Thank you, operator. Good morning, everyone, and welcome to SBM Offshore's half year 2026 earnings call.

I am Øivind Tangen, CEO of SBM Offshore, and joining me on the call, as always, is our CFO, Douglas Wood. Thank you for joining us today and for your continued interest in SBM Offshore.

Please take notes of the disclaimer. SBM Offshore entered 2026 with strong momentum, and the first half of the year confirms the strength of our model: disciplined execution, robust client demand, and continued value creation for shareholders.

Our strategy continues to deliver profitable growth from our core offshore energy production activities. New order intake, supported by sustained demand for lower-carbon, lower-cost deepwater infrastructure and strong project execution, reinforces the resilience of our business.

Our Fast4Ward program and disciplined investment in new hulls continue to enhance our competitiveness in a market supported by strong fundamentals. This performance is translating into value creation.

We are expanding our portfolio, strengthening our financial position, delivering on our shareholder return commitments, and supporting clients in developing critical energy infrastructure safely, efficiently, and responsibly. While our priority remains to grow the core, we are also selectively applying our offshore expertise, engineering capabilities, and lifecycle know-how to assess opportunities in the broader ocean infrastructure market.

The first half of 2026 was marked by strong execution and solid performance across the business. The resilience of our model, combined with the commitment of our teams, enabled us to continue to deliver predictable outcomes in a dynamic environment.

Commercial activity was strong. In the first six months of the year, we secured the FPSO SEAP 1 and SEAP 2 awards from Petrobras and the FEED contract for ExxonMobil Guyana's Longtail development.

These awards reflect client confidence in our execution capabilities and the continued robustness of our Fast4Ward program. Together, they strengthen our position in the lower-cost, lower-carbon deepwater market and support our long-term growth ambitions.

With the outlook for deepwater developments remaining strong, we ordered an additional Fast4Ward hull. We now have two hulls under construction to support ongoing tendering activity in addition to the hull allocated to ExxonMobil Guyana's Longtail development.

Our operational performance is also reflected in our financial results, with Directional revenue increasing to $4.9 billion and Directional EBITDA reaching $1.3 billion. Supported by strong execution, recent commercial successes, and a robust market outlook, we are increasing our 2026 Directional revenue guidance to around $7.6 billion and our Directional EBITDA guidance to around $1.9 billion.

The long-term fundamentals for deepwater remain attractive. Growing global energy needs continue to support demand for oil and gas while production from existing fields naturally declines.

Substantial new developments will therefore be required to help bridge the global supply-demand gap. Deepwater is well-positioned to meet this demand.

It combines attractive economics with breakeven costs around $20 to $35 per barrel and lower emission intensity than many other sources of oil production. This makes deepwater one of the most competitive sources for future oil and gas supply.

As a result, we continue to see strong client demand for large-scale offshore developments. Industry forecasts indicate that deepwater could account for approximately 30% of new oil production volumes up to 2030, reinforcing our confidence in the long-term outlook for the FPSO market and SBM Offshore's growth opportunities.

Deepwater projects provide safe, reliable, and affordable energy and are attracting an increasing share of upstream investment. Major operators continue to prioritize offshore developments, with around 80% of their exploration expenditure budgets directed towards deepwater.

Over the next three years, we see a pipeline of more than 40 potential FPSO awards globally, including approximately 16 opportunities that align well with our expertise in large-scale deepwater FPSOs. These projects are concentrated in our core market around the Atlantic Basin, including Brazil, Guyana, Mexico, and West Africa.

Gas is also becoming a more important element in our new FPSO designs, creating additional opportunities. Larger gas volumes increase topside complexity, from gas processing to reinjection or export for domestic use onshore.

Our proven track record in managing large gas volumes strengthens our position in this growing segment. Next, to highlight one of the key milestones of the first half: the award of the SEAP 1 and SEAP 2 FPSO contracts from Petrobras in a new basin.

These awards followed a demanding tender process and demonstrate the competitiveness of our offering. They add significant value to our backlog and reinforce our position in Brazil, a strategic deepwater region.

These FPSOs are large, technically complex units with sophisticated gas treatment facilities that enable pipeline-quality gas export to shore. They are clear proof points of the industry trend where the monetization of gas is becoming an increasingly important part of deepwater developments.

Given this level of complexity, our standardized Fast4Ward program is key to the derisking of execution while maintaining cost efficiency. The replication of our in-house design across these design-one, build-two projects improves execution efficiency, enhances schedule certainty, and supports disciplined delivery.

This is what Fast4Ward is designed to deliver: lower execution risk, stronger cost discipline, and improved schedule certainty through standardization and repeatability. Let me now explain how SBM can scale execution capacity for further growth while already managing five projects in execution.

Large FPSO projects typically take around four years to deliver. Given their increasing size and scope, there is limited room to shorten delivery timelines materially.

