.

Then on the right side, we spoke about that before, security and surveillance, quite an important market that is new and coming up. We have 1,000 Russian dark vessels sailing around on the North Sea, trying to inspect and also probably influence our infrastructure that is out there, map it. So we need to get to situations where, yes, Europe can protect itself for these threats, and this is something that Fugro can play a role in mapping the conditions, but also the situation on the North Sea. And also in the U.S., we see multiple projects coming up where we can help basically the countries, the governments with mapping and understanding the baseline of the current conditions of the infrastructure. And we see this also popping up now in the rest of the world where this becomes a more important element.

If we then go to the backlog development and the split in markets, then on the left side, you can obviously see revenue by market segment. And what you can see there, what I already spoke about, 22% growth in oil and gas for the first half of the year. You see wind coming down with another 24%. So mind you, last year, we dropped 45% in offshore wind. There's another 24% on top of it.

And if you then go to the right side of the picture, another 47% down in the backlog. So yes, this is really going to be significantly smaller for Fugro and over a very short time frame, and this is also the reason why we have to step in and do more cost savings in the short term. And it's not so much that we say something else than what we did a couple of months ago. We still say that this market comes back. We see the positive signs. We see multiple countries bringing these licenses to the market, but it takes time, as we said as well. However, what is the change maybe? We thought that we were already at the bottom earlier this year, but we see actually that it is declining even further. So it goes deeper before it comes back probably second half of next year.

So this is important to note. Then if you look at the other markets, then infrastructure, oil and gas and water, they have been growing in the first half of the year, and they have basically fully recovered that 24% drop in offshore wind. We have grown 4% for the first half of the year, primarily due to a 10% growth in the second quarter. Mind you, the second quarter of last year was quite low. So it was easy to grow and show growth in the second quarter. So also good to take note of that.

Now if you move forward and you look on the right side, again, on the backlog development. A couple of things to say there. You see 8% drop in oil and gas, which is, yes, fully attributed to the project that we do in Indonesia, where we had it in the full backlog. And then this year, there's only 15% left of that project still to be executed on. So that is a big drop. That's also, if you dive into the regions, why you see Asia Pacific dropping in the backlog so aggressively. That is only related to that project.

Now, what is also important to note because the backlog in itself drops by 13.9%, roughly half of it is related to this project in Indonesia and the other half to offshore wind dropping even further. Underlying oil and gas business is growing. So this is still -- also still happening, and we do expect also to continue to grow with other projects again like the one that we just announced in Timor-Leste in Asia Pacific. What is important to note there as well is the different dynamics in these markets.

So offshore wind projects are larger in size, and there are more -- you can anticipate them earlier. So you know that you bid for a license for next year to be on the board for maybe multiple months of work, where oil and gas is always a shorter backlog. So there's more uncertainty in the backlog right now because we need to rely more on oil and gas. There are also larger projects in oil and gas, as we have shown in the past as well, but the majority is also shorter-term backlog that we still need to secure. So I think these things are all important to note because in the upcoming months, we're going to secure more work for a few months down the line to still execute on.

The project in wind is often larger, not always, but often larger and more continuation on one project. So there are differences there, and that has also created more uncertainty to know exactly how the rest of the year progresses. That is also why we have to step in and adjust ourselves to the current market environment. And we're also going to do vessel rationalizations. All in all, the cost savings should contribute to EUR 50 million annualized savings. A large part of that is related to the assets that you see here on the board.

We're doing several things. And some of these things are really related to, yes, scenarios that we already spoke about before. So we always said we can take out a few older vessels, and we postponed it and postponed it because we still needed those assets. But now are we going to actually take them out and say, okay, this is it. As soon as the project is over, we'll take out this vessel or that vessel. So 2 to 3 vessels. And why is that still not 100% clear because we're still evaluating what we can do and which one we really need. And as this is changing all the time, we might extend one a little bit more or take it out as listed here.

Also charter reductions, we always said in the strategic review, we can adapt ourselves. So even when we were investing, for instance, and mind you, we were investing in the geotechnical fleet, not so much in the geophysical fleet or not at all in the geophysical fleet. And we said we bring in these newer capacity. We need that because we need to retire the older capacity. We haven't done that yet. Now we're doing it. And we also can adapt ourselves by reducing the amount of charters there. And that is also what we're doing right now. We're taking 3 charters out over time. So it's not like that's already happened, but that happens one maybe in September, another one in November, those kind of things, and one is happening as we speak.

So that is basically the more permanent structural change. We can obviously use those assets that we have installed on these charter vessels again if we want to ramp up. So if we have a drill rig that we take off a vessel, then it's obviously ready to be mobilized again on a new charter in the next season when it picks up. So the capacity is not necessarily completely gone. It takes time, and it's also a conscious decision that you have to take because if you mobilize these vessels, then normally you have to run with it at least 1 or 2 years to 3 years to actually earn back also the mobilization cost. So we will be careful before we take that decision again. Then we have some relocations. We spoke about in the past, that's a little bit less of a cost saving, but that's also important to drive utilization up.

And then on the right side, it's more temporary solutions, cold layup of 1 or 2 more vessels. Those are owned vessels that we will lay up then temporarily -- well, what is temporarily, at least 6 months. Otherwise, you don't go to a cold layup. Cold layup means that you actually take down also quite a bit of the personnel and that you cannot the next day, mobilize again. You can mobilize, but it will take a number of weeks to have it ready again to be operational. And that has to do with certifications that you need on these vessels, et cetera.

So if you go to a winter layup on the right side, and we haven't mentioned how many vessels because that's really dependent on how the winter will develop, but it could easily be 5 or 6 or 7 vessels that we will temporarily layup and then they are almost in a situation where you can, in a few days, mobilize again. So this is also much more reduction in the cost savings. So it's not really a large cost saving.

So this is quite an important element. That's why I spent a little bit of time on it because it's quite important for us to do this. We have postponed some of these actions, obviously, as long as we could and utilize those assets as long as we could, but now it's time to make this move. And that's, as I said, a move that will gradually be implemented in the upcoming months. So because some of the vessels are still operational.

Then I want to show you a little bit on some of the things that we're doing in line with our strategy before I dive into the hard numbers. But I think it's also important to show some of the good things that where we get traction also to change the portfolio of services of Fugro because that's the whole intention that we're also less cyclical and sensitive to these market dynamics in the future.

We spoke quite a bit about the new technology, GroundIQ, which is basically using, yes, more data that is available from particular sites, but also using geophysics. And you can see on the right side, an animation of several nodes in the ground. They look quite large, but they're actually only 10 to 15 centimeters high, and you put them in the ground and you listen to the ambient noise, so no active noise, but noise that the ground actually generates by cars going by or by machines working in the neighborhood. And then if we listen for a couple of days, we can actually determine a 3D cube of the whole environment, so we can see what kind of layers there are. And then if you -- as you see with the drill rig, go to the particular sites, then you can calibrate this whole 3D model.

And what you see on the left in the animation is how we actually get to this 3D model where we can quickly analyze and you see that with the green blocks, where are the critical areas. And then you can also make the plan much more specifically where to do boreholes and where you can maybe have a sparser array for drills or CPTs that you will do. So before the traditional way of doing this work would require that you basically do some CPTs or boreholes with a certain pattern in a block that you need to survey. You get to a probably 0.1 degree of mapping the area. With this way, we're going close to 100% of mapping the area, knowing exactly what the subsurface is all about. And this is really critical because then you can concentrate more boreholes in the critical areas.

And you might know and pick up from the news that there's a lot of money wasted by lawsuits and insurance claims at the end because they haven't done the groundwork properly. It can also save a lot of money for clients to know how they should develop their fields and design them. It's better data. As I said, we're close to 100% compared to less than 1% or 0.1%. It's a lot faster and it's even cheaper. So it's almost good to be true.

There are some great examples. So we have here some examples on the board. I don't want to dive into all of them in detail, but they all are aimed at they are collecting data quite fast in a matter of weeks. This example, for instance, on Bechtel in Rio Grande LNG terminal that we have done. This is basically, yes, gathering information in a very fast way and really help them to accelerate. And they had already their traditional information that matched completely, and we basically could confirm what they already knew and that gave them more confidence to move forward.

You see also examples of data center in Europe here or near-shore cable survey, which is very interesting because this was in the surf zone. So this is even in the nearshore area where we can also deploy when the water was gone, we could very quickly actually have some measurements done with the same system. So it really drives speed and better data and much more insights and a lot of cost reduction for the end clients. So we're very excited about it. You can see already we started with this actually last year. We picked up 22 projects last year. We're now for the first half already on 27 projects. We expect this to further grow this year. And this is one of the successes of new technology that we're bringing in.

I believe, especially on the land side, there is an enormous potential also to go back in areas where maybe there is more commodity or commoditized areas, and we can probably do a lot more and also have decent margins again in this area for the land business to further grow. So we're quite excited about this. And we'll see in the upcoming years further growth in this area. We're aiming also more towards this, and the investment is relatively minimal that we have to do in this area.

Then you probably picked up from the news that we have invested in a company, in a Dutch company, DTACT. We have acquired 30% of the shares there. And that is basically a continuation of a partnership that we already started earlier, where we do a pilot for the Dutch Navy or defense where we basically analyze and pilot what I just described, critical infrastructure on the North Sea, where we can basically with satellite information and various data sources combined and our data that Fugro has the knowledge on the geo-data determine where are the critical infrastructure, which pipelines are more exposed, which could be maybe dragged from the seabed by anchors from dark vessels. And if we see those dark vessels that are by satellite basically tracked, then you can basically indicate which vessels could be at risk coming close to a critical pipeline or cable. And then obviously, you can decide to have a surveillance vessel going there.

This is one of the examples that we're working on together with DTACT, but they have a data fusion platform where they can have multiple data sources being on top of each other. I think we all know about the other companies more from the U.S. that do these things. DTACT is a similar one, but then a Dutch company that can basically combine multiple data sources, even cloud independent. And this is very critical for Fugro to further develop the area that we have always announced as our Pillar 3 developments for software and hardware and geo-data solutions. So we're very excited about this and that we can work even more closely together.

Then coming back on one of the other strategic agendas that we have is advancing the capabilities we have on the USV side. You see a few projects mentioned here. You see also different USVs on the screen here. In the middle, you see our larger 18-meter platform, the Eclipse. We brought that to the market end of last year, and it has been working very steadily on multiple projects. And this is just one project as an example, but we see that this vessel is nicely filled. It's larger. It can operate better on the North Sea with obviously harsher weather patterns. We have a smaller one on the North Sea, doing a little bit less work because it's obviously more affected. So we really see that we move in the right direction there.

We are looking at the development of the next generation. However, we also are very careful in the investments currently today. So we're keeping cash very high on the agenda. So we have also slowed down some of the developments, but we're still in full force ahead with the ones that we have in the making, which is not shown are the geophysical USVs on this picture. We have 5 boats that we're building, 70-meter. They come to the market, the first one, end of this year, early next year. And then we'll start doing geophysical work with these prisms as we call them, 70-meter, we can do geophysical work with them.

The ones that you see on the board here are doing inspection work with ROVs, robots that come out of the back of the boat. You can see that in the middle, the yellow robot there, they can do inspections and the one in the middle can go a little bit deeper. And obviously, there's also a request for even going deeper water, especially in areas like Brazil, where they want to do inspections without divers or in the Middle East. So this is still high on the list as something that Fugro feels we should develop the inspection markets in. But it takes time, and it is a market that is still quite young and needs to further mature. So it's also coming with start-up pains with not enough utilization in certain areas yet, where we see the successes already on the board.

Especially in Australia, we have done quite a lot of work for multiple clients. And also in end of the second quarter or during the course of the second quarter, we were working in the Bass Strait, a very difficult environment, obviously, high currents, but -- and also in the Northwest shelf, we did a nice campaign. So we see this, yes, working really well and then clients adapting to this new environment where they can use these uncrewed, no people on board, once again, uncrewed platforms that are operated from control centers.

Okay. Then we get to the hard numbers. I already mentioned some of the numbers, and you have seen the press release, but let me go through the basics there. Yes, the second quarter. The second quarter had a growth, as you can see there, I already spoke about it. Now, the second quarter of last year, you can see as well was quite low. So it's easier to generate the growth. But it's good to see that growth of 10-plus percent, close to 11%, which is basically solid, and that was good. Also on the EBIT side, close to 8%, 7.9%, an improvement compared to last year, where it was 4.3%. So that is positive. And in that sense, yes, also helping us for the first half of the year.

Operating cash flow, as you see on the bottom left graph, also significantly better. If you talk about free cash flow, we see also an enormous improvement in the free cash flow. That's not shown here on the slide, but we have reduced CapEx quite a bit and also improved working capital. And yes, this had a positive effect on the free cash flow generation. It was positive free cash flow for the second quarter, which is good for the whole first half of the year, minus EUR 38 million. That is not strange for Fugro. We normally see more cash inflow in the second half of the year, and it's an enormous improvement compared to last year first half.

If we then go into Marine, then we see that Marine grew by 4.2%. The margin was, however, flat. And site characterization reported an increase for the first half of the year. This was primarily related to some larger oil and gas field developments, as we said, in Indonesia, but also in the UAE. In Saudi Arabia, we did a lot more work in the marine environment. This is something that we have not done in the past. So Saudi Arabia was primarily a land business for us. We now pick up more and more work in the marine environment, which is actually quite good for us and also diversification again for the country.

The growth in Asia Pacific and Middle East regions, as I just mentioned, was partly offset by lower volumes, especially in the offshore wind environment in the Americas. There's no offshore wind in the Americas anymore. We had a little bit last year, EUR 20 million still in there, nothing now anymore and obviously, in Europe, Africa.

If we talk about asset integrity, then results both in Europe, Africa and the Americas were impacted by reallocating or relocating a vessel. We moved the vessel. We spoke about that before from Europe to the Americas, and it had quite a few knock-on effects. This was very much needed because we have these large contracts in Brazil for Petrobras, 4 projects, 4 years, really good, steady work, which is now, by the way, a touch wood, working really well. We have 2 vessels working on it, the Aquarius and [ M/V Bella ]. They are in full force ahead, and that is just for the upcoming years, steady income and steady returns for Brazil.

However, it took a little bit of time to get these vessels there and operational. We also had a dry dock of one of the vessels that was already working there, the Fugro Aquarius and that dry dock took a lot longer because these contracts are so intense that you don't really have the time to inspect the vessels in -- during these projects. So we had a few more things to do in the dry dock when we brought it to the shore. So that took time.

In the meantime, Europe-Africa didn't have this vessel anymore in the beginning of the year, so they didn't generate any revenues. They tried to -- or we moved in with the Fugro Resolve that was working with the Blue Dragon, our new robot for a deepwater geotech work, where we thought we can use this vessel temporarily for ROV work in Denmark. We communicated about that already in the first quarter, and that didn't go flawlessly. So they were somewhat delayed. They also mobilized the new vessel a little bit later than we normally operate in Europe. So that is the EDT Hercules that was operational at the end of May is now full force ahead. So the Hercules as well the EDT Jane are for the Europe-Africa region for the remainder of the year, quite steady income and quite good.

So MEI was quite affected there in the first half of the year. Obviously, in the Middle East, we were affected by the war situation and the spoofing and jamming, which also had an impact on our first half there. If we go to land, then land grew close to 5% currency comparable, supported by a strong nearshore development in Europe-Africa. So we have a lot more activities there, a good return. So that's great. In Asia Pacific, we're affected by a slow market. We spoke about that more often, Hong Kong, but also, to some extent, a slow market in the nearshore area in Japan in offshore wind. We do expect that there are opportunities again in Japan, nearshore very soon. So we have a rig there that should be able to start working in the near future.

In the U.S., particularly in the first quarter, we're still affected by the prolonged government shutdown that we had end of last year. So this was still delaying permitting because in actual fact, we have quite a lot of work on the land side for the U.S. So that is also the reason why you see in the backlog the Americas actually growing because we have quite a lot of firm work to be executed on in Brazil, as I spoke about, that's on the marine side and on the land side in the U.S. So this is helping the Americas to probably counter a little bit the uncertainties they have in the marine site characterization, which is significantly smaller for the U.S. moving forward.

So those are the business lines. Then I go to the net result, which is maybe not the nicest picture to show because we have a negative EUR 62 million net result, including discontinued operations, basically 2 blocks, 2 clear blocks mentioned on the right side, specific items. And you all picked it up. We have done impairments of EUR 36 million. That is, yes, due to the challenging market conditions in geophysics, we have taken a downgrade in 4 vessels on the value there, and that's because of the market situation and the pricing pressure there. One is retired. So one of these vessels in geophysics is retired. And the other one, we actually called layup one of the vessels. And that has an impact. And always the short-term development in these calculations, as you know, it's accounting, but you need to calculate the net present value of these things. And then the short term, the next 1 or 2 years have a lot of effect on these calculations. So this is why this needed to be done.

There's, in addition, also a conversion ongoing on one of the geotechnical platforms. This is basically the last modification that we're still completing, as we spoke about before, this is the Fugro Scout. I'm not keeping that as a secret, but we had quite a bit of issues there with the yard executing this. And basically, we had during -- halfway during the work, taking the vessel apart, that went well, but basically rebuilding it is not being done by the same yard. So we're moving this vessel. We have moved this vessel to a completely different yard to complete the modification of this vessel, which obviously had an impact on higher cost, and we have taken a downgrade on that in this current EUR 36 million. There's also EUR 9 million in writing down the bad debt provision in Asia Pacific. There, we're obviously still going after it. But at the moment, we have taken that hit. And the remainder is related to restructuring expenses, which is a relatively small EUR 2 million.

Then the second block, which is obviously also affecting the net result is all to do with income tax expense. And then, yes, the current tax expense is only EUR 7 million or is EUR 7 million, I should say. And the rest is all related to a derecognition of deferred tax assets. And this is, again, the same calculation that you do for your impairment testing, obviously, the future forecast and then the next 1 or 2 years have a major effect. We have also upgraded some of the DTAs last year. This year, we come to the conclusion that we have to downgrade that in certain geographies, and that had an effect of EUR 41 million. Yes, all in all, ugly picture because then you get to EUR 62 million negative net result. Luckily, some of it is noncash, but that is always a little bit of an unimportant one because it is basically reducing your balance sheet position.

Then if we go to cash flow, free cash flow, this slide is showing then overall free cash flow amounted to minus EUR 38 million, as I said, negative, so -- which is not unusual for the first half of the year. As I said, typically, we see working capital wind down towards the year-end and therefore, supporting the H2 cash flow. Operating cash flow, we already looked at was, yes, EUR 85 million -- or operating cash flow before working capital movements was EUR 85 million, and that is up from the EUR 58 million, mostly due to higher EBITDA. So the seasonal working capital buildup consumed EUR 59 million of cash, an improvement compared to last year where it consumed EUR 81 million of outflow in the first half of 2025. And I will get back to the working capital in the next slide. Capital expenditure is EUR 81 million for the first half of the year, representing a decrease -- EUR 87 million decrease from last year, EUR 168 million, which is obviously a big drop.

We then get to working capital. Working capital amounted to EUR 310 million in June 2026 compared to H1 2025. This is an increase of EUR 46 million. And this is a result of trade and other receivables consistent with the increased revenue in the second quarter. In addition, reduced CapEx resulted in lower trade and other payables, which obviously has an effect also on the net debt. At 16.6% of the 12 months revenue, working capital is lower than the previous 2 quarters, but still outside of our range that we have communicated before between 10% and 15%. That bandwidth is important. We want to drive that back into that, obviously, and we're really focused on getting this done. And also, yes, Marijn, Group Controller and Cees, our Interim CFO, really on top of this as we have been over the last period, and we will obviously continue to do that. On a positive note, days revenue outstanding improved to 78 coming down from the -- what is it, 87 last now -- 85 last year. So that's a positive side.

Then if we go to the balance sheet, then net debt amounted to EUR 473 million at the end of June, up from the EUR 383 million at year-end in 2025, so year-end compared to June. In addition to the free cash flow development, this increase was primarily due to the payment of dividend over the year 2025 and additions to leases. The net leverage at the end of June was 1.7x, which is down from the 1.8x previous quarter. We're still above the 1.5x, the self-imposed target that we have of 1.5x. We want to be below 1.5x leverage. We focus obviously very much on that by improving our cash flow, actively managing the capital discipline, limiting CapEx, as I just presented, but also driving down the working capital there. So our target remains there still to get in the level of 10% to 15% for the working capital in the revenue -- compared to revenue.

In July 2026, we have added a bank to our banking group, DNB, which basically gave us an additional EUR 50 million to our credit facility that now is EUR 400 million, not because we want to draw that, but this is just flexibility that we create operational flexibility if required. And this is also something that all the companies obviously do in this uncertain time that you have options there. The 1-year term loan that is maturing in October, we either pay that down with the available cash or we will use one of the financing options that we have. We have multiple options to refinance that term loan or extend it or go into different scenarios. So we're not concerned about that. Our key focus is to bring leverage down. That is basically what I want to emphasize and to focus on cash returns.

And that brings me to the last slide, the outlook of 2026. And yes, we have said that the uncertainty remains elevated due to the ongoing conflicts in the Middle East, but we also see the ongoing weakness in wind market. That is not new because we said it will take time, but we go a little bit deeper. And we have more oil and gas work to replace this offshore wind. And that is, yes, a little bit shorter-term backlog, and that is more uncertainty in the backlog, and that's also driving the backlog down now in the short term or the 12 months because you have less work, yes, beyond the 6 to 9 months, which is normally what we also see in our backlog.

And as it says here, we have taken the -- yes, previously expected margin improvement. We took that away. We say now that it's unlikely that we will achieve that. And that has to do with, first and foremost, great improvement in the first half of the year, but we expected even a better improvement, I can say that, because the war was not anticipated and the pricing pressure was probably more severe and also the second half of the year being more uncertain. We want to be very careful in what we do. We don't want to go back to the market, obviously, with surprises there. So we better say what it is, and therefore, we take away that earlier guidance.

And to support free cash flow, we have driven the CapEx or the investment profile from EUR 150 million to EUR 165 million now to the lower band around EUR 150 million. And yes, we can end with a little bit strange to say, but in the mid- to longer term, we still feel that geodata is really required and our core markets remain sound. But obviously, I fully appreciate that everybody is looking at what is happening in the second half of the year and early next year. And obviously, that's not necessarily the most optimistic outlook, but that's why we formulated it like this.

And with that, I want to move over to questions. And as I said before, I have some support lines here. If you become too technical on the finance side, I will call in my support lines here from Cees and [ Marijn ], which are here only a few meters away. Who can I give the word first? Luuk.

A couple of questions. First, on the CapEx. Can you explain a bit on the plans -- the outstanding expansion plans that you still have for execution in '27 and also the maintenance CapEx level, I think last year was slightly above EUR 100 million. Will that come down and to what level approximately? Then a question about the change in the type of orders that you mentioned from the shift from wind to oil and gas with smaller contracts and a shorter planning horizon. Will it make it more difficult for you to optimize your utilization because of the shorter planning horizon? Or will it be offset by the fact that the smaller projects and you have some flexibility from customers?

And then finally, on the behavior of customers in this environment. One of your strengths is obviously that you have -- you can combine several services, and you mentioned an example with GroundIQ, how you can save money for customers by doing that and replacing expensive services by cheaper ones. But I can also imagine that in the current environment with price pressure and some competitors with smaller set of services being desperate for work that some customers may be shifting to tendering each bit of parts to have the lowest price possible for each individual part. So how are they behaving? Are they opting for more integrated packages like yours? Or is it still very heavy competition for smaller parts?

