Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — FY2020 Earnings Presentation
34 slides from Vestas Wind Systems A/s's earnings presentation, Feb 10, 2021
Slide 1: Full Year 2020
FULL YEAR 2020 Copenhagen, 10 February 2021 Vestas Wind Systems A/S
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 Financial and operational results Executing our strategy • FY 2020 guidance met on all parameters • Acquiring full control of offshore wind activities and launch of new platform • Deliveries of more than 17 GW in a challenging COVID-19 environment; up 34 percent compared to 2019 and 5
Slide 4: Agenda
AGENDA Orders and markets Financials Strategy and market outlook Outlook & Q&A 4 Full year 2020 Classification: Public
Slide 5: Impact of the COVID-19 Crisis
IMPACT OF THE COVID-19 CRISIS Vestas performed strongly throughout 2020 in a challenging market without state aid Renewables Health and safety considered of all employees Global situation and business environment critical as a top priority • Second wave of COVID-19 still spreading in Europe; America
Slide 6: Fourth Quarter Order Intake
FOURTH QUARTER ORDER INTAKE Order intake at 5.6 GW, with an average selling price of EUR 0.71m per MW Order intake Average selling price of order intake MW mEUR per MW +25% 5,558 4,439 4,148 4,232 0.79 0.78 0.72 0.73 0.71 3,311 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2019 2020 2020 2020 2020 2019 2020 2020 20
Slide 7: All-Time High Order Backlog of EUR 43bn
ALL-TIME HIGH ORDER BACKLOG OF EUR 43BN Combined backlog increased by EUR 9.1bn YoY, driven by offshore and strong order intake Wind turbines: Service: EUR 19.0bn EUR 23.9bn Onshore: EUR 15.0bn Onshore: EUR 20.5bn Offshore: EUR 4.0bn Offshore: EUR 3.4bn EUR +3.0bn* EUR +6.1bn* * Compared to FY 2019.
Slide 8: Power Solutions
POWER SOLUTIONS Leveraging our global leadership position 2020 highlights • Increasing climate ambitions around the World in 2020: EU Green Deal and stimulus packages becoming more tangible with EUR 550bn to be allocated GW of installed onshore over the next 7 years; South Korea and Japan pledging c
Slide 9: Service Business
SERVICE BUSINESS Crossing the 100 GW milestone and integrating offshore service into the business 2020 highlights • Integration of offshore service off to a good start to leverage global supply GW of turbines with active chain and scale service contracts 117 • In 2020, more than 3 GW of wind turbine
Slide 10: Offshore
OFFSHORE Vestas strengthens offshore position Track record… 2020 highlights • 3,000 employees from MHI Vestas Offshore Wind to become part of the Vestas organisation ~5.8 > 1,300 turbines installed • Integration of onshore and offshore has started; creating one team and across 38 projects GW* operat
Slide 11: Agenda
AGENDA Orders and markets Financials Strategy and market outlook Outlook & Q&A 11 Full year 2020 Classification: Public
Slide 12: Income Statement – Full Year
INCOME STATEMENT – FULL YEAR Record-high activity levels Key highlights mEUR FY 2020 FY 2019 % change Revenue 14,819 12,147 22% • Revenue increased 22 percent; mainly driven by increased Production costs (13,281) (10,386) 28% deliveries in Power Solutions Gross profit 1,538 1,761 (13)% • Gross margi
Slide 13: Income Statement – Q4 2020
INCOME STATEMENT – Q4 2020 Strong activity levels also in Q4 2020 Key highlights mEUR Q4 2020 Q4 2019 % change Revenue 4,273 4,650 (8)% • Revenue decreased slightly in Q4 as H2 2020 deliveries were Production costs (3,734) (4,040) (8)% more front-loaded compared to 2019 Gross profit 539 610 (12)% •
Slide 14: SG&A Costs
SG&A COSTS SG&A costs under control Key highlights SG&A costs (TTM)* EURm and percent (0.9) %-pts 799 813 • SG&A costs increased YoY to cater for higher activity levels 778 788 752 757 709 725 • Depreciation and amortisation increased EUR 84m in 2020 672 compared to 2019 primarily due to introductio
Slide 15: Service Business
SERVICE BUSINESS Strong service performance Key highlights Service revenue and EBIT margin mEUR and percent • Service revenue increased by 10 percent compared to 10% FY 2019, mainly driven by higher activity levels 2,055 • 2020 Q4 EBIT: EUR 156m 1,871 2020 Q4 EBIT margin: 27.2 percent 1,669 1,522 1,
Slide 16: MHI Vestas Offshore Wind
MHI VESTAS OFFSHORE WIND Stable activity levels in offshore Key highlights Revenue and net profit* EURm • Revenue from MVOW of EUR 1,379m; slightly down from 2019 • Net loss of EUR 92m driven by changes in assessments of the (4)% need of warranty provisions 1,435 1,379 • Pre-PPA results in MVOW with
Slide 17: Change in Net Working Capital
CHANGE IN NET WORKING CAPITAL Net working capital continues to be negative Key highlights NWC change over the year mEUR • Net working capital negatively impacted by increased level of inventory driven by offshore • Down- and milestone payments together with payables partly offset inventory increase