However, we have clear levers to grow beyond our stated in-house capacity of six FPSOs in parallel while keeping the same core organization and execution discipline. Standardization is central to this approach.

A standardized design allows us to enter projects with greater maturity at contract award, reducing complexity and optimizing engineering scope during execution. At the same time, strategic relationships and early engagement with suppliers and yards allow us to order long-lead items in advance, improving predictability and supporting on-time delivery at scale.

Replication is another important enabler. Some clients adopt a design-one, build-many approach.

Combined with the systematic application of lessons learned, this creates design, engineering, and procurement synergies across multiple projects. It reduces scope, improves efficiency, and allows us to deliver more projects with the same core organization.

Partnerships also expand our execution capacity beyond the core organization. Standardization is critical here because standardized work scopes, whether in detailed engineering or topside construction, are easier to place with trusted strategic partners.

By remaining disciplined on what we outsource, we can expand capacity while maintaining the quality and consistency of our delivery model. Together, these enablers allow us to scale execution capacity and support further growth in a strong market.

In our turnkey portfolio, we are making good progress across five major projects under construction, and we have a well-phased execution plan extending into the next decade. FPSO Jaguar for ExxonMobil is the most advanced, with first oil expected in 2027.

FPSO GranMorgu for TotalEnergies and FPSO Trion for Woodside are both more than 50% complete, while the two SEAP units for Petrobras are progressing through the early execution phase, with contractual handover expected in 2030 and 2031. This phased delivery profile supports disciplined growth.

GranMorgu is being delivered in partnership with Technip Energies. Trion has limited topside scope, with the disconnectable turret buoy completed and on its way to Mexico for installation.

The SEAP projects benefit from design replication, improving engineering and procurement efficiency. Looking beyond the current portfolio, the market outlook remains attractive.

Our investment in three Fast4Ward hulls, one of which has already been allocated to the Longtail development, together with future slot options we maintain with key yards, gives us flexibility to support future client demand while maintaining schedule certainty. On the operations side, our fleet continues to perform exceptionally well, with uptime around 99% across 16 operating units, demonstrating the consistency and robustness of our assets.

Today, SBM Offshore is the largest FPSO contractor by oil production capacity, producing about 2 million barrels of oil equivalent per day, around 17% of total deepwater production, or 2% of total global production. Our focus remains on safe, reliable operations while continuously identifying opportunities to enhance performance across the fleet.

By systematically applying lessons learned, we continue to improve asset performance and unlock additional production potential. This has supported successful debottlenecking on recent units in Guyana and Brazil, where we are achieving production records and delivering around 140,000 barrels of additional oil production above initial nameplate capacity, accelerating value creation for our clients.

We also continue to unlock value from our portfolio. During the first half of the year, we completed the sale of FPSO ONE GUYANA and finalized the divestment of a minority interest in FPSO Trion.

In Angola, we continue to see opportunities to extend asset lives. We recently received the notification letter for a two-year extension of the N'Goma FPSO, and we have started brownfield work related to the extensions of FPSOs Mondo and Saxi-Batuque, further strengthening our long-standing positioning in the country.

Looking ahead, we see additional opportunities to enhance fleet performance through operational data. By combining operational excellence with data-driven insights, we continue to improve reliability, efficiency, and value creation across the fleet.

We have built a digital ecosystem that connects offshore teams, workflows, remote support functions, and operational data. By bringing together people, processes, and data, we can identify opportunities earlier, improve planning and decision-making, and apply lessons learned across the fleet.

This supports more targeted predictive maintenance and asset integrity, strengthening performance throughout the asset lifecycle. In parallel, we continue to deploy technologies that support smarter and safer operations.

Robotics are becoming increasingly important for asset inspection and maintenance, including confined spaces, tanks, and hull inspections. These technologies reduce exposure to higher-risk environments, improve inspection quality and consistency, and support more efficient maintenance planning.

Beyond our core FPSO business, we are selectively applying the capabilities built over decades of offshore experience to address global challenges through ocean infrastructure solutions. As land-based solutions face increasing constraints, offshore infrastructure offers growing potential.

Modularity, standardization, and scalability make the ocean an attractive platform for deploying proven technologies at scale and in new environments. By leveraging our expertise in offshore design, execution, and operations, SBM Offshore is well-positioned to enable proven industrial technologies offshore.

One example is our partnership with Veolia to develop a floating desalination solution, combining Veolia's water treatment expertise with our ocean infrastructure and operating experience. With more than 60 years of offshore experience and a strong track record in standardization and lifecycle management, SBM Offshore can act as an offshore enabler of technology solutions in areas such as carbon capture, power, ammonia, and freshwater.

At the same time, we remain disciplined in capital allocation, risk management, and the opportunities we pursue. With that, I will now hand it over to Douglas for the financials.

