Vestas - Interim financial report, first quarter 2018
Vestas Wind Systems A/S, Aarhus, 4 May 2018
Company announcement No. 23/2018
Vestas - Interim financial report, first quarter 2018
Summary: Revenue, earnings, and free cash flow decreased compared to last year’s very strong first quarter. Solid order intake and combined order backlog at high level. Guidance for 2018 maintained.
In the first quarter of 2018, Vestas generated revenue of EUR 1,694m – a decrease of 10 percent compared to the year-earlier period. EBIT decreased by EUR 85m to EUR 126m. The EBIT margin was 7.4 percent compared to 11.2 percent in the first quarter of 2017 and free cash flow* amounted to EUR (587)m compared to EUR 8m in the first quarter of 2017.
The intake of firm and unconditional wind turbine orders amounted to 1,629 MW in the first quarter of 2018. The value of the wind turbine order backlog amounted to EUR 9.3bn as at 31 March 2018. In addition to the wind turbine order backlog, Vestas had service agreements with expected contractual future revenue of EUR 12.3bn at the end of March 2018. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 21.6bn – an increase of EUR 1.6bn compared to the year-earlier period.
Vestas maintains its 2018 guidance on revenue of EUR 10bn-11bn, EBIT margin of 9-11 percent, total investments* of approx. EUR 500m, and free cash flow* of minimum EUR 400m.
Group President & CEO Anders Runevad said: “The wind energy industry continues to drive down electricity prices and further enable integration of sustainable energy, creating a larger long-term market for wind power solutions. In the short term, however, this has entailed fierce competition that has impacted profitability in the sector, which together with currency headwinds for Vestas resulted in first quarter 2018 results that are lower than last year’s historically strong first quarter. At the end of the first quarter of 2018, Vestas had an all-time high order backlog, solid revenue, and a best-in-class EBIT margin, while our service revenue grew organically by 5 percent and continued to deliver solid margins. Vestas continues to execute on its strategy, manage its cost base and use its leading position to invest in technology and innovations that over the long term will enable Vestas to increase wind energy’s prominence in the global energy mix.”
Key highlights
All-time high order backlog
Wind turbine and service order backlog of EUR 21.6bn; up 8 percent year-on-year.
Revenue of EUR 1,694m
5 percent organic decline compared to record-high revenue in Q1 2017.
EBIT of EUR 126m
EBIT margin at 7.4 percent.
Solid service performance
Organic revenue growth of 5 percent and EBIT margin of 26.8 percent.
*) Excl. the acquisition of Utopus Insights, Inc., any investments in marketable securities, and short-term financial investments.
Information meeting (audiocast)
Today, Friday 4 May 2018 at 10 a.m. CEST (9 a.m. BST), Vestas will host an information meeting via an audiocast. The audiocast will be accessible via vestas.com/investor.
The meeting will be held in English and questions may be asked through a conference call.
The telephone numbers for the conference call are:
Europe: +44 203 008 9806
USA: +1 855 83159 44
Denmark: +45 3544 5579
Presentation material for the information meeting will be available at vestas.com/investor approximately one hour before the meeting.
Contact details
Vestas Wind Systems A/S, Denmark
Patrik Setterberg, Vice President,
Investor Relations
Tel: +45 6122 1913