Vestas Wind Systems A/S · OMXCOP:VWS
Vestas Wind Systems A/S — Q2 2019 Earnings Presentation
25 slides from Vestas Wind Systems A/S's earnings presentation, Aug 15, 2019
Slide 1: Second Quarter 2019
SECOND QUARTER 2019 Vestas Wind Systems A/S Copenhagen, 15 August 2019
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 order intake and all-time high order backlog 5.7 GW of order intake in Q2 including first order for the new EnVentus platform Total revenue of EUR 2,121m Six percent decrease compared to Q2 2018 EBIT of EUR 128m EBIT margin at 6.0 percent impacted by competitive
Slide 4: Agenda
AGENDA Orders and markets Financials Outlook and Q&A 4 Second quarter 2019 Classification: Public
Slide 5: Second Quarter Order Intake
SECOND QUARTER ORDER INTAKE Record high order intake at 5.7 GW, with an average selling price of EUR 0.75m per MW Order intake Average selling price of order intake MW mEUR per MW +50% 5,517 5,696 0.81 0.78 0.76 3,807 0.75 3,261 0.71 3,004 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2019 2019 2018
Slide 6: All-time high order backlog of more than EUR 31bn
ALL-TIME HIGH ORDER BACKLOG OF MORE THAN EUR 31BN Combined backlog increased by EUR 8.5bn YoY, an increase of 37 percent Wind turbines: Service: EUR EUR 15.9bn 15.6bn EUR +5.7bn* EUR +2.8bn* * Compared to Q2 2018. 6 Second quarter 2019 Classification: Public
Slide 7: Regional Highlights: Americas
REGIONAL HIGHLIGHTS: AMERICAS Demand in USA and Latin America continues to increase Market highlights Deliveries MW • Increase mainly driven by US deliveries 1,608 1,010 +59% PTC and trade tariffs in the USA… • Argentina, Canada, and Mexico also contributing to the increase • Continued strong US dem
Slide 8: Regional Highlights: Europe, Middle East, and Africa
REGIONAL HIGHLIGHTS: EUROPE, MIDDLE EAST, AND AFRICA High activity levels as commitments towards renewables increase Market highlights Deliveries MW • Delivery growth in Spain, Italy, and Ukraine 1,199 1,441 offsets expected decline in Germany +20% Continuously increasing the penetration of renewabl
Slide 9: Regional Highlights: Asia Pacific
REGIONAL HIGHLIGHTS: ASIA PACIFIC Strong order intake Market highlights Deliveries MW • Decrease primarily driven by Thailand, and 954 China, and India 620 -35% Increased commitment in China… • Australia remains stable • Large scale auctions and tenders started; H1 2018 H1 2019 distributed wind segm
Slide 10: Service Business
SERVICE BUSINESS Well positioned as the world’s largest service provider Key highlights • First EnVentus order in Finland results in 30-year AOM 5000 service agreement GW of turbines with active 86 service contracts • More than 300 MW of multibrand deals in the US • 14-year full scope AOM 5000 servi
Slide 11: MHI Vestas Offshore Wind
MHI VESTAS OFFSHORE WIND Operational excellence secures fast and safe execution of projects Track record… Key highlights • Record installation time of the Norther project, seeing 50 percent faster installation times than the first V164 project only three years ago ~4.6* > 1,100 turbines installed •
Slide 12: Agenda
AGENDA Orders and markets Financials Outlook and Q&A 12 Second quarter 2019 Classification: Public
Slide 13: Income Statement
INCOME STATEMENT Lower profitability caused by Power solutions Key highlights mEUR Q2 2019 Q2 2018 % change Revenue 2,121 2,260 (6)% • Revenue decreased 6 percent Production costs (1,820) (1,844) (1)% • Power solutions expectedly impacted by back-end loaded Gross profit 301 416 (28)% activity profil
Slide 14: SG&A Costs
SG&A COSTS SG&A costs under control Key highlights SG&A costs (TTM)* EURm and percent 0.3 %-pts 733 722 725 • SG&A costs increased YoY (12m rolling) to cater for higher 692 705 709 674 672 activity levels in 2019 662 • Depreciation and amortisation increased EUR 23m YoY primarily due to introduction
Slide 15: Service Business
SERVICE BUSINESS Strong service performance Key highlights Service revenue and EBIT margin, onshore EURm and percent • Service revenue increased by 15 percent compared to Q2 15% 2018, mainly driven by higher activity levels 481 476 • 2019 Q2 EBIT: EUR 135m 413 409 424 2019 Q2 EBIT margin: 28.4 perce
Slide 16: MHI Vestas Offshore Wind
MHI VESTAS OFFSHORE WIND Increasing revenue and net profit Key highlights Revenue and net profit* EURm • Revenue in the JV increased EUR 508m compared to Q2 2018, mainly driven by deliveries for Horns Reef III and the Norther 633 project 534 • Improved profitability is a result of higher activity le
Slide 17: Change in Net Working Capital
CHANGE IN NET WORKING CAPITAL Build-up of net working capital to cater for high activity levels Key highlights NWC change over the last 3 months mEUR • Net working capital in the quarter negatively impacted by increased inventory, offset by higher down- and milestone payments and payables (534) 921
Slide 18: Cash Flow Statement
CASH FLOW STATEMENT Ramp-up for a busy second half impacts free cash flow in the first half of 2019 Key highlights mEUR Q2 2019 Q2 2018 Abs. change Cash flow from operating activities before change in net working capital 178 377 (199) • Free cash flow before financial investments increased EUR 98m c
Slide 19: Total Investments
TOTAL INVESTMENTS Increased total investments to meet strong demand Key highlights Total investments* EURm • Underlying investments increased approx. EUR 54m in order to +54 meet strong demand and new product launches 205 176 175 158 121 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2019 2019 Cash flow from investi
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 6 5 53 50 44 41 41 44 4 37 36 36 39 3 2 1 0 Q2 Q3 Q4 Q1 Q2 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Jun 2018 2018 2018 20
Slide 21: Capital Structure
CAPITAL STRUCTURE Net debt to EBITDA well below threshold Net debt to EBITDA before special items Solvency ratio mEUR Percent 1.0 35 30 (1.3) (1.2) (1.4) 25.9 25.9 26.1 (1.5) 24.9 (2.2) 25 25.0 Q2 Q3 Q4 Q1 Q2 22.1 2018 2018 2018 2019 2019 20 Q2 Q3 Q4 Q1 Q2 Net debt to EBITDA, last 12 months 2018 201
Slide 22: Agenda
AGENDA Orders and markets Financials Outlook and Q&A 22 Second quarter 2019 Classification: Public
Slide 23: Outlook 2019
OUTLOOK 2019 Outlook Previous outlook Revenue (bnEUR) 11 - 12.25 10.75 - 12.25 - Service is expected to grow approx. 10 percent EBIT margin before special items (%) 8-9 8 - 10 - Service margin is expected to be minimum 24 percent Total investments (mEUR) (*Excl. the acquisition of SOWITEC, any inves
Slide 24: Financial calendar 2019: Q&A
Financial calendar 2019: • Disclosure of Q3 2019 (7 November) Q&A 24 Second quarter 2019 Classification: Public
Slide 25: 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,