Thank you, Øivind, and good morning, everybody. As you've heard, we've delivered a strong set of results for the first half, and that's thanks to the performance of the project portfolio, the fleet, including the impact of the three large vessels we started up last year, and of course, the sale of ONE GUYANA and a share in the FPSO Trion.

Now this great performance from our teams in executing our existing portfolio drives the increase in EBITDA guidance from around $1.8 billion to around $1.9 billion. Then for revenue guidance, the SEAP awards and the Trion divestment drive the significant increase in guidance from above $6.9 billion to around $7.6 billion.

Now while these awards won't get past the 25% completion stage and impact EBITDA this year, obviously, as you'll see from the backlog, that's to come. On top of this, the FEED activity we have in hand plus the market outlook speak to the further strong cash and margin potential.

On the backlog, this increased to a record $35.6 billion, with the SEAP awards offsetting significant consumption over the first half, where we had the ONE GUYANA and Trion divestments on top of the strong underlying operational performance. Then we'd expect to generate around $8 billion from the backlog on a net cash basis.

Net debt was $3.7 billion, lower than year-end, driven by the sale of ONE GUYANA and repayment of the associated financing. This leads to a pro forma leverage ratio of around 1.6 times EBITDA based on the rolling last 12 months EBITDA.

As we've mentioned in the past, construction financing that we have in place for Jaguar and likely Longtail, and sale-and-operate temporary working capital movements will mean this will fluctuate a bit, but the long-term trend is for structurally lower leverage. Finally, we paid the $100 million 2025 dividend in May, and are formally reconfirming today the identical $100 million interim dividend for 2026 to be paid in September.

This, together with the ongoing $270 million equivalent buyback program, means we're on track relative to delivering a minimum $2.1 billion aggregate return for the six years 2026 to 2031 inclusive, with the anticipated upside potential materializing as we secure new awards. Next to review the financials in a little bit more detail, starting with the backlog.

This was, as I mentioned, $35.6 billion, an increase of around $4.5 billion versus the year-end. The addition of the two SEAP awards more than offset the consumption from the strong operational performance over the first half and the impact from the sale of ONE GUYANA and a share in FPSO Trion.

On net debt, the ONE GUYANA sale resulted in a significant decrease in leverage. Total revenue was around $4.9 billion compared with around $2.3 billion for the first half 2025.

The biggest contributor to revenue was Turnkey, above $3.7 billion compared with around $1.3 billion in the year-ago period, and the main driver of the increase was the sale of ONE GUYANA. On the Lease and Operate side, revenue was around $1.2 billion versus around a billion dollars for the first half 2025.

Here the increase was driven by the contribution of the three large vessels that joined the fleet over the course of last year. Now turning to EBITDA, this was over $1.3 billion, almost double the year-ago period, and this increase was driven by Turnkey, where EBITDA was $813 million.

That's up by almost $600 million compared with the year-ago period, the main driver again being the ONE GUYANA sale. Lease and Operate EBITDA was around $547 million compared with around $500 million in the year-ago period.

Again, that was mainly due to the contribution of the three new vessels, the impact of which on an EBITDA basis was partially offset by the fact Aseng and Thunder Hawk left the fleet at the end of last year, plus the comparative impact of the gain on sale of Liza Destiny we saw in the first half 2025. Finally, other EBITDA was around $50 million negative, an increase versus around $40 million negative last year as a result of higher G&A costs to support growth activity.

Next, we're reconfirming the direction of travel on deleveraging. We foresee our leverage ratio staying below 3 times going forward, but we could see some upward movement this year from the pro forma H1 number as we draw down debt on Jaguar and Trion, and also depending on the timing of receipt of some large milestone payments relative to project progress at the year-end cutoff point.

That's a facet of the sale-and-operate model, being that we can see some large but temporary movements in working capital, which can then obviously impact net debt. Again, we see this trend staying below 3 times.

Turning to cash and the backlog on a net cash basis, this stood at around $8 billion. As highlighted in the chart we showed at year-end, the sale of ONE GUYANA drove significant consumption during the period.

Now while the impact of the SEAP awards was more than enough to offset this on a net cash basis, we also have an impact from the deconsolidation of the share of the Lease and Operate cash flow of FPSO Trion sold to partners, which meant we ended up a little lower than year-end. Now this illustrates something it's important to bear in mind for the backlog linked to the sale-and-operate model.

Thanks to the SEAP awards, the Turnkey net cash backlog has more than doubled to $1 billion, and this boosts the near-term cash, and that's very clear as you can see in the chart. Now while the NPVs for sale-and-operate and lease-and-operate projects are similar in absolute net cash terms, the same award on a lease-and-operate basis is much higher as the cash comes much later.

That's why the sale of a portion of the 20-year Trion project has a relatively material impact. However, given ongoing FEED activity and the market outlook, we're optimistic we could see an increase at year-end.

