Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — Q1 2017 Earnings Presentation
27 slides from Vestas Wind Systems A/s's earnings presentation, May 5, 2017
Slide 1: First quarter 2017
First quarter 2017 Vestas Wind Systems A/S Copenhagen, 5 May 2017 Classification: Public
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 Solid first quarter performance. Strong Q1 revenue Revenue at EUR 1,885m. Improved earnings EBIT margin at 11.2 percent. Solid Q1 order intake Order intake in the quarter reached 2,049 MW. Backlog increasing Wind turbine and service order backlog of EUR 20bn. 3 First quarter 2017 (Pub
Slide 4: Agenda
Agenda Q1 Interim financial report, first quarter 2017 1. Orders and markets 2. Financials 3. Outlook and questions & answers 4 First quarter 2017 (Public) 5 May, 2017
Slide 5: Vestas gained market share in 2016
Vestas gained market share in 2016 Vestas remains market leader with more than 16 percent market share in 2016 – improvement of ~3-4 percentage points. Market shares development Percent 100% = 53 GW 100% = 57 GW 100% = 54 GW 100% = 58 GW Vestas 16.5% 13.5% Goldwind Vestas 16.1% 13.3% Vestas 12.6% Ve
Slide 6: Overall supportive environment for renewable energy remains
Overall supportive environment for renewable energy remains As wind has become competitive, the trend towards auction systems is present in most regions. Americas EMEA PTC timing in USA… • Continued strong US demand driven EU moving towards 2020 and 2030 Asia Pacific by current PTC structure. target
Slide 7: Solid Q1 order intake
Solid Q1 order intake Order intake at 2,049 MW. Average selling price remains fairly stable. Order intake Average selling price of order intake MW mEUR per MW -354 4,532 0.95 0.89 0.88 0.88 2,403 2,049 0.82 1,790 1,769 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2016 2016 2016 2016 2017 2016 2016 2016 2016 2017 K
Slide 8: Solid order intake across all regions
Solid order intake across all regions Q1 2017 order intake mainly seen in the US, China, Germany, and Argentina. First order received in India after opening of blade factory. Americas EMEA Asia Pacific MW MW MW -57% 2016 2017 +100% 1,885 +462% 921 802 460 326 58 Q1 Q1 Q1 • Increase primarily driven
Slide 9: Increased deliveries highlight benefits from unique global reach
Increased deliveries highlight benefits from unique global reach Main improvements seen in USA, UK, and Germany. Americas EMEA Asia Pacific MW MW MW +63% 2016 +10% 2017 790 641 706 484 -36% 89 57 Q1 Q1 Q1 • Overall increase primarily • Strong development in UK • Positive development in driven by str
Slide 10: Combined order backlog at EUR 20bn
Combined order backlog at EUR 20bn Combined backlog increased by EUR 0.8bn in the quarter. Backlog of wind turbines increased by EUR 0.5bn, while the service backlog increased by EUR 0.3bn. Wind turbines: Service: EUR 9bn EUR 11bn EUR +0.5bn* EUR +0.3bn* * Compared to Q4 2016. 10 First quarter 2017
Slide 11: Good start to the year for the JV
Good start to the year for the JV Largest order ever and launch of 9 MW turbine. Manufacturing ramp-up and project execution Preparing for near-term project execution Projects currently in progress Walney Blyth (UK) ~2.5 Announced FOI since JV formation Extension (UK) 330 MW 42 MW V164-8.0 MW GW • Q
Slide 12: Agenda
Agenda Q1 Interim financial report, first quarter 2017 1. Orders and markets 2. Financials 3. Outlook and questions & answers 12 First quarter 2017 (Public) 5 May, 2017
Slide 13: Income statement
Income statement EBIT margin increased by 5.4 percentage points. mEUR Q1 2017 Q1 2016 % change Key takes: Revenue 1,885 1,464 29% • Revenue increased 29 percent primarily driven by Production costs (1,508) (1,217) 24% increased MW-deliveries and service. Gross profit 377 247 53% • Gross profit up by
