Long Term Offshore Wind Backlog And New Vessels Will Transform Earnings Visibility

Catalysts

About Cadeler

Cadeler provides offshore wind turbine and foundation transport, installation and operations and maintenance services across Europe, the U.S. and Asia.

What are the underlying business or industry changes driving this perspective?

• A record order backlog of about €2.9b, with roughly 78% tied to projects that have reached final investment decision and more than €700 million expected within the next 12 months, supports clearer visibility on future revenue and earnings.
• Growing offshore wind build out in Europe, the U.S. and APAC and early signs of capacity scarcity in 2029 and into the next decade, especially for foundations and WTG installation, position Cadeler's large, versatile fleet to compete for higher value projects and potentially support vessel day rates and margins.
• Recent delivery of multiple newbuild vessels in 2025, Wind Ally arriving ahead of schedule and Wind Mover on track, combined with further vessels due in 2026 and 2027, expands available operating days and can lift revenue and EBITDA as these assets enter full service.
• Full scope foundation T&I contracts, including a very large undisclosed foundation project for 2029, reflect customer preference for integrated solutions, which can increase project stickiness and support both top line growth and utilization driven operating leverage.
• Rising demand for offshore wind O&M services, with Cadeler building out its Nexra platform and upgrading vessels like Wind Keeper for long term O&M work, can create a growing base of recurring campaigns that smooth revenue and potentially support net margins over time.

Assumptions

This narrative explores a more optimistic perspective on Cadeler compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts. How have these above catalysts been quantified?

• The bullish analysts are assuming Cadeler's revenue will grow by 22.4% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 50.0% today to 38.7% in 3 years time.
• The bullish analysts expect earnings to reach €382.0 million (and earnings per share of €1.1) by about January 2029, up from €269.6 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as €304.0 million.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 8.8x on those 2029 earnings, up from 5.3x today. This future PE is lower than the current PE for the NO Construction industry at 15.9x.
• The bullish analysts expect the number of shares outstanding to grow by 0.99% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 10.23%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The company itself flags 2027 and 2028 as years with lower than expected utilization and more competition for projects. If Cadeler cannot secure enough work in that weaker period, vessel days could go unfilled and reduce revenue and EBITDA through lower activity and weaker day rates.
• A portion of the €2.9b backlog is tied to projects that have shifted to the right or still depend on future auctions and government support. Further delays, cancellations or less favorable contract terms could erode backlog quality and visibility, which would weigh on future revenue and earnings.
• The business is committing substantial capital to newbuild vessels and upgrades such as Wind Mover, Wind Apex, Wind Pace and Wind Keeper. If vessel undersupply in 2029 and beyond does not materialize as expected or day rates soften, the return on this CapEx could fall short and pressure both net margins and return on equity.
• Offshore wind project developers are under their own financial and policy pressures. If more projects are postponed, restructured or bid at tighter economics, Cadeler may face tougher pricing and contract conditions, which could cap day rates and compress net margins even if utilization remains high.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Cadeler is NOK81.16, which represents up to two standard deviations above the consensus price target of NOK67.24. This valuation is based on what can be assumed as the expectations of Cadeler's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of NOK81.16, and the most bearish reporting a price target of just NOK45.41.
  
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2029, revenues will be €987.0 million, earnings will come to €382.0 million, and it would be trading on a PE ratio of 8.8x, assuming you use a discount rate of 10.2%.
  
• Given the current share price of NOK47.78, the analyst price target of NOK81.16 is 41.1% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.