Yes. Thank you very much for the questions, Luuk. Maybe first on CapEx. And I think I know the number roughly from the top of my head, but the maintenance CapEx for the first half of the year was EUR 36 million, if I'm not mistaken. And yes, if you would double that, then you're lower than the EUR 100 million. I'm not saying that that's exactly the way you should look at it, but we are lower this year on maintenance and sustaining, so to say, the expectation. There are a few larger blocks in the CapEx, and one is the vessel that we just mentioned that is going through the modification. We're also finalizing these prisms, the 17-meter USVs that is more expansion and growth as we call it. And then there are smaller things like growth on, for instance, some additional ROVs that we need to have and some other things, smaller things. There are no big blocks that we can necessarily take out so easily anymore. So we're really strict on what we're doing there.

And yes, we will keep the maintenance sustaining down and that's also to do with less maintenance on the vessels this year. So that -- and that is always difference between the various years. We expect in '27, we have, again, maybe a few more vessels going into dock or into special survey. As you know, every 5 years, you need to do a special survey. You can't really deviate from it because if you don't do it in that time frame, you can't work with these vessels anymore. And then you have these intermediate surveys every 2 years. So this is on the CapEx side.

Yes, wind is absolutely creating more certainty in the longer term. So indeed, as I said, there is a different dynamic in oil and gas. With the actions that we take right now, we obviously adapt ourselves to the right size of serving the market that we feel is there. We also pick up things that maybe the next season, we need more capacity, but that's with a certain peak.

And I want to make sure that we also drive or stabilize pricing again. So I'd rather take out a little bit more or stall a little bit more on some of the assets so that we also see that there's imbalance again with the market size. So we take the steps that we feel is required right now. With the steps that we take, we can still be quite flexible, especially with geophysics. We can mobilize more easily short-term charters. We're also working on an extension of our strategy to become even more flexible so that we can more easily ramp up and down. This is always a bit more complex for the geotechnical platforms because, yes, as I said before, you mobilize them for at least 2 to 3 years. But this is also something that we are looking at, can we create more flexibility there.

But especially on the geophysical side and also with the USVs coming in, we do see a completely different way of working in the future on the geophysical side. I'm not planning to talk for another few years about geophysics. We're just going to shake up that geophysical market and do it in many different ways with more modular solutions, with more USVs, but also with different technologies that we can really compete again and make money. And if not, we'll leave those areas in particular areas.

Then the behavior of the clients and if they are now tendering certain blocks separately, I don't necessarily see that, but there are a few other things. The markets are different between wind and oil and gas because the oil and gas players are much more mature, and they have very specific requirements. They have also departments that really know I need to have this for geotech or I need to have this for my metocean research, so to say. And therefore, they have always been a bit more selective in bringing packages to the market. That's a good -- that was the right answer? No. So anyway, they have always been a bit more particular in we want to have this for the metocean or this for geophysics or geotechnics. So they have specialists there, where the wind business is more integrated services, longer contracts, and more combined services.

If we talk about the land business itself, I think with the movement into more total solution around GroundIQ, we do see more embedded services coming together. And that is, I think, also a positive thing, especially because it drives really the cost down for our clients. And I think, yes, if you look at it correctly, any clients listening, then this is also the sales pitch because this is really beneficial to them for lower cost and much better data and less risk on the ground. So it's really driving ground risk down. Quirijn?

Quirijn Mulder from ING. 3 questions. First about the U.S. as usual. So are you still expecting a profit in the U.S. full year 2026 on EBIT level? And in connection with that, we discussed last year the issues with regard to jack-up rigs, et cetera, that they were not utilized. So is that situation now improving there? My second question is about the debt. You see an increase of additional leases, for example, EUR 36 million, I think. Is the reverse coming in the second half because of the rationalization of the vessels and the taking out of the -- some charters?

And yes, and then on general, I think if you look at the situation, are you -- if you look at wind offshore and you say, okay, we can -- maybe if it is early, then in September, October, the tender restarts and then it takes 6 to 8 months before the vessel is being asked to perform. What is then, in that respect, your view on 2027, especially with regard to the seasonal period?

Thank you very much, Quirijn. So let me go back to your first question on the U.S. I'm not specifically going to guide on a particular region and then on the profitability. So you obviously couldn't expect that. But I'm optimistic about 2 things in the U.S. or in the Americas. And that is on the one side, the land business development. As I said, some of the permitting unfortunately delayed some of the work into the second half of the year, but we do have solid work there. And that is positive, that is data centers, that's nuclear and LNG development. So there is quite a lot happening and also on the defense side, the security side. So I'm optimistic about that.

I'm also optimistic about the asset integrity business in the Americas, especially with the Petrobras work that is now ongoing with vessels up and running, generating good returns, so always pray for vessels not breaking down. But if that continues as is at the moment, then that is also a solid return for the second half of the year. And in general, we see our positioning and construction support work that we do is actually worldwide strengthening. So this is good business for us. This is just simple positioning. It is helping our customers for the work that they do in various areas during installation, during the build, but also in OpEx-related environment. So that is positive.

I think where the risk in the U.S. is still is around the MSC work. That was not too bad in the first half of the year, but we see less work there and the limited projects that are there on the MSC side, there's obviously more competition and also pressure on the pricing. So that is basically what I can say. It is significantly smaller by now than we used to have in the Americas on the MSC side. So the risk is a little bit lower to see further drop. So we have, yes, a more optimistic view of the second half of the year for the Americas. So that's one.

And then, yes, you spoke specifically about jack-up rigs, which is one thing that is needed. So we are bringing in a jack-up rig or barge for the project in Brazil. This was a problem because we wanted to actually bring 1 over from the Middle East. That didn't work, and then we had to source another one. So this is -- that was delayed and caused some issues there, but that is now under control, Quirijn.

Then on your additional leases, will that drive down the overall cost. So with the charters obviously disappearing, that will help, but not all charters disappearing at 1st of July. So it's during the course of the second half of the year. And how much the impact exactly will be is difficult for me to know exactly at the moment. But in principle, yes, the additional leases should come down because we're very focused on doing more with our own equipment.

The other thing that we see, Quirijn, is that we hired quite a bit of third-party assets in the project in Indonesia. You need in Asia -- so if you would drill deeper into the third-party cost, which is actually up compared to last year, which is a little bit strange, the amount that it's up, but that's because in certain countries, you need vessels that are flagged for the country, so Indonesian flagged vessels. And we are actually bringing 1 vessel now into an Indonesia flagged situation. But before that, for the project that we have executed over the last half year, we had to hire quite a lot of Indonesian vessels, and that drove up also the leases and the third-party cost.

Then your last question is the crystal ball question around offshore wind Europe. So the view on 2027. So what I said before, things take time for the wind business to come back. But also if you look at our slide that we presented on the market, you see multiple licenses now coming on the board. Obviously, some is delayed in Germany towards next year. But you see also now in the U.K. end of this year, they will start again with the next round, which is positive. I just spoke about the Netherlands bringing a large area to the market. Denmark is doing things. So there is a lot of activity, and that wasn't there this year or end of last year, so to say.

So in that sense, we do expect that during the course of '27, yes, we will see activity picking up on that side. I'm still careful in saying how much that is and when it exactly will happen because I'm taken by surprise all the time. But we're emphasizing this and pushing also jurisdictions or the governments in various countries to help the business to really overcome this gap.

But having said that, it's not for nothing that we take out capacity and that we now retire some of the older assets and let go of some of the lease assets and move some vessels around in the world. Yes, we don't do that for nothing, but we have the flexibility also during the winter season to lay up warm or hot stack some of the vessels, small cost reductions, but not large, but then we can actually ramp them up again in the season next year.

First we have [indiscernible]

Yes, go ahead.

Kristof Samoy, KBC Securities. First on turnover and backlog. You commented on the trends and the comparable evolution year-on-year. In the past, you've also shed some light on pricing and volume trends in there. Could you share that with us both in terms of revenue and backlog? And then as a second, on the land business, comparable growth in the first year of 5%, respectable growth margin, I would say. But if you strip out the capital gain on the building sale in Hong Kong, let's say, a subdued result. The land division has been underperforming for quite a while. Aside from GroundIQ, what are the main growth pockets within the land segment? And what share or what proportion of the land business is indispensable for nearshore activities because in the past, you've always indicated that the relevance of the land business is for the nearshore activities. And then a final housekeeping question. Maybe I'm mistaken, but I couldn't find the vessel utilization rates in the half year report. If you could share that with us.

Thank you very much, Kristof. First, on the backlog, yes, we have not issued the details on how much is volume, how much is pricing. And I understand that could be interesting to know all the details on. To be honest, it's not easy to actually get a very exact pricing effect in the various regions and then have 1 overall picture that gives you a good insight on what's happening because we see in some regions actually hardly any price effect. And in other regions, obviously, the effect in the wind business is quite large. And then obviously, also other markets like oil and gas benefiting from that in particular situations.

So what I can say is that we have in our current backlog absolutely already priced in the pricing effect. So yes, for the work that is already on the books, we don't feel that there is a large additional drop on top of what we already know and see for the remainder of the year. But as I said before, it's also important that we balance again the oversupply because we have actually gained quite a lot of market share in some areas. For instance, on Geotech, we have managed to grow market share significantly. But if you are one of the competitors to Fugro, then after sitting still for half a year, you're going to become quite desperate and then you will drop your prices probably to be cash flow positive on a particular asset and a job and you go in very aggressively. This is also happening.

Now for the projects that are already secured, that's not so much the case. But you see in certain areas that, yes, you normally have an offer a tender to a client and then you get a request for a best and final offer, BAFO. And now we have seen certain contracts where they ask 3 times for the best and final offer, which is actually scandalous if you ask me because they should also make sure that parties like Fugro and also some of our peers continue to exist. But to be honest, they are not so nice.

And then when these crises are over, I know from the past as well, then they apologize and they say we shouldn't do that next time. And the next time comes and they repeat exactly the same thing. So that's painful, but I don't think it will help you a lot to because then you need to dive into all the regions in specific, and we also don't want to necessarily open up too much on that.

On the land side, so you're obviously right that the result is affected by the income of the building. You can read that. We're not hiding that EUR 12 million of the building sale. We also -- as I said before, we're also not hiding the impact on the land business, for instance, or on the overall business on the Middle East situation. So that's obviously also in there, the EUR 50 million negative there.

So obviously, we will have to balance those out and then look at land as a, yes, specific thing if you take out all these special items, then you could see that especially nearshore is doing well in Europe, Africa. Then you see that land in the Americas has been staying behind, absolutely, but with lots of potential moving forward, as I just described. Middle East, India, very much affected on the land side by the current geopolitical situation and the war situation there. And then, Asia Pacific, we spoke about, the Hong Kong market and also Japan nearshore market has been slow. We do expect not necessarily Hong Kong, but certainly Japan to contribute a little bit more moving forward.

Then your question around, okay, what else is there in the land business and what are you focusing on beyond nearshore because most of the people see that nearshore is an interesting market. Well, to be honest, it is GroundIQ, and the next thing is GroundIQ, and the next thing is GroundIQ, or what I'm saying is everything in land will be changed to the new situation where we're going to change everything towards GroundIQ.

We have a lot of potential to grow, I think, our share, our opportunities because, as I said, some markets are maybe commoditized, and we never served anymore. And we believe with this new technology I always call it the iPhone of the site characterization, we're going to change. We're going to change the land business, how it's being done. And this is happening, and we see the first proof points, and it's growing very rapidly and will change the whole land business and then nearshore will continue to do what we have been doing.

And most investments for the [ land IQ ] is up and running, is operational. So you don't need further add-on investments?

Well, there are investments required, but it's relatively small. You have seen in the news that we also created a new setup in Australia, where we bought a small setup in Australia with geotechnical expertise, and we'll complement that with geophysics so that we have a real good hub there for GroundIQ development because we see that this area also offers opportunity to further grow in the area in whole Australia with large projects that are coming up where we can also offer GroundIQ. Also in the mining business, GroundIQ can offer quite a few solutions there. So I think this is helping a lot.

But to be honest, over time, yes, things will change to GroundIQ and nearshore. That's the land business for the future. Monitoring will also stay because we do monitoring services, but solidly only doing, let's say, CPT work or drilling work, that will disappear over time. If it makes money, I'm less eager to close it down because making money always fits in our strategy.

So then your housekeeping question, and now I'm a little bit stuck because I...

Yes. It's on top of page number 3.

Sorry, I missed it.

Yes, I thought it was also in there, but I didn't want to off the cuff mention the number. It is down compared to last year. Thijs and then Philip and then [indiscernible].

Thijs Berkelder, ABN AMRO ODDO BHF. First housekeeping question, one-off costs for the efforts to realize your EUR 50 million cost savings. What should we pencil in there? Then coming back on GroundIQ and the numbers you mentioned, back of the envelope, let's say, EUR 2.5 million per project means GroundIQ revenues last year, something like EUR 50 million. And now in H1 already EUR 60 million. Is that too high? Or is such a project on average, much smaller than that or maybe much larger?

Further, I want to have an update on the U.S. for the unmanned fleet. What is the revenue growth there, the utilization of the unmanned fleet because you are rewarded in your bonus schemes based on that. So I'm curious what the progress is there. And I have a couple of other questions, but they are more on corporate governance.

Okay. Thank you, Thijs. So I'm going to ask one of my experts here to maybe say a few words on how much the cost is for the cost saving and maybe they don't have the full answer, but they can think about it now while I answer the other questions. So on the GroundIQ side, I think you're slightly too high, not on average project size, by the way. But basically, we have projects that are actually EUR 20 million that will run over multiple years and involve GroundIQ. We have also projects of a couple hundred thousand. So it's difficult to give you that average number. So that is basically what I can say there.

Then let me see. You asked the question around the utilization of the USVs. And that is obviously also connected to us being successful in maybe some incentives. Well, the incentive program is not running really well for management at the moment with the current figures. And this is also part of that. Some is still close to meet. Others are far from. And I think this is one that is staying behind in the first half of the year, certainly really catching up in the second half of the year, but I don't think we'll meet our targets that are set for our incentive scheme, unfortunately, but that's life.

Then corporate governance, can you give an update...

But we can first maybe answer the question on -- do you have an indication on what the cost could be for downscaling basically the EUR 50 million, the restructuring cost that is related to it. We have a microphone there. This is Marijn Feddes, our Group Controller, answering. Yes, you can speak.

Yes. So the costs related are similar to the restructuring costs that you have seen for the first half year. There will be a little bit more on the vessels, but I don't expect that to be in this half year yet.

Thank you, Marijn. Governance question, Thijs.

Yes. Then on the -- can you give an update on the process to hire a final new CFO? Where are you in the process? When should we get announcements there? Yes. You've probably seen the news on WSP approaching Arcadis with a bid. Did you also receive a letter in the past few weeks from WSP or maybe other industrial players approaching you? I would say you are, as an engineering firm, maybe as attractive or more attractive at this point as Arcadis. So from a consolidation perspective, it's maybe now the right timing to consolidate also viewing Fincantieri, let's say, acquiring NextGeo, an example of that.

Finally is going back on guidance. The profit warning in my view, has 2 sites, Middle East continuing the events and offshore wind orders not yet in. Are these the prime components while coming back on Asia -- the Asia Pacific project is about to end. So maybe you also banked there on further progress. ENI has done a lot of additional discoveries offshore Indonesia. So is that also affected?

Okay. Thank you for all the questions there. So let me start with the easy one. We did not get a letter from WSP or from anybody else. So that's one thing. If it's the right time for consolidation, I leave that for you to speculate about and write about. The question on the CFO, it's quite clear that you don't like me as a CFO, but that's not taken personally. But the update there is that we're working through that recruitment. That's a process. We want to hire the right person. And that takes time because, yes, there are multiple phases that you need to go through.

Obviously, our Supervisory Board is very involved there as well. And we have a reputable, obviously, executive search firm helping us with that. And that's progressing. There are good candidates that we're talking to, and that is progressing. But we are actually very pleased that we have interim CFO right now, Cees den Ouden, that the pressure is off. Cees is just in for 3 weeks. So we give him a little bit of time before he's presenting towards you, but he's getting a good handle on the business, supported obviously by our existing team, Marijn, who just spoke. So that is the update on the CFO.

On the outlook, you're right that there's a lot of uncertainty. So I would create basically the change in the outlook. I said before, it's 2 reasons. First is the first half of the year that we would actually expect more, although I know the consensus was below what we delivered right now, we had a feeling that this could be better if the Middle East, India wouldn't be -- would not have been there and some of the operational issues we had with vessels moving around. So that has affected also the confidence that, yes, if you're already below in the first half of the percentage that you basically generated last year, 4.1% versus 4.9% last year, that is 1 reason. And the other reason is, yes, the uncertainty in general moving forward. We don't know how the conflict will continue and how long it's lasting. That has an impact.

We're quite optimistic about several items that we have on the board, but especially marine site characterization in Europe. and in the Americas is still, yes, uncertain, especially because it relies on oil and gas development, and that has a shorter outlook, shorter visibility. So that is what it is, not so much wind not coming back this year because wind not coming back this year. I already said a few months ago, that's not the case. We are moving further down. So we would have expected a little bit more replacement work there for demand that we were doing. Asia Pacific actually shows a steady continuation. They don't have a second Indonesia project, but they do have follow-on work and other projects like Timor Leste, and there's more to gain.

Thank you very much, Thijs. Then we move over to Philip.

Phil Ngotho from Kepler Cheuvreux. One follow-up on the last comment on the guidance. I was still wondering, given that the order book for renewables has declined so much, that must have come, of course, as a negative surprise even though you expect -- you didn't expect it to come down or to recover this year yet. So yes, can you say anything about that? Are there other things that are driving that in terms of clients just being more cautious?

And the other questions I have are, first of all, on the recovery that you foresee offshore wind recovery in 2027. You mentioned, of course, the tender auctions that are upcoming. But are there any other concrete evidence that supports the thesis of a recovery in 2027? Are you getting approached early by governments or potential developers? And also, I'm interested in understanding what your base case is for the oversupply situation that we are seeing now in geotech. If these additional work come back to the market, will that be sufficient to -- and I'm asking you, of course, look in your crystal ball, but will it be sufficient to balance the market again to remove that oversupply and pricing for that to recover?

And I think related to that, maybe interested in also hearing your views on whether you're seeing or what you're hearing in the market, are other players taking out capacity as well? And from the vessels that you are taking out, what portion is geotech and what is really geophysical? And then I have one last question on working capital. That's more on the -- we've seen receivables coming down, of course, days payable outstanding coming down. At the same time it was helped, of course, also by the write-down. So the drop is maybe a bit less. But the unbilled receivables have actually moved up year-on-year. So maybe you can explain what's driving that specific region as well.

Very good. Thank you very much. So first, your question was around clients being more cautious and order book coming down. I think what we did expect, obviously, there will be a drop with an Indonesia project that was in there last year and not in here right now. So you could basically see that coming because we don't have those projects. We announced when we came to the market that it was the largest project that we signed in Asia Pacific region since 10 years or so. So a very large project. So that could have been expected. And if people would have thought about that, then you could see that.

The other part is that, yes, the clients are in some areas, waiting and waiting longer. So there's much later awards coming through. So the work is still there, but they obviously negotiate longer, as I just said, do the second and the third BAFO, best and final offer. So they drive the price down where they can, but also they award much later. And then that creates uncertainty. Last but not least is that I think our teams are also much more careful what they have in their backlog, especially the highly likely backlog, which we saw in the past sometimes pushed out again. So people are also more conservative in how they look at their backlog. So this is also an element that is somewhat in that backlog development.

So I think there is an element there also when it comes back, and that is your second question, is then the capacity that is taken out enough that is taken out because it is then in balance? Or do you need more? So that is a very good question. So my experience from the past is if markets come back, they don't come back with 5% to 10%. They come back with much more and much more aggressive. And you can see that in the past in Fugro history as well. So once the market comes, and I say the first signs maybe in 2027, but we know that there is a ramp-up coming for offshore wind, then you need a lot more capacity. So people are obviously waiting as long as they can to reduce capacity to make sure that they are able to serve the market in the future.

Having said that, I see all our peers also reducing capacity. Some are laying off staff as well, similar to Fugro. Others have had their vessels idle for more than half a year. We have been working. This is also what I've seen in the previous energy crisis that Fugro was with lower prices still at work and the peers did not have work, some of the peers. So this is also what I see, but I see competitors taking assets out, because everybody knows it will take time before that ramp-up comes. But when it comes, we will all be stretching again for having enough capacity.

One of the things that are important there is that you have the drill capacity for geotechnical. So the drill rigs are not disappearing. We're not -- even if we take out a charter or a permanent vessel, we keep our drill rig basically ready to be mobilized again. It will take a couple of weeks or a month or 2 to get the vessel up and running, but we can ramp up, and we can see that coming, then the market coming back. So I think it is important that capacity comes down, and we need to do our fair share. Is it enough to stop, so to say, the fighting in the short term? I don't think so. That's why we're also careful in that, and we mentioned pricing pressure will continue.

Then you have a question around working capital, especially about the unbilled. Maybe Cees, you want to say a few words about that because I know you picked up on that as well that you're going to really emphasize that element, the work in progress on -- please use the microphone. Cees, can you use the microphone?

Yes, sorry, but your question was more about the prepayments, I think, in the -- not order...

Sorry? Unbilled receivables.

Unbilled receivables. We are working on work in process. It was already a project, which started on a very high quality. But of course, we want to look to the total cycle from getting an order in maybe a bit more hard, stringent contract conditions to get prepayments more and more easy way of being able to bill to invoice when you have to meet a deadline because when 2 weeks earlier, a project becomes [ a debtor ], it's also 2 weeks earlier on the bank. So we're working on that all over the world to get improvements there. But in the contracts, in the behavior, in the project setup, we think we can get some proper improvements there. Although people are working on high quality already on it.

Yes. I think so we have had a few projects like that to really focus on obviously recovering outstanding receivables, also invoicing earlier contractual terms and conditions. But Cees really put it high on his list to give this an additional push now together with the whole financial team to say, yes, we have to go and do even better in the second part of this year and moving forward because this is obviously, yes, just hard work, and you can never stop with that. You had a follow-on question?

And the write-down on the receivable that you took, the EUR 8.8 million, what type of client was this that you had...

Yes. So this is a local wind player in Asia. And basically, they should definitely pay this amount, and they stopped their wind farm development, and they basically stopped paying everyone. To be honest, they have a parent company that has enough money, I would say. So there's obviously lots of battles. We're not the only 1, but there's lots of battles.

So we're starting this -- we have started a legal process to confiscate whatever they have on the bank accounts and so on. But this is -- obviously, we're not the only one. And yes, we basically took this write-down right now. Just to be sure, it doesn't come up -- there's nothing else there. There can only be upside in the future if we recover some of it.

Jeremy Kincaid from Van Lanschot Kempen. 3 questions. First, one more on the guidance. You talked to a EUR 15 million headwind from the Middle East in the first half. What do you assume in the guidance for the second half?

Second question, just on the offshore wind recovery. You mentioned that you now expect a recovery in the second half. That seems to be pushed back from the first half that was previously communicated. I was just wondering what's changed? When I look at the tender outlook, it doesn't appear as though there's much slippage. So just curious on your thoughts on that. And then on the oil and gas outlook into 2027, just curious on your view there. It feels like there's conflicting messages. On one hand, the oil price is high and the forecast you have in the presentation from Rystad look like there'll be growth in '27 and there's lots of regions that are coming to the market. However, on the other hand, you mentioned the IEA sees oversupply of quite a lot of oil in that year. So it's just hard to see more capacity or more production coming online. So just curious on your thoughts.

Very good. Okay. First, on the Middle East impact of EUR 15 million for the first half of the year. In principle, we would expect it to be lower for the second half of the year. However, I'm careful because we don't know how this progresses. And yes, we have to see in the beginning of the conflict, there was a different situation where, obviously, there were lots of bombs thrown on the UAE and Qatar and that has now changed towards Bahrain. And now yesterday, again, we see that, yes, Iran is fighting with Saudi Arabia. And yes, so this is very difficult to say.