Then looking more at the charts on the page, we've played out the blue bar on the left, which includes Turnkey and Lease and Operate, over time in dark blue on the right-hand chart. We have average net cash over four-year cycles as sale-and-operate transactions can have a material impact in the early years and introduce significant year-on-year volatility, making a multi-year average a more representative measure of underlying cash performance.

As the backlog already includes the two new SEAP awards, we've then adjusted the light blue modeled scenario from February, showing two large FPSO awards for the next six years up to 2031 accordingly. The scenario now has 10 rather than 12 FPSOs.

Again, it's important to note here we're not planning on shutting up shop and running down the business in six years, and are confident of more to come thereafter from FPSO awards, but also from diversification into other ocean infrastructure solutions over time. We've therefore maintained further illustrative waves of awards to the right of the modeled near-term scenario.

Then in the chart on the top right, we have the usual euro-per-share analysis of the backlog at a range of discount rates, where again we've maintained the light blue modeled near-term scenario on top. Looking at capital allocation, as a result of the strong operational performance and the backlog, we remain very much on track to deliver a minimum of $2.1 billion in shareholder returns for the six years 2026 to 2031 inclusive.

Now the chart on the left is the same six-year view as we showed in February for 2026 to 2031 inclusive. We're going to provide a further update for 2027 to 2032 inclusive with the 2026 full-year results.

During the course of the year, of the $440 million cash return we intend to pay in 2026, we've already paid $100 million in dividends, we've repurchased around 3 million shares for $118 million, and we're formally reconfirming the $100 million interim dividend to be paid in September. Now that $440 million cash return represents a 7.2% cash yield based on the share price end of June.

If you benchmark this for the AEX, this is top quartile. Now as I mentioned, the 2.1, it's a minimum based on the backlog we had in hand at the end of 2025, but obviously since then, we've made very good progress on materializing the upside with the two SEAP awards, and we're working on the FEED for Longtail.

We're optimistic our year-end update will reflect further progress, with more to come in future as a result of the strong market outlook. Finally, to cover the details of the guidance update: 2026 Directional revenue guidance is updated from above $6.9 billion to around $7.6 billion, of which around $2.4 billion is expected from the Lease and Operate segment and around $5.2 billion expected from the Turnkey segment.

2026 Directional EBITDA guidance is updated from around $1.8 billion to around $1.9 billion. That's it from me.

Now back to Øivind to conclude.

Thank you, Douglas. Very clear, as always, and no, we're certainly not planning on shutting up shop.

With that, to conclude: our first-half performance demonstrates the resilience of SBM Offshore's lifecycle model and the continued strength of the deepwater market, supported by disciplined execution, operational excellence, and commercial momentum. We're growing the core with two new FPSO awards in Brazil and a FEED award in Guyana, reinforcing our position in key deepwater markets.

The outlook for deepwater remains strong, and we're well-positioned to capture our share of future opportunities. To support these opportunities, we recently ordered an additional Fast4Ward hull, bringing the total number of hulls under construction to three.

These hulls strengthen our ability to respond to client demand while maintaining execution discipline and derisking delivery schedules. Finally, reflecting our execution performance, operational excellence, and recent awards, we have increased our Directional revenue and EBITDA guidance for 2026.

I would like to thank our clients and stakeholders for their continued trust and support, and our teams around the world for their dedication, collaboration, and commitment to delivering our strategy. Thank you all for listening.

We will now be happy to answer your questions.

Hi. Yes, good morning.

Thank you for taking my questions. Firstly, perhaps to make the capacity discussion a little bit more concrete, is there a particular phase of execution that we should think as the actual constraint?

Engineering, procurement, fabrication, meaning if you get awards for the two new unallocated hulls, your headline number of orders will rise to eight rather than the six of stated capacity. Of course, some will be almost complete, others will still be in very early stages, not necessarily an overlap of stages.

Can we think about the six number as something applicable to a specific stage of execution rather than for the whole process? Then secondly, on Venus, there is a press article this morning saying that your competitor is now the front-runner on the negotiations with Total.

I know that you normally don't comment on the current state of bids, but perhaps can you tell us a bit about this prospect, what are the main challenges from an engineering execution standpoint, and where you think you have an edge versus others? Thank you.

Thank you, and good morning. Particular constraints associated with the work phases of the FPSO.

I guess the thing to think about the work phases is some are done largely in-house, some are done outsourced. Typically our engineering and procurement is in-house, so that's where the partnership discussion comes into play and we have a means of scaling up to add to that capacity constraint as it may be.

On the supply chain, sort of equipment deliveries and yards, that is where we have time to plan ahead and look at the prospect pipelines and as we go through the commercial processes scale up accordingly. When we communicated in the past, it was sort of the sizing of the organization and number of projects, project management we could run in parallel.

