Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — Q2 2015 Earnings Presentation
29 slides from Vestas Wind Systems A/s's earnings presentation, Aug 19, 2015
Slide 1: Second quarter 2015
Second quarter 2015 Vestas Wind Systems A/S Copenhagen, 19 August 2015
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 statemen
Slide 3: Key highlights
Key highlights Another strong quarter Very strong order intake in the quarter Order intake in Q2 2015 reached 3,018 MW – up 56 percent. Largest combined order backlog ever Wind turbine and service order backlog of EUR 16.9bn. Return on invested capital (ROIC) remains at record-high level ROIC increa
Slide 4: Agenda
Agenda Q2 Interim financial report, second quarter 2015. 1. Orders and markets 2. Financials 3. Summary, outlook and questions & answers 4 │ Second quarter 2015
Slide 5: Regulatory environment generally supportive
Regulatory environment generally supportive Continued overall support for renewable energy and decarbonising Americas Positive signals in USA… EMEA • Tax Extenders Bill, including 2-year PTC extension, Tenders in Germany… passed in Senate Finance Asia Pacific Committee. • Draft paper for introductio
Slide 6: Wind turbine order intake remains strong
Wind turbine order intake remains strong Order intake at 3,018 MW – an increase of 56 percent compared to Q2 2014. Average selling price remains fairly stable. Order intake Average selling price of order intake MW mEUR per MW +56% 3,018 2,254 0.91 0.92 1,932 0.90 1,750 0.87 0.87 1,170 Q2 Q3 Q4 Q1 Q2
Slide 7: H1 2015 order intake increased across all regions
H1 2015 order intake increased across all regions Improvements mainly seen in Latin America, USA, Offshore, Poland and China 2014 2015 Americas EMEA Asia Pacific MW MW MW +74% +37% +81% +53% 2,463 2,029 1,753 1,416 1,484 +24% -67% 971 1,209 791 222 276 172 56 H1 Q2 H1 Q2 H1 Q2 • H1 2015 overall stro
Slide 8: Unique global reach proven in H1 2015
Unique global reach proven in H1 2015 Balanced order intake from 27 countries across five continents during the first six months of 2015 Order intake by country, H1 2015 Northern Europe Scandinavia Finland 4,768 MW • 27 countries Canada United Kingdom Sweden Netherlands Denmark Belgium Norway • 5 co
Slide 9: Turbine platforms continues to excel in global marketplace
Turbine platforms continues to excel in global marketplace Both platforms delivering strong market performance in H1 2015 driving our global reach 2 MW platform 3 MW platform Order intake by region, H1 2015 Order intake by region, H1 2015 MW MW Americas Americas 12% EMEA 15% EMEA Asia Pacific 1% Asi
Slide 10: Delivery performance continues to support growth
Delivery performance continues to support growth H1 2015 total MW deliveries up by 35 percent – totalling 2,872 MW. Solid growth in Americas and Asia Pacific, EMEA stable. 2014 2015 Americas EMEA Asia Pacific MW MW MW +85% -4% -1% +151% 1,387 1,291 1,244 +162% 750 792 787 +69% 669 267 241 145 92 86
Slide 11: Combined backlog increased by EUR 1.9bn in the quarter
Combined backlog increased by EUR 1.9bn in the quarter Backlog now at largest-ever level of EUR 16.9bn. Wind turbines increased by EUR 1.3bn, while service increased by EUR 0.6bn. Wind turbines: Service: EUR EUR 8.8bn 8.1bn EUR +1.3bn* EUR +0.6bn* * Compared to Q1 2015. 11 │ Second quarter 2015
Slide 12: Strong US market position reconfirmed in H1 2015
Strong US market position reconfirmed in H1 2015 Continued high market activity in the USA Master Supply Agreements (MSA) Order intake YTD 2015 ~2.3 ~1.7 GW GW* Potential of up to approx 2.3 GW with Firm order intake split between: group of large customers. - Under MSAs (~40 percent) - Outside MSAs
Slide 13: MHI Vestas Offshore Wind on track
MHI Vestas Offshore Wind on track Well received by customers, serial production started on nacelle and blades, JV milestone payments progressing according to plan Order situation Manufacturing ramp-up Well received by customers Serial production started on nacelle and blades Announced Announced firm
Slide 14: Agenda
Agenda Q2 Interim financial report, second quarter 2015. 1. Orders and markets 2. Financials 3. Summary, outlook and questions & answers 14 │ Second quarter 2015
