Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — Q1 2016 Earnings Presentation
26 slides from Vestas Wind Systems A/s's earnings presentation, Apr 29, 2016
Slide 1: First quarter 2016
First quarter 2016 Vestas Wind Systems A/S Copenhagen, 29 April 2016 Classification: Public
Slide 2: Disclaimer and cautionary statement
Disclaimer and cautionary statement This presentation 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 state
Slide 3: Key highlights
Key highlights Solid first quarter performance and inventory build-up for expected busy 2016 Record-high Q1 order intake Order intake in the quarter reached 2,403 MW. Highest combined order backlog ever Wind turbine and service order backlog of EUR 18bn. Improved earnings EBIT margin before special
Slide 4: Agenda
Agenda Q1 Interim financial report, first quarter 2016 1. Orders and markets 2. Financials 3. Outlook and questions & answers 4 │ First quarter 2016 Classification: Public
Slide 5: Vestas gained market share in 2015
Vestas gained market share in 2015 Vestas retains strong position in fragmented market Market shares development Percent 100% = 58 GW 100% = 50 GW 100% = 57 GW 100% = 49 GW Vestas 13.3% 10.5% GE 10.7% GE Goldwind 13.5% 10.2% Vestas 9.9% Siemens Goldwind 12.0% Vestas 12.6% 9.5% Goldwind 9.9% Vestas G
Slide 6: Overall supportive environment for renewable energy remains
Overall supportive environment for renewable energy remains Various regulatory developments in all regions; PTC IRS timing a key event. Americas PTC timing in USA… • IRS developing new guidance EMEA on PTC extension - timing uncertain, but likely Q2 2016. EU moving towards 2020 and 2030 targets… Asi
Slide 7: Record-high Q1 order intake
Record-high Q1 order intake Order intake at 2.4 GW – an increase of 37 percent compared to Q1 2015. Average selling price impacted by 1 GW order in the quarter. Order intake Average selling price of order intake MW mEUR per MW +653 3,018 2,668 2,403 0.96 0.92 0.90 0.90 1,750 1,508 0.82 Q1 Q2 Q3 Q4 Q
Slide 8: Overall improvement in order intake driven by EMEA-region
Overall improvement in order intake driven by EMEA-region Q1 2016 order intake improvements mainly seen in Norway, France, and Germany, whereas the Americas and Asia Pacific regions had relatively lower activity levels 2015 2016 Americas EMEA Asia Pacific MW MW MW +130% -35% 1,885 820 -74% 710 460 2
Slide 9: Stable deliveries highlight benefits from unique global reach
Stable deliveries highlight benefits from unique global reach Main improvements seen in Germany, Thailand, Sweden, and the UK 2015 2016 Americas EMEA Asia Pacific MW MW MW -33% +40% 718 641 484 457 -7% 96 89 Q1 Q1 Q1 • Overall decline mainly driven • Strong development driven by • Stable development
Slide 10: Record-high combined order backlog at EUR 18bn
Record-high combined order backlog at EUR 18bn Combined backlog increased by EUR 1.2bn in the quarter. Backlog of wind turbines increased by EUR 0.7bn, while the service backlog increased by EUR 0.5bn. Wind turbines: Service: EUR EUR 8.6bn 9.4bn EUR +0.7bn* EUR +0.5bn* * Compared to Q4 2015. 10 │ Fi
Slide 11: JV on track
JV on track Ownership ratio remains 50/50. 8 MW platform gradually commencing project execution. Ownership ratio remains 50/50 Manufacturing ramp-up and project execution Preparing for near-term project execution • MHI has chosen not to exercise the option to change the ownership ratio to 51 percent
Slide 12: Agenda
Agenda Q1 Interim financial report, first quarter 2016 1. Orders and markets 2. Financials 3. Outlook and questions & answers 12 │ First quarter 2016 Classification: Public
Slide 13: Income statement