Now, as we've gone in and have had very successful deliveries over the last few years and standardization is materializing, or the learnings from standardization are materializing, we are able to reassess our view on capacity and expand that capacity beyond the six. That is always a function of the pipeline ahead and keeping a cost base in the organization that is optimized.

We don't see any particular constraints, but in terms of award pace and historical execution models, that's where the six came in. Now we can look beyond that in the same very disciplined way and not compromising on the quality of the execution.

When it comes to Venus, I think I've seen many opposing articles on Venus over the last few years. We don't know the outcome of the prospect yet, beyond that, I don't think we have any further comments.

It has no particular technicalities that compared to others is a good fit for our portfolio, but beyond that, I don't have any technical comments on it.

Understood. Thank you.

Thank you.

Yes, good morning. First, a question about the statement that you included in your press release on an increasingly complex and volatile environment.

I see that for the first time, can you elaborate why you included it? Are there any specific new challenges, for example, in the supply chain?

The second question is on the impact of Trion on the EBITDA guidance. Is there a significant impact from that?

Finally, a question on the taxes, which were very low, due to higher deferred tax assets in H1. Can you indicate if there will be any such change in H2?

Thank you, Luuk. Good morning.

I'll do the first one, and Douglas will do the other two. Volatile environment.

I think we're just observing a world that moves around a lot, and one could think that that could impact elements of our operational activities or the commercial prospects. We like to think that the predictability of our performance, whether it's operational and financial, is a bit of a contrast to that volatility, and we like to emphasize that as a strength in our value proposition.

Those are based on the parameters that we've communicated on before, so that's, think, is very consistent. Then I'll leave Douglas to two and three.

Morning, Luuk. Trion had a small impact, but not very significant impact on EBITDA in the first half.

The tax is really about the ONE GUYANA sale where we've basically already paid the tax, you have a lot of income with no associated tax to pay now.

Thank you.

Yes, good morning. Thank you for taking my questions.

I have a few. Maybe just to start with a relatively simple one, just trying to understand the 2026 guidance and the bridge from the H1 EBITDA.

Of course, ONE GUYANA will not be present in H2. You discussed Trion just now.

Are there any other items that we should be mindful of when looking at, yeah, modeling H2 EBITDA versus H1? Then my second question is still on Venus as well.

I appreciate it's an ongoing process and you're also limited in what you can disclose, of course. I was wondering to what extent the competitors in the bidding process are maybe also placing more value on strategic entry into the market and perhaps willing to accept also lower margins.

We've been reading on about of course possible follow-on orders as well in the region. Is winning this first project therefore more important than in other bidding processes?

My last question is more on working capital going into year-end and net debt evolution. How much should we expect given the hull investments and any additional cost on SEAP and Longtail?

Just for modeling purposes for net debt figure.

All right. Let me take, Philip, good morning.

Let me take the Venus, and then I'll let Douglas take the other two. As to the commercial strategies of our competitors, I can't really comment, but we've always said that Venus was strategically important for SBM because we would like to be a front-runner in Namibia.

I think we see a lot of exploration activities in Namibia, we'll see how that market evolves from thereon. As to when our own gross margins and the discussions around our commercial strategies, we don't compromise on the return expectations on our prospects.

There's no single prospect that will make us shift from our general appetite for returns to our shareholders. We keep our discipline there as we do stay disciplined in the way we operate and run the company.

That's as much as I can say about that, I think, and I'll let Douglas talk to working capital and guidance.

Yeah. Hi, Philip.

On the guidance, and as you mentioned, clearly ONE GUYANA makes a big boost in the first half results, yeah, unfortunately the year-end isn't going to be double that. I think there isn't anything really significant other than needing to maintain very good operational and project performance in terms of the delivery of the around 1.9 where we've set the guidance.

On the working capital, as I sort of mentioned in the remarks, it's quite hard with the sale-and-operate project to project exactly because we can see these timing differences between the money we've invested and when we get paid for it by the clients. Especially when you have a cutoff period, there can be a few weeks between you book the expenditure and then you get paid for it a bit later.

That there can be a bit of volatility there. Underlying, yeah, obviously we recently announced the new hull, so that's going to be in our working capital, there will be some increase associated with that.

Okay. Thank you.

Good morning. Thank you very much for your time.

Just one question remaining for me. Can you talk a bit about how you've seen the tender pipeline evolve over the past 12 months?

Obviously the oil price has changed dramatically, the environment around the world has changed, but also it appears the competitive environment has shifted a little bit for you guys. Again, these are long-term projects, decisions aren't made quickly.

What are your customers telling you in terms of the tender pipeline, the opportunities there, appetite? Have you seen a shift in delays or any slowdown because it's hard to make decisions in this environment, or are you seeing a continued acceleration as I guess the slides would suggest with the tender pipeline you present?

Thanks very much.

