Vestas Wind Systems A/S · OMXCOP:VWS
Vestas Wind Systems A/S — Q2 2022 Earnings Presentation
22 slides from Vestas Wind Systems A/S's earnings presentation, August 2022
Slide 1: Second Quarter 2022
Vestas Wind Systems A/S SECOND QUARTER 2022 August 2022
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 Q2 2022
KEY HIGHLIGHTS IN Q2 2022 Sustained price increases continue to pave the way towards profitability target Maintaining the discipline to protect value creation Order intake of 2.2 GW Wind turbine order backlog remains high at EUR 18.9bn Revenue of EUR 3.3bn Revenue decreased by 7 percent year-on-year
Slide 4: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 4 Classification: Public
Slide 5: Global Business Environment
GLOBAL BUSINESS ENVIRONMENT Employee health and safety top priority Challenging global business environment and supply chain disruption expected to last throughout 2022 Renewables Maintain • Energy crisis underlines wind power’s criticality to meet critical business electricity demand, ensure energy
Slide 6: Power Solutions
POWER SOLUTIONS Firm and unconditional order intake, MW Increased pricing remains key to value creation Onshore Offshore 4,557 Highlights AME 1,302 (53%) • Decrease in order intake driven by EMEA and 2,123 APAC; impacted by delayed orders from customers 733 EMEA 2,758 balancing cost inflation and of
Slide 7: Service Business
SERVICE BUSINESS Service order backlog GW under active Average backlog Well positioned for further growth Up EUR 4.4bn comp. to Q2 2021 service contracts contract duration Highlights EUR 138 10 31.3bn GW Years (27.3bn onshore) (130 GW onshore) • Increased activity level and higher transactional sale
Slide 8: Sustainability Strategy
SUSTAINABILITY STRATEGY The most sustainable company in the world CO2e avoided 167 105 (37%) Expected CO2e avoided Highlights over the lifetime of the capacity produced and shipped during the period Q2 2021 Q2 2022 (million t) • Lifetime CO2e avoided by produced and shipped capacity in the quarter d
Slide 9: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 9 Classification: Public
Slide 10: Income Statement
INCOME STATEMENT Challenged profitability as expected in revised outlook mEUR Q2 2022 Q2 2021** % change Revenue 3,305 3,536 (6.5%) Highlights Production costs (3,208) (3,161) 1.5% Gross profit 97 375 (74.1)% • Revenue decreased 7 percent YoY driven by lower SG&A costs* (279) (281) 0.7% offshore ins
Slide 11: Power Solutions
POWER SOLUTIONS Profitability continuously challenged Power Solutions revenue and EBIT margin before special items, mEUR Highlights 4,921 (10.6%) 1,191 3,830 335 • Revenue decreased by 11 percent YoY, driven by 2,914 2,605 project delay in offshore 719 78 1,862 157 • EBIT margin before special items
Slide 12: Service Business
SERVICE BUSINESS Higher activity levels but lower profitability Service revenue and EBIT margin, mEUR and percent +12.5% Highlights 721 700 622 617 623 • Service revenue increased 13 percent compared to 27.8 Q2 2021 driven by higher activity overall and transactional sales as well as inflation lever
Slide 13: SG&A Costs
SG&A COSTS SG&A costs under control SG&A costs (TTM)*, mEUR and percent Highlights 1,128 1,212 1,209 882 7.5 7.6 849 7.2 • Relative to activity levels, SG&A costs amounted to 7.6 percent – an increase of 1.8 percentage points 5.8 5.8 compared to Q2 2021 primarily related to offshore impairment and t
Slide 14: Net Working Capital
NET WORKING CAPITAL Increased NWC in the quarter NWC change over the quarter, mEUR Highlights • Net working capital increased in Q2 2022 driven by an increase in the level of inventory partly offset by down- and milestone payments (498) 716 (63) (66) (488) 32 (609) NWC end Receiv- Inventories Contra
Slide 15: Cash Flow Statement
CASH FLOW STATEMENT Negative cash flow in the quarter mEUR Q2 2022 Q2 2021*** Abs. change Cash flow from operating activities Highlights before change in net working capital (90) 107 (197) Change in net working capital* (98) 245 (343) • Negative cash flow from operating activities of Cash flow from
Slide 16: Total Investments
TOTAL INVESTMENTS Stable investments level Total net investments*, mEUR 247 Highlights 214 193 168 174 • Investments of EUR 174m in Q2 2022, on par with last year Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Cash flow from investing activities* * Excl. acquisitions of subsidiaries, joint ventures, associ
Slide 17: Provisions & LPF
PROVISIONS & LPF Lost Production Factor (LPF), Percent Elevated warranty provisions and LPF 5 4 3 Highlights 2 1 • LPF* continues at high level as a consequence of 0 the extraordinary repair and upgrade level Dec Dec Dec Jun 2009 2013 2017 2022 • Warranty provisions made corresponding to 3.7 percent
Slide 18: Capital Structure
CAPITAL STRUCTURE Net debt to EBITDA increasing due to challenged profitability Net debt to EBITDA before special items Highlights 1.0 0.5 • Net debt to EBITDA at 0.5 in Q2 2022 0.0 (0.2) (0.5) • Commitment to cash focus and capital allocation (0.9) policy remains Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2
Slide 19: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 19 Classification: Public
Slide 20: Outlook 2022
OUTLOOK 2022 Outlook Revenue (bnEUR) 14.5 – 16 - Service is expected to grow min. 10 percent EBIT margin before special items (%) (5) – 0 - Service margin is expected to be approx. 23 percent Total investments (mEUR) Approx. 1,000 Excl. acquisitions of subsidiaries, joint ventures, associates and fi
Slide 21: Financial Calendar 2022: Q&A
Financial calendar 2022: • Disclosure of Q3 2022 (2 November) Q&A 21 Q2 2022 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,