So if the conflict is the same as the earlier part of the year and depending on how long it will last, then maybe the impact will be roughly the same. I would think it could be lower However, if it changes, yes, I will come back to you and tell you, surprise-surprise, it is even worse. So it is a lot of uncertainty there. I cannot make it much nicer there.

On the offshore wind side, what has changed? As I said, not a lot has changed because we said in the beginning of the year as well, it will take time before these new licenses come to the market. And yes, you're right, these new licenses are on the board, and they are progressing. And some of it is actually brought forward like the round in the U.K., they want to do as fast as they can. Also, the Netherlands is now bringing something to really quickly decide on, okay, Area 6/7, very large, we can bring this to the market to help the industry, but it takes time. And this is what it is.

I think what is the difference is there is much more aggressiveness in whatever is left, and we have done well on the geotech, not so well on the geophysics. And there's a lot of fighting going on with all the parties that are still out there trying to get what is still out there. So there's more competition and there's lower pricing. So this is what it is, and that is more aggressive than what we maybe anticipated earlier in this year. Because we were doing quite well in the earlier in the year, and now we see that, yes, some of our peers have not had any work and they've become really aggressive now to jump and basically desperate to get some work as well. So this is basically what we see.

Oil and gas, a crystal ball question again. If I had the answer, that will be great. I don't know. I also read the overcapacity and oversupply in storage and all these things. At the same time, I see a lot of oil and gas companies thinking, hey, this is the time because now sustainability is a little bit in the background. This is the time to progress with the field that we still wanted to develop in, I don't know, Mozambique or in Nigeria or in Angola. We are allowed to talk about oil and gas again, and we're moving forward. And we know how to make money with oil and gas even with lower oil prices. And I think the anticipation is that, yes, that we still need the oil and gas for -- and especially gas -- for quite a bit longer.

Energy requirement is enormous in the world, obviously, especially with the AI data centers and storage capacity that's required. That in itself is driving energy requirements up, which for many, many years, people kept a stable outlook for energy. So there's a lot of things happening. Now do you need to take my view for granted? Absolutely not. It's a crystal ball answer, and I don't know exactly how it will go. But over time, absolutely, oil price could come down again, if you ask me.

Thijs Berkelder, ABN AMRO ODDO BHF. Coming back on your jamming and spoofing, your global positioning business. Is that also affected by that jamming and spoofing or how are you handling it there? Can you still deliver towards your clients?

Yes. Very good question. Well, we are protected in those contracts in a different way. We cannot control, obviously, that delivery. So we're protected in where we only supply the signals for DP, for instance, for platforms and so on. So that is a different situation than where we offer a service to the customer where we say, hey, we're going to do a survey for you. And yes, then we cannot sell because we don't have the capacity or we don't have positioning and then we cannot enter the 500-meter zone of a platform and do inspection on platform legs or on the pipeline. So it's different situations.

But to some extent, they are obviously also being jammed and spoofed. So in that sense, absolutely. The beauty is as well for Fugro that we have obviously a lot of knowledge. We're one of the leading parties or the leading parties in the world on positioning offshore. We have a service that basically also signals if there's spoofing going on. Spoofing is basically giving the receiver a different location, telling you that you're somewhere totally else than what you are. And if this is automatically connected to your navigation system, it goes wrong. So that is a big problem. Jamming is very difficult to overcome because, yes, if somebody from the site is jamming the signals, which is happening, we are now moving towards different antenna setups and different equipment where we can block basically the jamming a bit more because we only look at a certain angle.

But sometimes there's jamming coming from the top as well or different areas, and then we're still out and cannot work. So this is a very hot topic at the moment in the world because a lot of suppliers cannot work. They cannot do pipelay or they cannot do their services in certain areas because it's not only in the Middle East, it's also in the Baltic Sea. There's a lot of jamming and spoofing going on and in several other areas as well in the world. And it's not 1 party doing it. It's actually all the parties doing it towards each other.

So therefore, it's also important, especially for the spoofing to have multiple services. So yes, you need to have GPS from the U.S., but also GLONASS from the Russian system as well as the Galileo system as well as the BeiDou system from China. So we have these G4 systems that we can actually also pick up which signal is maybe spoofed and which one we should use. So those kind of things are really technical things that we're trying to solve. Can we solve everything? No, because if they are weak signals and if you come and jam, then it's jammed.

Yes. Then. Another question on the outlook. You're giving a outlook for the second half of the year. But we have to first make, let's say, the forecast for Q3. So is it primarily related to not having the order backlog now, which makes for Q3, which makes you cautious because you're now not yet knowing what the weather conditions will be in Q4, et cetera. Yes, that's primarily the question. And last year, you gave an outlook at this point in time and 5 weeks later, had to give a totally different picture. So could it be vice versa this year?

You want to tease me into doing the same as last year. Well, good luck. I think we're over time. This is a wonderful last question because you're now asking questions that you don't get an answer to. You know that as well because you asked very specific what is happening with Q3 and Q4. There's a lot of uncertainty for the second half of the year. That's what we have guided for. That's why we're careful because we don't want to be in the same situation as we have been in the past. So we're careful in what we guide for. And we realize that this is obviously difficult because everybody wants to know, obviously, where this is going. But if somebody could tell me what is happening with the oil price or what is happening with the Middle East or what Mr. Trump is going to do in the next few weeks, then I can give you an answer. But I think this is a wonderful way to stop this first half of the year presentation from Fugro. I thank everyone for your questions and for your attention. And yes, look forward to the next update.

Good morning, all. Thank you for dialing to this webcast -- audio webcast. Catrien van Buttingha is my name, Investor Relations. I'm here with Mark Heine, CEO; and Barbara Geelen, CFO. We have a short presentation to give to you about the Q1 trading update, which will last, I don't know, I think, around 10, 15 minutes in total max, and then we'll open the floor for your questions. Mark, please go ahead.

Yes. Thank you, Catrien. Good morning, everyone. Q1 2026 trading update. As anticipated, Q1 was seasonally low and the market conditions remain challenging with a lower offshore wind activity impacting our top line.

Revenue declined by 2.1% on a currency comparable basis. We saw growth in other markets, especially oil and gas and infrastructure, largely offset by offshore wind softness.

The EBITDA margin slightly improved to 10.4%. EBIT margin was in line with last year, driven by lower revenue, largely offset by cost reductions. The EUR 120 million cost reduction program is completed, but we're also prepared to take further action if required.

Free cash flow improved due to significantly lower capital expenditure. However, working capital increased because of large ongoing contracts, high activity of billing, especially at the end of the quarter and very high payables last year in the third quarter.

Remain focused on what we can control, maintaining cost discipline, actively managing vessel capacity, improving cash flow conversion through reduced capital expenditure and lowering working capital from elevated levels seen in the recent quarters. At the same time, strengthening sales momentum remains a clear priority with a strong focus on accelerating the conversion of opportunities into awards.

Our backlog for the coming 12 months stands at EUR 1.4 billion, slightly lower than last year, 3.5% lower with a strong tendering activity across markets.

Next slide, please. The direct impact of the conflict in the Middle East has so far been largely confined to our operations in the UAE and Qatar. And this relates to, amongst others, to our two key vessels there, Fugro Proteus and Pacific Grouse. The latter one is a charter, a long-term charter that will probably release later in the year. And yes, they have been facing limitations on operations in the UAE and Qatar. And please note that these vessels currently do not require the passage through the Strait of Hormus.

The other vessels in the region, the Kobi Ruegg and the Fugro Mapper have been and are operating outside of the affected area and are less exposed.

Still, we have experienced some knock-on effects in other countries and regions. Going forward, we continue to monitor the situation, ready to respond when necessary with safety of our people as our foremost priority.

Next slide, please. If we talk about the markets, a brief update compared to what we said earlier in the full year presentation -- publication. Offshore wind markets in Europe are indeed showing first signs of recovery with increased tender activity in several key markets in quarter 1 2026. And that's notable in the U.K., Germany, Netherlands, France and Ireland.

The war in the Middle East, which might well have meaningful and long-lasting implications for the global energy sector with increasing localized oil and gas investments and a diversification of the energy sources.

We dive a little bit deeper in oil and gas, what's also here on the board, and we spoke about that before as well. Energy companies in oil and gas are selectively expanding their oil and gas portfolios through targeted exploration programs with obviously a strong emphasis on tight time lines and cost efficiency. And there's heightened attention on energy security and energy independence, and that's also expected to support continued client investments, particularly where the higher oil prices improve project economics.

If we talk about the offshore wind market, we already said that we see the signs of recovery of the market. It will take some time. So it is important to note that this is obviously happening. We see it happening. We see activity increasing over time, but it will take a little bit of time before that materializes where they increase installations only from 2030, '31 onwards.

In Asia Pacific, short-term challenges remain, as we said before, but the sector is cautiously optimistic about the auction frameworks that are revised there and the bottlenecks are addressed. Obviously, we don't see any new fields coming to the market in the U.S. albeit we saw the first emerging wind activities in Latin America, Brazil and Canada.

And with that, I would like to hand over to Barbara.

Thank you, Mark, and good morning, everyone. Thanks for joining us. I want to first talk about revenue and margin developments. In Marine, revenues declined by 2.4% with the vessel utilization of 60%. Overall, we increased market share during the period despite ongoing pricing pressure.

In the Americas and to a lesser extent, Europe Africa, lower volumes of offshore wind work were only partly mitigated by higher activity levels in traditional energy markets. Middle East and India recorded growth driven by surveys for multiple field developments in the UAE and Saudi Arabia.

The Marine EBIT was adversely impacted by delays arising from vessel-related challenges on an inspection and monitoring project in Denmark.

Land revenue declined marginally, as you can see. The EBIT improvement was mostly related to the strong growth in nearshore projects in Europe-Africa, which was partially offset by permitting delays stemming from the prolonged U.S. government shutdown.

Next slide, please. Now first, let's look at the free cash flow graph on the left. First of all, operating cash flow before changes in working capital was EUR 13 million for the first quarter of the year. The working capital increased by EUR 55 million, and this was driven by higher billing due to higher activity towards the end of the quarter in combination with high payables for the comparable period last year.

A couple of additional comments on the working capital. While we previously noted large receivables at year-end 2025 have been collected, we are reporting an increase in Q1, as you can see on the right-hand side graph compared to year-end 2025.

And this is outside our targeted 10% to 15% bandwidth, which we are always communicating about. And obviously, we're not pleased with that, and we remain focused on bringing working capital back within the bandwidth. And also please note that March 2025 was exceptionally low.

If we look at the cash flow CapEx, one more comment. You can clearly see comparison of the spend EUR 101 million in Q1 last year versus EUR 31 million of this year. The net leverage amounted to 1.8x at the end of March. And in connection with our full year guidance, we expect this ratio to return to below the 1.5 targets towards year-end.

Next slide, please. And if we look at the backlog, the 12 months backlog stands at EUR 1.385 billion, which is a modest 3.5% decline. And just like previous quarters, this reflects the step down in offshore wind-related activity since Q4 2021. And I do want to point out that this is a lower decline than we have seen during the past couple of quarters, and this decline was largely mitigated by successful replenishment of the backlog with oil and gas and infrastructure projects.

And this underscores our ability to recalibrate our business to our diversified and market-agnostic business model, serving clients across different end markets and geographies. And we see a solid tendering activity across most markets now, although conversion into awards remains slower than usually.

And now I would like to hand back for the outlook to Mark.

Thank you, Barbara. For the outlook 2026, we can say once again that we anticipate margin improvements as our cost savings and efficiencies are now fully implemented. The capital expenditure will be reduced to EUR 150 million to EUR 165 million for the year, well below the 2025 levels. First quarter, you saw is EUR 30 million compared to EUR 100-plus million last year.

We're closely monitoring the situation in the Middle East. So far, the impacts have been mainly confined to the UAE and Qatar, but the broader implications are uncertain in the longer term. The safety and well-being of our people remain our top priority. That's always good to emphasize there.

The medium- to long-term outlook across our core markets remain sound. In addition, emerging markets, including nuclear, critical minerals and security solutions for safeguarding vital undersea infrastructure also present promising midterm opportunities. With that, I would like to go over to questions. Over to you.

[Operator Instructions] Our first question comes from Thijs Berkelder from ABN AMRO ODDO BHF.

I first want to thank Barbara for her period as CFO, and I wish her good luck in the rest of her career. Can you give us any update on the succession track of the CFO? Where are we?

Second question is on small nuclear reactors. You were active there for AI and data centers in the U.S. last year already, Rolls-Royce now three of these SMRs in the U.K. and there are many more to come in the rest of Europe.

And finally, in Marine, offshore wind is weak, but the grid market is very strong. Are you switching in Marine from -- in focus from offshore wind to grid? And is grid reported in renewables or in infrastructure?

Thank you, Thijs. So three questions. First, the succession of Barbara. I guess I need to answer that because that would be strange if Barbara does that. But obviously, thanks to Barbara as well for her period. Let me emphasize that. At Fugro, where she really brought the company to the next level on the financial side. So thanks a lot, Barbara. We're in a good decent process for succession of Barbara for a new CFO that runs well. And as soon as we have more to announce, then we'll let you know.

And the second question was about nuclear SMRs. We are involved in those. We have communicated about that with a project in the U.S. last year. We have also secured the next project there, and we're bidding for a few projects in the U.S. So this is something that you will probably hear more of from Fugro moving forward.

We also spoke about the partnership that we signed for the U.K. with Fermi. So we're also really on top of that moving forward on this market in Europe. Europe obviously still needs to make some changes around accepting nuclear developments in some -- in the wider European region. So this is to be done. And then I expect this also to take off in the rest of Europe. We'll be on top of that. In the U.S., for instance, we are one of the three parties that can actually do the ground investigation work and be accredited for that.

And then the last question is around the grids and offshore wind. Indeed, the grid market is active. That's obviously onshore, then we will put that in infrastructure. And we are involved in several of these grid developments, for instance, in Germany with the line interesting development there, obviously, but there are several other activities that we're getting involved in. But if it's offshore, then it will be part of renewables. So that is what I can say there.

The next question comes from Philip Ngotho from Kepler Cheuvreux.

I have three, if I may. First of all, on the comment on the cost reduction program that you could take additional measures if required. I was wondering what measures that could possibly be because I mean you have done already quite a bit, of course, in terms of FTEs. So where could you still see cost savings opportunity if it's needed?

Second question is also on the comment that you made that you're taking market share despite ongoing pricing pressure. I was wondering if you could provide a bit more commentary around that. Is the pricing pressure also intensifying versus the last quarter? And in the past, you spoke, of course, about geophysical versus geotechnical where geophysical is much more competitive. Is that trend the same? Or is geotechnical also seeing pricing pressure? And I'm also wondering, are there a situation where you're choosing not to bid just because prices are not right in your view?

And last question is on working capital. I was just wondering if you could indicate which regions saw the largest deterioration in Q1.

Barbara, you might want to start with the last one, the working capital?

Yes. First of all, thanks going back. But yes, so on working capital, what are the regions? Well, there is some distinction to be made in the regions. There are -- as we mentioned before, there is in APAC, there are some large contracts which we are executing at the moment, and we expect the working capital to decrease there as a result of these large contracts.

Middle East has been hampered. You will not be surprised also by the Ramadan and the conflict. And there, that is also a different, I would say, how should I say that it's a different structurally situation in the Middle East of working capital as we are all aware, Europe, Africa is very sound. And that is also where the revenues towards quarter end and the invoices send out are mostly located, I can say. That's why we also say that the receivables portfolio remains sound. And the Americas is pretty stable, I would say, from a working capital perspective. That's what I can share.

So there are some differences within regions. Overall, the sum of the part is too high at the moment, but we're confident we can bring that back within the bandwidth and some regions are already showing that in April due to the good collections. That's what I can share.

Okay. Thank you, Barbara. Then the other two questions. So the cost reduction program, I think you're right, Philip, that we have done a lot. So in that sense, a small further cost reductions are not going to make a difference, then we need to look at our assets where we are actually also preparing this year for a few changes. If you take assets out, then obviously, everything related to those assets, that cost will come down as well.

I spoke earlier about a vessel in the Middle East, a geotechnical vessel, the Pacific Grouse. That will be taken out once we have brought the resilience over from the U.S. to the Middle East. Obviously, we monitor the situation there very carefully if we want to proceed with that. But this is the plan and the Pacific Grouse will absolutely go out this year, latest, I think, September time, but maybe a little bit earlier.

We're also looking at Explorer beyond lifetime. That vessel still operating in the Americas, also geotechnical platform will take out in the second half of the year. The date or when we do that is primarily depending on when we don't have work anymore for that vessel. She is at the moment working. So that's good.

We're also looking at taking a geophysical vessel out, the Meridian this year. This is another thing that we're going to do and not replacing those vessels with something else.

We have a few more vessels that had low utilization also last year and need to change. For instance, the Equator in Asia Pacific, we are in the process of flagging her Indonesian so that we can deploy her in that country. And we're also obviously deploying the Resolve with our Blue Dragon, the new seabed robot, the geotechnical robot that should also drive utilization up for a vessel like Resolve.

So just a few indications what we're working on related to cost savings and also changes in assets there. If we talk about market share, yes, we made that comment because we see that competition actually has more idle capacity vessels alongside. Fugro is still working against the lower pricing. So we have seen that in previous crisis as well that we managed to keep going, but pricing is under pressure. And we see and expect that, that will probably increase that pressure a little bit more during the course of the year up until the time that we see activities in wind and oil and gas really stabilizing and increasing again.

We also see that in geotech now coming in because there is also competition that has less work there. So obviously, that puts pricing under pressure. So that's what we can say about market share and competition and pricing pressure.

The next question comes from Luuk Van Beek of Degroof Petercam.

First of all, a question about the oil and gas, which seems to be showing a recovery. And those customers are typically quite cash flow driven and with the higher oil and gas prices, they have higher cash flows. Do you see any signs that are accelerating things that are in the pipeline that would benefit you?

And furthermore, on the wind market, you mentioned that most of the work will be executed in -- or installed in 2030, 2031. But obviously, your activities are mainly ahead of that. So can you indicate in what period we should expect the impact for your revenues from these installations?

Yes, Luuk, I think everybody is asking three questions, but I will take your two. So oil and gas, we obviously see this market picking up. I said before as well in the previous announcements, full year that we were actually expecting oil and gas to already increase last year. We did not see that because we saw the second half of the year more cash discipline from the oil and gas companies and therefore, keeping the cash in the wallet, so to say, postponing things.

We do see projects back on the board. We are not 100% sure how fast these things are going because, yes, oil prices and gas prices are high, higher. They also face a lot of challenges, obviously, these companies. So they need to get the act together. And yes, with a higher oil price for a couple of months, it doesn't mean necessarily that then immediately all these things will move ahead because yes, any investment decision -- final investment decision is obviously taken with a view of longer-term oil and gas price developments.

But it is absolutely helping, and we do see those markets being more buoyant. Also, it's more acceptable to talk about new oil and gas projects because the world starts to realize that this is still on the board for many years to follow. So in that sense, we see a general, more buoyancy in that market.

If you talk about wind and the installations 2030, '31, obviously, we know about the conference in Hamburg earlier this year. There, they communicated the 9 countries together, 15 gigawatts installation per year from '31 onwards. That means that they need to start doing ground investigation work probably 2 to 3 years before that. So you could expect in '27 onwards more activity for Fugro.

The big question mark there, Luuk, is at the moment, which parties are starting earlier because everybody knows that the activity will increase, and this is going to happen for many years to follow because they said up to 2040 every year, 15 gigawatts installation. I still need to see if that's achievable. But having said that, even if it's less than that, that's 3 to 5x more than what is being done over the last couple of years. So enormous uptake. And that means that, yes, in the years to come, maybe already some things this year as we see with AR 7. AR 8 is pulled forward because the industry is pushing the U.K. to launch a new license round to bring more fields to the market. So that is positive. We see obviously France making strong commitments around additional investments in the wind market.

Also the Netherlands committed to two additional licenses. So there is quite some buoyancy there, but everything takes a little bit of time. It's not like, okay, this is brought to the market and then immediately, these projects kick off. Having said that, we are executing.

You also saw in our press release a new announcement on a project in Taiwan, which is positive for the development in Asia Pacific and give some more confidence that this market is also continuing for Copenhagen Investment Partners is starting there. And you also see that we are about to execute a large project from AR 7, which is also announced there in the press release, which will start during this season this year.

So you can see if there are new licenses, then absolutely before even the licenses come to the market, we will work for the government, RVO, BSH or Energinet, you name them, or we'll start working for the energy operators to collect more ground investigation work.

Our next question comes from Jeremy Kincaid from Van Lanschot Kempen.

I have a few questions about the vessel changes. Obviously, the Explorer and Meridian, you say they will be taken out. What does taken out mean? Does it mean they'll be sold for parts or sold as whole boats or just destroyed? And also those 2 vessels, I believe, are owned and not chartered. So can you explain some of the thought process behind retiring those vessels, which are owned rather than taking a chartered vessel out of your fleet?

And then my next question is also about the Pacific Grouse. You're planning to release that charter later in the year. Do you have to deliver it to a certain location back to the original owner? In other words, is the fact that the Strait of Hormuz is closed, could that be an issue for you in the future?

And then finally, you mentioned that there was a project in Denmark you're working on, which impacted earnings in the Marine business in the first quarter. Do you think that will continue to impact earnings in the second quarter?

Thank you, Jeremy. Maybe first about the changes there on the Explorer and the Meridian. Those are owned vessels. I recall discussions started probably more than 10 years ago around retiring the Meridian, then we extended for 5 years. And you go -- yes, blocks of 5 years more or less or 3 years because you need to go from survey to survey, so a special survey every 5 years or an intermediate survey every 3 years, so to say, or in the midterm between those 5 years.

And basically, then there's a judgment call to make how many millions do you need to invest to get the vessel again on an accreditation or certification to be operational. So that is something that over time, when the vessels become too old become too expensive, and then we need to make a judgment call.

So we had the Meridian and actually the Explorer already twice on the board to take out. So it has been basically yes, on the board for a longer time, we have extended that. So basically, we squeeze the maximum out of those vessels and then at some point in time, also to drive utilization up, we want to have a bit more tightness in that market.

No doubt, there will be times that we need to hire probably a third-party vessel then again if we need to ramp up. But that's possible because we have also the equipment to put on temporary vessels if we need to. Explorer is obviously geotech, Meridian and geophysics. So that's important to know. Pacific Grouse straight of homes. I need to check where we need to deliver that vessel, I think in the region, but I need to confirm that, Jeremy. I don't know because it has been a few years ago that we hired that. I thought it came out of the region, but something to be confirmed. And then Denmark, do you want to answer that, Barbara?

Yes. We're nearing completion there on them.

Next question comes from Quirijn Mulder from ING.

Especially thanks to Barbara for all these contributions to Fugro.

Let me say a couple of words on the working capital question. And the reason is related to what -- let me say, if you speak about 17% at the end of the quarter, what percentage was caused by the decline of -- let me say, by the decline of the payables compared to the first quarter of 2025 to get an idea about how the split between, let me say, the activities in the month of March and the payable adjustments as I see it.

And the second question is about the U.S. as you -- or about Americas, in fact. We see a strong development of order intake. When is it being executed, do you think? Because it looks like that the relation between, let me say, revenues and backlog is quite high at this moment. So is it being executed, let me say, in the coming months? Or is it being executed for later, let me say, second half of 2026? That are my two questions.

Thank you, Quirijn. Maybe first on working capital, Barbara.

Yes, I can say, Quirijn, and thanks for your kind words, that the payable decrease was a major component actually. So if you look at the delta between year-end and quarter end, it's mostly in the receivables that have gone up. And as I mentioned, these are very young receivables. So we don't see a deterioration. But if you compare it to last year, where really the step-up, if you like, is there is no longer the payables and those were unwind and partially that is related to the lower CapEx. And as we mentioned, it was -- we went from EUR 100 million to EUR 230 million and there were some personnel expenses in there.