Good morning, Victoria. Thank you for your question.

In terms of tendering, before a prospect comes to tendering, there's been already a lot of work and exploration and for development to get enough definition before it reaches sort of our pipeline. That wouldn't really be influenced by the more recent, let's call it, oil price hikes.

It's more about for us remaining on our model of early engagement with our clients and helping clients when they invite us in with their development plans to gain pace and use the SBM value proposition, and that dynamic hasn't really changed materially. We see the continued pipeline in Guyana, we see other countries in West Africa, as we've spoken about before as well, emerging with opportunities, and we see Brazil still with a strong prospect pipeline in the years ahead.

For us, really the dynamic hasn't changed that much. What you see the last couple of years is this change from lease-and-operate to more sale-and-operate, and that has doing something with the competitive landscape.

It may bring in other types of contractors, which is where we refer back to our competitive positioning and the lifecycle proposition of SBM. It is competitive, it will remain competitive, but the tender pipeline and we like to think that the deepwater and the Atlantic Basin, as we said, in the years ahead of us remains very strong.

Thanks very much. Just as a follow-up to that, we've also seen a shift in the public commentary around decarbonization, certainly from the majors and throughout the value chain.

How much has that impacted, I guess, the work you do that we don't see around decarbonization options, and that tender opportunity, I appreciate it's much longer timeline to that and it's much earlier stage, but have you seen a change as the outside environment has seen a change in tone?

No, I think from our own perspective, right, we've been working for many years on lowering the emission intensity of our FPSOs, so that's been an ongoing journey. We bring that into our offering of reducing the environmental footprint of the FPSOs, and we're also conducting studies right now on modularized carbon capture systems that we are ready to integrate into our future FPSOs as and when they become as part of the specification in the actual prospects.

Today from the prospects in the market and the way the current market is, all the efficiency gains that we've developed and sort of already deployed on our FPSOs, that remains, of course, a part of the FPSOs of tomorrow. The next step to carbon capture, we don't see it materializing yet, or it's may start to materialize, but nothing has really changed dramatically for us.

We always want to be environmentally efficient and also deliver on reliable and energy solution for the future. Let's see how policies evolve in the years ahead.

Thanks very much.

Thank you.

Good morning, team. Couple of questions, if I may.

They're both back-of-the-envelope-type questions, I'm just thinking medium term here. If I look at your turnkey order book by year of execution, you've roughly got $3 billion in for next year and $3 billion for '28.

If I'm looking on that longer-out view, $3 billion already, Longtail adds a chunk as well, you expect to win a couple more units before then, why would I be wrong in thinking that turnkey doesn't go towards $5 billion of turnover medium term?

Is that your question?

Your only question, Mick? Good morning.

Morning.

That's the starting one.

Okay.

Okay.

All right,

Douglas, there's numbers in there, I stay away from that.

Just kind of generally, you can see it from our backlog chart. What we have in hand is what we have in hand, so that's obviously in the backlog.

What we're saying is there is a lot of potential from the strong market that we see. That's why we included that modeled scenario you can look at.

Now, I think we've been very clear that's not a forecast, it's not a target, but I think it gives a level of opportunity that we see. If we're successful in capturing a portion of that, yeah, you can expect turnkey to grow.

Right, and then follow-up is just looking at your chart at the back on your net cash backlog. You're saying there's a billion dollars of net cash coming from turnkey.

You've got $10 billion of backlog, teens margin, just talk through the gap to that $1 billion of value. Obviously tax is a big chunk, but is there anything else I should be thinking of?

Yeah.

In terms of the net cash, we've got Longtail, some of the stuff associated with the FEED in there, so that's a bit dilutive. Then, you have the billion net cash, but it's net of overheads.

Which we've actually extended a bit because we added the SEAP awards, they're longer. Obviously, we'll be aiming to add more awards in the coming period, which will then consume or offset, if you like, a portion of those overheads.

That's the core.

That's kind of in the mix. If you're looking at kind of doing a gross margin type of calculation, you have to add back the roughly $100 million overheads a year.

Okay. Cuz obviously clearly you got $10 billion in a backlog, and you used to say a billion of capital value was just under a euro a share, and that $10 billion is coming to €5 then.

Yeah.

The difference is that includes the corporate costs now?

No, it's not the corporate cost. It's the turnkey overhead.

It's $100 million a year, you've got six years' worth of overheads there, so that's $600 million. You're looking at 1.6 versus 10, including Longtail, for which there isn't any net cash in the backlog yet.

Of course, we're always clear to mention, we take a relatively conservative approach when we project forward the backlog and include a bit of contingency.

Thank you.

Thank you, Mick.

Good morning, gentlemen. Congrats on the result.

I'll start with two questions first. I saw in the release that there was unfortunately a fatality at one of your subcontractors in one of the Chinese yards.

