Vestas Wind Systems A/s · OMXCOP:VWS
Vestas Wind Systems A/s — Q2 2020 Earnings Presentation
25 slides from Vestas Wind Systems A/s's earnings presentation, Aug 11, 2020
Slide 1: Second Quarter 2020
SECOND QUARTER 2020 Copenhagen, 11 August 2020 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 in Q2 2020
KEY HIGHLIGHTS IN Q2 2020 Strong performance in a challenging environment without state aid Revenue of EUR 3.5bn; up 67 percent compared to Q2 2019 Order intake continues at high level with stable prices Firm order intake of 4.1 GW; all-time high combined order backlog of more than EUR 35bn Underlyi
Slide 4: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 4 Second quarter 2020 Classification: Public
Slide 5: Impact of the COVID-19 Crisis
IMPACT OF THE COVID-19 CRISIS Vestas performs strongly 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 • COVID-19 epi-centres are now Americas, India and South Africa; all infrastr
Slide 6: Second Quarter Order Intake
SECOND QUARTER ORDER INTAKE Order intake at 4.1 GW, with an average selling price of EUR 0.78m per MW Order intake Average selling price of order intake MW mEUR per MW (1,548) 5,696 4,738 4,439 4,148 0.79 0.78 0.75 0.75 0.72 3,311 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2019 2019 2019 2020 2020 2019 2019 2019
Slide 7: All-Time High Order Backlog of More Than EUR 35bn
ALL-TIME HIGH ORDER BACKLOG OF MORE THAN EUR 35BN Combined backlog increased by EUR 3.6bn YoY, a growth of 11 percent Wind turbines: Service: EUR EUR 16.2bn 18.9bn EUR +0.3bn* EUR +3.3bn* * Compared to Q2 2019. 7 Second quarter 2020 Classification: Public
Slide 8: Power Solutions
POWER SOLUTIONS Leveraging our global leadership position Q2 2020 highlights • Strong efforts globally to secure business continuity despite the COVID-19 situation GW of installed turbines 118 globally • Broad-based increase in orders in EMEA; EU Green Deal and stimulus packages becoming more tangib
Slide 9: Service Business
SERVICE BUSINESS 100 GW milestone highlights leadership Q2 2020 highlights • Signed a 30-year AOM 5000 service contract in the US for the new V162-5.6 MW EnVentusTM turbine GW of onshore turbines with 104 active service contracts • Long-term commitment to Multibrand demonstrated in Asia Pacific thro
Slide 10: MHI Vestas Offshore Wind
MHI VESTAS OFFSHORE WIND Scotland’s largest offshore wind project secured Q2 2020 highlights • Firm order signed for the 1,140MW Seagreen project (114 V164-10 MW TM turbines), MVOW’s 4th project in Scotland, with a 15-year service agreement GW installed; more than 5.2 1,230 turbines • Northwester 2
Slide 11: Vestas' Ambitious Sustainability Journey Continues
VESTAS’ AMBITIOUS SUSTAINABILITY JOURNEY CONTINUES The first wind turbine manufacturer with validated strategy in line with 1.5°C global warming scenario ”The 1.5°C target classification is the most ambitious designation available through the SBTi validation process and covers Vestas’ targets to red
Slide 12: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 12 Second quarter 2020 Classification: Public
Slide 13: Income Statement
INCOME STATEMENT Strong activity levels in Power solutions albeit lower profitability Key highlights mEUR Q2 2020 Q2 2019 % change Revenue 3,541 2,121 67% • Revenue increased 67 percent mainly driven by high activity Production costs (3,313) (1,820) 82% levels in Power solutions Gross profit 228 301
Slide 14: SG&A Costs
SG&A COSTS SG&A costs under control Key highlights SG&A costs (TTM)* EURm and percent 1.5 %-pts 799 • Continuing to leverage on SG&A costs 778 752 757 725 709 • Depreciation and amortisation (excluding impairments) 674 662 672 increased EUR 27m YoY primarily due to introduction of new products • Rel
Slide 15: Service Business
SERVICE BUSINESS Strong service performance Key highlights Service revenue and EBIT margin, onshore mEUR and percent • Service revenue increased by 6 percent compared to Q2 2019, 6% mainly driven by higher activity levels 529 505 • 2020 Q2 EBIT before special items: EUR 144m 476 474 2020 Q2 EBIT mar
Slide 16: MHI Vestas Offshore Wind
MHI VESTAS OFFSHORE WIND Activity levels down as expected YoY Key highlights Revenue and net result* EURm • Revenue in the JV of EUR 196m; down 63 percent from Q2 2019 as 2020 expectedly will see lower activity levels • Net profit of negative EUR 12m (63)% 534 399 220 196 22 90 6 4 (12) (30) Q2 Q3 Q
Slide 17: Change in Net Working Capital
CHANGE IN NET WORKING CAPITAL Inventory increased to cater for increasing activity levels Key highlights NWC change over the quarter mEUR • Net working capital negatively impacted by increased level of inventory and contract assets to cater for high activity levels; partly offset by higher payables
Slide 18: Cash Flow Statement
CASH FLOW STATEMENT Positive cash flow from operating activities in the quarter Key highlights mEUR Q2 2020 Q2 2019 Abs. Change Cash flow from operating activities before change in net working capital 296 178 118 • Free cash flow before financial investments of EUR (78)m compared to EUR (75)m in 201
Slide 19: Total Investments
TOTAL INVESTMENTS Investments stable year-over-year Key highlights Total net investments* EURm • Investments of EUR 129m in Q2 2020; down from (66) underlying EUR 175m in Q2 2019 232 • Optimisation of product portfolio to reduce total investment 195 need; focus on 2020 execution and long-term 20 com
Slide 20: Warranty Provisions and Lost Production Factor
WARRANTY PROVISIONS AND LOST PRODUCTION FACTOR Warranty provisions increased in the quarter Warranty provisions made and consumed Lost Production Factor (LPF) mEUR Percent 283 6 5 175 4 118 3 93 90 80 70 73 2 58 44 39 108 1 0 0 Q2 Q3 Q4 Q1 Q2 Dec Dec Dec Dec Dec Jun 2019 2019 2019 2020 2020 2009 201
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 (0.8) in Q2 2020 • Liquidity position remains strong with close to EUR 2bn cash at hand (0.8) (1.0) (1.4) (1.3) (1.6) Q2 Q3 Q4 Q1 Q2 2019
Slide 22: Agenda
AGENDA Orders and markets Financials Outlook & Q&A 22 Second quarter 2020 Classification: Public
Slide 23: Outlook 2020
OUTLOOK 2020 Outlook Initial outlook Revenue (bnEUR) 14 – 15 14 - 15 - Service is expected to grow approx. 7 percent EBIT margin before special items (%) 5–7 7-9 - Service margin is expected to be approx. 25 percent Total investments (mEUR) Below 700 Approx. 700 Excl. investments in marketable secur
Slide 24: Financial Calendar 2020: Q&A
Financial calendar 2020: • Disclosure of Q3 2020 (4 November) Q&A 24 Second quarter 2020 Classification: Public
Slide 25: 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,