Vestas Wind Systems A/S · OMXCOP:VWS
Vestas Wind Systems A/S — FY2002 Earnings Presentation
37 slides from Vestas Wind Systems A/S's earnings presentation, Mar 12, 2003
Slide 1: Annual Report 2002
Annual Report 2002 Vestas Wind Systems A/S 12 March 2003
Slide 2: Agenda
Agenda • Overview • Finance • Market development • Products and production • Expectations for the future 2
Slide 3: Agenda
Agenda • Overview • Highlights for 2002 • Structure and organisation • Shareholders and shares • Finance • Market development • Products and production • Expectations for the future 3
Slide 4: Highlights for 2002
Highlights for 2002 • A challenging year for Vestas • Sales of 1,640 MW - at the level of 2001 • Europe compensated a strongly reduced market in the USA • Sales increased to 1,468 MW outside the USA (+45%) • Market share in 2002 of approximately 23% (-1%) • Events • The world’s largest offshore wind
Slide 5: Organisation
Organisation • A fluctuating year for the employees • Highly influenced by the development in the USA • Work sharing programme for 1,200 employees in spring • Reduction of staff in December • 5,999 employees at the end of the year - a net increase of 759 employees • The Vestas School became reality
Slide 6: Structure
Structure • Purchase of Windcast Group AS • Leading supplier of advanced castings • Know-how and supplies secured • Due diligence completes at the end of March 2003 • Changes to group structure in 2003 • Split of responsibilities for sales and manufacturing • 4 global production units • 4 regional s
Slide 7: Shareholders and shares
Shareholders and shares • Shareholder increase Geographical overview of shareholders • 52,738 shareholders % registered by name (+50%) 50 • 79% of the share capital is 45 registered by name (+4%) 40 35 • New employee shares and 30 warrants 25 20 • 223,105 employee shares 2001 2002 15 • 132,000 warra
Slide 8: Agenda
Agenda • Overview • Finance • Accounting policies • Results for 2002 • Market development • Products and production • Expectations for the future 8
Slide 9: Accounting policies
Accounting policies • New Danish accounting policies implemented in 2002 - follows the IAS rules in general • Capitalisation of R&D costs in 2002 • Effect on profit/loss account mEUR 6.3 • Effect on shareholders’ equity mEUR 23.9 • Effect on balance sheet mEUR 34.2 • Capitalisation of financial leas
Slide 10: Profit and loss account
Profit and loss account mEUR at 1 EUR=7,4243 DKK 2002 2001 2000 Net turnover 1.395 1.282 869 Growth in turnover 8,7% 47,6% 37,0% Gross profit 142 192 136 Gross margin 10,2% 15,0% 15,7% Operating Profit (EBIT) 74 143 100 EBIT margin 5,3% 11,1% 11,5% Profit from associated companies 0 19 25 Write down
Slide 11: Balance sheet
Balance sheet mEUR at 1 EUR=7,4243 DKK 2002 2001 2000 Intangible fixed assets 36 27 20 Tangible fixed assets 281 205 149 Financial fixed assets 5 5 30 Current assets 947 772 443 Total assets 1.269 1.009 642 Equity 596 566 243 Provisions 130 97 59 Long term debt 113 78 70 Short term debt 430 268 270
Slide 12: Working capital
Working capital 31/12 31/12 2002 2001 Change mEUR Inventories 223 178 (45) Receivables 676 556 (120) Prepayments (38) (20) 18 Trade payables (148) (123) 25 Other payables (86) (72) 14 Net Working Capital 627 519 (108) 12
Slide 13: Working capital
Working capital • In 2002, working capital has increased by mEUR 108 - from 40% to 45% of turnover • Disregarding the receivable from from sale of shares in Gamesa Eólica S.A. in 2001, working capital increased from 29% to 45% of turnover in 2002 • Large supplies for especially Germany around new ye
Slide 14: Cash flow statement
Cash flow statement mEUR at 1 EUR=7,4243 DKK 2002 2001 2000 Cash flow from operations (126) (14) 14 Capital expenditures 3 37 (92) Cash flow from financing activities 123 (31) 94 Net cash flow 0 (8) 15 Cash at bank and in hand 21 21 29 14
Slide 15: Key figures
Key figures mEUR at 1 EUR=7,4243 DKK 2002 2001 2000 Increase in turnover 8,7% 47,6% 37,0% Gross margin 10,2% 15,0% 15,7% Operating margin (EBIT) 5,3% 11,1% 11,5% Return on equity 7,8% 84,1% 39,8% Earnings per share (EUR) 0,43 3,25 0,77 EPS growth -87% 319% 32% Net debt / equity (gearing) 45% 22% 58%
Slide 16: Agenda
Agenda • Overview • Finance • Market development • Installed capacity • Vestas’ sales • Market status • Products and production • Expectations for the future 16
Slide 17: Accumulated installed capacity end 2002
Accumulated installed capacity end 2002 • Preliminary statement shows installed capacity in 2002 of 7,000 MW • Total accumulated installed capacity is estimated to app. 32,000 MW Europe 23,737 MW 5,925 in 2002 America 5,113 MW Asia 520 in 2002 2.635 MW 398 in 2002 Rest of world 443 MW 157 in 2002 17
Slide 18: Installed capacity in 2002
Installed capacity in 2002 • World market growth of approximately 3% • Major fluctuations in the geographical distribution • USA decreased by approximately 75% • The world market outside the USA increased by app. 33% 2002 2001 Market Total MW Vestas Market share Total MW Vestas Market share USA 410
Slide 19: Geographical overview 2002 sales totals 1,640 MW
Geographical overview 2002 sales totals 1,640 MW Japan USA/Canada 0,7% Italy 16,1% 8,9% Iran 0,9% Australia Benelux France 2,0% 7,8% 0,7% China UK/Ireland 0,6% 3,5% Other Scandinavia India 3,4% 17,9% 1,1% Portugal 0,4% Taiwan Poland 0,2% 1,8% Others 0,4% Germany/Aut 37,0% 19
