Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — FY2023 Earnings Presentation
28 slides from Vestas Wind Systems A/s's earnings presentation, February 2024
Slide 1: Full year 2023
Full year 2023 Vestas Wind Systems A/S Copenhagen, February 2024
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 for full year 2023
Key highlights for full year 2023 Vestas returned to profitability and achieved upper end of guidance EBIT margin b.s.i. of 1.5 percent enables Vestas to pay employee bonus for the first time in four years Record order intake of 18.4 GW Order intake driven by strong growth in both Offshore and Onsho
Slide 4: Agenda
Market, orders and sustainability Financials Strategy Update Outlook Agenda Q&A Classification: Public 4 FY 2023
Slide 5: Our current business environment
Our current business environment We drive industry maturity within our core circles of influence to power the energy transition Global Environment Raw material and transport costs down Geopolitical volatility Inflation and interest rates still high Global environment Market Environment Grid investme
Slide 6: Power Solutions – Q4 2023
Power Solutions – Q4 2023 A record quarter and year and improved execution throughout the year Firm and unconditional order intake, MW Highlights Onshore +78% Offshore Order intake of 8.2 GW in a single quarter, a 7,468 record for Vestas, driven by strong Onshore activity in the USA, but also positi
Slide 7: Service – Q4 2023
Service – Q4 2023 Profitable backlog continues to grow Service order GW under active Average years Highlights backlog service contracts contract duration Service reached 152 GW under service compared to 144 GW a year ago, solidifying our position as the largest Service business in the industry EUR 1
Slide 8: Vestas Development – Q4 2023
Vestas Development – Q4 2023 Focus on pipeline quality Order intake New secured Total project Highlights generated pipeline pipeline 135 MW of order intake was generated in Q4, and other successful transactions were completed in the USA and Italy 135 5.1 30 Our strategic focus on quality projects in
Slide 9: Sustainability – FY 2023
Sustainability – FY 2023 Low-emission steel offering to reduce carbon footprint of wind turbines towers CO2e avoided Highlights 408 396 -3% Expected CO2e avoided over the lifetime of the Last month, we announced a partnership with ArcelorMittal capacity produced and to launch a low-emission steel of
Slide 10: Agenda
Market, orders and sustainability Financials Strategy Update Outlook Agenda Q&A Classification: Public 10 FY 2023
Slide 11: Income statement – Full year 2023
Income statement – Full year 2023 Vestas returned to profitability in 2023 mEUR 2023 2022 % change Highlights Revenue 15,382 14,486 6% For the year, revenue increased 6 percent YoY, driven by Gross profit 1,283 118 Positive turbines delivered at higher prices, stable volumes, as well SG&A costs* (1,
Slide 12: Income statement – Q4 2023
Income statement – Q4 2023 Gross margin continues to improve mEUR Q4 2023 Q4 2022 % change Highlights Revenue 4,771 4,783 0% Revenue for Q4 was unchanged YoY. Lower delivery Gross profit 523 (162) Positive volumes and a decline in Service revenue was offset by SG&A costs* (341) (352) Positive higher
Slide 13: Power Solutions – Q4 2023
Power Solutions – Q4 2023 Positive earnings in Power Solutions for the first time since 2021 Power Solutions revenue and EBIT margin, mEUR and percent Highlights Offshore revenue EBIT margin Onshore revenue Revenue increased by 2 percent YoY. A decline in Offshore revenue was more than offset by hig
Slide 14: Service – Q4 2023
Service – Q4 2023 Revenue declined and profitability impacted by employee incentives Service revenue and EBIT margin before special items, mEUR and percent Highlights Service revenue EBIT margin before special items In Service, revenue decreased 9 percent YoY in Q4, driven by lower transactional sal
Slide 15: SG&A costs – Q4 2023
