Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — FY2021 Earnings Presentation
29 slides from Vestas Wind Systems A/s's earnings presentation, February 2022
Slide 1: Full Year 2021
FULL YEAR 2021 Vestas Wind Systems A/S Copenhagen, February 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 2021
KEY HIGHLIGHTS IN 2021 Revenue of EUR 15.6bn Year on year revenue growth despite increasing supply chain challenges. High level of deliveries at 16.6 GW. EBIT margin of 3 percent EBIT hampered by supply chain disruptions, causing cost inflation, delays and high warranty provisions. Total order intak
Slide 4: Agenda
AGENDA Orders and markets Financials Strategy and market outlook Outlook & Q&A 4 Full year 2021 Classification: Public
Slide 5: Global Business Environment
GLOBAL BUSINESS ENVIRONMENT Employee health and safety top priority Challenging global business environment and supply chain instability expected to last throughout 2022 Renewables Maintain critical business • Wind power is increasingly critical as short-term electricity infrastructure continuity de
Slide 6: Power Solutions
POWER SOLUTIONS Firm and unconditional order intake, MW Increased pricing is a key factor for value creation Onshore and offshore 17,249 Highlights AME 6,403 13,896 (19)% 4,571 • Decrease in order intake impacted by accelerating cost inflation and timing of individual markets EMEA 7,417 7,637 • Powe
Slide 7: Service Business
SERVICE BUSINESS Service order backlog GW under active Well positioned for further growth +EUR 5bn comp. to Q4 2020 service contracts Average years contract duration Highlights EUR 129 10 29bn GW Years (25.6 onshore) (122 onshore) • Offshore fully integrated within the service business with further
Slide 8: Sustainability Strategy
SUSTAINABILITY STRATEGY The most sustainable company in the world CO2e avoided 493 532 +8% CO2e avoided over the Highlights lifetime of the capacity produced and shipped during the period (million t) 2020 2021 • Vestas named the most sustainable company in the world by Corporate Knights and achieved
Slide 9: Agenda
AGENDA Orders and markets Financials Strategy and market outlook Outlook & Q&A 9 Full year 2021 Classification: Public
Slide 10: Income Statement – Full Year
INCOME STATEMENT – FULL YEAR mEUR 2021 2020 % change Strong resilience in challenging times Revenue 15,587 14,819 5.2% Production costs (14,027) (13,281) 5.6% Gross profit 1,560 1,538 1.4% Highlights SG&A costs* (1,099) (788) 39.5% EBIT before special items 461 750 (38.5)% • Revenue increased 5.2 pe
Slide 11: Income Statement – Q4 2021
INCOME STATEMENT – Q4 2021 mEUR Q4 2021 Q4 2020 % change Strong activity levels but challenged profitability Revenue 4,551 4,273 6.5% Production costs (4,156) (3,734) 11.3% Gross profit 395 539 (26.7)% Highlights SG&A costs* (289) (181) 59.7% EBIT before special items 106 358 (70.4)% • Revenue incre
Slide 12: Power Solutions – Full Year
POWER SOLUTIONS – FULL YEAR Profitability further challenged Power Solutions revenue and EBIT margin, mEUR and percent Highlights +55.4% 12,764 13,104 2,338 • Revenue increased by 2.7 percent YoY, driven by 10,276 offshore offsetting a decrease in the onshore 8,465 8,431 activity level 13.5 • EBIT m
Slide 13: Service Business – Full Year
SERVICE BUSINESS – FULL YEAR Continued positive service performance Service revenue and EBIT margin, mEUR and percent Highlights +63.2% 2,484 • Service revenue increased 21 percent compared to 2,055 1,871 2020 driven by higher onshore activity and 1,669 inclusion of offshore as well as increase in 1
Slide 14: SG&A Costs
SG&A COSTS SG&A costs under control SG&A costs (TTM)*, mEUR and percent (0.3) %-pts 1,099 Highlights 757 788 733 • Higher SG&A costs primarily driven by the integration 672 of offshore causing increase in depreciation and IT cost 7.4 7.1 6.6 6.2 • Relative to activity levels, SG&A costs amounted to
Slide 15: Net Working Capital
