Vestas Wind Systems A/S · OMXCOP:VWS
Vestas Wind Systems A/S — Q1 2006 Earnings Presentation
17 slides from Vestas Wind Systems A/S's earnings presentation, May 16, 2006
Slide 1: First Quarter 2006
First Quarter 2006 Vestas Wind Systems A/S Copenhagen Marriott Hotel Tuesday, 16 May 2006
Slide 2: Financial highlights Q1 2006
Financial highlights Q1 2006 Q1 Q1 2006 2005 Change Revenue (mEUR) 715 495 220 EBIT (mEUR) 6 -37 43 EBIT-margin (%) 0.8 -7.4 8.2 Net profit/loss (mEUR) -3 -35 32 • Revenue up 44 per cent • EBIT margin improved by more than 8 percentage-points • Q1 revenue accounts for 19 per cent of expected annual
Slide 3: Highlights, continued
Highlights, continued • Continued improvement of prices, terms and conditions • Warranty provisions and warranty costs as expected • Continued severe key component shortage • Significant risks remain 3
Slide 4: Shipment, deliveries and work in progress by region
Shipment, deliveries and work in progress by region Work in progress Shipments Beginning of period: 1,235 MW 777 MW Asia 6% Americas Asia 19% Europe 39% 52% Europe 75% Americas 9% Work in progress Deliveries End of period: 1,269 MW 743 MW Asia 15% Asia Americas 26% 10% Europe 50% Europe Americas 75%
Slide 5: Income statement
Income statement Q1 Q1 mEUR 2006 2005 2005 Revenue 715 495 3,583 Growth YoY 44% 52% Gross profit 61 6 84 Gross margin 8.6% 1.2% 2.4% Operating profit/loss, EBIT 6 -37 -116 EBIT margin 0.8% -7.4% -3.2% Loss before tax -5 -52 -158 Loss after tax -3 -35 -192 5
Slide 6: Balance sheet
Balance sheet Q1 Q1 FY mEUR 2006 2005 2005 Balance sheet total 3,212 3,031 3,085 Equity 1,146 1,113 962 Solvency ratio 35.7% 36.7% 31.2% Provisions 235 171 239 Avg. interest-bearing liabilities (net) 373 364 560 Net working capital 534 737 498 • NWC up 7 per cent in Q1 due to seasonality effects and
Slide 7: Cash flow statement
Cash flow statement Q1 Q1 mEUR 2006 2005 Cash flow from operating activities -24 -105 Cash flow from investing activities -33 -24 Cash flow before financing activities -57 -129 Cash flow from financing activities -50 -18 Change in the year in cash and cash -107 -147 equivalents less current portion
Slide 8: Energy costs towards a new equilibrium
Energy costs towards a new equilibrium 100 1,0 90 0,9 Cost of wind power (USD/kWh) 80 0,8 ? Oil price (USD/barrel) 70 Oil (left hand scale) 0,7 60 0,6 50 0,5 40 0,4 Wind (right hand scale) 30 0,3 20 0,2 Today 10 0,1 0 0,0 1980 1985 1990 1995 2000 2005 2010 8
Slide 9: Wind, Oil & Gas
Wind, Oil & Gas By being the best and most trustworthy provider of wind energy in the world, our customers will in the future regard Vestas and wind as an energy source on par with oil and gas.
Slide 10: Our vision is gaining momentum
Our vision is gaining momentum 1. Wind is an inexhaustible resource 2. Wind power can compete with conventional sources of energy when comparisons are made on equal terms 3. Wind power contributes to a higher level of self- sufficiency 4. Wind power enables considerable MW-capacity, fast 5. Wind pow
Slide 11: One Vestas V90-3.0 MW offshore turbine will save 233,000 tons of CO2
Over 20 years, one Vestas V90-3.0 MW offshore turbine will save the environment from 233,000 tons of CO2. This corresponds to the annual amount of CO2 emission of 27,500 EU citizens. Source: International Energy Agency, 2005
Slide 12: Firm and unconditional orders, 31 March 2006
Firm and unconditional orders, 31 March 2006 Asia/ Pacific 9% • Total order backlog of EUR 3.5bn at end of period North • Firm and unconditional Europe America 53% orders cover more than 80 38% per cent of expected revenue in 2006 12
Slide 13: Outlook for FY 2006
Outlook for FY 2006 2006 2005 Revenue 3.6 - 3.8 3.58 (bnEUR) EBIT margin 4-7 -3.2 (% of revenue) Investments in property, plant 160 - 180 95 and equipment (mEUR) Investments in intangible assets 40 - 50 50 (mEUR) Net working capital 20 - 25 14 (% of revenue at year-end) 13
Slide 14: Significant risks remain in 2006
Significant risks remain in 2006 • Component shortage • Warranties • Pending patent disputes • US Dollar • Price pressure on steel and copper 14
Slide 15: Compensating for component price pressure
Compensating for component price pressure In order to compensate for the increasing price pressure on especially steel and copper, Vestas will have to increase prices accordingly 15
Slide 16: The Will to Win
The Will to Win Objectives for 2008: 1. EBIT-margin is first priority • EBIT-margin of at least 10 per cent 2. Net working capital is second priority • Net working capital at year-end of maximum 20 to 25 per cent of turnover 3. Market share is third priority • A global market share of at least 35 pe
Slide 17: Q & A Wind, Oil & Gas
Q&A Wind, Oil & Gas 17