So that is really the biggest by far, the biggest component is the unwind of the payables. And you're right to say that it is high. That's why we're saying we bring it back. We did see an absolute decrease in receivables quarter-on-quarter. However, not to the same effect as the revenue drop. And that's why also the percentage went up. So there's a couple of factors there.

And the factor of high CapEx last year will also remain because that was last year was high and this year it will be significantly lower. So we'll see that effect to a certain extent working through.

If you talk about U.S., Americas in general and the backlog increasing and then when it's being executed, well, quite clearly, you have seen also not necessarily high activity executed then in the first quarter. You're right. And that has to do with some delays in the start-up of these projects. We do expect in the coming quarters that these things will continue to kick off.

So we have a lot of things in the backlog, especially also on the land business and nearshore business that will really start in the second and the third quarter.

Good example is we are doing some work for some of the islands there, for actually security purposes of the U.S., some survey work. And we could not mobilize the equipment. This is just an anecdote. We could not mobilize the equipment because there was no military plane available to mobilize the equipment and that was obliged to that area because of the conflict in the Middle East. You can't really come up with these things in advance, but this is just a consequence of what can happen in the world if you have conflict like that.

So that project is now being mobilized, but it was delayed because we would initially start already in the first quarter.

Our next question comes from Kristof Samoy from KBC Securities.

First of all, Barbara, all the best for the future to you. I have two questions. First one, coming back on the U.S. backlog as a follow-up. Could you -- because the evolution is quite positive. Could you disclose some kind of percentage to what extent the backlog composition is firm signed orders and then quotes with high award potential? That's the first question on the U.S. backlog.

And then on the regional performance. I know on a quarterly basis, you do not disclose profits per region. But could you shed some more light on the evolution of the profitability of the different regions in the first quarter? What the trends were per region? Were they above?

Sorry, the last question you were dropping out a little bit, Kristof. Could you repeat that?

Okay. So on the regional performance, you do not disclose regional profit margins or regional profits on a quarterly basis. But could you give some more color on the evolution of the profitability during the first quarter of different regions and which one went according to plan and which one [indiscernible]...

Well, maybe I can comment on this last question before going to the other one. I think it's -- what I can say about Q1, Q1 is always the lowest season. And the project business, there's quite a lot of pluses and minuses in the regions.

I think if you look at the -- also the backlog and the composition, that is a good representation. And I think it goes too far now to qualify that further because it's only 1 quarter in the year.

Okay. And then your question around backlog, that depends a little bit. Yes, if you look at the EUR 1.4 billion roughly for the next 12 months, then there's roughly around 65% is firm and others are highly likely prospects. If we talk about obviously a different period, the remainder of the year or the next 3 months, there are different percentages involved. Specifically around the U.S., I don't have that split from how much is firm or highly prospects.

No. What we can say there is that, obviously, indeed, you see a strong increase in the backlog in the Americas. That's also related to traveling from a lower base after the offshore wind drop last year.

But having said that, on the AI and the data center then that looks very positive and encouraging, I would say. So this is mainly on the land and the Marine Asset Integrity side of the business.

Our next question comes from Thijs Berkelder from ABN AMRO ODDO BHF.

A couple of smaller questions. Can you quantify the impact of the late arrival of the vessel in Denmark on the Q1 results roughly?

Second question, you sold office in Hong Kong cash in EUR 13 million. Did you also account for a book profit in Q1? And is that included in your reported adjusted EBITDA?

Third question is on your activities around Cyprus. Are these -- created these activities hampered or ongoing?

Yes. Maybe I will take the last question there. So Cyprus, we have seen some impact. We could, for instance, not do a crew change in the place that we wanted to do. So we have to deviate to different ports. So there was some impact minimal, but some impact there.

Before I hand over to Barbara for the profit there, maybe first on the Denmark side, that was the Fugro result that we basically mobilized for that with ROVs on board. And that had to do with maybe a bit more color with the Aquarius that we sent over to the U.S. to serve the large Brazilian contract because we have now -- or sorry, the well that moved over to the U.S.

The Aquarius is already working there in Brazil, albeit the price is in a dry dock at the moment. So that's also good to mention, unfortunately, a bit longer than expected. That has some impact on the first quarter as well. But the result in Denmark basically was mobilized last minute. It had some issues, and then we had some permit issues from Total that took a bit longer. So it had a couple of million impact there in the region. So that's what I can say on the result. Then maybe to Barbara.

Yes. So the sale of the building in Hong Kong was indeed included in the EBITDA and EBIT and booked as other income.

But what kind of book profit should we think of?

Well, it's in the cash flow, right? It's less -- it's around EUR 10 million.

EUR 10 million book profit or EUR 10 million proceeds or both?

Both.

Our next question comes from Quirijn Mulder from ING.

I have one question. So for me, it's a little bit unclear why, let me say, your revenues were a little bit -- were down, okay, but not dramatic. It's 2% organically. And you had realized massive cost savings. So I understand that it is partly to blame because of low pricing in certain projects. And to what extent is also related to extra cost? Can you give me some idea -- some flavor on how you can explain that? So cost savings, as you told, EUR 10 million, let me say, EUR 120 million in the full year, combined with revenues 2% organically down, that should lead to higher earnings. Is there maybe a good explanation for that?

Well, there's a couple of factors. And if I can answer that question. So first of all, historically, Q1 EBIT is low and the margin is low. And the EBIT margin now is protected as a result of the cost savings on the personnel costs and other operating expenses. And I think we should not forget that we had a revenue drop of EUR 427 million last year. So we adjusted the cost base to the new reality. The cost base did decrease quarter-on-quarter as demonstrated by this by, as you say, a flat EBIT with a EUR 32 million revenue drop.

So within that, the cost savings are included and that is what we can say. And then there is indeed additional operational issues as we just explained. And there is also the Hong Kong building that was there. Plus we had limited impact of the conflict in the Middle East. However, based on the millions of EBIT that is still in Q1, a couple of million.

So there's a couple of pluses and minuses that are playing a role in the EBIT, but the cost savings are definitely there. Otherwise, the EBIT would have been much lower.

Thank you. And with that, I will now turn the call back over to Catrien for any final remarks. Catrien, go ahead.

Yes. Thank you so much for participating in this call. If you have any other questions or remarks, you know where to find me. Thank you. Have a good day.

Okay. Welcome to the full year result presentation of Fugro. Welcome, everybody. Good morning, good afternoon. Good evening for some of you. We'll first start with the presentation and then open up for some questions.

Today, we're wrapping up what has been a very challenging year for Fugro. At the start of the year, we were expecting growth, supported by a 4% backlog growth and ongoing client engagement. But instead of that, we actually found ourselves navigating uncertain and volatile market conditions, along with shifting geopolitical circumstances. All of this created a more cautious business environment and prompting many clients to rethink their projects, the timing and the scope of their projects. And I will come back on the markets a little bit later to give a bit more detail. All in all, that resulted in a EUR 427 million decrease in revenue, 16% on a currency comparable basis. That's enormous. And obviously, also with the consequences for EBIT and cash generation.

We have responded decisively with a cost program, took control of what we can take control of. After rightsizing our operations during the recent quarters, we enter 2026, we believe, in a better position, more leaner, more focused and more resilient. And there are 3 specific points to highlight. We're nearing the completion of the earlier announced cost reduction program, delivering an annualized savings of EUR 120 million, resulting in a more flexible cost base. We also are successfully recalibrating our backlog, replenishing basically the reduction in renewables with oil and gas and infrastructure projects. And the capital expenditure will be significantly reduced, as announced before, to EUR 150 million to EUR 165 million for '26.

Looking ahead at our markets in '26 and beyond, offshore wind is showing early signs of recovery, as governments and industry collaborate to revitalize this sector, specifically in Europe, I must say. I'll come back on that, obviously, as well. We remain committed to executing our strategy whilst, at the same time, adapting also to the new environment and new realities.

If we then specifically go and look at offshore wind, there's a lot in the news lately. So I think there's a couple of things to highlight there. First and foremost, the North Sea Summit. Nine countries came together in January and made some significant commitments for 2031 and onwards, so a commitment of 15 gigawatts per year development of offshore wind. That is obviously 2031 and onwards. And today, we are in 2026. So it's important to note that despite the fact that Fugro is very early, a couple of years earlier before the construction starts, this will still take pain to -- this will take time to further develop and to come to our books in revenues. So, for the next 2 years, for sure, I expect still the industry to suffer in some areas because, yes, these projects are later in being kicked off. Having said that, there's a lot of push from a lot of supply companies, suppliers and even myself. I have been in Brussels to really push and try to accelerate basically this, as the supply base is ready to ramp up and to deliver more projects.

Secondly, and that is positive, recently on the 14th of January, there was the AR7, the last license round for the U.K. That was concluded. And for Fugro, that means that anticipated projects that we already bid for now firmed up and are in our firm backlog to be executed already this year. And that is a good example of what can happen if projects come to the board, then immediately, Fugro will get work on the geotechnical, geophysical sphere. Additionally, and I think that's also good to mention, obviously, Europe decided on Contracts for Difference, a new contract form, where you basically compensate low or the other way, if it's high energy prices, then also the energy operators will have to pay back some money to the government. But at least, that is a very nice balanced way of, well, indirectly subsidizing this market to stimulate, yes, renewable energy for the future in Europe.

If we look at the energy markets as a whole, in general, we can first say about offshore wind, what I just said, that Europe is really committing to be independent on the energy sourcing and basically the reliability and availability of energy in the future for the European Union being independent from the rest of the world. So, that will mean recovery over time for this industry. And we believe that, especially in Europe, this will be visible in the upcoming period already to some extent. In Asia Pacific, yes, short-term challenges remain, but we see that also the sector there is cautiously optimistic, addressing the bottlenecks that they have faced there, while obviously, in the U.S., and we have communicated that before that the current administration is not developing any new projects.

Now, having said, the Americas, I think it's good, and you probably picked up in the press release already, we are starting a project in Brazil. It's a pilot project, although quite a sizable project where we do nearshore work for new offshore wind developments. And this is falling in nearshore and therefore, booked in the land business moving forward. So this is already starting also in 2026.

If we look at traditional energy, oil and gas, energy companies are selectively expanding their oil and gas portfolios, really carefully assessing which ones they want to push along and which ones they leave aside with a strong emphasis on timelines and also cost efficiencies and how to quickly get them on stream and produce basically results there. What do we see? Quite clearly, South America with examples in Argentina -- for many years, we haven't seen Argentina on the board. Also countries in Africa are back on the board with projects, primarily in the deepwater, being developed in the years to come. Also, Asia Pacific shows some new areas of development for oil and gas.

If we look at, yes, the general market fundamentals, they remain solid, supported by mid- to longer-term investments. Projections are shown here on the board. These are the standard reports. It's not necessarily our data. It's good to mention it's 4C Offshore, Rystad, global databases for infrastructure. And this is what you then see. If you talk about, yes, the CapEx and OpEx development, offshore wind, quite clearly still a CAGR 11%, 12%, significantly less buoyant than the last couple of years. We have seen above or close to 30% growth year-on-year, which is now down for almost a year already. And this is now also stabilizing over the last quarters around 11%, 12%.

Oil and gas investments basically also hasn't changed too much. You see there is new investment. It's also really required to replace the depletion of many of these fields. But that also means that, yes, stabilizing this is quite important also for new developments, but it's obviously very related to the oil and gas prices. And recently, with a stabilizing oil price or even growing, that is positive, but that will obviously, over time, change again. Most of the operators actually count on longer -- lower for longer, so to say, where there will be modest pricing. Infrastructure, there's still quite a growth. This is also already for multiple years around this figure, primarily to do with urbanization, aging assets, climate adaptation needs, rising power and data demands. So we see a lot there basically in the longer term, still to be done on the onshore side and on the infrastructure there.

If we go to specific projects, this obviously always gives a good indication what Fugro is actually doing and working on. You see here on the left side, some offshore wind projects; on the right side, traditional energy. Top left, there is, NordSee 1, a comprehensive geotechnical survey that we do for TotalEnergies in Germany in the North Sea, quite a large project. We kicked it off in the first quarter now. We have multiple vessels involved, quite sizable, important project for us to start in European region at least this year in a decent manner. The Dogger Bank, on the bottom there, a comprehensive geotechnical survey for eastern array of Dogger Bank South, offshore wind farm, obviously, as I said before, major initiatives led by RWE and Masdar to develop one of the largest U.K. wind projects, energy projects.

On the right side, top right, we have spoken about that before, ENI development for Southeast Asia, very large project, the largest project that Fugro actually took over the last decade, I would say, on the geotechnical and geophysical survey work. It's involving onshore, nearshore and offshore work, combining all the geotechnical, geophysical surveys that we're doing. The geotechnical acquisition has actually already started end of last year or the fourth quarter, a little bit in the third quarter. But also there, there was a little bit of a shift from the project to the fourth quarter there.

Petrobras at the bottom right, we have spoken about that before, but it's good to mention because this is a very significant 4 multiyear contracts, actually 4x 4-year contracts with extension options there for inspection and monitoring surveys, critical infrastructure measurements that we need to do in Brazil. And this really supports the long-lasting relationship that we have with Petrobras. And I mentioned already, Petrobras now also kicking off some wind projects, and we also will start that very soon in that area as well. We brought over the Dweller, the Fugro Dweller, one of the vessels that we had operating in Europe is now moved over to Brazil also to support these long-term contracts.

I mentioned already, maybe also good to mention that Argentina, because there's developments -- YPF is developing LNG project there offshore. Quite -- yes, new on the board, I would say, because over the last decade, I haven't seen a lot of activity in Argentina. There are companies working there, Total and so on, but this is actually new, and this is also picking up in line with what I said before.

Some other projects on the board that's good to mention there. Top left again, LanWin 1 and 2 offshore grid connections for TenneT. Quite an important project where they connect 14 offshore connection systems and try to link that, obviously, with the electricity grid. It will actually support 35 million European households with energy. So this is a major development. It's part of the 2-gigawatt program that TenneT develops there in Germany.

Then Holtec on the right side, top right there, one of the first projects we did on the small modular reactors, nuclear, which is a quite interesting development. We spoke about this one before. We do the subsurface characterization with our new technology GroundIQ. And we have actually spoke even yesterday to our teams there in the U.S., multiple tenders outstanding right now. We expect a few more to come in, in the upcoming 1 or 2 months to actually do more work on SMRs there in the Americas, or in the U.S., I should say. We also recently signed a partnership agreement with Fermi in the U.K. Basically, they are looking at 30-plus sites for also SMR developments -- nuclear developments. So this is definitely something that we're focusing on.

Tonga LiDAR survey, bottom left, an airborne LiDAR, bathymetric LiDAR survey, something to do to map coastlines, very important. This is specifically for Marshall Islands and Tonga, supported by the Green Climate Fund and also the government of Australia and New Zealand. And we see more of these projects coming up as well, as we have spoken about, in our water sector. This will take time. And especially these government-funded projects take longer to secure, but it's also very interesting for us to deploy our expertise. On the right side there, the bottom right, Alcatel, geophysical and geotechnical cable survey to enable Alcatel submarine networks to basically build one of the most efficient and feasible routes, and they call it the WABAN route, between South Africa and Malaysia. And the other part is basically the second part of the project there.

We go to the next slide. This is a slide that you know quite well that we always present, and it's really good to see how we are diversified between markets. And I think it's good to say, once again, for the people that don't know us so well, we can use our people and our assets agnostically in these markets, so we can shift quite easily from one market to the other market, which is the benefit that we have. And here, you see that this is the first year where we see renewables being down compared to the previous year, so to say. We were growing up to 38% in 2024 for renewables being part of our full share of wallet of revenue. And now you see 26%. So quite a drop, and this is the EUR 380 million drop in offshore wind compared to 2024. And then, you see oil and gas taking a larger part of it, still not growing so much last year, now 45%. But you see a small decrease, and that has to do also with the latter part of the year that we won for where people were -- and companies were pushing out some of the projects and delaying and descoping things to the next year. We have some payments also. Barbara will talk about that in the working capital that some clients even asked to pay in 2026. So this is something that was related to what we communicated before where the energy companies really kept their hand on their wallets.

And then, also on the right side of this page, you see the diversification between clients that we have. We work from energy companies, local, international energy companies, government agencies more and more as well, also for the offshore wind. Very important because the governments, for instance, in Germany or the Netherlands, BSH or RVO are handing out the most early projects on offshore wind. And then, there's only the phase thereafter where the operators come in. So this is important for Fugro because they're really early on. And then, obviously, contractors -- IPC contractors and so on that we work for. Quite a nice mix. Moreover, the top 10 clients in Fugro do not generate more than 25% of our revenue, and there's no real client that is much larger than 2% of our revenue, or only a few, so to say.

If we talk about our strategy, then we have 3 pillars. We spoke about that before, a simplified picture here. The first pillar is most important. We said that the first pillar will generate most value in the short term -- or in the midterm, I would say, 2027. We remain committed in that strategy towards full potential. Having said that, we're more focused. So we are, over the last period of time, also during the phase where we went through cost reductions, have decided to reduce some of the actions that we have to tailor it more to what we really think will make the difference in the short term, where we focus on cost efficiencies and also execution efficiencies in the operations and really looking at how can we generate better returns and higher cash flows. This is the focus for 2026, which is, I think, quite clear that our focus is only on, yes, really generating -- not only, but on generating good returns and on good cash flows.

What you also see here is that we are still focusing on new market opportunities. I spoke about the water market, coastal resilience, ocean health. I gave an example there. Also critical minerals is coming up in many areas. Obviously, a big topic on the board in the Americas, in the U.S., but also you see that in the Middle East, that being more prevalent and, for instance, also in Australia. So this is really growing. And opportunities that are not even mentioned here is, for instance, data centers, which is also offering opportunities for our new GroundIQ solutions.

Maritime security and surveillance is something that we have on the board. We have a dedicated team there that is really focusing on it. That takes time because governments also are not so quick in this environment, but we're really working on that, and there are some great opportunities.

If we look at Pillar 3, the data platform access, no details here, but I can say that we're making good progress there with TotaLite, with GeoDin, with EOMAP that we bought obviously a year ago; double-digit growth for EOMAP last year. We have new licenses for clients like GeoDin. We have new clients for TotaLite, more than 30 now. So that's really getting into a level where it starts to become, yes, slowly contributing to what we're doing there.

Satellite positioning is also in the third pillar, so to say, with some new initiatives. We're getting back into the agricultural land satellite positioning business with the acquisition of OmniSTAR, something that we sold many years ago. We got that back into our portfolio for a very small amount, and we're progressing to make use of the existing clients there.

Then the last slide that I will present for now is the overall financial highlights. I can't really call them highlights. I would say, financial lowlights because 2025 was very disappointing, and we don't have to debate about that. I think we're all very aware of that. It was a perfect storm with too high investment that we couldn't really stop during the course of the year anymore, and obviously, no returns and a big drop in top line.

We generated EUR 1.848 million (sic) [ EUR 1,848 million ] revenues, which is, yes, significantly lower than 2024, EUR 427 million lower. And I already said that was EUR 380 million on the offshore wind side. EUR 170 million in Americas, EUR 180 million in Europe-Africa, and the rest in the rest of the world, Asia Pacific. EBIT decline was primarily driven by lower revenue, partly mitigated by cost measures. Barbara will say a few more things about the cost measures because this is obviously important. And it resulted in an EBITDA margin of 14.5%.

Fugro's backlog, 12-month backlog -- and we will get some more details on that as well from Barbara -- EUR 1.4 billion, down 5.7%, and that's on a currency comparable basis, and that's also reflecting the big drop in offshore wind, which was still high at the end of 2024, and you see then still this drop. Q4 still has a significant drop in offshore wind, and you will see those details a little bit more with Barbara there. But oil and gas and infrastructure is growing this year.

With that, I would like to hand over to Barbara for some more details on the finances.

Thank you, Mark, and welcome, everyone, also online. Good morning, good evening, good afternoon. Let me start with Q4 before I move into the full year. Just a couple of comments here. As mentioned before, our business has a seasonal pattern, and this is very obvious now. Q2 and Q3 are the high season and Q4 and Q1 are the winter season. And we mentioned this before that this seasonal pattern has become more pronounced as the weight of oil and gas in our mix has increased again. And as a result, group revenue declined by 20.5% in Q4 versus last year. And although cost savings initiatives helped to cushion, it did not fully offset the impact of the lower revenue. And this resulted in an EBIT margin of the year -- for the year of 1.2%. We generated EUR 22 million cash flow from operations and a positive free cash flow for the last quarter of EUR 24 million.

Then let's look at Marine, and this is the performance for the full year of 2025. And in Marine, the revenue declined by 15.4%. In 3 out of 4 regions, we were impacted by the reset of the global offshore wind market. Through targeted redeployment of assets and personnel, we partly mitigated this revenue decline by securing and executing more projects in the oil and gas energy markets, the traditional energy markets. However, this could not fully offset the shortfall, as mentioned by Mark, the EUR 380 million in offshore wind, which also, by the way, was partially on Land.

In addition, the revenues were also impacted by 2 elements. One is the limited geotechnical vessel availability in the Europe-Africa region in the first half of the year due to a high number of vessel conversions. And two, we have seen scope reductions and postponements during the latter part of the year from our customers and an intensified competition in the geophysical market. Overall, the vessel utilization in '25 was 66% compared to 70% in 2024.

Now, let's look at the performance of Land. The Land revenue declined by 18%, which was primarily driven by 2 factors: one, less nearshore projects in Europe, Africa and Asia Pacific, which was, again, largely offshore wind related, where in '24, we did a lot of work for landing zones and renewable customers; and secondly, we have witnessed subdued market conditions in some of our key countries, notably Saudi Arabia and Hong Kong. And this resulted in a disappointing negative EBIT of EUR 12 million in 2025.

Now, if we look at the backlog, the backlog stands at the end of the year at EUR 1.396 million (sic) [ EUR 1,396 million ], which is down 5.7% on a currency comparable basis versus year-end '24, where we saw an FX impact of EUR 91 million. Just like previous quarters, this largely reflects the step-down in offshore wind. And I want to highlight that this decline was largely mitigated by the successful replenishment of the backlog with oil and gas and infrastructure projects, and you can clearly see that on this slide, and that's why we've included this slide.

The currency comparable growth of oil and gas-related backlog was 5%. And for infrastructure projects, it amounted to 15%. And this is driven by nearshore projects, nuclear in Europe-Africa, as an example, and some SMR projects, as mentioned by Mark also, in the U.S. And this underscores our ability to recalibrate our business with our sector-agnostic model through our diversified end market business model, serving clients across different end markets and geographies.

Now let's look at the cost reduction program. Our comprehensive cost reduction measures program of EUR 100 million to EUR 120 million addresses both fixed and variable costs to align with the current market realities with approximately 2/3 from the workforce reduction and 1/3 from operational efficiencies. At midyear, we started, and we started even earlier with cost measures that at midyear, we communicated EUR 80 million to EUR 100 million of cost measures when it became apparent how our markets had changed. In September, we announced further measures of EUR 100 million to EUR 120 million in response to the further deteriorated market conditions. And this includes increasing also the planned workforce reduction from 750 to 1,050 FTEs, a difficult but necessary step. We're now nearing the completion of the total savings of EUR 120 million. And of this total, the majority has been implemented per the end of 2025, and the remaining part will be implemented in Q1 2026. And this has taken a bit longer than originally planned due to the lengthy consultation process in the U.K. in particular. We continuously monitor top line development, and we will continue to implement measures to safeguard profitability and cash flow, while at the same time, maintaining a strong foundation for future growth.

Now, let's look at the free cash flow. After substantially negative free cash flow in the first half of EUR 186 million, just like in Q3, we generated positive free cash flow in Q4, positive cash from operations, and partly due to an unwind of working capital of EUR 34 million. And we were able to balance the CapEx with cash from operations. On balance, free cash flow in the fourth quarter amounted to EUR 24 million, resulting in a negative cash flow of EUR 137 million for the full year. And there, of course, working capital as a timing component plays a role in that.