Income statement EBIT margin before special items increased by 0.6 percentage points despite lower revenue and higher quarterly fixed costs % mEUR Q1 2016 Q1 2015 Key takes: change Revenue 1,464 1,519 (4)% Cost of sales (1,217) (1,293) (6)% • Revenue decreased by 4 percent mainly due to lower delive
Slide 14: Leveraging on fixed costs
Leveraging on fixed costs Fixed costs continue to be under control Fixed costs (TTM)* Key takes: mEUR and percent of revenue • Fixed costs* relative to a activity (0.8) %-pts levels continue downward to stable trend. 671 660 636 638 645 619 622 • Relative to activity levels, fixed costs* amounted to
Slide 15: Service
Service Strong service performance driven by organic growth and impact from service acquisitions Service revenue Key takes: mEUR • Service revenue increased by 17 +17% percent compared to Q1 2015 mainly due to organic growth and impact 311 292 299 from service acquisitions. 280 255 • EBIT before spe
Slide 16: Balance sheet
Balance sheet Balance sheet remains strong Abs. % Assets (mEUR) Q1 2016 Q1 2015 Key takes: change change Non-current assets 2,568 2,278 290 13% Current assets 6,223 5,216 1,007 19% • Stronger net cash position. Assets held for sale 103 103 - - • Slightly higher net working capital Total assets 8,894
Slide 17: Change in net working capital
Change in net working capital Satisfactory net working capital management despite negative impact from higher activity levels NWC change over the last 12 months NWC change over the last 3 months mEUR mEUR (140) 593 (284) (572) 563 158 (1,068) (74) (107) 202 71 (1,068) 9 (1,148) (1,383) (24) NWC Rece
Slide 18: 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 56 6 44 5 33 4 27 26 28 28 3 22 19 19 2 1 0 Q1 Q2 Q3 Q4 Q1 Dec Dec Dec Dec Dec Dec Dec 2015 2015 2015 2015 2016 2009 201
Slide 19: Cash flow statement
Cash flow statement Free cash flow impacted by inventory build-up and acquisition of Availon Abs. mEUR Q1 2016 Q1 2015 Key takes: change Cash flow from operating activities before 164 160 4 change in net working capital • Free cash flow of EUR (296)m Change in net working capital (278) 49 327 driven
Slide 20: Total investments
Total investments Quarterly investments heavily impacted by EUR 83m Availon acquisition. Moulds and capitalised R&D main drivers of normalised investments. Net investments Key takes: mEUR • Investments excluding service acquisitions increased by EUR 32m compared to Q1 2015 primarily driven 204 by bl
Slide 21: Capital structure
Capital structure Capital structure targets within set boundaries. Quarterly developments primarily impacted by working capital elements due to higher activity levels and approved dividend. Net debt to EBITDA Solvency ratio ×EBITDA Percent < 1.0 36 35.0 33.8 33.8 34 32.2 32 31.4 30.7 30 30.0 (1.7) (
Slide 22: Return on invested capital
Return on invested capital ROIC at very high level of 119 percent Return on invested capital (ROIC) Key takes: Percent 117.2 119.1 120 • ROIC increased to 119.1 110 percent in Q1 2016 – an improvement of 75.3 100 percentage points compared 90 to Q1 2015. 80 71.3 70 • Development primarily driven 60
Slide 23: Agenda
Agenda Q1 Interim financial report, first quarter 2016 1. Orders and markets 2. Financials 3. Outlook and questions & answers 23 │ First quarter 2016 Classification: Public
Slide 24: Outlook 2016
Outlook 2016 2016 outlook unchanged Outlook Revenue (bnEUR) min. 9 EBIT margin before special items (%) min. 11 Total investments (mEUR) approx 500 (incl. the acquisition of Availon GmbH) Free cash flow (mEUR) min. 600 (incl. the acquisition of Availon GmbH) • Service business is expected to continu
Slide 25: Financial calendar 2016: Q&A
Financial calendar 2016: Q&A • Capital Markets Day 2016 (21 June 2016). • Disclosure of Q2 2016 (18 August 2016). • Disclosure of Q3 2016 (8 November 2016). 25 │ First quarter 2016 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,