Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — Q3 2018 Earnings Presentation
24 slides from Vestas Wind Systems A/s's earnings presentation, Nov 7, 2018
Slide 1: Third quarter 2018
Third quarter 2018 Vestas Wind Systems A/S Copenhagen, 7 November 2018
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 Quarterly performance Strong order intake Order intake of 3.3 GW; an increase of 25 percent year-over-year leading to all-time high order backlog Good service performance Organic revenue growth of 14 percent, and EBIT margin of 24 percent EBIT before special items of EUR 276m EBIT mar
Slide 4: Agenda
Agenda Q3 Interim financial report, third quarter 2018 1. Orders and markets 2. Financials 3. Outlook and questions & answers 4 Third quarter 2018 (Public) 7 November, 2018
Slide 5: Q3 order intake
Q3 order intake Order intake at 3,261 MW, with an average selling price of EUR 0.78m per MW Order intake Average selling price of order intake MW mEUR per MW +25% 3,844 3,807 3,261 2,615 1,629 0.80 0.78 0.74 0.73 0.71 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2017 2017 2018 2018 2018 2017 2017 2018 2018 2018 Ke
Slide 6: Americas
Americas Deliveries in line with last year while order intake increases 36 percent Market highlights Deliveries MW • Decline in US deliveries as a result of PTC 2.735 2.660 component deliveries in 2017 -3% PTC and trade tariffs in the USA… • Argentina and Mexico as main contributors to • Continued s
Slide 7: Europe, Middle East, and Africa
Europe, Middle East, and Africa Broad based order intake in EMEA; order intake up 11 percent Market highlights Deliveries MW • Decline in deliveries mainly driven by UK, but 2.651 2.198 partly offset by France and Italy European RE target increased to 32% -17% from 27% for 2030… • Continued solid le
Slide 8: Asia Pacific
Asia Pacific Strong deliveries across the region’s markets Market highlights Deliveries MW • Diversified deliveries secures high level of 1.396 activity Positive signals in broader APAC… 405 245% • Strong development in India, Australia, and • Feed-in tariffs in Vietnam for onshore wind Thailand 9M
Slide 9: All-time high order backlog of close to EUR 24bn
All-time high order backlog of close to EUR 24bn Combined backlog increased 17 percent since Q3 last year Wind turbines: Service: EUR EUR 10.5bn 13.2bn EUR +0.3bn* EUR +0.4bn* * Compared to Q2 2018 9 Third quarter 2018 (Public) 7 November, 2018
Slide 10: First turbine manufacturer to launch a 10 MW turbine
First turbine manufacturer to launch a 10 MW turbine V164 turbine continues to develop on proven technology and track record Track record… Key highlights • Conditional order for 950 MW Moray East project to deliver 100 V164-9.5MW ~3.8 > 1.000 turbines installed • Firm and unconditional order of 855
Slide 11: Agenda
Agenda Q3 Interim financial report, third quarter 2018 1. Orders and markets 2. Financials 3. Outlook and questions & answers 11 Third quarter 2018 (Public) 7 November, 2018
Slide 12: Income statement
Income statement Revenue on par with last year but with lower profitability mEUR Q3 2018 Q3 2017* % change Key highlights Revenue 2,811 2,743 2% • Revenue on par with Q3 2017, primarily driven by Production costs (2,376) (2,217) (7)% higher activity in Service; negative FX impact of Gross profit 435
Slide 13: Leveraging on SG&A
Leveraging on SG&A Continued control of SG&A costs SG&A costs (TTM)* Key highlights mEUR and percent of revenue • SG&A costs down YoY (0.2) %-pts 733 • Relative to activity levels, SG&A costs amounted to 713 722 705 709 692 705 6.7 percent – a decrease of 0.2 percentage points 674 662 compared to Q3
Slide 14: Service
Service Good service performance Service revenue Key highlights mEUR • Service revenue increased 11 percent compared to Q3 2017; negative FX impact of approx. EUR 10m +11% resulting in 14 percent organic growth 414 413 409 • EBIT of EUR 100m (24.4 percent margin) as a result 368 366 of reliable turb
Slide 15: Balance sheet
Balance sheet Balance sheet remains strong and provides flexibility Assets (mEUR) Q3 2018 Q3 2017* Abs. change % change Key highlights Non-current assets 3,061 2,778 283 10% • Net interest bearing position of EUR 1,754m, Current assets 8,220 7,784 436 6% negatively impacted by net working capital de
Slide 16: Change in net working capital
Change in net working capital Continued high level of inventory as a result of strong demand NWC change over the last 12 months* NWC change over the last 3 months* mEUR mEUR 980 (1.356) 39 (157) (8) (765) 258 (45) (765) 273 (24) (176) 423 (1,053) NWC end Receiv- Contract Inventories Pre- Payables Ot
Slide 17: Warranty provisions and Lost Production Factor
Warranty provisions and Lost Production Factor Warranty consumption and LPF continue at a low levels Warranty provisions made and consumed Lost Production Factor (LPF) mEUR Percent 6 54 55 5 43 44 41 41 41 37 36 4 27 3 2 1 0 Q3 Q4 Q1 Q2 Q3 Dec Dec Dec Dec Dec Dec Dec Dec Dec Sep 2017 2017 2018 2018
Slide 18: Cash flow statement
Cash flow statement Negative free cash flow in the third quarter mEUR Q3 2018 Q3 2017* Abs. change Key highlights Cash flow from operating activities 382 493 (111) • Free cash flow before financial investments of EUR before change in net working capital (223)m, impacted by net working capital develo
Slide 19: Total investments
Total investments Underlying investments increased compared to Q3 2017 Total investments* Key highlights mEUR +31 • Underlying investments increased by EUR 31m 184 compared to Q3 2017, primarily driven by capitalised 176 R&D as well as tangible blade investments 158 65 127 121 119 Q3 Q4 Q1 Q2 Q3 201
Slide 20: Capital structure
Capital structure Net debt to EBITDA well below threshold; solvency ratio remains higher than 25 percent Net debt to EBITDA* Solvency ratio* xEBITDA Percent 1 <1.0 40 0 35 29.9 28.6 27.6 30 -1 25.9 25.9 (1.3) (1.2) 25 -2 (1.5) (1.7) (2.0) 20 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2017 2017 2018 2018 2018 201
Slide 21: Agenda
Agenda Q3 Interim financial report, third quarter 2018 1. Orders and markets 2. Financials 3. Outlook and questions & answers 21 Third quarter 2018 (Public) 7 November, 2018
Slide 22: Outlook 2018
Outlook 2018 New outlook Previous outlook Revenue (bnEUR) 10.0 - 10.5 10.0 – 10.5 - Service business is expected to grow EBIT margin before special items (%) 9.5 - 10.5 9.5 – 10.5 - Service margin expected to increase compared to 2017 Total investments (mEUR) (Excl. the acquisition of Utopus Insight
Slide 23: Financial calendar 2018: Q&A
Financial calendar 2018: Q&A • • Capital Markets Day (29 November) Disclosure of annual report 2018 and outlook for 2019 (7 February) 23 Third quarter 2018 (Public) 7 November, 2018
Slide 24: 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,