And the increased working capital position is driven by 2 factors. First, several one-off payments at -- payables at year-end '24 temporarily elevated the payable balance, resulting in an unusually low balance and working capital position at that time of 7.6% of 12 months revenue. And this, I already mentioned last year, you may recall, at the publication of last year's results that this was a very low working capital position. Second, in 2025, we see a typical unwind at year-end of receivables. And this year, that was constrained by timing effects, most notably non-overdue receivables on a major APAC project and delays linked mostly to the U.S. government shutdown, in combination with, as Mark already mentioned, clients holding their hands on the wallet also in delaying payments to us. These receivables are expected to be collected in the first quarter of '26. And we already have seen this happening. I also want to stress that the quality of the receivables has not declined.

Then we move to CapEx. And I highlighted phasing the transformation. CapEx totaled EUR 248 million last year, in line with guidance, and it was below the EUR 265 million, as you can see on the slide, in 2024. For 2025, transformation and expansion CapEx includes the final phase of the geotechnical fleet expansion and related vessel conversions, in particular, the acquisition and conversion of the Zephyr -- Fugro Zephyr vessel and the delivery and the related special surveys of Fugro Zenith and the Fugro Revelation. Maintenance CapEx included the Fugro Voyager hybrid conversion, which we completed, plus the special survey and our new headquarters.

For 2026, looking forward, we are guiding for CapEx of EUR 150 million to EUR 165 million. We are adapting to changing market conditions by phasing the pace of our transformation program. And as a result, we're scaling back capital expenditure to around EUR 100 million maintenance and sustaining CapEx and selective discretionary CapEx to transform capability and optimize business performance. Now that the geotechnical fleet expansion is complete, we are shifting focus towards enhancing our uncrewed and remote operational capabilities, positioning us to seize the opportunities, amongst others, within the defense sector and realize additional operational efficiencies. Of course, all CapEx is subject to strict capital return guidelines.

In 2021, we announced our ambition to achieve net zero emissions from Scope 1 and 2 operations by 2035. Sustainability remains a core part of our purpose. Together, we create a safe and livable world. It is part of our identity, and the goal is enhancing our positive impact in renewable energy with climate change adaptation and ocean health services. And as we continue to execute on our decarbonization road map, we have now decided to concentrate entirely on our SBTi targets.

In recent years, technological advancements in sustainable solutions have slowed. Alternative fuels, while promising, remain prohibitively expensive and are not yet available for large-scale development. And client demand for sustainable solutions has not reached the levels that we originally had anticipated with limited willingness to absorb the cost. We continue to work closely with our clients and industry partners to forge partnerships and to create a safe and livable world. However, in light of these developments, we have elected to forego our net 2035 net zero ambition in favor of concentrating on the SBTi. And this reflects a more realistic and resilient pathway aligned with market condition, technological and financial developments.

Now, let's look at the net results, some highlights of the P&L. Specific items: in 2024, restructuring costs in relation to the cost savings program amounted to EUR 21 million. In addition, we reported: a EUR 51 million goodwill impairment related to the full carrying amount of the goodwill for the Middle East and India region due to a more cautious outlook for the midterm; EUR 25 million impairment loss on Fugro's headquarters, following the sale and leaseback in the second half year; EUR 11 million various asset impairments in the geophysical fleet; and EUR 6 million other one-off write-downs.

Then if we look at the finance expenses, the reduction was mainly the result of lower interest rates, resulting from the group's bank debt refinancing at better conditions at the end of December 2024. And this was partly offset by the increased interest expenses from the revolving credit facility drawdown. And then, lastly, the income tax expense gain of EUR 34 million comprises a current tax expense of EUR 14 million and a deferred income tax gain of EUR 48 million. And the deferred income tax gain relates to our recognition and utilization of previously unrecognized tax losses, mainly in Australia and Brazil.

Net debt increased to EUR 382 million compared to the EUR 96 million in December '24. And this was primarily as a result of the lower EBITDA, in combination with dividends paid in respect of 2024 results of EUR 84 million, and additions to leases. Cash-outs were mostly funded through cash on balance with limited additions to gross debt of EUR 60 million.

The balance sheet remains robust with a leverage of 1.4x, and there is no significant maturities until 2029 other than the 1-year term loan of EUR 40 million, which we put in place to add flexibility and as a liquidity backup, as communicated before. We arranged this loan as a prudent measure.

Then moving on to capital allocation. And as part of our capital allocation framework and our commitment to pay annual dividends, we will propose a dividend of EUR 0.15 per share, representing a payout ratio of 28% of net result, excluding impairments, as these are largely one-off, noncash and nonrecurring in nature. And although we do not expect to be able to start a new program -- a new share buyback program soon, considering our net leverage, we have now included also share buybacks in our overall capital allocation framework. We have done so to provide an indication of future priorities for excess cash forward, and we will conduct an annual balance sheet review to evaluate whether excess cash is available to share buybacks.

And now, I want to hand back to Mark for the outlook.

Thank you, Barbara. Okay. So the last slide before we open up for questions, the outlook, summarizing basically 2026. I think it's all aimed at, as I said, solid performance and good cash flows. So that's what we aim for. That's also how we modified basically everything we do around cost, but also our strategic direction. We have spoken about the CapEx reduction, which is very important there as well. And basically, we're finalizing those cost measures that we have implemented, operational efficiencies that we introduced with our strategic direction. And then, basically, yes, we can only say that mid to longer term, and hopefully, the wind market will progress faster than, yes, everybody saw in 2025, recover that, realign that market, then we can also benefit from that part. In the meantime, we see backlogs growing, specifically on infrastructure and oil and gas, with multiple opportunities in other markets, as I discussed before, nuclear, critical minerals, security, surveillance, water market that we're also exploring to further expand markets that we serve with our expertise.

With that, I would like to close this part of the presentation. I just want to mention one more thing, which is to do with the other press release that we issued this morning, which you all have seen. This is about, yes, Barbara Geelen, our CFO, leaving the company in due time, not yet. And I think this is also very important to say, this is absolutely no goodbye because you will see Barbara also presenting the quarter 1 results. You will see her on roadshows, some of you at least. So she will still be there, and we'll be working on the best results that we can get in the upcoming period. And this is an agreement that she made together with the Supervisory Board, and she will be there officially in this role until the end of April, and then will serve us even up till August.

What I would like to say is, absolutely, already, despite the fact that there's no departure, emphasize what Barbara has done over the last couple of years, 5 years that she was with us to really professionalize the company also on the financial side and to actually lead the company in the right direction for all the teams that we have around the world. So also already thank you, Barbara, for that.

With that, I would like to say thanks. With that, I would like to open up for questions. And I would like to also ask Barbara to join me again.

And we have a microphone in the room, so you maybe -- you raise your hand, and then, somebody...

Luuk Van Beek, Degroof Petercam. First of all, a question about your CapEx. We see quite a drastic shift in your capacity by segment. And I understand that your assets are market agnostic, but I can imagine that if you move, say, from a wind project to an oil and gas project, the way you use your assets are slightly different and you may need some additional equipment or other things. So do you expect any significant CapEx for that? And is that in your budget?

My second question is on the impairment on the Middle East and India. You see lower demand in the midterm. Does that also have an impact on your capacity planning? And do you have any capacity or assets basically in that region that you want to shift to other regions or have to sell?

And finally, on the headcount reduction, can you give a rough indication of how much of those people are worked in overhead versus project functions?

Okay. I will take the first 2, and I'll hand over to Barbara for the last question around the cost savings specifically there. And I don't know if we have all the details there, but we'll get to that. First, on the CapEx and the budget shift, and if we move assets to different environment, then normally, we do not have to do a lot to these assets. In actual fact, we have many examples where we have assets sailing, not even touching the port, moving from one project to the other, shifting between markets. So this is specifically the case if you talk about assets that, for instance, for the geophysical area where we do not touch basically the seabed, then we can actually move on and do these things.

Where you see differences is, if you talk about water depth. So if you go from a shallow water to a deepwater project, you sometimes, yes, need to make modifications. Not all the vessels that we have on the geotechnical side can work in very deepwater, 1,500 meters or 2,000 meters water depth. So this is a difference. If we want to see and we see more opportunities with deepwater coming up, then there might be some assets where we need to do some modifications. At the moment, we have multiple assets that can serve deepwater, but we carefully have to place them in the right areas, and this is also what we're looking at. So these are the modifications you could think about. But in general, the assets are basically deployable immediately to other markets. So this is good to mention.

On the Middle East, the impairment, what we can say is, there -- basically, there are still quite some opportunities in that region. However, as we have seen over the last couple of years, it takes time for these opportunities to materialize. We have made quite some changes also to the region with new management there that also have taken a more careful view on the outlook related to basically what has happened over the last couple of years. So we are basically cleaning up and revitalizing that region for ourselves. And then, you asked, if there are assets moving away from that region? In actual fact, we will bring one of the geotechnical assets to the region from the Americas over to -- for shallow water geotechnics. The Resilience will move during the course of the year towards the Middle East-India, and we'll let go off a leased asset, the [indiscernible] that we have there. Very likely that will happen. It depends a little bit on timing, how that exactly will happen this year.

Then on the personnel side, Barbara, do you have those details on how much?

Well, I would say that by far, the majority has been in overheads, not only at corporate, but also in the regions. We have -- and maybe the question behind the question, what if the market comes back, do you have sufficient staff? The answer is, yes. Of course, there have been -- difficult choices been made, but we believe that the company at this point is, despite the reduced headcount, very well positioned to deal with the upswing, if it may come back, even though I have to caution that, that will be more towards the high season, typically Q2 and Q3 than in Q1.

Yes. Maybe 2 things to add there. Thank you, Barbara, not being specific about the numbers, but I'm 100% aligned there. And the vacancies that you probably still see if you go to the Fugro website, because some of you are very clever, and then look on the website, hey, what kind of vacancies do they have? You still see vacancies, and those are the vacancies of people that we don't have and that we can't redeploy in those areas and primarily are operational people that are required in very specific areas, where we still see the need for these things. So that is, I think, good to add.

[ Christian Brunke ], Kepler Cheuvreux. Two questions on the outlook. First of all, you're indicating early signs of recovery in the offshore wind market, but it will take time to materialize. Can you provide a little bit more feeling on that? When you speak about time to materialize, is this something for 2027 and beyond? Or can we already expect some kind of pickup later this year? That's the first question.

And then, on the margins, the outlook states a commitment to taking measures to improve margins. How should we see this commitment in relationship to the medium-term objectives for the margins?

Thank you, Christian. So I will take the first question there. If we talk about the positive signs that we currently see, we're careful, and you see the wording is very careful, and maybe also not sustained because I think you all were there when we saw multiple times in -- Fugro in the times that we presented our quarterly results, we had to modify downwards. So we're very careful now in giving too much guidance that we cannot deliver on, yes. So that is one reason. So I say that upfront.

Then secondly, I want to make another point, and that is also very important. We can all become very enthusiastic about what is on the board and the projects that we present and also announce to the market, which I think are great signs of early recovery of this market. However, first and foremost, it doesn't say anything about the total size and the total growth. So that's one thing. And secondly, we have seasons in Fugro. So I want to also caution everyone for the fact that the first quarter, as always, is a winter season and needs a start-up time as well, despite the fact that we have projects that actually kicked off in Germany and so on. And then, we need to be careful that not people say, oh, there's a great project in Germany, and therefore, it will be full force ahead. Yes, but we need work also to deliver some results as well. So that's what I would like to caution you on.

Having said that, there are some signs, and AR7 is clear, where we say, hey, this is great because this is already happening this year. There's even work that is probably related to the next license round in the U.K., AR8 already on the board, and we're probably getting involved in that for this year. Again, signs that things are changing. However, if you look at Hamburg, and this is fantastic, this is, yes, 2031 onwards. So what I said before, when I was in Brussels a couple of weeks ago, we're emphasizing that it's important that the supply base needs work now and next year and the year thereafter. And you will hear probably from peers and certainly also construction companies being very busy this year or last year, but will probably run out of work in '28 if there are no new projects on the board. And they already see some gaps in their planning as well, '28, '29. And that's logical because it takes time before these licenses are awarded, before Fugro has done the survey work, and then before they can actually start building.

So I think absolutely positive, carefully optimistic. However, be careful and don't be overenthusiastic there because it takes time, especially what you see there. And as we said, on the U.S. side, we don't expect anything in the short term quite logically. And then, if you look at Asia Pacific, we are also carefully optimistic there, but it has really normally been the case that Asia Pacific is lagging behind a little bit the tendency that Europe actually follows. So there's always a bit of a wave that we see. When Europe picks up, it takes 1 or 2 more years before also Asia follows. And that's because the same operators are involved, and they can't operate everywhere in the same speed. So this is what I can say, Christian.

And then, for the second question on margin, Barbara?

Yes. Thank you. So we have not indeed -- we're not guiding for any margin level. I think that has been very well explained by Mark, why we're not doing that, especially not at this point in time in the year. What we are saying we're better positioned, and we focus on cash generation. What does that mean then for the midterm targets? It's too early to say something about that. So for the time being, the midterm targets are the midterm targets, I would say.

Quirijn Mulder from ING. A couple of questions. And maybe Celine Gerson is going to hate me, but I will start about the U.S. again. When do you expect, let me say, that U.S. is becoming profitable because the results are despite the fact that you do a lot of cost savings and they were early on, and we haven't seen any results yet.

The other question is about the market. So you said at the beginning of the year, last year, that's what your presentation started, Mark. You said we had a growth of the order book by 4%. So we expected growth in 2025. If I reflect that to today, then we have a minus 6% order book. So is the conclusion to make easy to say we expect lower revenues in 2026. Is that the correct conclusion at this moment? And if I look at your text, you speak about margin, not about revenue. So it is quite logical. But then I would like to get an idea about the expected utilization of the vessels because that is also important in my view.

Perfect. Okay. So first and foremost, maybe on the Americas and on -- let me put it like this, every region, every service line, every business line in Fugro needs to make money next year, this year. So it cannot be any doubt about that. This is what we're driving. And there could also be always something that changes or there's radical change or market conditions, but everybody can make money, and that's what we're steering for. There are no excuses whatsoever in that aspect. And that's something I want to be extremely clear on.

So is the Americas going to make money this year? Absolutely, that is the plan, that is in the budget, and that's also what they are tasked for to do so. So very clear. And if that's not happening in any area, there will be additional cost saving, additional measures, and we'll step in very forcely. So that's one thing.

Secondly, if you talk about the backlog, and this is absolutely true, backlog a year ago was growing by 4%. We have communicated during the course of the year that certain things were not happening anymore. So basically, even things that were in the backlog were taken off, a number of things, not a lot and other things were postponed and stayed in the backlog for a very long time. And this is a problem, and that's also what we communicated on during the course of the year.

Now what you see in this year, you see things firming up a lot more and also be more secure in when it is happening. And that is also for 2 reasons. One, we spoke about wind already, and these projects are mobilizing and happening, as we say. And secondly, there's also a willingness to get them going, which I made very clear on what is happening in Europe. And secondly, if you talk about oil and gas, as I also communicated about, there was a clear wish to postpone things and descope things because they wanted to keep the cash in the pocket.

Now as we have started 2026, some of these projects also go ahead now and payments are -- and money is flowing again because they obviously also want to progress. And there's a little bit of a battle out there who gets the oil or gas out first and who will get some money by selling that. So that is also what you see in the world.

Then the last question was about.

Utilization of vessels.

Utilization of vessels. Now, I don't know exact number of the utilization in our budget, but obviously, the utilization has been low in 2025, quite clearly. We're continuously monitoring this. We're obviously also rightsizing the fleet always to what is required. So we're not keeping a fleet size because we have certain things. If we have a vessel that doesn't have work in our planning in the longer term or midterm, we're going to take action. That vessel either needs to be sold, needs to be scrapped or needs to be changed in the portfolio. Now, that still means that you might have a vessel on the wrong side of the world. We have seen that with one of the assets that we had in Asia Pacific. For a long time, the equator didn't work. And then it affects actually the overall utilization of Fugro quite a bit. And this is a problem.

Secondly, we had, as you know, also quite a few modifications of vessels in 2025. There's still a big one ongoing with the Fugro Scout, which is still to be completed, not an easy one. It's also quite a major overhaul. But then we have more or less completed, as we said before, in [indiscernible] to -- yes, our expansion and modification of all the geotech vessels that we wanted to do. Does that mean there is nothing else to do? No, of course, there will be modification, maybe we turn things into deepwater or smaller modifications, but not new acquisitions of boats or new installations in that sense as we have seen over the last 2 to 3 years. I hope that answers your questions, Quirijn.

Kristof Samoy, KBC Securities. First question, just on the timing of the restructuring. You said during -- or in the press release and now in the presentation, you said the majority of the layoffs have occurred. I mean, the majority is pretty vague. Can you put a percentage on this so that we can get a feel how much extra savings are still to come?

And then regarding the land performance, I understand it's also impacted by the drop in nearshore activities. But if you look at Clarksons data, for instance, you see that the expected FIDs in LNG terminals worldwide are really going up aggressively. You have been involved in these type of activities in the past. Is this not picking up for you as we speak right now? Are you missing out on opportunities? Did you lose a lot of tenders? That would be my first question.

You want to take the first?

Yes. I'll answer the cost measure program. So what I can say is that we have completed EUR 90 million of the program as at the end of 2025, and we still have around EUR 30 million to go. Of that EUR 30 million, largely the majority has been derisked. As I mentioned in my presentation, this has to do with the long consultation program that is happening in the U.K. And therefore, cost and personnel reduction will still be falling in Q1. We expect even maybe the financial impact, some residual impact in Q2, but the majority is completed. And this is the EUR 90 million is on an annualized basis. So that's not the P&L impact. The P&L impact, and you will also see that when you look at the P&L is around EUR 45 million, and that is divided by a personnel reduction and operational efficiencies. And for that, we've taken a restructuring cost of EUR 21 million.

We talk about the nearshore projects. I can confirm that we expect quite a change between '25 and '26 on nearshore projects. I already spoke about. It's not only LNG or nearshore LNG developments. There are absolutely newer projects on the board again in the U.S., in the Americas, I should say, also South America, and we're bidding for those. So tender activity has picked up since the end of last year. So a number of projects on the board there, not yet secured, but it's ongoing.

But it's also projects like nearshore wind development, as I spoke about in Brazil, which is a significant project. We'll start doing that in 2026. And then we have multiple nearshore projects actually in the Europe region that is also awarded and starting in 2026, some of them in the Baltic and some of it in the North Sea. So we see indeed higher activity on multiple markets, so to say, but all nearshore and the nearshore activities is very closely related to our land business. So we continue to see in '26 a step-up in nearshore.

Okay. And then maybe one other question on the vessel capacity. You spoke about the relocation of a vessel from Europe to Brazil. Did that occur in the fourth quarter? Or was this the first quarter of this year? And secondly, you said, okay, if we're not keeping capacity just for the sake of keeping it, are there still possibilities to dry stack vessels? Or are you already at the end game there?

Yes. So first vessel, the Dweller that moved from Europe to Brazil, that was end of last year. So that is, I think, November time that was moving over. So that is basically supporting now the project in Brazil or is about to be mobilized there to work on Petrobras work. And then I spoke about the vessel that will move from the Americas to the Middle East, which is a geotechnical platform, nearshore or shallow water geotechnical boat, which is not required at the moment because there's no wind development so much in the Americas. So the project or the vessel will do 1 or 2 projects before it will leave the Americas. One of the projects is in the Argentina region. It was also working before in Argentina. So that will be done, and then we will move over to the Middle East.

We still have some assets that we can retire, and we're planning to retire over time. So there's a plan, for instance, on one of the vessels in the Americas that has been there for a long time and is quite old. We spoke about retiring that vessel before. And we will decide exactly when there is no work anymore and what the right time is to do that. So this is normally what we do. So we retire maybe some older vessels and then move the newer vessels into the areas where we still need them. So this is a good option.

Yes, dry stacking or cold stacking vessels is basically your last resort, I would say. And it's normally not very ideal because a cold stack means you have a lot of cost again to actually mobilize the vessel. A warm stack is hardly reducing any cost, maybe 10%, 15%. And then you even have, I don't know, hot stacking, warm stacking, cold stacking, it doesn't really matter. It all costs you money. And you should prevent doing it, you should just use this vessel or take it out. If you don't have it, they work anymore, get rid of it. A vessel is normally not something that you should be very much in love with, although you need them, but it is normally something that costs money if it doesn't work. So we need to be very careful there.

Jeremy Kincaid from Van Lanschot Kempen. Three questions. You've given us a bit of an update about the potential revenue outlook for '26, but I was just hoping if you could let us know what the type of revenue would be. Obviously, I'm looking at the projects you're working on this year, there's Dogger Bank, North Sea, the fiber optic cable as well that all looks quite geotechnical heavy. So just would it be fair to assume there's more geotechnical work in 2026 compared to 2025?

And then my second question is on the sale and leaseback and impairment of the property. Obviously, the impairment is EUR 25 million, and I read somewhere that it was sold for around EUR 32 million. So does that mean that you spent nearly EUR 60 million building it and then selling it for EUR 32 million? Or is there some other accounting trickery in there?

And then finally, you're adding the share buyback to your capital allocation framework or at least considering it. Could you let us know what time of year you conduct the balance sheet review for that share buyback decision?

Perfect. Okay. So I'll take the geotech question or the revenue. You said nicely, you have given some guidance on revenue. Well, let me be clear. I did not give any guidance today on revenue development. So for everybody, please take note of that. No guidance on revenue. I have specifically spoken about where we see work and where we're doing work. And those are signals. There are early signs that certain things are picking up in some areas and so on. It doesn't say anything about the overall revenue. Sorry. This is just a precaution also because we do not want to be in the same situation as we have before. And I hope you appreciate that. So this is very important.

Now, we are not building additional geotech capacity. Some of the capacity wasn't working last year. That's true. We hope to deploy our capacity in a proper manner. So in that sense, in multiple markets, we do see opportunities and probably some more deepwater work over time for sure. That is also what we do see.

Now, do we see more geophysical work? I think there's -- and we spoke about that before, more competition in that area, also more fiercer competition, pricing is under pressure. So also reviewing the way we actually deploy our assets there, how we do it, how much we need and what kind of systems we're going to use. We're going to launch USVs, you're probably following some of the announcements we're also putting online.

We're bringing the first USV for geophysical operations on stream this year or during the first half of this year. And then there are 3 or 4 others to follow on geophysics, which is quite exciting. And in that sense, something that, yes, we believe will make a difference also on the geophysical side. But that will take a little bit of time. So we really need to fix geophysics because it was a loss-making business in '25. And we're really on top of that with multiple actions there. So that's how we look at the revenue potential then without saying how much that is and how much growth or decline that could be. So this is my apology, Jeremy, that just to make it very sharp.

The other 2 questions maybe for Barbara.

Yes. So on the new headquarters, it is -- there's a couple of things to mention. One is the fact that we moved indeed from Leidschendam to Nootdorp, where we already have the tech center. It concerns location from a property perspective, property valuation location perspective, that has an impact on the sale and leaseback amount. And we have chosen to build a headquarters next to the tech center with high-quality builds. We also got a BREEAM Outstanding, which makes it very sustainable the new headquarters for and truly future-proof. That has meant that indeed, it's not EUR 60 million, but it's EUR 56 million. We have built a high-quality headquarters. We will still be receiving funds from the old previous building. And this is the current situation that we have, and this is how we came to also that location choice.

Then on the share buyback, you can expect us to review that. We haven't communicated the exact timing, but you can expect us to do that at the end of the high season, so to speak, when we have clarity on the liquidity position of the company and the leverage and how that has developed through the year. On timing of the actual share buy program, obviously, we'll keep that fully flexible and at the company's discretion. But that is basically the thought process that we will follow, and we will not communicate or put on paper exact timings in this regard.

