Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — Q3 2016 Earnings Presentation
24 slides from Vestas Wind Systems A/s's earnings presentation, Nov 8, 2016
Slide 1: Third quarter 2016
Third quarter 2016 Vestas Wind Systems A/S Copenhagen, 8 November 2016 Classification: Public
Slide 2: Disclaimer and cautionary statement
Disclaimer and cautionary statement This presentation contains forward-looking statements concerning Vestas' financial condition, results of operations and business. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking state
Slide 3: Key highlights
Key highlights Solid quarterly performance High activity levels Deliveries up by 44 percent in third quarter of 2016 – driven by all regions. Strong earnings EBIT margin before special items of 14.9 percent – up by 4.0 percentage points compared to third quarter of 2015. Solid free cash flow Free ca
Slide 4: Agenda
Agenda Q3 Interim financial report, third quarter 2016. 1. Orders and markets 2. Financials 3. Outlook, and questions & answers 4 │ Third quarter 2016 Classification: Public
Slide 5: Quarterly order intake increased by 17 percent
Quarterly order intake increased by 17 percent Order intake of 1.8 GW – an increase of 17 percent compared to Q3 2015. Average selling price fairly stable. Order intake Average selling price of order intake MW mEUR per MW +261 2,667 2,403 0.96 1,790 1,769 0.90 0.89 0.88 1,508 0.82 Q3 Q4 Q1 Q2 Q3 Q3
Slide 6: Order intake: 9M 2016 keeping up the pace from last year
Order intake: 9M 2016 keeping up the pace from last year Global reach from 29 countries across five continents secures order intake level on a par with 9M 2015. Overall regulatory environment remains favourable with no significant Q3 2016 events. 2015 2016 Americas EMEA Asia Pacific MW MW MW +22% -2
Slide 7: Deliveries: Continued strong growth across all regions
Deliveries: Continued strong growth across all regions 9M 2016 total MW deliveries up by 35 percent – totalling 6,487 MW – driven by stronger perfor- mance in all regions. US market expected to build up towards 2020 from lower level in 2017. 2015 2016 Americas EMEA Asia Pacific MW MW MW +36% +29% +6
Slide 8: Combined order backlog remains strong at EUR 17.1bn
Combined order backlog remains strong at EUR 17.1bn Combined backlog decreased by EUR 1.0bn in the quarter. Backlog of wind turbines decreased by EUR 1.0bn due to higher MW deliveries in Q3, while the service backlog increased slightly. Wind turbines: Service: EUR EUR 7.2bn 9.9bn EUR -1.0bn* EUR +0.
Slide 9: JV in installation mode
JV in installation mode Delivery of projects progresses according to plan, while sales activity remains high Sales strength continues High installation activity • Order backlog grows to… Burbo Bank Extension (UK) ~1.7 258 MW, 2017* GW Nobelwind (BE) 165 MW, 2017* Rampion (UK) 400 MW, 2018* … with th
Slide 10: Agenda
Agenda Q3 Interim financial report, third quarter 2016. 1. Orders and markets 2. Financials 3. Outlook, and questions & answers 10 │ Third quarter 2016 Classification: Public
Slide 11: Income statement
Income statement Strong quarterly revenue and earnings primarily driven by higher activity levels – EBIT margin before special items increased by four percentage points to 14.9 percent % mEUR Q3 2016 Q3 2015 Key takes: change Revenue 2,903 2,120 37% Cost of sales (2,312) (1,731) 34% • Revenue increa
Slide 12: Leveraging on SG&A
Leveraging on SG&A SG&A costs continue to be under control SG&A costs (TTM)* Key takes: mEUR and percent of revenue • SG&A costs* relative to activity levels (0.9)%-pts continue downward in stable trend. 712 713 636 638 645 660 • Relative to activity levels, SG&A 619 622 costs* amounted to 7.2 perce
Slide 13: Service
