Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — Q3 2022 Earnings Presentation
22 slides from Vestas Wind Systems A/s's earnings presentation, November 2022
Slide 1: Third Quarter 2022
Vestas Wind Systems A/S THIRD QUARTER 2022 November 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 Q3 2022
KEY HIGHLIGHTS IN Q3 2022 Average Selling Price continues upward trend Increased prices secure continued high order backlog of EUR 18.1bn despite lower order intake of 1.9 GW Offshore momentum building Preferred supplier agreements of 3.8 GW announced over the last quarter Revenue of EUR 3.9bn Reven
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 3,727 Highlights AME 1,699 (49%) • Slow permitting processes and regulatory offtake 1,895 uncertainty EMEA 1,177 1,027 • Decreased order intake in all regions impacted by APAC 851
Slide 7: Service Business
SERVICE BUSINESS Service order backlog GW under active Well positioned for further growth Up EUR 4.8bn comp. to Q3 2021 service contracts Average backlog contract duration Highlights EUR 141 10 32.8bn GW Years (28.9bn onshore) (133 GW onshore) • Increased activity level and higher transactional sale
Slide 8: Sustainability Strategy
SUSTAINABILITY STRATEGY The most sustainable company in the world CO2e avoided 89 80 (10%) Expected CO2e avoided Highlights over the lifetime of the capacity produced and shipped during the period Q3 2021 Q3 2022 (million t) • Lifetime CO2e avoided by produced and shipped capacity in the quarter dec
Slide 9: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 9 Classification: Public
Slide 10: Income Statement
INCOME STATEMENT Delayed revenue and cost inflation impacting profitability mEUR Q3 2022 Q3 2021** % change Revenue 3,913 5,538 (29.3)% Highlights Production costs (3,752) (4,939) (24.0%) Gross profit 161 599 (73.1)% • Revenue decreased 29 percent YoY driven by SG&A costs* (288) (281) 2.5% lower off
Slide 11: Power Solutions
POWER SOLUTIONS Recovery of profitability in focus Power Solutions revenue and EBIT margin before special items, mEUR Highlights 4,921 (37.1%) 1,191 3,830 335 • Revenue decreased by 37 percent YoY, driven by 3,096 2,605 lower activity in EMEA and US. 78 373 • EMEA negatively impacted by Russia and 1
Slide 12: Service Business
SERVICE BUSINESS Higher activity levels drives all-time high EBIT Service revenue and EBIT margin, mEUR and percent +32.4% Highlights 817 721 700 617 623 • Service revenue increased 32 percent compared to Q3 2021 driven by higher activity overall, higher transactional sales, inflation levers in cont
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 1,217 1,013 8.5 7.5 7.6 7.2 • Relative to activity levels, SG&A costs amounted to 6.6 8.5 percent – an increase of 1.9 percentage points compared to Q3 2021 primarily related to lower level of revenu
Slide 14: Net Working Capital
NET WORKING CAPITAL NWC impacted by delayed revenue and order intake NWC change over the quarter, mEUR Highlights 93 104 • Net working capital increased to EUR 93m in Q3 2022 284 • Usual inventory unwind delayed due to back-end loaded delivery profile driven by delayed revenue • Lower order intake i
Slide 15: Cash Flow Statement
CASH FLOW STATEMENT Negative cash flow in the quarter mEUR Q3 2022 Q3 2021*** Abs. change Highlights Cash flow from operating activities before change in net working capital 81 521 (440) Change in net working capital* (695) (8) (687) • Negative cash flow from operating activities of Cash flow from o
Slide 16: Total Investments
TOTAL INVESTMENTS Stable investments level Total net investments*, mEUR 247 Highlights 213 193 174 • Investments of EUR 138m in Q3 2022. The 138 decrease is driven by lower PPE investments and proceeds from disposal of Lauchhammer facilities Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Cash flow from inv
Slide 17: Provisions & LPF
PROVISIONS & LPF Lost Production Factor (LPF), Percent 6 Elevated warranty provisions and LPF 5 4 3 Highlights 2 1 0 • LPF* continues at high level as a consequence of Dec Dec Dec Sep 2009 2013 2017 2022 the extraordinary repair and upgrade level • Warranty provisions made corresponding to 4.5 perce
Slide 18: Capital Structure
CAPITAL STRUCTURE Net debt to EBITDA increasing due to challenged profitability Net debt to EBITDA before special items Highlights 2.6 1.0 0.5 • Net debt to EBITDA at 2.6 in Q3 2022 0.0 (0.5) • Strong focus on cash and capital structure targets (0.9) remains but net debt to EBITDA expected to be abo
Slide 19: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 19 Classification: Public
Slide 20: Outlook 2022
OUTLOOK 2022 Outlook Previous outlook Revenue (bnEUR) 14.5 – 15.5 14.5 – 16 - Service is expected to grow min. 20 percent EBIT margin before special items (%) Approx. (5) (5) – 0 - Service margin is expected to be approx. 22 percent Total investments (mEUR) Excl. acquisitions of subsidiaries, joint
Slide 21: Q&A and Financial Calendar 2023
Financial calendar 2023: • Disclosure of Annual Report 2022 (8 February, 2023) Q&A • • • Annual General Meeting (12 April, 2023) Disclosure of Q1 2023 (10 May, 2023) Disclosure of Q2 2023 (9 August, 2023) • Disclosure of Q3 2023 (8 November, 2023) 21 Q3 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,