Slide 18: Cash Flow Statement
CASH FLOW STATEMENT Positive free cash flow of EUR 84m Key highlights mEUR FY 2020 FY 2019 Abs. change Cash flow from operating activities before change in net working capital 1,331 1,260 71 • Free cash flow before financial investments of EUR 84m compared to EUR 94m in 2019, positively impacted by
Slide 19: Total Investments
TOTAL INVESTMENTS Investments slightly down year-over-year Key highlights Total investments* EURm 749 • Investments decreased slightly to EUR 659m compared to 20 EUR 729m in 2019 668 659 617 65 • Optimisation of product portfolio to reduce total investment 83 need 22 407 • Acquisition of MHI’s 50 pe
Slide 20: 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 283 6 5 175 4 194 3 146 118 2 90 101 80 70 73 108 62 1 0 0 Q4 Q1 Q2 Q3 Q4 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec De
Slide 21: Capital Structure
CAPITAL STRUCTURE Net debt to EBITDA well below threshold Key highlights Net debt to EBITDA before special items 1.0 • Net debt to EBITDA remains at low level of (1.4) in Q4 2020 • Liquidity position remains strong with close to EUR 2bn cash at hand (0.8) • Assigned Baa1 long-term issuer credit rati
Slide 22: Agenda
AGENDA Orders and markets Financials Strategy and market outlook Outlook & Q&A 22 Full year 2020 Classification: Public
Slide 23: Impressive Journey for Renewables and Wind
IMPRESSIVE JOURNEY FOR RENEWABLES AND WIND Renewables and wind have gained foothold and become the most cost competitive source of energy Installed fleet of wind capacity Global Levelised Cost of Energy ranges – H2 2020 update GW $/MWh Onshore wind 17 192 701 Offshore wind 51 231 Solar PV tracking 2
Slide 24: Still Significant Decarbonisation Potential Ahead
STILL SIGNIFICANT DECARBONISATION POTENTIAL AHEAD Very limited penetration of the total energy market of renewables Energy consumption 2019 (% of total) Solutions to decarbonise the world WIND ACCOUNTS FOR 7% OF ELECTRICITY AND Drive increasing deployment of renewable energy 1% OF ENERGY Replace fos
Slide 25: Sustainability in Everything We Do
SUSTAINABILITY IN EVERYTHING WE DO Carbon footprint Circularity Our employees Energy transition Zero-waste wind The safest, most Leading the transition Carbon neutrality turbines inclusive and socially to a world powered by by 2030 by 2040 responsible company sustainable energy 25 Classification: Pu
Slide 26: Sustainability
SUSTAINABILITY Progress on strategy ENVIRONMENTAL SOCIAL (15)% Carbon footprint Safety 5.3 4.0 3.9 • Emissions from own operations Total Recordable Injury Rate 3.3 reduced by 33 percent at an all-time low of 3.3 • 186m tonnes CO2 emissions avoided 2017 2018 2019 2020 through our installed fleet in 2
Slide 27: Our Portfolio Consists of Three Attractive Segments
OUR PORTFOLIO CONSISTS OF THREE ATTRACTIVE RE SEGMENTS Vestas uniquely positioned in the industry ONSHORE SERVICE OFFSHORE Large market, healthy growth Mid-sized market, high growth Younger market, high growth New installations Installed fleet New installations GW GW GW CAGR 1-3% CAGR 8-10% CAGR 20-
Slide 28: Introducing the V236-15.0 MW
INTRODUCING THE V236-15.0 MW™ • Underlines Vestas’ full return to offshore wind • Leverages modular approach and proven system designs from Vestas’ onshore and offshore turbine technology • Delivers industry-leading performance with fewer number of turbines required, to optimise our customer’s busin
Slide 29: Integration of Offshore
INTEGRATION OF OFFSHORE Current indicative impact of Offshore business addition 2025- 2021-22 2023-24 Mature, scaled, leading Temporary high driven by Offshore OEM Lower activity and continued few large orders high investments REVENUE* EUR 2-2.5bn EUR 1-2bn EUR +3bn Average Vestas EBIT margin Low si
Slide 30: Long-Term Financial Ambitions
LONG-TERM FINANCIAL AMBITIONS Long-term financial ambitions largely intact; assumptions and starting point changed with integration of offshore wind Long-term financial ambitions Stable pricing to continue Roll-out of new technology with high focus on quality Market leader in Onshore Onshore wind co
Slide 31: Agenda
AGENDA Orders and markets Financials Strategy and market outlook Outlook & Q&A 31 Full year 2020 Classification: Public
Slide 32: Outlook 2021
OUTLOOK 2021 Outlook Revenue (bnEUR) 16 – 17 - Service is expected to grow approx. 15 percent EBIT margin before special items (%) 6–8 - Service margin is expected to be approx. 24 percent Total investments (mEUR) approx. 1,000 Excl. acquisitions of subsidiaries, any financial investments, and the i
Slide 33: Financial Calendar 2021: Q&A
Financial calendar 2021: • Annual General Meeting 2021 (8 April) Q&A • • • Disclosure of Q1 2021 (5 May) Disclosure of Q2 2021 (11 August) Disclosure of Q3 2021 (3 November) 33 Full year 2020 Classification: Public
Slide 34: 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,