Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — Q1 2019 Earnings Presentation
26 slides from Vestas Wind Systems A/s's earnings presentation, May 8, 2019
Slide 1: First Quarter 2019
FIRST QUARTER 2019 Vestas Wind Systems A/S Copenhagen, 8 May 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 Organisational update Anders Runevad to step down as CEO effective 1 August 2019; Henrik Andersen, CEO of Hempel A/S and member of Vestas’ board to succeed Record Q1 order intake and all-time high order backlog 3 GW of order intake in Q1 leads to combined order backlog of more than EU
Slide 4: Agenda
AGENDA Orders and markets Financials Outlook and Q&A 4 First quarter 2019 Classification: Public
Slide 5: Expanding Our Market Leadership
EXPANDING OUR MARKET LEADERSHIP Vestas expands its market share in both onshore and offshore Market share development Percent 100% = 45 GW 100% = 47 GW 100% = 4.3 GW 100% = 4.8 GW 16.4% Vestas Vestas 22.2% Siemens Gamesa 31.7% 14.6% Siemens Gamesa 56.0% Siemens Gamesa Goldwind 14.7% GE 11.6% Goldwin
Slide 6: First Quarter Order Intake
FIRST QUARTER ORDER INTAKE Record high order intake at 3 GW, with an average selling price of EUR 0.81m per MW Order intake Average selling price of order intake MW mEUR per MW +84% 5,517 0.81 0.78 0.76 3,807 0.73 3,261 0.71 3,004 1,629 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 2018 2019 2018 201
Slide 7: All-Time High Order Backlog of More Than EUR 28bn
ALL-TIME HIGH ORDER BACKLOG OF MORE THAN EUR 28BN Combined backlog increased by EUR 6.7bn YoY, an increase of 31 percent Wind turbines: Service: EUR EUR 13.3bn 15.0bn EUR +4.0bn* EUR +2.7bn* * Compared to Q1 2018. 7 First quarter 2019 Classification: Public
Slide 8: Regional Highlights: Americas
REGIONAL HIGHLIGHTS: AMERICAS Demand in US and Latin America continues to increase Market highlights Deliveries MW • Increase mainly driven by US deliveries 991 PTC and trade tariffs in the USA… 274 +262% • Argentina, Mexico, and Chile also contributing to increase • Continued strong US demand drive
Slide 9: Regional Highlights: Europe, Middle East, and Africa
REGIONAL HIGHLIGHTS: EUROPE, MIDDLE EAST, AND AFRICA Expanding market share and increasing order intake Market highlights Deliveries MW • Decline in deliveries expectedly driven by 674 Germany Continuously increasing the penetration 309 -54% of renewable energy in EU… • Generally low level of delive
Slide 10: Regional Highlights: Asia Pacific
REGIONAL HIGHLIGHTS: ASIA PACIFIC Geographically diversified deliveries and order intake Market highlights Deliveries MW • Increase primarily driven by Australia, Thailand, 244 301 and Vietnam 23% Increased commitment in China… • China and India remains fairly stable • Large scale auctions and tende
Slide 11: Service Business
SERVICE BUSINESS Fleet under service increased to 88 GW Key highlights • 20-year service extension with Novatus Energy for 1 GW of wind turbines in the US of non-Vestas turbines 8 GW under service covering all • 30-year service contract with Copenhagen Infrastructure Partners for the 143 major platf
Slide 12: MHI Vestas Offshore Wind
MHI VESTAS OFFSHORE WIND First preferred supplier agreement for the new V174-9.5 MW turbine Track record… Key highlights • Preferred supplier announcement for the 476 MW Baltic Eagle project utilising the V174-9.5MW turbine ~4.5 > 1.100 turbines installed • 50 MW signed as a firm order to deliver V1
Slide 13: Agenda
AGENDA Orders and markets Financials Outlook and Q&A 13 First quarter 2019 Classification: Public
Slide 14: Income Statement
INCOME STATEMENT Lower profitability driven by Power solutions Key highlights mEUR Q1 2019 Q1 2018 % change Revenue 1,730 1,694 2% • Revenue increased 2 percent driven by positive FX impact of Production costs (1,495) (1,413) (6)% EUR 46m Gross profit 235 281 (16)% • Power solutions expectedly impac
Slide 15: SG&A Costs
SG&A COSTS SG&A costs under control Key highlights SG&A costs (TTM)* EURm (0.4) %-pts 733 722 • SG&A costs down YoY (12m rolling) but increased compared to 709 692 705 709 674 672 Q1 2018 to cater for higher activity levels in 2019 662 • Depreciation and amortisation increased EUR 27m primarily due
Slide 16: Service Business
SERVICE BUSINESS Strong service performance Key highlights Service revenue and EBIT margin, onshore EURm and percent • Service revenue increased by 16 percent compared to Q1 16% 2018, mainly driven by higher activity levels 481 424 • 2019 Q1 EBIT: EUR 112m 413 409 2019 Q1 EBIT margin: 26.4 percent 3
Slide 17: MHI Vestas Offshore
MHI VESTAS OFFSHORE Continued positive contribution from offshore JV Key highlights Revenue and net profit* EURm 83% • Revenue in the JV increased by 83 percent compared to Q1 2018, mainly driven by deliveries for Horns Reef III and the 633 Norther project • Improved profitability is a result of hig
Slide 18: 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, only partly offset by lower receivables and higher down- and mileston
Slide 19: Cash Flow Statement
CASH FLOW STATEMENT Ramp-up for a busy second half impacts free cash flow in the first quarter Key highlights mEUR Q1 2019 Q1 2018 Abs. change Cash flow from operating activities before change in net working capital 156 17 139 • Free cash flow decreased 243m compared to Q1 2018, primarily driven by
Slide 20: Total Investments
TOTAL INVESTMENTS Increased total investments to meet strong demand Key highlights Total investments* EURm • Underlying investments increased approx. EUR 57m in order to meet strong demand and new product launches 205 184 176 158 65 +57 121 119 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 2018 2019 Acquisitions an
Slide 21: 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 41 44 41 41 4 37 36 36 3 27 2 1 0 Q1 Q2 Q3 Q4 Q1 Dec Dec Dec Dec Dec Dec Dec Dec Dec Mar 2018 2018 2018 2018 2
Slide 22: Capital Structure
CAPITAL STRUCTURE Net debt to EBITDA well below threshold Net debt to EBITDA before special items Solvency ratio mEUR Percent 1.0 40 35 (1.3) (1.2) 30 (1.5) 27.6 (1.7) 26.1 25.9 25.9 (2.2) 24.9 Q1 Q2 Q3 Q4 Q1 25 25.0 2018 2018 2018 2018 2019 20 Q1 Q2 Q3 Q4 Q1 Net debt to EBITDA, last 12 months 2018
Slide 23: Agenda
AGENDA Orders and markets Financials Outlook and Q&A 23 First quarter 2019 Classification: Public
Slide 24: Outlook 2019
OUTLOOK 2019 Outlook Revenue (bnEUR) 10.75 - 12.25 - Service is expected to grow approx. 10 percent EBIT margin before special items (%) 8 - 10 - Service margin is expected to be approx. 24 percent Total investments (mEUR) (*Excl. the acquisition of SOWITEC, any investments in marketable securities,
Slide 25: Financial Calendar 2019: Q&A
Financial calendar 2019: • Disclosure of Q2 2019 (15 August) Q&A • Disclosure of Q3 2019 (7 November) 25 First quarter 2019 Classification: Public
Slide 26: 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,