SG&A costs – Q4 2023 Fixed capacity costs remain fairly stable SG&A costs (LTM)*, mEUR and percent Highlights SG&A costs % of revenue Relative to activity levels, SG&A costs amounted to 8.1 percent on a trailing 12-month basis 1,270 1,251 1,258 1,247 1,223 The slight improvement compared to last yea
Slide 16: Net working capital – Q4 2023
Net working capital – Q4 2023 Working capital decreased in a busy fourth quarter NWC change over the quarter, mEUR Highlights Net working capital decreased substantially during the fourth 291 43 quarter. The decrease in inventories was driven by good project execution, and a high amount of down- and
Slide 17: Cash flow statement – Q4 2023
Cash flow statement – Q4 2023 Strong finish to the year Highlights Operating cash flow was EUR 2.0bn in the quarter, an mEUR Q4 2023 Q4 2022 Abs. change increase compared to last year. The increase was driven by Cash flow from operating activities better profitability and improvements in net working
Slide 18: Total investments – Q4 2023
Total investments – Q4 2023 Investments in offshore manufacturing continue Total net investments*, mEUR Highlights Cash flow from investing activities* Investments of EUR 308m in Q4 increased compared to last 308 year, driven by higher investments for our V236 offshore manufacturing footprint, as we
Slide 19: Provisions and LPF – Q4 2023
Provisions and LPF – Q4 2023 Warranty provisions remain elevated but LPF has started to decline Lost Production Factor (LPF), Percent Highlights 6 LPF*, although still at an unsatisfactory level, 5 has improved throughout 2023 4 3 Warranty costs amounted to EUR 268m in the quarter corresponding to 5
Slide 20: Capital structure – Q4 2023
Capital structure – Q4 2023 Financial leverage decreased as earnings recover Net debt to EBITDA before special items Highlights Net debt to EBITDA, last 12 months Net debt to EBITDA, financial target Net debt to EBITDA decreased to 0.0x at the end of 2023 due to the strong cash flow in the quarter a
Slide 21: Agenda
Market, orders and sustainability Financials Strategy Update Outlook Agenda Q&A Classification: Public 21 FY 2023
Slide 22: Market outlook
Market outlook The green transition holds tremendous growth potential for wind Global energy consumption by source Global wind generation capacity scenarios In exajoule (EJ) and percent (%), 2022 In TW Wind electricity 1.5% 8 7 Net Zero Other >290 GW annual electricity installations 18.5% 6 5 Announ
Slide 23: Market growth by business area
Market growth by business area Vestas’ four business areas make up our core Onshore Offshore Service Development Market expectation 2023-2030 Market expectation 2023-2030 Market expectation 2023-2030 Vestas’ expectation 2023-2025 New installations (GW) New installations (GW) Market value (EUR) Order
Slide 24: Vestas’ strategic priorities
Vestas’ strategic priorities Six strategic priorities for getting back on track 2023 2024-2025 2026-2030 Back in Black Back on Track Sustainable Growth Onshore Quality Offshore Grow onshore Ensure the right Ramp-up offshore while restoring quality across profitability our solutions Cash Efficiency T
Slide 25: Long-term ambitions
Long-term ambitions Our financial and ESG ambitions remain unchanged REVENUE EBIT ROCE FCF ESG Grow faster than the Best-in class 20% return on Free cash flow Carbon neutrality market and be earnings, at least investment over the positive across our own market leader in 10% EBIT margin cycle operati
Slide 26: Agenda
Market, orders and sustainability Financials Strategy Update Outlook Agenda Q&A Classification: Public 26 FY 2023
Slide 27: Outlook 2024
Outlook 2024 Outlook Revenue (bnEUR) 16 – 18 EBIT margin before special items (%) 4–6 - Service is expected to generate EBIT b.s.i. of EUR 800-880m Total investments (bnEUR) Approx. 1.2 Excl. acquisitions of subsidiaries, joint ventures, associates and financial investments • The 2024 outlook is bas
Slide 28: Financial calendar 2024: Q&A
Financial calendar 2024: • Disclosure of Q1 2024 (2nd May) Q&A • Disclosure of Q2 2024 (14th August) • Disclosure of Q3 2024 (5th November) Classification: Public 28 FY 2023