Service Continued progress in the underlying service business and the integration of Availon and UpWind proceeds as planned Service revenue Key takes: mEUR • Service revenue increased by 11 percent compared to Q3 2015 driven +11% by both organic as well as growth 326 311 312 from service acquisition
Slide 14: Balance sheet
Balance sheet Continued strong balance sheet supporting the business model Abs. % Assets (mEUR) Q3 2016 Q3 2015 Key takes: change change Non-current assets 2,557 2,158 399 18% Current assets 6,780 6,061 719 12% • Improvement in net debt due to improved earnings. Total assets 9,337 8,322 1,015 12% Ab
Slide 15: Change in net working capital
Change in net working capital Satisfactory and controlled development in net working capital despite negative impact caused by higher activity levels NWC change over the last 12 months NWC change over the last 3 months mEUR mEUR 55 (47) 34 (337) 573 11 65 (71) (282) (274) (787) 299 199 (783) (787) (
Slide 16: Warranty provisions and Lost Production Factor
Warranty provisions and Lost Production Factor Warranty consumption and LPF continue at a low level Warranty provisions made and consumed Lost Production Factor (LPF) mEUR Percent 56 52 6 48 44 5 4 26 28 28 27 3 19 18 2 1 0 Q3 Q4 Q1 Q2 Q3 Dec Dec Dec Dec Dec Dec Dec Sep 2015 2015 2016 2016 2016 2009
Slide 17: Cash flow statement
Cash flow statement Free cash flow of EUR 155m driven by strong underlying earnings capabilities Abs. mEUR Q3 2016 Q3 2015 Key takes: change Cash flow from operating activities before 563 398 165 change in net working capital • Free cash flow in line with Q3 2015 Change in net working capital (295)
Slide 18: Total investments
Total investments Investments driven by capitalised R&D, blade moulds, and IT. Q3 2016 investments also impacted by acquisition of Vestas leased blades facility in Lauchhammer, Germany. Net investments Key takes: mEUR • Investments excluding other acquisitions increased by EUR 12m compared to Q3 201
Slide 19: Capital structure
Capital structure Capital structure targets within set boundaries Net debt to EBITDA Solvency ratio ×EBITDA Percent <1.0 36 35.0 33.8 33.8 34 32.9 32 30.7 30.5 30 30.0 (1.8) (1.4) (1.7) (1.6) 28 (1.9) Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2015 2015 2016 2016 2016 2015 2015 2016 2016 2016 Net debt to EBITDA
Slide 20: Return on invested capital
Return on invested capital Strong ROIC of 163 percent Return on invested capital (ROIC) Key takes: Percent 180 • ROIC increased to 162.5 162.5 percent in Q3 2016 – an 160 148.2 improvement of 91.2 140 percentage points compared 117.2 119.1 to Q3 2015. 120 100 • Development primarily driven 71.3 by h
Slide 21: Agenda
Agenda Q3 Interim financial report, third quarter 2016. 1. Orders and markets 2. Financials 3. Outlook, and questions & answers 21 │ Third quarter 2016 Classification: Public
Slide 22: Outlook 2016
Outlook 2016 2016 outlook raised on all parameters based mainly on better visibility for the remainder of the year New outlook Previous outlook Revenue (bnEUR) 10 – 10.5 min. 9.5 - service business is expected to continue to grow EBIT margin before special items (%) 13 – 14 min. 12.5 - service busin
Slide 23: Financial calendar 2017: Q&A
Financial calendar 2017: • Disclosure of FY 2016 (8 February 2017). Q&A • • • • Annual General Meeting (6 April 2017). Disclosure of Q1 2017 (5 May 2017). Disclosure of Q2 2017 (17 August 2017). Disclosure of Q3 2017 (9 November 2017). 23 │ Third quarter 2016 Classification: Public
Slide 24: Thank you for your attention
Thank you for your attention Copyright Notice The documents are created by Vestas Wind Systems A/S and contain copyrighted material, trademarks, and other proprietary information. All rights reserved. No part of the documents may be reproduced or copied in any form or by any means - such as graphic,