Slide 14: 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 continues stable (1.3) %-pts downward trend. 712 713 705 709 660 • Relative to activity levels, SG&A costs amounted to 638 645 6.6 percent – a
Slide 15: Service
Service Strong service performance driven by high activity levels. Service revenue Key takes: mEUR • Service revenue increased by 23 percent compared to Q1 2016 mainly due to higher activity levels. +23% 372 369 • EBIT: EUR 71m. Margin: 19.2 percent. 326 312 299 • Service order backlog growth of EUR
Slide 16: Balance sheet
Balance sheet Balance sheet remains strong. Assets (mEUR) Q1 2017 Q1 2016 Abs. change % change Key takes: Non-current assets 2,879 2,568 311 12% • Improvement in interest bearing position (net). Current assets 7,388 6,223 1,165 19% Assets held for sale - 103 103 (100)% • Positive net working capital
Slide 17: Change in net working capital
Change in net working capital Satisfactory net working capital management despite negative impact from high activity levels. NWC change over the last 12 months NWC change over the last 3 months mEUR mEUR 231 (262) 254 (1,068) (13) (580) (60) (379) 64 708 (1,710) (159) (1,941) (8) (1,710) (207) NWC e
Slide 18: 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 100 6 5 4 48 52 3 35 28 27 26 23 2 19 18 1 0 Q1 Q2 Q3 Q4 Q1 Dec Dec Dec Dec Dec Dec Dec Dec 2016 2016 2016 2016 2017 20
Slide 19: Cash flow statement
Cash flow statement Positive free cash flow driven by improved earnings and sale of office buildings. mEUR Q1 2017 Q1 2016 Abs. change Key takes: Cash flow from operating activities • Free cash flow of EUR 8m driven primarily by before change in net working 258 164 94 increased earnings and proceeds
Slide 20: Total investments
Total investments Underlying investments in line with Q1 2016 - net investments impacted by sale of office buildings. Net investments* Key takes: mEUR • Investments decreased by EUR 194m compared to 226 Q1 2016, primarily driven by the sale of office buildings in Aarhus, Denmark. 182 • Underlying in
Slide 21: Capital structure
Capital structure Capital structure targets within set boundaries. Net debt to EBITDA Solvency ratio xEBITDA Percent < 1.0 36 35.0 34 32.9 32.1 32.2 32 30.7 30.5 (1.2) 30 30.0 (1.4) (1.5) (1.6) (1.8) 28 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2016 2016 2016 2016 2017 2016 2016 2016 2016 2017 Net debt to EBITD
Slide 22: Return on invested capital
Return on invested capital ROIC at very high level of 353 percent. Return on invested capital (ROIC) Key takes: Percent • ROIC increased to 353.3 percent in Q1 2017 – an 400 improvement of 234.2 percentage points compared to 353.3 350 Q1 2016. 300 265.2 • Development primarily driven by higher earni
Slide 23: Agenda
Agenda Q1 Interim financial report, first quarter 2017 1. Orders and markets 2. Financials 3. Outlook and questions & answers 23 First quarter 2017 (Public) 5 May, 2017
Slide 24: Outlook 2017
Outlook 2017 Outlook Revenue (bnEUR) 9.25-10.25 EBIT margin before special items (%) 12-14 Total investments (mEUR) (Before investments in marketable securities and short-term financial investments, and incl. approx. 350 proceeds of EUR 99m from sale of office building facilities.) Free cash flow (m
Slide 25: Market leadership
Market leadership Summarising our market-leading position. Revenue: EBIT: Backlog: EUR EUR EUR 11bn 1.4bn 22bn • Grow faster than the market. • Best in class margins. • Annual order intake of 11 GW. • Leading market share of 16.5 • Largest R&D investments in • Largest installed base of more percent.
Slide 26: Financial calendar 2017: Q&A
Financial calendar 2017: Q&A • • Disclosure of Q2 2017 (17 August) Disclosure of Q3 2017 (9 November) 26 First quarter 2017 (Public) 5 May, 2017
Slide 27: 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,