Vestas Wind Systems A/S · OMXCOP:VWS
Vestas Wind Systems A/S — Q3 2020 Earnings Presentation
24 slides from Vestas Wind Systems A/S's earnings presentation, Nov 4, 2020
Slide 1: Third Quarter 2020
THIRD QUARTER 2020 Copenhagen, 4 November 2020 Vestas Wind Systems A/S
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
KEY HIGHLIGHTS Highest ever quarterly deliveries Continued strong activity level in a challenging COVID-19 environment Revenue increase of 31 percent compared to Q3 2019 Revenue of EUR 4.8bn; EBIT margin before special items of 8.6 percent Solid performance in Service Revenue growth of 14 percent in
Slide 4: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 4 Third quarter 2020 Classification: Public
Slide 5: Impact of the COVID-19 Crisis
IMPACT OF THE COVID-19 CRISIS Vestas performs strongly in a challenging market without state aid Renewables Health and safety considered of all employees Global situation and business environment critical as a top priority • Second wave of COVID-19 spread in Europe; Americas and India still infrastr
Slide 6: Third Quarter Order Intake
THIRD QUARTER ORDER INTAKE Order intake at 4.2 GW, with an average selling price of EUR 0.73 per MW Order intake Average selling price of order intake MW mEUR per MW -506 4,738 4,439 4,232 4,148 0.79 0.78 3,311 0.75 0.73 0.72 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2019 2019 2020 2020 2020 2019 2019 2020 2020
Slide 7: Order Backlog of EUR 34bn
ORDER BACKLOG OF EUR 34BN Combined backlog increased by EUR 1.1bn YoY despite negative FX impact of approx. EUR 700m Wind turbines: Service: EUR EUR 14.6bn 19.3bn EUR (1.9)bn* EUR +3.0bn* * Compared to Q3 2019. 7 Third quarter 2020 Classification: Public
Slide 8: Power Solutions
POWER SOLUTIONS Leveraging our global leadership position Q3 2020 highlights • Higher climate ambitions around the World: EU Green Deal and stimulus packages becoming more tangible with EUR 550bn to be allocated over the GW of installed onshore next 7 years; South Korea and Japan pledging carbon neu
Slide 9: Service Business
SERVICE BUSINESS Fleet under service continues to expand Q3 2020 highlights • Viking order in Shetland Islands with 443 MW and 30-year AOM 5000 service agreement GW of onshore turbines with 108 active service contracts • Increased long-term commitments in China, with additional orders of approx. 150
Slide 10: MHI Vestas Offshore Wind
MHI VESTAS OFFSHORE WIND Vestas and Mitsubishi Heavy Industries agree to strengthen partnership Q3 2020 highlights • Supply chain progress was made in Taiwan as several industrial partners were announced to provide components to meet localisation requirements GW installed; more than • WindFloat Atla
Slide 11: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 11 Third quarter 2020 Classification: Public
Slide 12: Income Statement
INCOME STATEMENT Strong activity levels in Power solutions albeit lower profitability Key highlights mEUR Q3 2020 Q3 2019 % change Revenue 4,770 3,646 31% • Revenue increased 31 percent mainly driven by high activity Production costs (4,158) (3,031) 37% levels in Power solutions Gross profit 612 615
Slide 13: SG&A Costs
SG&A COSTS SG&A costs under control Key highlights SG&A costs (TTM)* EURm and percent 1.5 %-pts 799 813 • Continuing to leverage on SG&A costs 778 752 757 709 725 • Depreciation and amortisation (excluding impairments) 662 672 increased EUR 27m YoY primarily due to introduction of new products • Rel
Slide 14: Service Business
SERVICE BUSINESS Strong service performance Key highlights Service revenue and EBIT margin, onshore mEUR and percent • Service revenue increased by 14 percent compared to Q3 2019, mainly driven by higher activity levels +13.8% 529 505 503 • 2020 Q3 EBIT before special items: EUR 144m 474 2020 Q3 EBI
Slide 15: MHI Vestas Offshore Wind
MHI VESTAS OFFSHORE WIND Strong quarterly performance in the offshore JV Key highlights Revenue and net result* EURm • Revenue in the JV of EUR 508m; up 27 percent from Q3 2019 driven by high level of activity in the quarter • Net profit of positive EUR 30m +27.3% 508 399 220 196 90 6 4 30 (12) (30)
Slide 16: Change in Net Working Capital
CHANGE IN NET WORKING CAPITAL Positive net working capital development as activity levels increased in the quarter Key highlights NWC change over the quarter mEUR • Net working capital positively impacted by decreased level of inventory and contract assets as deliveries increased; partly offset by l
Slide 17: Cash Flow Statement
CASH FLOW STATEMENT Strong cash flow from operating activities in the quarter Key highlights mEUR Q3 2020 Q3 2019 Abs. Change Cash flow from operating activities 611 450 161 • Free cash flow before financial investments of EUR 546m before change in net working capital compared to EUR 205m in 2019; p
Slide 18: Total Investments
TOTAL INVESTMENTS Investments stable YoY Key highlights Total net investments* EURm • Investments of EUR 142m in Q3 2020; in line with EUR -4 146m in Q3 2019 232 • Optimisation of product portfolio to reduce total investment need; focus on 2020 execution and long-term competitiveness remains 159 146
Slide 19: Warranty Provisions and Lost Production Factor
WARRANTY PROVISIONS AND LOST PRODUCTION FACTOR Warranty provisions increased YoY Warranty provisions made and consumed Lost Production Factor (LPF) mEUR Percent 283 6 5 175 4 146 3 118 93 80 73 90 2 58 70 62 108 1 0 0 Q3 Q4 Q1 Q2 Q3 Dec Dec Dec Dec Dec Sep 2019 2019 2020 2020 2020 2009 2011 2013 201
Slide 20: Capital Structure
CAPITAL STRUCTURE Net debt to EBITDA well below threshold Key highlights Net debt to EBITDA before special items 1.0 • Net debt to EBITDA remains at low level of (1.1) in Q3 2020 • Liquidity position remains strong with close to EUR 2bn cash at hand (0.8) (1.0) (1.1) (1.3) (1.6) Q3 Q4 Q1 Q2 Q3 2019
Slide 21: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 21 Third quarter 2020 Classification: Public
Slide 22: Outlook 2020
OUTLOOK 2020 Outlook Revenue (bnEUR) 14 – 15 - Service is expected to grow minimum 7 percent EBIT margin before special items (%) 5–7 - Service margin is expected to be minimum 25 percent Total investments (mEUR) Below 700 Excl. any investments in marketable securities and short-term financial inves
Slide 23: Financial Calendar 2021: Q&A
Financial calendar 2021: • Disclosure of Annual report 2020 (10 February) Q&A • • • Annual General Meeting 2021 (8 April) Disclosure of Q1 2021 (5 May) Disclosure of Q2 2021 (11 August) • Disclosure of Q3 2021 (3 November) 23 Third quarter 2020 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,