Vestas Wind Systems A/S · OMXCOP:VWS
Vestas Wind Systems A/S — Q3 2021 Earnings Presentation
22 slides from Vestas Wind Systems A/S's earnings presentation, November 2021
Slide 1: Third Quarter 2021
THIRD QUARTER 2021 Vestas Wind Systems A/S Copenhagen, November 2021
Slide 2: Disclaimer and Cautionary Statement
DISCLAIMER AND CAUTIONARY STATEMENT This document 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 statement
Slide 3: Key Highlights in Q3 2021
KEY HIGHLIGHTS IN Q3 2021 Organisational update Marika Fredriksson to step down as CFO effective 1 March 2022; Hans Martin Smith, CFO of Vestas Northern and Central Europe, to succeed. Vestas’ largest preferred supplier agreement to date secured Vestas as preferred supplier for the 2.1 GW Empire Win
Slide 4: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 4 Third quarter 2021 Classification: Public
Slide 5: Global Business Environment
GLOBAL BUSINESS ENVIRONMENT Employee health and safety top priority Challenging global business environment and supply chain instability expected to last throughout 2022 Renewables Maintain critical business • Wind power is increasingly critical as short-term electricity infrastructure continuity de
Slide 6: Power Solutions
POWER SOLUTIONS Firm and unconditional order intake, MW Increased pricing level while lower orders Onshore 4,232 3,727 (12)% Highlights AME 1,247 1,699 • Power prices continues to be record high yet smaller EMEA 2,202 1,177 increases in PPA levels APAC 783 851 • Fully subscribed auction Germany; non
Slide 7: Service Business
SERVICE BUSINESS Service order backlog GW under active Average years Well positioned for further growth +EUR 9bn comp. to Q3 2020 service contracts contract duration Highlights EUR 124 10 28bn GW Years (24 onshore) (118 onshore) • Introduction of Covento, a digital platform to build and leverage sca
Slide 8: Sustainability Strategy
SUSTAINABILITY STRATEGY Sustainability in everything we do Displaced CO2e 182 206 +13% Annual CO2e avoided by the total aggregated installed fleet (million t) Highlights Q3 2020 Q3 2021 • Roadmap launched to secure full circularity by Carbon emissions 23 2040 and accelerating targets for full rotor
Slide 9: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 9 Third quarter 2021 Classification: Public
Slide 10: Income Statement
INCOME STATEMENT mEUR Q3 2021 Q3 2020 % change Strong activity levels but challenged profitability Revenue 5,538 4,770 16.1% Production costs (4,938) (4,158) 18.8% Gross profit 600 612 (2.0)% Highlights SG&A costs* (277) (200) 38.5% EBIT before special items 325 412 (21.1)% • Revenue increased 16 pe
Slide 11: Power Solutions
POWER SOLUTIONS Profitability continuously challenged Power Solutions revenue and EBIT margin, mEUR +15.3% Highlights 4,921 4,267 0 3,700 1,191 • Revenue increased by 15 percent YoY, driven by 100 2,914 offshore offsetting a decrease in the onshore 719 activity level impacted by continued supply cha
Slide 12: Service Business
SERVICE BUSINESS Continued positive service performance Service revenue and EBIT margin, mEUR and percent +22.7% Highlights 622 617 573 524 503 • Service revenue increased 23 percent compared to 28.6 28.6 Q3 2020 driven by higher activity both onshore and 26.2 offshore 23.2 22.2 • 2021 Q3 EBIT befor
Slide 13: SG&A Costs
SG&A COSTS SG&A costs under control SG&A costs (TTM)*, mEUR and percent 991 916 Highlights 813 835 788 • Depreciation and amortisation (excluding 6.3 6.5 impairments) increased by EUR 79m YOY 5.4 5.7 5.3 primarily related to offshore • Relative to activity levels, SG&A costs amounted to 6.5 percent
Slide 14: Net Working Capital
NET WORKING CAPITAL Stable NWC development NWC change over the quarter, mEUR Highlights 282 • Net working capital positively impacted by a 146 (526) significant decrease in the level of inventory more (616) 38 than offset by down and milestone payments as (1,134) well as receivables 758 NWC end Rece
Slide 15: Cash Flow Statement
CASH FLOW STATEMENT Positive cash flow from operating activities mEUR Q3 2021 Q3 2020 Abs. Change Cash flow from operating activities Highlights before change in net working capital 531 611 (80) Change in net working capital* (8) 77 (85) • Positive free cash flow before financial investments Cash fl
Slide 16: Total Investments
TOTAL INVESTMENTS Higher investments year-over-year Total net investments*, mEUR 229 223 Highlights 177 152 141 • Investments of EUR 223m in Q3 2021, increase from Q3 2020 mainly driven by investments in construction equipment and transport tools and investments in the V236 offshore turbine Q3 2020
Slide 17: Provisions & LPF
PROVISIONS & LPF Lost Production Factor (LPF), Percent Focus on warranty provisions and LPF 5 4 3 Highlights 2 1 • LPF* increasing further during Q3 2021 as a 0 consequence of the extraordinary repair and Dec Dec Dec Sept upgrade level 2009 2013 2017 2021 • Additional provision of EUR 50m related to
Slide 18: Capital Structure
CAPITAL STRUCTURE Net debt to EBITDA well below threshold Net debt to EBITDA before special items Highlights 1.00 • Net debt to EBITDA at low level of (0.4) in Q3 2021 (0.3) (0.2) (0.4) (1.1) (1.4) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Net debt to EBITDA, last 12 months Net debt to EBITDA, financi
Slide 19: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 19 Third quarter 2021 Classification: Public
Slide 20: Outlook 2021
OUTLOOK 2021 Outlook Previous Outlook Initial guidance Revenue (bnEUR) 15.5 – 16.5 15.5 – 16.5 16 – 17 - Service is expected to grow approx. 15 percent EBIT margin before special items (%) - Service margin is expected to be approx. 24 Around 4 5–7 6–8 percent Total investments (mEUR) Excl. acquisiti
Slide 21: Financial Calendar 2022: Q&A
Financial calendar 2022: • Capital Markets Day (15th December) Q&A • • Disclosure of Annual Report 2021 (10th February) Disclosure of Q1 2022 (4th May) • Disclosure of Q2 2022 (10th August) • Disclosure of Q3 2022 (2nd November) 21 Third quarter 2021 Classification: Public
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,