I assume that's one of the yards producing the Fast4Ward hulls. I was just wondering what the impact might be for you.

Could there be delays? Might you have to do an audit of that yard, and does that limit your ability to construct future Fast4Ward hulls there going forward?

Then my second question is on the upgrade to your EBITDA guidance. I was just curious about the nature of some of these strong operational performance factors which drove the upgrade.

How sustainable are they? Should that mean I upgrade my EBITDA forecast by $100 million out in FY '27 and beyond?

I've got two follow-up accounting questions after that, please.

All right. Thank you, Jeremy.

Let's talk to the fatality. In in the in the layers of how we contract, a subcontractor of a subcontractor very unfortunately suffered a we suffered a fatality after an incident in in one of our yards in China.

This the way this is dealt with as as any what we categorize as a Tier 1 event, is a very thorough investigation. Obviously, when there's loss of life, this has also involved the authorities of the country in question, and we draw all the learnings from that and and we look after all the immediately impacted people, both in the external part of that equation and our own people that have been there sort of and and involved in those activities.

That's our first priority, and then of course there is a lot of lessons we can learn from any such event, and and that's takes time, so that we are in that phase now. We're working on the thorough investigation to to see, also in mind that we keeping in mind that we we expect to have growth in our operational activities in China going forward.

We want to make sure we walk into that growth with the full set of learnings from this event. That is the main focus.

From an operational perspective, there is no impact as such on on the yard selections, or capacity, or schedules on any work out of this incident as a as a as a direct impact. This this this is an extremely unfortunate event, and and and our duty is to to to deal with that in the in the in the way the best practices are established for.

To the second part of your question, no, there is no impact other than that. Douglas?

Yep. Hi, Jeremy.

Just backing up a bit on EBITDA, we've been very consistent with our guidance since when we set the guidance from the beginning of the year. There are a number of risks and opportunities that we could potentially foresee, we try to take a balanced view.

I think it's fair to say, so far this year, we have been successful in capturing a number of opportunities. There, I would say the fleet has performed pretty well, and some of our contracts, there are bonuses for uptime and various other performance things, we've been very successful during the first half in capturing those.

Then on if you like the risk side, a percentage point in percentage of completion on a project, particularly at the scale of the projects that we're now building, can have quite a material impact. What we've seen is the projects so far this year have gone very well, so that's basically what makes the difference.

Now for the accounting. Yeah.

Just picking up on the working capital question, the drag has been quite severe over the last 12 months. It was, I think, $500 million in the second half last year and then another $450 million this year.

You obviously talked to timing on the S&O contracts and you've had some hulls which have been constructed. I suppose my question would be should we expect a similar level of working capital drag over the next 6 to 12 months as you are building more hulls and you do have more S&O contracts coming into the mix?

We're very focused on managing working capital and associated liquidity. I guess one component to start with is yeah, as we add more FPSOs, then we're going to add on the operate side if you like, more working capital.

Obviously when we're doing our tendering, we're kind of pricing in the cost of that. Structurally, you have more FPSOs, you're going to have more in the operate phase working capital.

Then on the turnkey side, sale-and-operate, over the lifetime of the construction process, we're aiming to run on average cash-neutral. That's how we try to build things.

Of course, yeah, from time to time, you get these big timing differences. Then, of course, again, it depends on new projects versus the rundown of old projects because at some point, even if you've got a working capital help, at the end of the day, after the project finishes, you need to pay the bills.

It's this phasing you will see. Then, as you mentioned, yes, it is a strong market outlook, so as such, we're very comfortable in the hull investments that we're making.

With growth, growth will increase working capital on an absolute basis, and also because of sale-and-operate, the volatility.

Helpful. Thank you.

Thank you. Congrats with the strong performance.

First question is on your slide nine on your projects in execution where Jaguar, GranMorgu, and Trion all according the picture are more or less 1 and 1/2 year before delivery. Could it be that also GranMorgu and Trion more or less get finalized before end of '27?

Then the next question is yeah, question, comment on Namibia. I wish Total good luck as they would make choice for Hanwha because then delivery date probably will be two years or more later.

In case the project is not one would you need to then move people again away from Namibia to other location in world? Then the third question is on slide 17 on the cash returns.

Douglas, you more or less said, well, at this moment we're not yet updating our cash return picture, although you have won SEAP 1 and 2 and are probably close to the award of Longtail. What is sort of reasonable to assume once let's say Longtail lands?

Related to that, is it correct that in the backlog '27 there's nearly nothing for Longtail at this moment?

Thijs Thijs?

I think so, yeah.

Did we lose? Okay.

Sorry. Let's see.

Projects in progress, I think our release has pretty clear dates. The most advanced project is Jaguar, right, with pretty much all our topside modules on board and we are in the early commissioning phase for a startup next year, and the other two are going to start up in the subsequent year as per plan.