NET WORKING CAPITAL Stable NWC development NWC change over the year, mEUR Highlights • Net working capital generally stable, negatively impacted by an increase in the level of inventory partly offset by payables and down- and milestone (115) payments 705 (678) (7) 173 (1,049) (1,127) NWC end 2020 Re
Slide 16: Cash Flow Statement
CASH FLOW STATEMENT Free cash flow continues to be positive mEUR 2021 2020 Abs. Change Highlights Cash flow from operating activities before change in net working capital 987 1,331 (344) Change in net working capital* 9 (588) 597 • Positive free cash flow before financial investments Cash flow from
Slide 17: Total Investments – Full Year
TOTAL INVESTMENTS – FULL YEAR Higher investments year-over-year Total net investments*, mEUR Highlights 813 749 668 20 687 ** • Investments of EUR 813m in 2021, increase from 65 2020 mainly driven by investments in the V236 407 offshore turbine and the modular onshore platform, EnVentus. 729 603 506
Slide 18: Provisions & LPF
PROVISIONS & LPF Lost Production Factor (LPF), Percent Focus on 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 Dec 2009 2013 2017 2021 • Warranty provisions made corresponding to 4.4 percent
Slide 19: Capital Structure
CAPITAL STRUCTURE Net debt to EBITDA well below threshold Net debt to EBITDA before special items Highlights 1.00 • Net debt to EBITDA at low level of (0.9) in Q4 2021 (0.3) (0.2) (0.4) • Financial strength highlighted by Baa1 rating from (0.9) Moody’s (1.4) • EUR 2bn sustainability-linked revolving
Slide 20: Agenda
AGENDA Orders and markets Financials Strategy and market outlook Outlook & Q&A 20 Full year 2021 Classification: Public
Slide 21: Global Leader in Sustainable Energy Solutions
. FUTURE H2 INNOVATION DEVELOPMENT OFFSHORE GLOBAL SERVICE LEADER IN SUSTAINABLE ONSHORE ENERGY SOLUTIONS 21 Capital Markets Day 2021 Classification: Public
Slide 22: For Wind This Means a Step Change in Any Scenario
FOR WIND THIS MEANS A STEP CHANGE IN ANY SCENARIO Vestas is fundamentally in the right place at the right time World energy consumption by source 2020 Global wind generation capacity scenarios In exajoule (EJ) and percent (%) In terawatts (TW) Wind electricity 1% Other electricity 19% 8 Net Zero 7 >
Slide 23: Our Portfolio Consists of Three Attractive Segments
OUR PORTFOLIO CONSISTS OF THREE ATTRACTIVE RE SEGMENTS Vestas uniquely positioned in the industry ONSHORE OFFSHORE SERVICE Large market, healthy growth Younger market, high growth Mid-sized market, high growth Market expectation 2021-2025 Market expectation 2021-2025 Market expectation 2021-2025 New
Slide 24: Long-Term Financial Targets
WITH OUR LONG-TERM FINANCIAL TARGETS IN PLACE REVENUE EBIT MARGIN FCF ROCE Outgrow market >10% by 2025 Positive every year >20% over the cycle 2025e 0-4% 10% 24 Capital Markets Day 2021 Classification: Public
Slide 25: Ambitious Targets for Our Sustainability Journey
AND AMBITIOUS TARGETS FOR OUR SUSTAINABILITY JOURNEY CARBON FOOTPRINT CIRCULARITY Carbon neutral Producing zero-waste company by 2030 – wind turbines by 2040 without using carbon offsets PEOPLE ENERGY TRANSITION Safest, most inclusive Leading the transition & socially-responsible towards a world com
Slide 26: Agenda
AGENDA Orders and markets Financials Strategy and market outlook Outlook & Q&A 26 Full year 2021 Classification: Public
Slide 27: Outlook 2022
OUTLOOK 2022 Outlook Revenue (bnEUR) 15 – 16.5 - Service is expected to grow approx. 5 percent EBIT margin before special items (%) 0–4 - Service margin is expected to be approx. 25 percent Total investments (mEUR) Approx. 1,000 Excl. acquisitions of subsidiaries, joint ventures, associates and fina
Slide 28: Financial Calendar 2022: Q&A
Financial calendar 2022: • Disclosure of Q1 2022 (4th May) Q&A • • Disclosure of Q2 2022 (10th August) Disclosure of Q3 2022 (2nd November) 28 Full year 2021 Classification: Public
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,