Slide 20: Europe
Europe • Germany - the world’s largest market for wind power • App. 3,200 MW installed in 2002 - another record year • Supplies postponed from 2002 into 2003 • Vestas’ market share in 2002 is 18% • Vestas expects continued growth in 2003 • Benelux - a growing market • Record year - 128 MW supplied i
Slide 21: Europe (2)
Europe (2) • Scandinavia • 294 MW supplied in 2002 • Market share of 44% • Limited expectations for especially the Danish market in 2003 • The British Isles • 57 MW supplied • Market share of 57% • Clear, positive target for 10% renewable energy before 2010 • Positive expectations for the future 21
Slide 22: Europe (3)
Europe (3) • Poland is an interesting new market • 30 MW supplied in 2002 • Lack of clarification for power sales prices • Positive expectations long-term • Italy • 146 MW supplied in 2002 • Very high market share • Lack of clarification for certificate prices • France • Developing slowly • Positive
Slide 23: Europe (4)
Europe (4) • Status for the Spanish market • Continuously, the world’s second largest market • No Vestas-sales in Spain in 2002 as expected • Local presence a necessity - industrial plans • Either access via acquisition or via establishment of own production • Vestas’ strategy for the Spanish market
Slide 24: Europe (5)
Europe (5) • The Horns Reef project - a milestone for wind power • One of the largest entrepreneur assignments in Denmark in 2002 • 160 MW = 150,000 Danish household’s annual electricity consumption • The world’s largest offshore wind power plant • Vestas supplied turbines, remote monitoring system,
Slide 25: Europe (6)
Europe (6) • Vestas is well prepared for new offshore projects • Vestas selected as supplier • 50 V80-2.0 MW in Belgium • 30 V80-2.0 MW in England • 30 V80-2.0 MW in England • Plans on several markets • Germany • Benelux • The British Isles • Sweden 25
Slide 26: North America
North America • USA • Late PTC extension in March 2002 - expiring end of 2003 • The clarification of the “Energy bill”/PTC was postponed several times during the autumn • The feasibility of the projects is influenced by declining dollar exchange rate and the decrease in ratings for a number of elect
Slide 27: Oceania and Asia
Oceania and Asia • Positive development in Australia - high expectations • Positive expectations for the Japanese market • Some optimism on the Chinese market 27
Slide 28: Agenda
Agenda • Overview • Finance • Market development • Products and production • Products • Facilities • Expectations for the future 28
Slide 29: Products
Products • New generation of MW- turbines • V90-3.0 MW - a ground breaking design • Prototypes installed • Test and verification • Launch in 2003 • VestasOnlineTM • Unique remote monitoring and control system • Product corrections on V80 • The V80-2.0 MW turbine lives up to Vestas’ high quality stan
Slide 30: Production facilities
Production facilities • Nacelle assembly • Full capacity on new factory in Scotland • New factory is established on Tasmania with capacity for 75- 150 MW-turbines • Conversion from kW- to MW- turbines on factory in Denmark • Blades • Production on planned capacity at new factory in Germany • Convers
Slide 31: Production facilities (2)
Production facilities (2) • Tower & Steel • Full capacity on new tower factory in Scotland • Know-how is secured for cast components via purchase of Windcast Group AS • Controllers • Electronics factory and controller factory in Denmark integrated in one production unit 31
Slide 32: Production capacity and investments
Production capacity and investments • Production capacity at the beginning of 2003 • The capacity includes approximately 1,000 MW for kW- turbines and approximately 2,000 MW for MW-turbines calculated on the basis of full utilisation all year • Expansion in 2003 • In 2003, the capacity will be incre
Slide 33: Agenda
Agenda • Overview • Finance • Market development • Products and production • Expectations for the future • Order backlog • Expectations for 2003 • Vision and goals 33
Slide 34: Order backlog 1 January 2003
Order backlog 1 January 2003 Firm and unconditional orders for delivery in 2003-2004. The order backlog corresponds to approx. 4 months average production Other 9,0% Germany/Aut January 2003 orders for 39,1% Egypt, value mEUR 65 Benelux 9,3% Portugal 2,2% UK/Ireland 10,1% March 2003 offshore order f
Slide 35: Expectations for 2003
Expectations for 2003 • Continued growth • The European markets will be driving the growth • The North American market will contribute positively, however, there is a continued uncertainty related to exchange rates etc. • Currently, half of the expected sales in the USA in 2003 is secured by firm an
Slide 36: Vision and goals
Vision and goals • Vision • Global increase in energy consumption • Growing environmental awareness • Increased competitiveness • Conversion to other sources of power • Wind power - one of the significant sources of energy • The Vestas Group’s strategic goals • World market share of 25-30% measured
Slide 37: With quality and care we use the wind to generate competitive, clean and renewable energy
With quality and care we use the wind to generate competitive, clean and renewable energy 37