Slide 15: Income statement
Income statement Earnings continue to improve % mEUR Q2 2015 Q2 2014 Key takes: change Revenue 1,749 1,341 30% Cost of sales (1,434) (1,081) 33% • Revenue increased by 30 percent primarily due to higher volume and Gross profit 315 260 21% impact from currency. Fixed costs* (170) (156) 9% EBIT before
Slide 16: Leveraging on fixed costs
Leveraging on fixed costs Continued fixed costs control in high-activity environment Fixed costs (TTM)* Key takes: mEUR and percentage of revenue • Positive effects from turnaround period highlighted by lower fixed costs* in both absolute and relative 671 622 636 terms Q2 2015 vs. Q3 2014 despite 61
Slide 17: Service
Service Service revenue increased by 20 percent Service revenue (onshore) Key takes: mEUR • Service revenue increased by 20 +20% percent compared to Q2 2014 mainly due to organic growth and impact 292 from currency. 260 255 244 235 • EBIT before special items: EUR 49m Margin: 16.8 percent. • Service
Slide 18: Balance sheet
Balance sheet Structural strength of balance sheet further improves Abs. % Assets (mEUR) Q2 2015 Q2 2014 Key takes: change change Non-current assets 2,223 2,222 1 -% Current assets 5,675 4,087 1,588 39% • Improvement in net debt due to improved earnings and net working Total assets 8,001 6,357 1,644
Slide 19: Change in net working capital
Change in net working capital Solid net working capital management in environment characterised by high activity levels and high order intake NWC change over the last 12 months NWC change over the last 3 months mEUR mEUR 292 170 (27) (886) (336) (229) 365 (286) (169) 90 (1.025) 48 82 (1.025) (16) (1
Slide 20: 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 36 34 6 33 33 28 28 5 27 22 4 18 19 3 2 1 0 Q2 Q3 Q4 Q1 Q2 Dec Dec Dec Dec Dec Dec Jun 2014 2014 2014 2015 2015 2009 201
Slide 21: Cash flow statement
Cash flow statement Free cash flow of EUR 183m – mainly generated by underlying operating result Abs. mEUR Q2 2015 Q2 2014 Key takes: change Cash flow from operating activities before 207 134 73 change in net working capital • Free cash flow improvement of Change in net working capital 55 (100) 155
Slide 22: Total investments
Total investments Investments primarily driven by blade moulds and capitalised R&D Net investments Key takes: mEUR • Investments increased by 44 percent +44% compared to Q2 2014. 98 • Investments in the quarter were mainly 79 for blade moulds and capitalised R&D on the 2 and 3 MW platform. 66 63 55
Slide 23: Capital structure
Capital structure Net debt to EBITDA stable and continues to be within target, while solvency ratio increased by 0.6 percentage points Net debt to EBITDA Solvency ratio ×EBITDA percent < 1,0 35.0 min.35.0 34.5 34.0 34.0 33.5 33.0 32.5 32.2 (0.5) (0.7) 32.0 31.6 31.4 31.5 30.8 31.0 (1.5) (1.8) (1.7)
Slide 24: Return on invested capital
Return on invested capital ROIC on strong upward trend with record-high 55 percent. Value creation continues. Return on invested capital (ROIC) Key takes: Percent 54.6 55 • ROIC increased to 54.6 50 percent in Q2 2015 – an 43.8 improvement of 33.2 45 percentage points compared 40 35.3 to Q2 2014. 35
Slide 25: Agenda
Agenda Q2 Interim financial report, second quarter 2015. 1. Orders and markets 2. Financials 3. Summary, outlook and questions & answers 25 │ Second quarter 2015
Slide 26: Summary – Q2 2015
Summary – Q2 2015 A strong quarter executing on our strategy of “Profitable Growth for Vestas” Grow profitably in mature & emerging markets • Order intake: ~3 GW balanced across all regions. - grow faster than the market - • Backlog: combined backlog of EUR 16.9bn. • Revenue: increase of 20 percent.
Slide 27: Outlook 2015
Outlook 2015 2015 outlook unchanged Outlook Revenue (bnEUR) min. 7.5 - service business is expected to continue to grow EBIT margin before special items (%) min. 8.5 - service business is expected to have stable margins Total investments (mEUR) approx 350 Free cash flow (mEUR) min. 600 • Dividend po
Slide 28: Q&A
Q&A Financial calendar 2015: • Disclosure of Q3 2015 (5 November 2015). 28 │ Second quarter 2015
Slide 29: 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,