[ Derek ], ING. Some follow-up questions. First one on the write-down on the receivables, EUR 6 million. Is that a concentration of a bigger ticket or a combination of some smaller items? That's my first question.

Second, on the remark you made on geophysical and the intensified competition. We know that it's been a more challenging market already for a while. So has that situation deteriorated over, let's say, second half '26 because you make this specific remark? And in this respect, what is your view on the order -- quality of the backlog in geophysical specifically now versus, let's say, a year ago at this point in time?

And then third question, more a general one on the offshore wind ambitions as the supply chain has been involved in this process on the North Sea. We see a 15 gigawatt ambition as from 2031 for a number of years, for a decade even. Yes, if we look back, and I don't want to be the elephant in the room, but the installed gigawatts over the past decade or so have been around 3 in the North Sea region. So -- and also knowing the ambitions in other parts of the world, how do you see that materializing? It looks very, very bullish, of course, on the long term, but how realistic are those ambitions? As said, I don't want to be the elephant in the room, but any help here could be appreciated.

Yes. On the receivable write-down, this is a couple of specific projects that I'm not going to disclose further, but it's spread and it's in different locations. So not on one particular project.

And 2 questions on -- first is geophysical. First and foremost, I think we have spoken about it multiple times that geophysical business is a more commoditized business with more competition and pricing under pressure. Over the last period of time, we see actually that we are gaining traction to some extent again, with winning work -- more work again in the geophysical area. And then we need to be a little bit careful because geophysical is not geophysical as it is. It's not one thing.

So if you do geophysical work for oil and gas or renewables is very different. You need also different equipment to some extent, mobilize some smaller equipment, not modifications to vessels, so to say. But it depends sometimes you need more seismic involvement. So a high-resolution seismic for the overburdened top layers, so to say, of the seabed or a more standard geophysical work or more deepwater where you also get AUVs involved, the friendly torpedoes that you can preprogram. So those kind of things are also geophysical or cable route surveys.

In some areas, we're actually operating quite a healthy business. In other areas, it's more challenging. And that has to do with, I think, yes, obviously, a larger offering. And because the offshore wind market came down so much in '25, you see obviously a deterioration in that market because this market was or geophysical companies and also the competition could really flourish with this market growing so rapidly with large fields that had to be surveyed. Now these fields are significantly smaller in '25 and in some areas, nonexistent anymore, for instance, the U.S. And then you see obviously that everybody is fighting harder for what is remaining. So this is one of the key issues.

However, having said that, we're making good steps. We're having a clear view on how to progress with this, and we're picking up additional work now. So more promising outlook for '26 than '25, and this business needs to start to make money again. As I said before, every business in Fugro should make money. And I hope that also everybody in the organization is listening because this is obviously a clear message that we have.

If we talk about offshore wind, you're absolutely right, 3 to 5 gigawatts per year over the last couple of years probably being built on an annual basis. When we had this North Sea Summit in Ostend, I was present as well, lots of involvement from companies and supply base and governments. And there were some really good things decided there, but it never materialized in actual fact because people had to adjust, the ambitious goals that the countries had.

Having said that, I think over the last couple of years, I think everybody realizes that this is also an unsustainable situation where we're fully dependent on LNG of the U.S. or Qatar or other places. So I think there is a very clear statement made also at Davos that Europe needs to become independent on the energy side. And this is a drive that helps in the mid- to longer term, Derek, to be clear, to have this business further growing. That also means that also Europe will start to look at nuclear and other options, everything that can bring energy and people are now not talking about energy transition, they're talking about energy addition because we all start using the copilots and the ChatGPTs and the clouds of this world, and that requires a lot of energy and a lot of data centers.

So there is a lot more required. So there's quite a different view on what is the energy demand in the future. And this is definitely in the short term or midterm for Europe, important that we become more independent. So this is a drive. Now, can the supply base deliver basically what you just said? I think a lot of suppliers that I've spoken to say, yes, we can handle this or we can handle a lot more as long as we know that it's every year consistently roughly the same. The biggest problem that we have seen over the last decade, I would say, is the fluctuation. One year, we build 1 gigawatt and the next year, it's 5 gigawatts. This is a real big problem. And that's a problem for Fugro being in the forefront of our peers doing same surveys or geotech work and also for, yes, the builders, the construction companies and even for the operators, it's also difficult.

So if there's more certainty on license rounds, on contract for difference, the stability and the longer-term outlook and also countries coordinating, "Hey, where are we building? What in what year? And this is still to be decided, I would say, but there is already a high-level idea about it. This is really important. And then I think we can get close to these things. But having said that, I think the politicians are always a little bit too ambitious.

Thijs Berkelder, ABN AMRO-ODDO BHF. Three questions. First one on you not coming back with, let's say, a repeat statement, which we've seen mid-COVID, you also cut out 1,000 staff and clearly said we ASAP want to be back at EBIT margins between 8% and 12%, back to a ROCE of around 10% or above 10%, et cetera, et cetera. That crisis, in my view, was way bigger than this 1-year dip in offshore wind. So why -- who has stopped you from again publishing that target? Is that related to the negotiations with, for instance, U.K. unions that it only will increase your redundancy amount? Or is it the Supervisory Board preventing you from publishing that or maybe that you want to have that in the cards for your new CFO?

Second question is, in the press release, you guide for an improvement in margin. What margin are we talking about and compared to what your EBIT margin in second half '25 was more than 7%. And in '26, you will benefit from the cost savings. So are we expecting a margin improvement compared to second half '25? Or are we also including the horrible H1 we've seen in '25, which, in my view, is not representative of Fugro as a whole? And/or should we also read a rise in the EBITDA margin? Is it only EBIT margin or EBITDA margin included as well?

And please, I'd like to have some difference in margins on marine versus land. Land margins have been very weak. So for sure, you want to have them back into positive territory, I would say. Does that mean that what are -- are you also expecting improvements in margins in marine?

Third line of question is looking at your profit pool. Europe backlog is stable. So on first side, solid and sound, you act on cost reduction. So your profit pool in '26 then should deliver clearly higher results than in '25. Why wouldn't they?

Okay. So nice -- thank you for the 3 questions. We'll step through them, Thijs. So first and foremost, going back to the COVID days, yes, we were maybe in a different way, guiding very specifically on specific targets for EBIT and ROCE and so on. I want to be clear, we want to get back as soon as we can, indeed, also to a margin between those numbers, 8% to 12% and even back to what we have guided for in the midterm as soon as possible. And that's yes, for you to fill in when is as soon as possible. So we have not committed to a certain time frame there. But it's crystal clear that Fugro obviously will have to be in those margins, and we have a midterm guidance for 10% to 15%. You know that and -- or 11% to 15%, sorry, my mistake.

So this is very clear that we need to basically get back on track there. But when that exactly is, we have not committed, and that is indeed on purpose. Nobody is specifically blocking us there. There's no particular person in the company doing that other than Barbara and myself taking a careful decision in what is wise to give guidance-wise. So this is what we have decided there.

And then we move over to the improvement on the EBIT margin.

Yes. I concur what Mark said. I mean, there is not a lot to add there. We go there as soon as possibly. I've always maintained, and I will leave this for the next CFO, Thijs, perhaps. But what I've said is that the margins in land are lower. It's less asset intensive, but it should be around 8% and the marine margin should be north of 11% and there would be no reason of the prospects of Fugro that in a normal market, we can put the midterm targets on the board.

But unfortunately, as we said, we have been navigating a very challenging year. And a downturn in the market is not reversed in 1 or 2 quarters. So this is what we have to deal with, and this is where we are.

In those days, Thijs, you will recall, we said always for land, 6% to 9%, 10% to 13% for marine. But that was guiding above 10% ROCE. And now we're at 15% ROCE. So the margin needs to be a little bit higher for 15% ROCE. So -- and that's what Barbara said, guided for that in that sense. As soon as possible, and we will not commit to any date for that as soon as possible.

Europe, yes, nice question. So that was a hypothetical question or you created a picture of what is happening in the backlog in Europe stabilizing. It's the profit pool and with the cost savings. Yes, I can follow your reasoning. That's what I can say.

Quirijn Mulder from ING again. I have 3 additional questions. My first question is what you say about the wind offshore in Asia Pacific, and you treat it as one area, but I think there are different markets. So maybe you can give more some dynamics on the different markets from Japan to Australia. That will be nice.

The second question is on the headquarters. Now I'm not an adviser of Fugro, but let me say, even real estate guys come to me and say, "Hey, guys, this -- the value of your asset is only EUR 35 million against your EUR 60 million and my balance sheet is fine, then I never would consider to do a sale and leaseback. So maybe you can elaborate on that because then you can easily keep it at where it is and to make nice depreciations on it.

And then the third question is about your areas. So you have 4 areas where you do business. And then I see a massive impairment in Middle East. But in my view, if you look what's happened in the last couple of years that we are a little bit refraining from the developments with regard to sustainability and renewables, et cetera. And that means, of course, there will be more investments somewhere in the world with regard to oil and gas, especially in gas. And if I look at the measures and let me say, all the announcements from the Middle East, from ADNOC, from Saudi Aramco and other names, then I would never do something like an impairment of this size. And I can imagine that maybe a land maybe for the line is somewhat impairment justified, but not this amount in my view. But maybe you can discuss that.

Sure. First, wind offshore, Quirijn, a little bit more color in Asia. So we see a similar pattern as in Europe, where Asia also slowly dried up with new projects in Asia and Japan really being very slow, slowing down in -- they still have an ambition, but projects are postponed. Some projects where even the first projects that you might recall that Mitsubishi took were also given back, so to say. So you see also stagnation there. And we should not forget that this was a big ticket in '25 for the industry where these projects were given back, but also what happened with Orsted in the midst of 2025 that really put a bit of a blanket or a down view, negative view on wind as a whole in Europe on top of what was already happening at the time in the U.S. with the new administration there.

So you see a lot of things happening, a perfect storm in that sense also for Fugro, still investing quite a high number of dollars, so to say, in new equipment, which we couldn't stop during the course of the year because those programs had to be finished, while actually very much the revenues, EUR 427 million came down, yes. So that's obviously very painful.

If you talk about other countries there, Australia still is committed, but I have said before that I also have to see how much of that will eventually come to play, but we do have work and have done work there, and there's new licenses also to be executed on. But there's not any building yet executed or a lot going on there. And some of the ground conditions there in some areas are very, very complex. So that will be an expensive exercise to push through.

Then you have Taiwan and Korea, also that we see some slowdown, albeit for sure, also continuing. But yes, overall, that market is also affected by the whole tendency. So we have seen basically projects reducing quite a lot in Asia and also the backlog there in renewables is significantly lower than we have seen before on the renewable side.

The sale and leaseback, you wanted to add something there?

Well, thanks for the advice, Quirijn. We've decided differently. And on a like-for-like basis, also the lease costs are lower, and it was not the intention from the start to keep owning the building. So that's a decision that the company has made. You want to take the Middle East?

Yes, sure. No problem. So we have taken quite a goodwill impairment for the Middle East. So there's a few areas that we have decided on. Obviously, the goodwill spread around the world was decided a few years ago when we went over to regional segmentation. And that was, yes, not arbitrarily defined, but at a certain way defined how much goodwill would sit in certain areas. This has been looked at year after year. We have taken after quite a few years of losses and difficult operations in the Middle East, and that must be said as well, a different view on how this market is progressing.

Do we see the opportunities that you mentioned as well from ADNOC from Saudi Aramco? Absolutely. Was Saudi Arabia one of the most difficult areas for us to work in, operate in last year? Absolutely. So we had to cut cost a lot in Saudi Arabia because it was not progressing and because projects were stalled. Are they still saying that they're going to ramp up on production? Absolutely as well.

So you see this region has a lot of difficulty with pinpointing when what is happening. And we have suffered from that quite a lot also with Lower Zakum, Upper Lower, Umm Shaif. We have seen a lot of delays in when these things really happen, and then we're waiting for it for a very long time, affecting our results overall. So this is something that we have taken on board in our outlook.

We still believe that there's a lot of potential in that region, but we have taken that on board in a more conservative view and potential in that region in the mid- to short term or short to midterm. And also, I think it's for the new management that is there to review that in the upcoming period. But yes, we felt that this is applicable and also discussed with our external auditors, obviously, extensively.

Thijs Berkelder again, ABN AMRO-ODDO BHF. Three follow-up questions. One on other side of the Middle East, the Mediterranean Gaza war more or less has ended, a lot of activity picking up gas related in the Mediterranean around Cyprus, Greece, Turkey, et cetera. You had a contract with ConocoPhillips, which was canceled. So for Fugro is activity coming back there as well.

Second question, can you give an update on your defense related efforts and/or contracts coming in or not?

Thirdly, in your search for a new CFO, where should the new CFO be smarter, better, stronger than the current CFO?

You want to answer that one, Barbara? Okay. Let's go back to the Mediterranean. So you know we spoke about Cyprus indeed before with a project Cronos from Eni. We did part of the project in the fourth quarter. And part of the project was also pushed into the new year. So we have also done now some of the geotech work in the last period of time in Cyprus. So there is indeed there is more activity there.

I haven't heard yet if ConocoPhillips is back on the board or happening. So we'll have to check. Still pretty unstable as well in that region, to be honest. Also, this is what we have seen, obviously, in the Middle East, just to come back on the Middle East in general, this is also affecting, obviously, our outlook is what we have seen over the last couple of years on -- especially last year with the geopolitical situation has also impact on how we look at what could potentially happen. But there's absolutely an element that we also need to take on board there.

So that's what I can say about the Mediterranean. I think there's absolutely potential to further grow there. We're well positioned also with our office there in Egypt. So -- and then supported by our European activities and out of Italy. So that is on the Mediterranean.

Then defense, as I said before, we have obviously some good contracts. We have the patrol vessel, Galatea that is since the beginning of last year, operational there. There's adjacent work that we're doing there to test all sorts and pilots, all sorts of things together with the Navy, the Dutch Navy. There's a lot of discussion happening between the various countries how to further develop security at the North Sea. And we're participating in all these discussions, but things take time there. So we continue with this project there.

We have done before also some work with USV to prove what we can do there. So there's actually 2 elements that you can see there is, first and foremost, the security element at the North Sea, which is actually not a defense activity. It's a government activity, but a lot of governments do not know how to tackle this. So they ask also their local navies to support. So this is an ongoing discussion that needs to materialize. We're also part of discussions where they talk about data and how can you actually make a baseline of data of what is out there.

There are pilots where we, for instance, now develop something where you can monitor vessels and see if they might cross a critical pipeline, for instance, or cable. And if they go in that direction, then you can follow that vessel and another vessel that's actually not necessarily steering towards that critical area, you might let go of. So you can actually automate that with AI, and we're working together with some partners to develop a tool and to do a pilot there also for defense. So these are some examples where we're now very active in, but it takes time. This is an area where also the government is really looking at what is the best option.

The other element, and that is, I think, also important is, yes, defense needs equipment and material for protecting themselves, more defense activities. We're less involved in that. Although there are some specific expertise that we have that we try to contribute there as well. But we're obviously not building weapons or fighting boats or those kind of things. So that is not what Fugro is doing. We're trying to deploy our core expertise on the geo data side.

[indiscernible]

We are using actually a lot. So we have -- on our USVs, we have VSAT, we have Starlink, we have Iridium. We have sometimes even mobile phone connections. So we have multiple backup systems. Having said that, also, if we talk about our satellite positioning business, they can see if something is spoofed. So if you have no authentic position, which is also coming up a lot more, but all these things can be blocked and shut down. So this is just a fact of life. And this is also what we have seen in the Middle East area where some boats and some operations even from our clients could not continue because a couple of hours a day, no positioning. And then they can only throw a beacon on the seabed and say, okay, we know where we are, and that's it, but there's no GPS.

And we are so accustomed to GPS, GLONASS, Galileo, or BeiDou, one of the 4 satellite systems that are out there. We use all of them. So I think we can also play for defense actually in Europe, depending fully on GPS. I think that would be wise if they also depend on some other systems. But in the end, everything is being -- could be being blocked quite easily.

Do you want to answer that?

Yes, I want to answer that. I don't think it's a question for Mark or myself. I think it's a question for the Supervisory Board who will -- who has launched the search for my successor. Thanks for the question, Thijs.

Okay. Maybe last question, and then we'll stop. So Kristof?

Yes. One last question, if I may. Regarding CapEx, obviously, we were all happy to see a reduction in CapEx for 2026. But as of today, do you have any firm commitments already for growth CapEx beyond 2026, which is material?

So what I can say is, there's not a lot, but we are building some USVs at the moment that will roll into 2027, and they will have to be finalized. We can probably still stop some of the work. So if we have to really do that, then it's possible. We also modified the programs that we had on the board. So quite clearly, with a lower CapEx, you have to look at your earnings potential and how much you invest in one go. That was not possible last year anymore. So in that sense, very painful. Now moving into 2026, we're still more flexible there to modify that.

Well, thank you very much. And that concludes our presentation for the full year results of 2025. Thank you everybody for the attention. Have a great day. Thanks.

Thank you.

Good morning, everyone. I'm Catrien van Buttingha, Fugro Investor Relations. Thank you for attending this Q3 Trading Update Webcast and Analyst Call. [Operator Instructions] Mark Heine, CEO; and Barbara Geelen, CFO. I think that, that will last around 20 minutes or so and thereafter, there will be room for your questions.

Mark, I'd like to hand over to you now, please.

Yes. Thank you, Catrien. Good morning, good afternoon, everyone. Welcome to the Q3 2025 trading update. So we start with the first slide and have a look at the key financial headlines of our results.

The year 2025 has turned out to be a difficult year up to now with lower revenue against a very volatile market backdrop, something I will elaborate on a little bit more shortly. Still, the third quarter did show an anticipated performance improvement compared to the first half of the year, and we're now at 12.9% for Q3. The EBIT margin reflects a notable improvement, obviously, compared to the first quarter where we have a margin around 0 and a 4.3% margin in the second quarter.

Compared to Q3 2024, however, the decline was primarily driven by a lower revenue. We're taking control of what we can by reducing our cost base and protecting our cash flow, and Barbara will also talk a bit more about that a little bit later. Our balance sheet remains robust with a net leverage of 1.2x.

Above all, we're staying closely aligned with our clients' evolving needs, supporting them through key projects. In this quarter, for example, we are doing a significant -- or we started a significant site characterization for Eni deepwater gas field in Indonesia, but also work for RWE and TotalEnergies in the wind environment, Windbostel project. And our innovative and scalable GroundIQ land site screening solution is also gaining traction. And also, for example, that is specifically done, for instance, in Germany now on the TenneT LanWin grid connection project.

However, in the short term, the overall environment remains volatile. As per September's trading update, we anticipate a challenging winter season with the Q4 continuing to be subdued due to lower offshore wind activity and temporary reductions in the oil and gas client spending.

Next slide, please. So if I dive into the markets a little bit more and specifically wind and oil and gas to talk a little bit more about that. Offshore wind continues to face headwinds from high interest rates, rising construction costs, limited grid capacity and shifting political landscapes. Here on the left side, you see a graph from the International Energy Agency, and they are currently estimating quite a change in the wind capacity that will be online in 2030.

So there is the gigawatts commissioned by various areas in the world between 25 and 30, and you see the reduction in the outlook there. So minus 27% for the world in total that's compared to the outlook in 2024 with obviously a strong reduction in the U.S., Europe coming down as well and the rest of the world as well. China has not taken a part of this or at least is not listed here. Obviously, a country that is developing quite rapidly also in the renewable sphere. If you look at what's happening in the short term, then we can clearly see that, yes, developers are reviewing which projects are economically viable also against that backdrop of higher cost. and also less interest in green energy for the current pricing levels.

And I think it's important to say that it will take a little bit of time to further stabilize this market sector. And I think it's important that, obviously, politics also take some clear decisions on what kind of contract forms and subsidies are required for the development of these projects. So in the longer term, we believe that offshore wind absolutely stays a key part of the diverse energy mix. And when governments come in with contract for different type of solutions, basically subsidizing these programs again, which stopped, for instance, Europe, I think, in 2018 or so, which now comes back on the board and will help and support very much specifically the European market segment where we believe that, yes, Europe and also, obviously, China remains the largest wind developers in the world, but also Asia Pacific will steadily grow. U.S. will obviously pause for now, but we see Canada and Latin America coming in over time.

Then we jump to the next slide. If we look at oil and gas, then we have also committed or written in our press release that oil and gas project start-ups have temporarily slowed down. This is actually reflecting the short-term view from the energy companies to be very careful in their spending pattern for the second half of this year. So this is really short-term focus. And this was also the main driver for our earlier trading update on the 22nd of September. Also on this slide, you see on the left side, an estimate of the required demand for oil. And over time, you see that this is obviously becoming more uncertain with unsanctioned areas. And we see obviously a depletion that is rapidly continuing. So that means there are definitely new fields required to fill up the gaps or the depleted fields. So it is quite important that investments will continue and that we fill up this gap in 2030 and 2040 that are unsanctioned or even the additional supply that is required.

Now if you look at lately what has been communicated in the world, then there is a very mixed message. On the one side, we see that there is targeted exploration programs going on. However, with a strong emphasis on time lines and cost efficiencies because the energy companies are also preparing for potentially lower oil and gas prices for longer. You no doubt have seen also the latest submissions of the International Energy Agency that they see some oversupply in, for instance, LNG, but also oil in the short term. So that will keep the prices, I think, around a certain level, and that obviously will impact also the decisions around investments for these energy companies. At the moment, McKinsey is expecting that the capital expenditure will be very focused and probably funneled to more competitive deepwater and shale vessels around the world. So very focused and concentrated around areas where they can secure returns in the short term quickly.

If we go to the next slide. Then we see a summary of all our key markets in the long term, so multiyears ahead. In the mid- to longer term, our key markets are still, I think, solid, we can say. Offshore wind, as you see on the left side, still grows, CapEx and OpEx. However, significantly slower than what we have presented before. That was a 30-plus percent increases in this market before. It's still growing, but obviously a lot slower. Oil and gas is slightly up since the last presentation what we showed last time, it was minus 3% for the CapEx. OpEx was coming down a little bit. Now it's up 1%. So we see some momentum there.

We specifically see also momentum in our backlog. Barbara will talk a little bit about that. what we do is not necessarily directly the same as what the market is doing. So always be a little bit careful between those differences. And if you look at the infrastructure in the long term, that hasn't changed too much. That is still a steady growth moving forward with a lot of projects that need to be done to replace existing infrastructure or aging infrastructure.

I now want to hand over to Barbara for more details on the financial side.

Thanks, Mark, and thanks to all on the line for joining us for this call. As mentioned by Mark already, Q3 showed a notable improvement versus previous quarters, and this was especially from an EBIT and operating cash flow perspective. And in line with the previous quarters, our top line was impacted by the changing business environment, as Mark alluded to already. In this quarter, we generated around EUR 100 million less in offshore wind revenue than in the same period last year, whereas oil and gas declined modestly. And on the other hand, infrastructure and water-related revenue were up slightly.

So then if you look at the EBIT, let's look there, that is 12.9% margin for Q3, and this margin reflects a notable improvement from the previous 2 quarters, which was part driven by the cost reduction program that is well underway, which I'll talk about in a bit. And I also want to still compare it a little bit to Q3 where the margin decline was primarily driven by the lower revenue in offshore wind. So if you think about that on a like-for-like basis. The improved operational performance is reflected in operating cash flow, and this increased to EUR 95 million, up from EUR 36 million in the second quarter of this year.

Next slide, please. So a couple of comments on the regional performance. We saw a decline in Marine revenue of 12%. And the main 3 drivers for that were a lack of offshore wind in the Americas, pricing pressure in the geophysical services in Europe, Africa and finally, a relatively high volume of low pass margin pass-through revenue from inspection and monitoring campaigns in APAC in the comparable period last year. Offshore wind also played a key role in the 15% downturn within our land business. The nearshore service line was impacted by a slowdown in project volume across Europe, Africa and Asia Pacific. Most notably, this was in Japan.