We're very happy with the progress across the portfolio. On Namibia, sort of just can you just get me back to the question I didn't catch all of it if you could just repeat.

First coming back on Jaguar and GranMorgu. Are the contracts indicating that the transfer of the vessel is already taking place in Singapore, or not, or only after first oil because you have a first oil date there?

Isn't the contract saying that let's say you already deliver to the client when leaving the port in Singapore? On Namibia, what is let's say the SBM Offshore scenario on your people and preparations in Namibia, should you not get the award from Total?

Okay. Thank you.

The sale-and-operate contracts, they transfer ownership at the sailaway from the yard, and then there is a warranty period thereafter. That's standard, and then there's an O&M contract that comes into effect as we move into the operational phase following the offshore commissioning.

On Namibia, we have a very small structure in Namibia. We believe in the Namibian outlook, and that is not just linked to Venus, but in general terms.

It's we hope it can be a prolific market, it's a team that works on mapping out the opportunities in Namibia and position ourselves there for future growth there, we're not linking directly our plan there with just the outcome of the Venus. This is more a strategic direction for the company as such.

It's a very minimal cost with a high upside to us, so that is that. Then on the cash returns, Douglas?

Yes. As I mentioned, we'll do an update.

We're going to do it on an annual basis because then we don't want to do kind of 6 H1 to H1 2032 type of thing, to keep it simple, we do it once a year. Of course, and already in our net cash backlog, we have SEAP 1 and 2, and subject to Longtail going ahead, we would hope to add that.

As I mentioned, relative to H1, we're optimistic that the net cash backlog could be higher at the end of the year, which would then obviously convert into more available cash relative to the $2.1 billion minimum that we have so far. Just to be clear, we're pointing to the fact in the way that we say minimum, on the one hand, and then these new awards, there will be upside in terms of returns.

Our policy is to link our shareholder returns to the backlog, so as that grows, we should be able to increase returns. Then specifically you asked about Longtail.

In the revenue backlog, we've got Longtail, but we don't have it in the net cash backlog at the moment, Longtail would increase the net cash backlog.

Thank you for that. Maybe a final one for the record.

Whether you can indicate whether you have any real impact from the conflict in the Middle East on your operations or your S&O construction, and/or can you maybe repeat what your let's say maybe most crucial supply are, like turbines or so, also for the record?

Okay. Thank you, Thijs.

Middle East, we've assessed that in great detail since the start of this situation. We have no material impact of any sort on operational activities nor on, let's call it, recent awards where we're still going to go out and be very active in the supply chain.

For the record, we do not have it.

The most crucial supplies?

The most crucial supplies in our general supply chain is typically rotating machinery where we always work on anticipation, and it's not impacted by Middle East conflict.

Thanks.

Thank you.

Good morning, everyone. Some two small questions.

One is how large is the impact of N'Goma extensions, and what is the potential for later on, let me say, after December 20 2028? My second question is about your remark about Veolia.

How concrete are these plans for desalination plants with the French player? Where is the idea?

What is the place to build that? That were my questions.

Okay.

Let me do a bit of on desalination and Douglas will talk about N'Goma. We worked with Veolia on water treatment on many of our FPSOs, it's about repurposing already known technology with them.

They are a leading water treatment company in the world. They have a big network of industrial relations in that space.

We are very good on ocean infrastructure and modularized solutions. The combination of those two opens up potential commercial avenues into space where special industrial applications where fresh water is required.

Could be mining or other types of markets. For now, this is in a technology-wise is a well-documented solution.

From a commercial and market-wide, that is where we're looking now and studying the size of that potentially. Of course, it's about pace of execution, leveraging the same partnerships for build and equipment that we have already existing in our supply chain.

It's really in line with the strategic thinking that we've also communicated to the past of really repurposing the existing solutions that are some of the building blocks of the FPSOs and leveraging the partnerships we have in the supply chain. Follow this one.

It's exciting. Yes?

All right.

Hi, Quirijn. N'Goma, that's a two-year extension to 2028, it makes a small but meaningful, I would say, contribution to the net cash backlog.

Let's say, if you're generous with the rounding, it impacts the net cash backlog number, if that gives you a sense.

Thank you.

Thank you, Quirijn. All right.

Operator?

Yes, hi. Just one follow-up question and it relates to the comment on the turnkey segment, the 100 million overhead.

Douglas, I was just wondering how has that evolved over the years, how large has the turnkey segment then grown? Also just maybe interested in number of if you look at the FTE splits, what is there now in turnkey to get a sense of the size.

Hello again, Philip. I would say the overhead itself has been pretty stable and we're very good at managing the overall complement of people and minimizing under-recovery.

It's pretty stable.

Thank you.

All right. Thank you so much.

Thanks to all of you that have engaged in the call today, and we look forward to sharing more information as the company progresses in the next quarter. Have a nice day.