Vestas Wind Systems A/S · OMXCOP:VWS
Vestas Wind Systems A/S — Q2 2014 Earnings Presentation
22 slides from Vestas Wind Systems A/S's earnings presentation, Aug 20, 2014
Slide 1: Second quarter 2014
Second quarter 2014 Vestas Wind Systems A/S Aarhus, 20 August 2014
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: Agenda
Agenda Q2 Interim financial report, second quarter 2014. 1. Orders and markets 2. Financials 3. Summary, outlook and questions & answers 3 │ Second quarter 2014
Slide 4: Wind turbine order intake
Wind turbine order intake Order intake of almost 2 GW in Q2 2014. Average price per MW impacted by large proportion of supply-only contracts. Order intake Average selling price of order intake MW mEUR per MW +291 2,132 1,932 1,641 1,547 1,188 1.04 0.97 0.89 0.88 0.87 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 20
Slide 5: Backlog: Wind turbines and service
Backlog: Wind turbines and service Combined backlog increased by EUR 900m* to EUR 13.9bn excluding the offshore service business Wind turbines: Service: EUR EUR 7.4bn 6.5bn EUR +0.5bn* EUR +0.4bn* • Offshore service business of EUR 0.8bn* transferred to JV. * Compared to Q1 2014 excluding offshore s
Slide 6: Regional market development
Regional market development Overall market growth primarily driven by the Americas and Asia Pacific, while Europe and Africa was stable. Vestas total H1 2014 deliveries increased by 26 per cent. Americas Growing market… Europe and Africa in the USA due to the PTC. Deliveries in H1 14 already doublin
Slide 7: Agenda
Agenda Q2 Interim financial report, second quarter 2014. 1. Orders and markets 2. Financials 3. Summary, outlook and questions & answers 7 │ Second quarter 2014
Slide 8: Income statement
Income statement Significant improvement in Q2 2014 earnings % mEUR Q2 2014 Q2 2013 Key takes: change Revenue 1,341 1,185 13% Cost of sales (1,081) (1,016) 6% • Gross profit up by more than 50 per cent due to improved average Gross profit 260 169 54% project margins and higher volume. Fixed costs* (
Slide 9: Illustrative example of P/L effects: MHI Vestas Offshore Wind
Illustrative example of P/L effects: MHI Vestas Offshore Wind ToR timing may impact recognition of P/L items Q2 2014 Adjustments for internal ToR: Delivery of WTG transactions between components to JV. Vestas and the JV, e.g. with respect to ToR timing. time P/L: Recognition of revenue and cost of s
Slide 10: Service
Service Onshore service revenue increased by 6 per cent Service revenue (onshore and offshore) Key takes: mEUR • Onshore service revenue increased +6% by 6 per cent* in Q2 2013. 241 244 230 206 212 210 • First quarter without offshore service business. • Q2 2014 EBIT before allocation of Group costs
Slide 11: Balance sheet
Balance sheet Net cash position of EUR 442m Abs. % Assets (mEUR) Q2 2014 Q2 2013 Key takes: change change Non-current assets 2,222 2,482 (260) (10)% Current assets 4,087 3,537 550 16% • Net debt translated into net cash: From EUR (779)m to EUR 442m Current and non-current assets 48 21 27 129% – an i
Slide 12: Change in net working capital
Change in net working capital Working capital under control. Approx 60 per cent of Q2 2014 headwinds is due to JV effect. NWC change over the last 12 months NWC change over the last 3 months mEUR mEUR 63 67 (234) (56) 25 (42) (101) 60 (336) (180) 360 (570) (51) 8 (21) (336) NWC Receiv- CCP* Inventor
Slide 13: 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 Percentage 43 5 34 4 28 28 28 28 28 25 23 3 2 11 1 0 Q2 Q3 Q4 Q1 Q2 Dec Dec Dec Dec Dec Jun 2013 2013 2013 2014 2014 2009 2010 2
Slide 14: Cash flow statement
Cash flow statement Improved earnings more than offset by change in net working capital Abs. mEUR Q2 2014 Q2 2013 Key takes: change Cash flow from operating activities before 134 7 127 change in working capital • Free cash outflow of EUR 21m Change in working capital (100) 254 (354) primarily driven
Slide 15: Total investments
Total investments Q2 investments primarily for V110 and V126 blades Net investments Key takes: mEUR • Investments decreased by EUR 10m -9 compared to Q2 2013. 90 • Investments in Q2 2014 relates primarily to tangible investments for V110 and 66 V126 blades. 64 55 48 • Trailing twelve months net inve
Slide 16: Capital structure
Capital structure Net debt to EBITDA and solvency ratio within targets Net debt to EBITDA Solvency ratio ×EBITDA Percentage 31.6 32 31.0 1.5 1.4 30 min. 30.0 <1.0 28 27.0 26 24 22.8 (0.5) (0.1) (0.6) 22 20.5 0 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2014 2014 2013 2013 2013 2014 2014 Net debt t
Slide 17: Return on invested capital
Return on invested capital ROIC continues the positive trend with 19 per cent in Q2 2014 Return on invested capital (ROIC) Key takes: Percentage 20 19.0 • ROIC increased to 19 per cent 18 in Q2 2014 – an improvement of 17.4 percentage points 16 14.5 compared to Q2 2013. 14 12 • Development primarily
Slide 18: Agenda
Agenda Q2 Interim financial report, second quarter 2014. 1. Orders and markets 2. Financials 3. Summary, outlook and questions & answers 18 │ Second quarter 2014
Slide 19: Improved profitability
Improved profitability Profitable Growth for Vestas on track • Solid order intake and increased order backlog. • Increased revenue and improved quality of earnings. • Service business on track. • NWC under control. • Mid-term financial targets continue the positive trend. ROIC at 19 per cent. 19 │ S
Slide 20: Outlook
Outlook 2014 EBIT margin target raised to minimum 6 per cent based on the improved cost base and the expected delivery plan for the second half of the year Revenue (bnEUR) min. 6 EBIT margin before special items (%) min. 6 Total investments (mEUR) approx 250 Free cash flow (mEUR) min. 300 • Service
Slide 21: Q&A Financial calendar 2014
Financial calendar 2014: Q&A • Disclosure of Q3 2014 (7 November 2014). 21 │ Second quarter 2014
Slide 22: 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,