And in addition, on the land side, we see continued subdued infrastructure markets in Hong Kong and Saudi Arabia due to tightened government budgets. So if we compare to Q3 '24, the margin decline, which can be seen in the graph on the bottom, was primarily driven by the lower revenue, while the most significant effect in Europe Africa -- with the most significant effect in Europe-Africa, where the majority of our fleet is deployed.

Next slide, please. So if we look at what is happening in the backlog, this is a slide that we showed last quarter for the first time because this demonstrates our ability to recalibrate our business through our diversified and market-agnostic business model because we serve clients across different end markets and different geographies. And when you look at the composition of the backlog in the top graph, you can clearly see that the decrease in renewables is partly being replaced by oil and gas. The oil and gas backlog increased in all regions except in Middle East and India by 12% the backlog includes EUR 321 million in renewables today, which is a decrease of EUR 270 million compared to September last year. The large majority of the current renewable backlog is in Europe, Africa and then in APAC.

Next slide, please. Then as we said, we are taking action by reducing our cost base, and we already announced a comprehensive cost reduction program, and this addresses both fixed and variable costs to align with the current market realities with approximately 2/3 from workforce reductions and 1/3 from operational efficiencies. And while the personnel reductions in certain geographies take time to implement, by now, we are delivering significant reductions in staff levels and third-party spend. And in September, we announced further measures in response to the further deteriorated market conditions. And this includes increasing the planned workforce reduction from 750 to 1,050 FTEs, which is a very difficult step, but a necessary step. We expect to be able to complete the majority of the 1,050 FTE reduction by year-end. We're continuously monitoring top line development, and we will implement further measures if and when required to safeguard profitability and cash flow. And while at the same time, maintaining a strong foundation for future growth.

Next slide, please. As you can see on the cash flow, operational cash flow in Q3 was EUR 95 million. On the graph on the right, it shows that by the end of September, working capital as a percentage of 12-month revenue amounted to 15.1%, which is in line with the bandwidth of 10% to 15% that we communicate about. And in line with the previous years, it is expected to unwind in the fourth quarter due to the seasonality pattern that we have. On the CapEx, the CapEx for Q3 was EUR 30 million compared to EUR 52 million in Q2 last year -- in Q3 last year. We maintain our guidance of EUR 250 million for the full year, excluding the head office, as mentioned before. Overall, free cash flow for the quarter totaled EUR 26 million, a year-on-year decline from EUR 103 million, primarily driven by lower EBITDA and higher working capital.

Next slide, please. Then let's have a look at the balance sheet. Our balance sheet is robust with a net leverage of 1.2x, and it's well below our leverage target of 1.5x. The net debt position decreased to EUR 411 million as of September 25, which is down from EUR 437 million at the end of June at midyear. In October, we arranged a EUR 40 million term loan with a 1-year maturity to add flexibility and as a liquidity backup, and we see this as a prudent measure. Equally, we want to ensure that we have sufficient liquidity in the business to fund the ongoing business.

And then I want to hand over to Mark, who will talk about the outlook.

Yes. Thank you very much, Barbara. Then the last slide, before we hand over to questions -- for questions. Yes, we have for the outlook for 2025 and '26 basically stated the following. We have a challenging winter season ahead. And this is maybe different than what we have seen over the last couple of years, but we do see that seasonality to kick in again, and that will also affect the fourth quarter, especially now with some projects being descoped and deferred to 2026. We are continuing to focus really on our cost savings program. That's very important to execute on that, and we try to get most of it out of the way by the end of the year. We're scaling back investments moving forward to also reflect the lower growth environment, resulting in significantly lower CapEx in 2026.

And with that, I would like to close the presentation and open up for questions.

[Operator Instructions] We will now take our first question from Luuk Van Beek of Degroof Petercam.

I have a question about your cost savings because you take quite drastic action with roughly 10% headcount reduction. At the same time, there's a war for talent and the medium-term outlook is still more optimistic. So how are you balancing your ability to benefit from a recovery in the medium term with the need to bring down costs in the short term? So to what extent are you keeping spare capacity or protecting certain capacity?

My second question is about the current cost focus of customers. Does that also bring some opportunities for you given the new technologies that you've introduced over the last years, the USVs and other things that are more efficient than previous technologies and your ability to combine services to find a cheaper solution to get the right data?

Okay. Thank you very much, Luuk, for your questions. Maybe first around the headcount reduction. That is obviously a drastic measure and obviously something you try to avoid as you can. And we are definitely protecting the key expertise that we have in our operations. So it is very much aimed at how can we organize ourselves in a more efficient manner. This also means do we have in certain areas of the business maybe buildup for growth and further enhancement and professionalism on the support side, on the functional side as well, whereas we try as best as we can to protect the operational power that Fugro has. So yes, there is absolutely war for talent going on. We want to keep our good people. Unfortunately, if you go through a cycle like this, you always see that the motivation in the organization is affected, but we try to keep that to the highest level with extra communication and effort to protect our operational capacity there.

If I move to the technology side and what we can do around cost, I think the key thing that we see right now, what you referred to is especially the traditional energy companies that have quite a few projects on the board and also looking at exploration in certain particular areas, as I mentioned before, being very focused on what projects can generate quick returns in a very short time frame. So this asks also for Fugro to be super efficient and combine data sets efficiently where we potentially skip longer processes that you might have seen in the past in certain oil or gas developments that they now want to do that in a much quicker cycle where we also are asked to combine data more efficiently.

So we have solutions there, for instance, with our VirGeo software to allow clients to have more easy access to all the data that is collected around these fields that they also have quicker access to the data that we collect in the field. With our remote solutions, we can also transfer data quickly to the shore and process faster. So there are definitely solutions that help these clients in this difficult environment. The USVs are also kicking in being a solution, albeit I think we have to acknowledge that this is still a very early stage in a transformation that the industry is going through. It's absolutely moving to more remote and smaller assets. At the same time, this takes a little bit of time to make that very efficient. But we see if our USVs are working properly, then this is very successful, and we can help our customers there as well at lower cost.

If you talk about the land business, I spoke and I referred to one of the technologies we developed, it's called GroundIQ, where we use geophysical data more on the land site screening and site characterization, combining with traditional Geotech work. This is really gaining traction. We started with that in the Middle East, and they are already generating quite a bit of revenue on that and with faster returns and better insights, which is really very promising what that shows. And now we see projects also kicking in, in Europe and the Americas, and we will roll this out in the upcoming period across the world. And we definitely see this as a major shift in how we do work on the land side with a lot of potential moving forward.

And we'll now take our next question from David Kerstens of Jefferies.

First question on the savings you realized in the third quarter. I think OpEx was down 13% year-over-year in Q3, but pretty much in line with the second quarter. I appreciate there's probably also seasonality in OpEx in the fourth quarter. But what do you expect relative to the fourth quarter of 2024 in terms of cost savings coming in? And then the challenging winter season in Q4, how challenging will that be? Without cost savings, would that be a breakeven quarter similar to the first quarter of this year? Or would you say market conditions are incrementally worse than what you saw in Q1? And then maybe a more general question, how does the current downturn in your end markets and actions taken by the company to safeguard profitability compared to historical downturns, more diversified this time around, but you also now see weakness in oil and gas. And should we still anticipate a recovery for 2026 given the current market conditions?

Thank you, David. First question maybe for Barbara around the cost savings and the OpEx, and then I will take the other 2.

Yes. So David, on the cost savings, you mentioned indeed OpEx down, but in line with the second quarter. We are making progress on the cost savings program. I'm not going to be more specific on that in terms of the P&L impact. I can already tell you that because there's a lot of pluses and minuses in that, but we're executing on plan there, and we are generating -- realizing, of course, we have lower operational third-party costs because of lower activity levels. versus last year, but there is certainly an element of the cost savings program executed in the third quarter as well as we already had expected.

Then moving to the Q4. We are in a different situation there in terms of -- as we are managing for challenging conditions. We have also added quite a number of assets. So there are some shifts happening in our cost base, whereas the top line is not as strong as expected. That's why we're warning for the winter season. On the exact EBIT, we're not going to give guidance. Otherwise, we would have done that. But what we would say is that it is challenging and what we see back is that we're now moving more with the decrease in the renewable revenue that we have, we revert a little bit more to a traditional seasonal pattern before the years of '23 and '24 of lower Q4, lower Q1 and then more the high season Q2, Q3.

And then I'm handing back to Mark for the last question.

Yes. So talking about how challenging is the fourth quarter. Barbara already said a few things about that. I think -- and you're looking obviously for a little bit more guidance on the margin, which we will not give you. We basically want to emphasize that, yes, what we communicated in September was primarily related also to what is happening in the fourth quarter. So we saw some effect in the third quarter for sure, but we anticipated a certain amount of projects to be started and executed in the second half of the year.

That's why we communicated as we did in around midyear. But we saw after the announcements of a lot of companies midyear that especially the oil and gas companies try to push out some of the projects to next year and also descope some of the work. This has all to do with the returns that they had based on the lower oil and gas prices. So this is all retaining cash and keeping the hand on the wallet. For them, we have been trying to move some of the work that we actually already secured for 2026 into 2025 to do that before year-end. And this is not really happening because the companies really want to only start beginning of next year with some of these projects to make sure that they don't spend the money in 2025.

So this is a short-term situation, specifically around oil and gas. Therefore, it's important to understand what is happening there. So in the midterm, on the one hand, you see that these companies are preparing for lower oil and gas prices for longer. However, they also need to develop new fields and there is a race going on who's going to supply the oil and the gas in the future. So there are many new projects on the board in many areas where Fugro hasn't been for more than a decade, for instance, or for a decade roughly. And so there is activity on the board. However, they will be much more selective what they will kick off and what they won't kick off.

So in general, we're not negative around the oil and gas development. However, in the short term, there is absolutely in effect, and that is primarily visible in the fourth quarter. Moving forward, we have projects on the board, and we will execute some of the work that is now pushed out to 2026 in 2026. but we're also careful in guiding very specifically moving forward. Obviously, we have obviously shot ourselves in the foot a few times before. So we're also a bit more careful in that sense.

What is happening right now around the downturn, how different is that than maybe the previous downturns? That's also something that you asked. Well, if you look at, for instance, the COVID downturn, you obviously saw across the board everything being down by 20-plus percent over time, which is a totally different situation where you have to cut across the board in operation, in management, in support and functional groups. whereas now we very specifically try to make the organization also leaner and more effective, whereas we maintain and sustain to have a particular level of operational capacity because we see that this capacity is still required moving forward.

So there are insights that obviously, projects will be back on the board and then there are activities also ongoing for next year and beyond. Having said that, and we communicate very clearly about that, the wind business is still in a difficult situation. And as I just showed, there's maybe some growth in the world, but significantly less than before. Almost all the regions have less gigawatts on the board for the upcoming years. And that's very important to realize. Oil and gas, not negative, but be careful, especially in the very short term, and that's what we currently can guide for.

And we will now take our next question from Philip Ngotho of Kepler Cheuvreux.

I have 2. The first one is more of a -- related also to your comments that you see longer-term outlook, you're positive on that also given that you're seeing policy refinements, CFDs being implemented that should rebuild confidence and momentum. However, at the same time, we saw this week, of course, the news that came out on the budget that the U.K. plans to allocate slightly less than what the market was hoping for to the AR7 round. So it was seen as a disappointment potentially leading to also less capacity receiving support under AR 7. So I'm just wondering to what extent I mean, are you still confident that governments will have sufficient resources also given all the spending that has to go into defense to really kickstart this offshore wind sector?

And maybe as a follow-up on that. If this -- for whatever reason or we see these CFD measures really coming in below expectation, although there's still then a bit of growth, what -- how big do you see the risk of the industry really remaining in an oversupply situation for the coming years, specifically the geotechnical and geophysical market? That's my first question.

And the second one is more on strategic choices. And I acknowledge the measures that you're taking. Those are indeed quite drastic. But I was wondering in the discussions that you had on this internally, have you, for example, considered also, for example, for the geophysical fleet to maybe move more towards a charter model and potentially divesting assets of the balance sheet to just make the business more or less capital intensive, growing your overall cash flow breakeven level as well. As I mentioned the geophysical market just because, of course, as you point out, it's more competitive and there's lower barriers to entry, you have lower visibility. So maybe it also makes sense to not really be owning those assets. And apologies for the long questions, but those are the 2 questions I have.

Thank you very much, Philip. Okay. So first, around policies and how we look at the midterm to longer-term dynamics of that market. So we still feel that the world will go through an energy transition or maybe we should say more an energy evolution as some of the reports now talk about where every form of energy is required moving forward. So everything will be part of the mix and offshore wind is absolutely a very competitive way of providing energy and will stay on the board is our estimate, and that's also what most of the reports say. There will be differences between regions, but we believe that definitely Europe and also, as I said before, some areas in Asia will continue to push for this and we will build on this because also getting the energy out of -- well, imported, so to say, from other areas is also expensive and very -- affecting the climate very much so. But it takes time. And this is, for instance, even this morning, you saw in the Netherlands newspaper message around Nederwiek wind farm, which was actually not new news, so to say, because we already knew that this will not fly.

And the minister actually already in the Netherlands stated that we need to get a contract for difference in place to let this new license go on. So I was a little bit surprised that they still put it in the market because we felt that this shouldn't happen because it only creates negative sentiment more than required. On the other hand, I think they do this specifically to also make sure that changes are enforced because people obviously get worried about the fact that without a different contract, this is not going to fly.

And then you referred to the AR7 license rounds in the U.K. This is another good example of what we see as a market being really in a subdued situation right now. The government in the U.K. has indeed also stated that they can allocate more money if that is required moving forward. But obviously, this is not a positive sign. Let me be very clear about that, and that's also why we are very specific around, yes, we do not see in the short term, and then I'll talk about in the next 1 or 2 years, this to be drastically changing, but it will be changing again, and it will move on, and we will get those contracts back in shape. There's a lot of discussion going on between many parties in the industry to make sure that governments, but also not only in particular governments of countries, but also in the European Union that there are decisions taken that this is moving in the right direction.

Obviously, there is a competing business with defense. And as we said before as well, well, if there's more opportunities on the defense side, then we're also happy to play a role there. We do not necessarily see if you take an average there that there is a big oversupply, for instance, on the geotechnical side. Maybe there's a temporary drop, as we said, for the winter season, but we do see that the assets that we have will be deployed, and therefore, also we maintain the operational capacity that we have and the levels of vessels. We have scaled down a little bit. We did release some of the lease assets already over the last year. And on the geophysical side, as you referred to, and that's also jumping into your strategic choices question. We obviously discuss everything.

Now we have moved some geophysical capacity already to the fiber optic cable market. So that means that they are not deployed anymore in wind or oil and gas because there are long cable routes, full ocean depth capacity you need for that. So 6-kilometer depth you need to reach with your measurements. So we need some different equipment on board of these vessels. So we have moved assets into that market, which is still quite buoyant with a lot of new fiber optic cables being installed around the world for obviously Internet and AI and all sorts of data centers that need to be connected.

So the Googles and the Facebooks of this world are on top of that. And Fugro is involved and has a very good position there to do a lot of these cable route surveys. So we have moved some assets around. We can reduce by taking out 1 or 2 older assets, which we might do in the upcoming period. And then having said that, we have some very good geophysical assets that we still continue to need moving forward. There will be price pressure moving forward as well on these assets, but we have invested in them before.

So in that sense, it's money that has already spent in the past, and that can really help us right now moving forward also to create a competitive business for us in this area. But we obviously will follow that very closely. Divesting these assets would be very unwise because you're just giving the competition the assets that you used to work with, and we have been competing with our old assets in the past when we sold maybe something and we felt this is not going to come back in the industry and then you're competing with your own asset with a very long and great reputation because Fugro used it for maybe 25 years in this area.

So if we take assets out, we destroy them and they will not be coming back in the market. So owning your assets is, in some ways, and obviously, in the upcoming period, may be difficult if there is an oversupply, but we actually try to manage that supply very well and very carefully so that there is no oversupply by taking out maybe some lease assets or concentrating on our own assets only or taking out some older assets or moving them into different markets.

And we'll now take our next question from Jeremy Kincaid of Kempen.

I have 2 questions. Firstly, Mark, during your commentary, you sounded a little bit more optimistic on a slight recovery in oil and gas and potentially FY '26 than you did for offshore wind. So I was just wondering if there's anything when your jobs are postponed that your oil and gas customers are saying that the postponement might only be 6 to 12 months or if there's anything like that. I was just hoping to get a little bit more color around that. And maybe I might be reading between the lines too much, but interested in your thoughts. The second question I have is just, yes, it sounds like FY '26 will be a little bit quieter than previous years. I'm wondering, should we expect to see any vessel conversions potentially from geotechnical to geophysical given the different dynamics in the markets there?

Okay. Thank you, Jeremy. So on your first question, I think you're listening very carefully. So in that sense, yes, there is a difference between wind and oil and gas, for sure. So this is also why we specifically in the press release, tried to also make a distinction between those 2. wind overall is in a subdued situation. This is ongoing already for longer since the beginning of the year. We have been communicating about it. Obviously, very clear what is happening in the U.S., but also in the rest of the world with high interest costs with a more expensive supply chain with no big contracts of taking off the green energy, the grid capacity. So there's a multiple or a whole rift and then the political changes as well, a rift of issues that are ongoing on the offshore wind side, and that will take time to fix this and to see this changed around. So this will take longer for sure.

In the oil and gas, we said very clearly in the very short term, and actually, we said that before, in the second half of the year, they are very careful in spending money. And obviously, I haven't been in the boardroom with all these energy companies when they took the decisions. But my information tells me that they obviously look very carefully at the first half of the year cash returns and are very careful in spending it all in the second half of the year. So they have paused some of these investments or pushed them out into next year. They can't really push them out much further because they need to develop some of these fields, and they are in a race and competing with each other who brings on the next field as quickly as possible with great returns. But they will not take 5 or 6 years anymore to bring an oil or gas field on stream. It needs to be done in 3 years. So there's a lot of pressure on it, and that also asks for very efficient work and data supply from Fugro. So we do see a little bit more on the board, for sure, moving forward on the oil and gas side.

As I said before, there are countries on the board and areas on the board that we haven't seen for a long time, like all the developments in Africa that multiple energy companies are looking at or in South America, just as an example. If I move into your next question around 2026 and being quieter, we have stated what we stated in our press release on 2026, and that is that we do not guide for '26 right now. That's too early, and there is too much happening in the market. So I'm not confirming or reaffirming what you just concluded there. are we moving vessels from one operation to the other operation like Geotech to Geophysics or vice versa? No, we are not because those vessels are very specific and not being able to mix those. You can do some light geotechnical work on geophysical vessels, and that is happening all the time.

So that's more shallow water, CPT con penetration work that we do from our geophysical fleet, which is needed, for instance, for cable routes, also interconnected cables in offshore wind farms or other CPTs that need to be done for the work offshore. But you cannot do the drilling from a geophysical vessel. And we are not transforming any vessels right now or from one to the other operation. If we talk about '26, there are still work to be done on our vessels, as always. However, it's a bit lighter on the work that needs to be done because we had a lot going on at the beginning of this year, 2025. In 2026, we have significantly less modifications to be done. We have one bigger modification still on the board, which is for the Fugro Scout, and that will continue to happen. But other than that, there are no major overhauls planned.

And we'll now take our next question from Thijs Berkelder of ABN AMRO.

Question on your order intake and backlog. Your order intake in Marine was down 36% year-over-year and your backlog in Marine is down 13% from a year ago. Should we roughly assume both have a 50-50 volume price mix? Second question is on the guidance for the 2026 CapEx. You're guiding significantly lower. Does it mean that you're clearly slowing down your investments in uncrewed vessels? Or should we see it primarily as that you slow down the conversion of the existing fleet. This while I can imagine that having less work for the existing fleet in principle is now the time to bring the necessary upgrades to all these existing vessels.

No. So on the order intake in Marine, what we can say, yes, this has gone down mostly because of the -- we see the 2 developments, as I also showed in the backlog. the order intake in oil and gas is pretty healthy, whereas in the renewables, it is below 100. So we see, as we mentioned before, we see there a different trend in the end markets. Now if you talk about price and volume, that really has to do with the type of service that we do. So where we see on Geotech, we have -- the prices are holding up quite well. We also are very clearly there the market leader and the demand is -- remains to be there. So that's very healthy on the -- with the caveat of seasonality, I would say, but that has already been explained by Mark.

On the geophysical side, the pricing -- there is the pricing pressure. And this is also why you see the top line being the top line for Q3, where we have a relatively high utilization of our assets of 76%, but pricing pressure on the geophysical fleet. So there's really a mix effect. And then you also have the difference in regions where activity levels differ. For example, in the Americas, obviously, the offshore wind came down quite significantly with the behavior of the energy companies as we see it at the moment.

Then on the CapEx, what I can say, yes, what does that mean? We have to look -- we have completed our Geotech CapEx program. But as Mark just mentioned, we're still in one large conversion. We have to look at the affordability. And this is really a capital allocation question, and that is really driven also by the market backlog that we see for '26. We're still looking at that, and that will determine also how we're going to split the CapEx wallet that we feel we can allocate for next year. We will always have a level of EUR 100 million to EUR 125 million on maintenance and sustaining. And of course, that's flexible as well in the end, you can shift, you can decide not to do something in a certain year and allocate it elsewhere.

We remain very committed on the remote operations and the transformation. Having said that, just like the energy companies, just like our clients doing, we need to see where we can allocate the best -- the cash in the best possible way, also driven what is leading to cash flows in '26 and what is really resulting into cash flows in the longer term. So it all starts, obviously, with the market backdrop. Conversion in the existing fleet, there we are pretty much, as I mentioned, the geotechnical side done. And we believe that the asset integrity is absolutely there. We are well maintained and invested. And of course, we can always optimize. But that is not going to be very big in '26.

And a follow-on...

Thijs, maybe if I can add 2 things just on the specifics. I think it's important, 100% what Barbara said. And then maybe on top of that, it's good to mention that we are working on 7 USVs at the moment in our development group. They will be issued in 2026. So this is going to be completed. So we're continuing with that. We will also reinvest in additional units. And then going over to Barbara, what Barbara said is we will review how fast we will go moving forward thereafter. But we are in the full force at the moment. And the other thing is that we're still completing our Blue Dragon. We spoke about that before. That's our seafloor robot that will also come on stream beginning of next year, and we're also not stopping there. We are still very committed to our strategic road map, especially around remote operation, USVs, geotechnical advancements like the Blue Dragon.

Good to hear. A follow-on question on your cost savings program. Earlier, you planned to cut 750 FTEs, which to me says on roughly 10,000, so 7% cut and anticipating, let's say, a market 7% weaker than you assumed before. Now you're lifting that to more than 1,000 should I read it that you, in principle, are adjusting the organization for having 10% less volume work and maybe a bit of extra pricing pressure. So for, let's say, a downturn of something like minus 15% in 2026.

Well, it's a good question, Thijs, and I will only partially answer that. We had around 11,000 people earlier, and we are decreasing that indeed to around 10,000 now. What is important to keep in mind that we're also progressing on the technology and innovation side of the business. So we are taking still people off vessels, bringing them onshore with the remote operations. So it's not said that we can do less work in the future with that. We will be working differently in the future on that.

Also, what is important to realize is that, unfortunately, all these redundancies are very painful. But what we have said, we still are quite busy and in some places, very busy. So we are hiring operational staff. We need to execute the projects. And obviously, we look at there the fixed and the variable also the flexible layer in that -- so there is an element in uncertain markets that you need to be more flexible, and therefore, you need to also be -- have a more flexible cost base.

Now we're very -- we are absolutely making sure that we have sufficient people on board, but also really technical staff and the deep expertise that we have as a market leader that we're absolutely protecting that. But my point is really that there's many ways in different functions also in the company where we can benefit from automation, from remote operations, from robotics to really also increase and at least maintain the same productivity levels and still are ready to -- when growth is returning that we are -- really can benefit from that growth and positive market development.

And we'll now take our next question from Quirijn Mulder of ING.

Two questions from my side. The first one is let's get back to the profit warning in September and what you're now seeing. In September, you said, okay, we haven't seen this anyway, any time before this collapse in oil and gas clients' behavior. Is there anything -- can you add to that? Is there still -- is it as it is? Is it bottoming out? Is the situation even getting worse if you compare what you have seen in September? That's my first question. And then on Americas, for example, can you give me an idea about your profitability in the different regions, especially with regard to Americas because I think they went to the cost savings in an earlier phase than the rest. And how the outlook is there? And then maybe to refer also to the LNG part.

Okay. Quirijn, thank you for your question. So first, to go back to September. Yes, the September '22 message and what we said there. So there were a lot of things happening in the beginning of the third quarter with messages coming out to us and say, okay, this project will start later. This scope is lower than we estimated before, all these kind of things. We have, over the last couple of weeks, not seen any new descopings or notable delays in our field or in our projects that we have on the board. So that's what I can say there.

So yes, can you say is this bottoming out? I think it's more important to realize that we said it has an impact on the second half of the year, specifically the fourth quarter, and this is a temporary measure that oil and gas companies take in the short term. In the longer term or in the midterm, they take a general measure, which is more related to, as I said before, high returns, quick development of fields that have good IRRs in a short time frame. So those things are happening.

In general, as I said, there is more on the board for oil and gas. So that is also what we said. If we talk about profitability per region, then I can say we only issue that on the full year basis. So you will have to be a little bit patient there, Quirijn. No, of course, not. I understand that. So it's a very good question, but I'm not going to give you the answer on that.

But you cannot give some idea about the trends in that direction. And if you -- so Americas is a good example. There was a downturn already flagged, let me say, at the end of last year, the problems already started with the election of Trump and the discussion about the wind. And so you took some measures. So in general, you should be able to show the first signs of a recovery on cost savings in Americas earlier than the rest. Is that happening? I say 9 months later.

Actually, this comes back to the question you asked that midyear, why am I not seeing it because then we were showing actually the EBIT. And I think it's good to realize that we are readying the Americas or we're recalibrating the Americas to make the shift from a serious drop in an end market in terms of turnover to a new -- to other markets. And that means that, yes, we have done cost savings and restructuring. At the same time, we're also developing and building up for the new opportunities that are there.

And then I think it's important to reiterate the growth of data centers, the increase in critical mining and the opportunities that are there also in Latin America and as Mark earlier said, in Canada and Latin America. So also then you need to see -- you need to take that into consideration that, that costs time because there's quite some shifts also in your talent base where you need to invest in before you can also benefit from that.

Now we all read in the newspaper about these giant data centers and these large and these small nuclear plants, but this takes time. So we have to be a little bit cautious to say why is it not showing through? We have to realize the backdrop against which we operate in, but that the opportunities are there and that we will be able to monetize on those, but not in the next quarter or so.

Yes. Maybe good to add there, Quirijn, is also if you look at the revenue development of the Americas, you have received those numbers. On the top line, you see a currency comparable growth number of minus 10%, whereas we have also communicated before that renewables in the Americas was EUR 170 million in 2024. So on a region that does less than EUR 500 million, EUR 170 million is an enormous drop whereas now you see revenues coming down less than basically you could expect with taking wind out completely.

So that region is indeed during the course of the year, finding other markets, as Barbara has been saying, to deliver our services in. So in that sense, I think a very good positive development that we see in that market where there are other opportunities for Fugro to move into. It takes a little bit of time and therefore, also not immediately visible, but over time and especially also next year, you will see different markets to be served out of the Americas with quite a bit of opportunities there, not only in the U.S., but also in Canada and in South America.

And we'll now take our next question from Thomas Martin of BNP Paribas.

Three, I think, if I can. Back to the deferrals that you highlighted in September. It sounds to me like you feel that these are being projects that are being deferred into early 2026, first half, maybe some early second quarter or late first quarter. I wanted to understand how much visibility you have around about those deferrals at the moment? Is there a significant risk that there could again be further deferrals pushing these already deferred revenues from first half next year into second half next year, for example, around about the oil price trends?

Second question was just on tendering activity really related to the order intake question. It looks like order intake was reasonable for Q3, first of what I was expecting. Are tendering activity levels declining beyond seasonal norms through Q4 to date? Or do you think you might be able to maintain order intake around about these recent levels?

Third question, just on the CapEx for '26. I appreciate you're not going to give us the numbers. But can you give any insight into what areas of CapEx are the potential levers for 2026? From what you said before, it didn't sound like really it was USVs in the short term. You mentioned the sort of ongoing maintenance levels of EUR 100 million to EUR 125 million. What are your levers for deferring? Operationally, what types of activities are you looking at in terms of being able to defer CapEx for next year? Where is the flexibility?

Yes. Very good. Okay. Maybe first back on the deferrals. As I said before, we haven't seen in the last 2 or 3 weeks, any new news on additional deferrals. So it has been a specifically, I think, concentrated period after the half year for everyone, all the companies reporting their numbers where we saw an action taken from, yes, quite a few companies and therefore, also a direct impact there. And the projects that are deferred indeed will start in the first half of next year and continue there. It's not like, as we said before, projects are canceled or not a lot, at least was related to cancellation or put out in indefinite deferrals where we don't have clarity on when -- what is happening.

So that's what we can say. Obviously, taking into account that, yes, first quarter is still winter season as well. So it's difficult to execute work when we have a high sea state. So in certain areas, it's not possible to execute those projects in the first quarter. So therefore, starting later as well. Tendering activity, you asked if it's -- if order intake is declining beyond the normal seasonal pattern. So no, we have not seen that. Having said that, obviously, in general, we see lower tendering activity on the offshore wind side, quite clearly, and that's also visible in our backlog. which is, well, not half, but close to half than the wind backlog that we had a year ago.

But if you see the order intake, as Barbara spoke about before as well on oil and gas or a few other areas, we see that this is higher and above the 100% book-to-bill, for instance, on the oil and gas side. So there, you see a growth in the wallet that we have in oil and gas for the backlog. So it is shifting. As we said before as well, we see that shift. We're filling up the backlog, maybe it hasn't increased the backlog, but it is definitely filled up and made of a different composition. So that is good.

On the CapEx, maybe one thing from my side. I just wanted to emphasize again, we are still committed to our strategy. And therefore, that means that we will continue with the things that we have on the board. We just need to balance the way and the speed of certain things. We're not stopping developing USVs, for instance, or other things, as I just mentioned also on the question of Thijs, we are very committed to continue. But we might pace a few things in a different way, but we also have a different profile with the large modifications in the Geotech are being completed. So now -- and we have been clear about that as well. We will move some of that room that we have towards remote solutions. And we just added now that we need to balance that more in line with what we can spend and what is possible with the lower growth that we have seen over the last 1.5 years.

That's great. Could I just clarify one follow-up on the deferral side? So the contracts that were being deferred as per your September update, is it correct to understand that they are now basically signed first half of 2026, largely signed, i.e., they couldn't be delayed without further contractual penalties from the clients. Is that the correct understanding?

Yes. So I don't have all the insights on every contract situation right now. So it's difficult to make a generic comment around it. But for instance, one of the deferrals that we saw was the geotechnical campaign for the Cyprus work that we did for -- we're going to do for Eni. That is now confirmed to start early next year. So yes, we will kick off that. And that is a great example, for instance, an important project that we announced earlier on, which we could not complete this year, but is actually partially starting next year.

At this moment, there are no further questions. I would like to hand over to Catrien for any closing remarks.

Well, thank you all for dialing in, listening in, asking questions. If you might have any more, please contact me. And thank you. Bye.

Thank you. Bye.

Bye.

Good morning. Thank you for dialing in this morning. This is Mark Heine, CEO of Fugro. I'm together here with Barbara Geelen, our CFO. I would like to give you a short update before we open up for questions on the press release that we had to issue this morning.

Unfortunately, Fugro has to withdraw its financial guidance for the full year 2025, and this is following significant changes in the market conditions, specifically focused on what has happened over the last recent weeks. We still expect a notable improvement in the second half of the year compared to the first half of the year, but the previously anticipated 20% revenue growth is no longer realistic.

And this is all to do with projects that have been postponed and some also descoped and moved to 2026. We will provide a further update at our normal Q3 trading update on the 31st of October. And therefore, we'll try to answer as many questions as we can, but we'll probably keep it quite short and refer also to the normal update that will come out soon.

The recent developments, obviously, are visible in offshore wind, and you have seen all the news. But moreover, we see the impact in the oil and gas market, where we still expect that activity levels are expected to increase and have increased for us, but the timing of projects is currently affected by intensified disciplined cash and cost management from our clients.

So we have taken a number of actions, and you see that in the press release that we have issued, we'll do additional cost reduction measures on top of the program that we already have ongoing, EUR 80 million to EUR 100 million, but we're going to look at additional reduction of staff, FTEs, 300 on top of the 750 that we have mentioned before.

We also look at optimizing our fleet, specifically looking at vessels that are not enough busy in the upcoming winter season. We'll probably put some vessels in warm stack mode and this applies to the geophysical fleet in particular. And then last but not least, we also have emphasized in the press release that we'll reduce our capital expenditure for 2026. We thought it was prudent to mention that already.

With that, I would like to open up for questions. And if you have a question, please follow the instructions.

[Operator Instructions]

We will now take our first question from Philip Ngotho of Kepler.

It's Philip Ngotho. I have two. First, starting, just want to understand a little bit better what has exactly deteriorated over the last weeks, also given that you only issued the updated guidance 7 weeks ago. And in particularly in the oil and gas market, if I look at in terms of the price movement, of course, it has been volatile. But looking over the last year, during the year, its levels as we have seen previously as well. So what has changed so strongly over the last weeks that actually that made the market so much weaker?

And the other item that I want to understand a little bit more is on the warm stacking. How much can you actually save on that versus cold stacking or what are the cost savings that you could foresee on that?

Thank you, Philip, for the questions. Maybe first on the oil and gas market and what has happened over the last couple of weeks. So what you see with multiple clients in this market is that, I guess, since their own midyear financial reviews that they have done from the first half of the year have intensified real focus on retaining cash.

And this has all to do with the low commodity prices and probably their cash returns in most of these companies. So you see that they focus on postponing a number of things to later. We still see that this market is increasing in activity, and we have communicated that before. We have a number of projects awarded to us and they will continue. But you see that clients are pushing those out, those mobilizations, or move a part of the work to next year.

And we have seen that really in the last couple of weeks that close to maybe even 20 projects have been mentioned by our regions altogether seen in all of the world that clients are taking those steps from smaller to larger projects where they step in. So this is really since the last couple of weeks, and I guess this has all to do with their own financial reviews that they have done at midyear.

If I talk about warm stacking of vessels, that can be relatively limited what you can achieve there because you want to keep your vessels ready to go, so you normally these things during the winter seasons. So you reduce some people onboard of these vessels, you put them alongside or even offshore ideally in a group. So if you have 2 or 3 to do, then you can save some more costs. You're talking about 10% to 20% of your normal operating cost. Obviously, you don't need project staff onboard as well if you warm stack these vessels. So this is the cost saving that you can achieve.

If you go to cold stacking, then your vessel is very difficult to bring back to the market. Then you have to go through recertifications and so on. So this is where we want to refrain from because we do expect in the season next year that work will pick up again and that activity will be requiring those vessels to be operational.

We'll now take our next question from Thijs Berkelder of ABN AMRO.

Thijs Berkelder, ABN AMRO ODDO BHF. Question on your margin guidance. You're withdrawing the EBIT margin guidance for this year, which was 8% to 11%. So implicitly, that means that you no longer expect to meet the low end of that range, so below the 8%. Is then 5% more or less or lower? Is that then logical to assume, and looking at your cost reduction announcements for '26, can you sort of confirm that you, in principle, are targeting to return to, let's say, around 10% in '26?

Thijs, thank you very much for the question. I think we specifically have not mentioned any numbers there, and that is for a reason. And we'll come back at the Q3 trading update to see if we can give more guidance there. We cannot confirm what you say there because we are obviously working on multiple programs and really are committed to optimize and safeguard our profitability and cash there. So I think your assumptions are not necessarily to be confirmed by us at all.

And we basically see a top line reduction, and that obviously has an impact on the bottom line as well, as you also mentioned. But we're not specifically guiding for any direction at the moment other than that we are fully focused on still, safeguarding that profitability as best as we can with our programs that we have installed.

Okay. Then on the staff reductions announced, where are you at this moment, let's say, in the target reaching 750?

We're at the moment around 650 staff reductions.

Okay. And then on the EUR 100 million revenues missed in the second half, how much of this EUR 100 million is simply delayed and what part has been canceled?

Yes, the cancellations are very minimal. You're talking about a couple of percent of that amount. You see some descoping, which is you could X to the cancellation, then the number is a bit higher. But the majority is absolutely moving out to next year. So this is the majority where we see that work is still happening, but later.

And I can mention a few examples. We have some project examples. We spoke about that also over the last couple of weeks where this popped up, for instance, on our work that we do in Cyprus for Eni, now the geotech work has moved to January. That is not happening this year anymore. But we also see some descoping, which is basically reducing the total scope.

We have seen that a good example of that is with the work that we won in the Middle East for ADNOC. We see some descoping happening there, which means that the overall turnover that we will realize this year on these projects will be less.

And do you also have a specific example for offshore wind related?

Well, there are multiple smaller offshore wind-related projects that are pushed out, not major projects because we were not necessarily on major projects developing there. We have obviously the work for RWE starting in Germany. That has not been affected thus far.

But in general, wind is in a more challenging environment, I would say, as we mentioned in the press release, especially after the announcements of Ørsted and Mitsubishi and so on. So obviously, these are major announcements in these industries. And this all happened also in August, end of July, August that they came through with these messages, which has an impact and everybody is going back to the drawing board to see what kind of impact that has on their projects.

And on U.S. gas related, is there also a slowdown or?

In general, I think those messages that we have given at midyear have not really changed too much. We see opportunities in the Americas region coming up also in oil and gas. And gas in itself is still important. Also, the LNG development will be there and back on the board. The question is more when are these things really happening and kicked off.

I think some things in the U.S. are stabilizing to a certain extent on some of the industries. So we see opportunities coming back on the board and slowly materializing. So we are not necessarily negative around the Americas moving forward. But that doesn't really help for this year at the moment of what we have communicated this morning.

And we will now take our next question from Quirijn Mulder of ING.

I have two questions. My first question is, can you say something about the order intake at this moment for the -- especially as people start to order again in September? Is there anything to say about that? And about 2026, so the descoping will probably continue in this environment, preserving cash for these names, large IOCs. Can you give me an indication how that will offset, let me say, some of the postponements into next year? Have you any view on that?

The last question, Quirijn, is related to postponing from '25 to '26, you said because then I don't...

Exactly. Exactly. So you get postponement, but at the same time, you have descoping, which continues probably in 2026, with the oil price not recovering.

This is interesting, obviously, to see how this is developing. There's a very mixed message in this oil and gas market at the moment because on the one hand, we see very clearly that the oil and gas companies or the energy companies are active and have, in a way, the feeling that they can continue with their programs from the past, developing very specifically in focused areas to expand on their productions and also exploration.

So in that sense, not negative around this market development in general. In the short term, we really see a disciplined cost and cash focus, which now has an impact on the second half of the year. How that further will develop in the next year is difficult to say.

Signals are that this market is probably increasing in activity or shifting, maybe better to say, shifting from maybe development towards exploration or from brownfield to greenfield, so you could say many things. If you look at the CapEx development and OpEx development is quite stagnant or maybe even going down a little bit, 1% or 2% or 3% depending on what reports you look at, but that's very generic.

And as you know, Fugro is very much in the forefront. So we now feel it immediately in our site characterization work in the short term if they postpone things or if they say, hey, we delay this survey, the start of this project. At the same time, it will also work the other way around. If they get going again, this is the first that will get kicked off. So that is what I can say about it. We'll have to follow this very closely.

Mixed messages, I think we have all seen some messages, for instance, ConocoPhillips cutting down on people by 25% and some others and also service companies stepping in quite severely to reduce cost. And some of it is related to merging companies as well. But this has an impact on this industry in the short term. In the long term, not negative as such around this market.

On the order intake, I would like to ask you to wait until the end of the first quarter. We'll give more guidance on the backlog and order intake over the last couple of months.

And we'll now move on to our next question from Jeremy Kincaid of Van Kempen.

I just have one additional question. Obviously, Mark, you gave the color on what has changed in the oil and gas market. So I was just wondering if you could provide a little bit more color on what has changed in the offshore wind market and you say Europe is particularly weak. So is that all just related to Ørsted? Or is there other moving parts in there, too?

Well, there's obviously multiple things that happened over the last period of time. So Ørsted is a big thing, as we all know, and everybody following that very closely, how their rights issue will go. At the same time, we saw Mitsubishi pulling out of the 3 projects kicked off in Japan, which is also quite a shock there in the market. Not a major surprise because these projects were also, I think, taken on a couple of years ago, way too cheap. So in that sense, not a big surprise, I would say.

But what it does to the industry is that everybody is obviously really looking much more carefully around what kind of projects they want to start and what they don't want to start. You see governments that need to get their regulations in order. And you see now a movement specifically in Europe, where people are talking about different contract forms, contract for difference. You see that here in the Netherlands that the government just announced this and allocated some money to subsidizing some of the work.

Is that enough? Is that good enough to get the operators moving again? We will have to see. Obviously, in the U.K., there's just a license round where multiple parties have committed to some of these licenses on a contract for difference type of setup. So this is positive in a way that there are movements now. But in general, I would say this market is really going through a maturing phase where people obviously really carefully look in this current environment with high interest cost, high supply chain costs and a relatively low grid solution, so to say, in most of these countries, how they can get the energy prices that they need to develop these fields profitably in a win-win situation for them as well.

So this is what is happening. And I think that, that will continue for a bit longer. So this was on the board already, independent, I think, from what has happened under the new administration in the Americas. Obviously, that doesn't help. Some of the companies, Ørsted was very affected by that as well. And even in the Americas, recently, there were some additional steps taken, obviously, towards Ørsted and field that was for 2/3 already installed and then canceled after 45 monopiles being installed. So this is all not very good for the market. And therefore, I think things will take a bit longer to recover there. And that is what we see currently in the wind market.

And we will now take our next question from Luuk Van Beek of Degroof Petercam.

I have one question left. With the H1 results, you announced that you would shift capacity from North America to South America. Can you comment in general on if you are happy with the global distribution of capacity now or that you expect any further shifts?

Thank you, Luuk. Good question. Yes, we have shifted some assets already earlier in the year, and we will continue to look at that. So I do expect some more movements in the upcoming period. So we might shift some activity or some capacity from Europe to other regions. And as we said, we will look at the winter months because this is now -- always where in Fugro, we have seen Q4, Q1 being the winter season, especially in the Americas and Europe being affected by a more difficult season to work with the high activity in offshore wind, that was for 1 or 2 years, significantly less so that seasonality.

That seasonality will be back on the board as we have seen in the past as well. So in that sense, we'll have to be clever on moving our assets to the right regions and also make use of what we have. We see a bit more surplus in the market on the geophysical side as we have communicated on before as well.

And we'll now take our next question from Thomas Martin of BNP.

Firstly, can I just ask or clarify, what are the mechanics of what happens now? So I think you stated that there are projects that you've been working on and the client says you want to postpone. What contractual protection do you have in the near term? Are you simply exposed? You have to stop work, you're not getting paid? What's going on there?

Second question, just on the cost savings. Your prior target, I think, was a sort of 700 reduction in FTEs and you're adding the incremental 300 today. And I think you're targeting EUR 80 million to EUR 100 million of overall cost, which wasn't just personnel. How much of the EUR 80 million to EUR 100 million is not personnel? Can you help me think about how we can prorate the prior savings with the number of FTEs that you're going to now incrementally add to the program?

Just a third one maybe on the geography, you just spoke about vessel movements. You didn't mention that you might look to move vessels out of the Middle East or reduce capacity in the Middle East. The oil price is one of the impacts that we're talking about today. Could you maybe expand on that a little bit? Why do you think you won't be needing to reduce capacity in the Middle East? Is it because of near-term contract visibility that you have there?

Yes. Well, let me start with the last question, Thomas. In actual fact, we're looking at maybe moving additional assets to the Middle East because we need capacity there at the end of this year to execute the work that we have secured there. So we'll ramp up in activity there towards the end of the year on firm work, and we're looking at opportunities to see what is possible there. Now with the Red Sea still being closed, that is not so easy. So this is obviously hindering us. So that's good to realize.

Coming back on your first question, what does this mean when clients postpone or descope and what kind of compensation or contractual terms we have. This is not necessarily straightforward in our industry because there has been certain standard over the years developed, and we're obviously pushing back very hard during any contract negotiations.

But what you see is that clients have cutoff dates where they can say, okay, mobilize on this date. And if they are moving the mobilization date to later, they are allowed to do that to a certain extent. So yes, in some ways, we get compensation, but often if it's not fully off the cards and the project is still happening, they are allowed to postpone the mobilization date of the vessel. So this is what we face, and this is quite standard in the industry with all our competitors as well, they face the same thing.

Having said that, we are obviously always negotiating and talking about these things with our clients. Descoping is, in a way, also possible because they -- to a certain extent, so they contract at a certain contract value, but very often, they have all sorts of options. But then in these kind of situations, they move back to the base load. And then you have a contract for the base load and you are counting on the options as well because they have given you the indication that they wanted to do the options over the last period of time, but now they scale back to the base case. So this is the difficulty that you face with postponement and descoping.

Cancellations, then very often, there is a compensation possible, but also they are not on all the contracts depending on what the cutoff date is for the customer. And on the last question, I will hand over to Barbara.

So on the cost savings, the FTE, the additional FTE that we've communicated this morning is not included in the EUR 80 million to EUR 100 million that is already on the board, and we will be communicating at 31st of October more on that. In terms of how much the current reduction is, this is around half, but as I mentioned -- of the current program. But as I mentioned before, the P&L impact will be limited given we're also following local labor law and regulations in terms of reducing these FTEs. But as Mark mentioned, we are well underway in progressing that.

That's great. Sorry, can I just clarify one thing related to the backlog and options just to be absolutely clear. The backlog figures include all of the options on contracts or some of the options on contracts? How do you treat those?

No, we normally put in the backlog what we expect the project to deliver. If there are options that they might call off on that are not specifically discussed at the start of the project or during the negotiations, then we will not include those. Only the ones that are really clear that we are going to do a certain amount of work, but that could be that the client says, okay, we're going to kick off this project and we do, I don't know, 25 boreholes, and we want you to go to these specific areas. And then on hindsight, they come back once the project is maybe kicked off and they say, well, no, we actually want to cancel, I don't know, a certain area and you only do 15 boreholes.

But if they have an option and they say, well, we kick off the program and we can always expand with another 50 boreholes, I don't know. We're not including that in the backlog. So it's only what we know that will happen in the project. But obviously, there is still some flexibility there.

And as I said before, maybe it's good to emphasize that is the majority of the work that we're talking about here is now moving as we have seen before as well, which I think some of you have flagged in the past as well, what will happen now? Is this going to continue that we see all the time projects moving out. That is not necessarily what we say. And I haven't seen this before in the way we have seen this now over the last couple of weeks.

At this moment, there are no further questions. [Operator Instructions]

Okay. Then we close this call. Thank you very much. If there's any additional questions, obviously, you can reach out to our Investor Relations team with Buttingha Wichers. Thank you very much.