Vestas – Interim Financial Report, First Quarter 2023

Summary: Quarterly revenue of EUR 2.8bn with an EBIT margin before special items of 1.4 percent. Continued strong wind turbine backlog of EUR 19.7bn driven by higher order intake. Full-year guidance maintained.

In the first quarter of 2023, Vestas generated revenue of EUR 2,829m – an increase of 14 percent compared to the year-earlier period. EBIT before special items amounted to EUR 40m, resulting in an EBIT margin before special items of 1.4 percent, compared to negative 13.2 percent in the first quarter of 2022.

Free cash flow¹⁾ amounted to negative EUR 1,081m compared to negative EUR 1,121m in the first quarter of 2022.

The quarterly intake of firm and unconditional wind turbine orders amounted to 3,303 MW with an average price per MW (ASP) of EUR 0.89m. Comparing to the fourth quarter 2022, the order ASP is negatively impacted by mix effects from project scope, different countries, as well as foreign exchange rates, while underlying pricing and project profitability are not diluted. The value of the wind turbine order backlog was EUR 19.7bn as at 31 March 2023.

In addition to the wind turbine order backlog, at the end of the quarter, Vestas had service agreements with expected contractual future revenue of EUR 31.0bn. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 50.7bn – an increase of EUR 1.8bn compared to the year-earlier period.

Vestas maintains the full-year guidance. We expect revenue of EUR 14.0bn-15.5bn including Service revenue, which is expected to grow min. 5 percent. Vestas expects to achieve an EBIT margin before special items of (2)-3 percent with a Service EBIT margin of approx. 22 percent. Total investments¹⁾ are expected to amount to approx. EUR 1bn in 2023.

Group President & CEO Henrik Andersen said: “Vestas has had a good start to 2023 and achieved 14 percent growth year-on-year in revenue and an EBIT margin of 1.4 percent. Our growth in the first quarter was driven by higher value and increased volume of delivered projects, as well as a 29 percent revenue increase in Service. Compared to 2022, our profitability in the first quarter of 2023 was positively impacted by the sale of our converter business, lower warranty provisions, and solid profitability in Service. Order intake increased 12 percent year-on-year to 3.3 GW with an Average Selling Price of EUR 0.89m/MW, which was alone caused by mix effects from scope, country, and exchange rates. Underlying pricing and profitability are not diluted by the lower Average Selling Price in the quarter, and we continue to strengthen industry discipline and maturity to return Vestas and the industry to profitability and prepare for future growth. The wind industry remains challenged by political uncertainty, slow permitting processes, and high inflation, which we expect to continue throughout 2023, but we are on track for our 2023 financial outlook. There is still a long way to go for the full year, and we must remain focused on delivering on our promises to our customers and partners. We want to thank our customers and partners for their continued support, as well as our more than 28,000 colleagues for their hard work getting Vestas back to profitability and powering the energy transition.”

Key highlights

Revenue of EUR 2.8bn
Growth of 14 percent YoY driven by higher average pricing on deliveries, higher volume, and 29 percent Service growth.

EBIT margin of 1 percent
Profitability improvement driven by the sale of the converter business, lower warranty provisions, and strong Service business.

Order intake of 3.3 GW
Wind turbine orders in GW grew by 12 percent YoY with an ASP of EUR 0.89m/MW impacted by mix.

Solid capital structure with more than EUR 1bn of new financing in Q1
EUR 500m sustainability-linked bond issued and EUR 750m revolving credit facility signed.

Vestas leading the industry forward with discipline
Despite driving industry maturity, Vestas maintains leading position in the global market.²⁾
1) Excl. acquisitions of subsidiaries, joint ventures, associates, and financial investments.
2) Source: Wood Mackenzie Global wind turbine OEM 2022 market shares (May 2023).

Information meeting (audiocast)
On Wednesday 10 May 2023 at 10 am CEST (9 am BST), Vestas will host an information meeting via an audiocast. The audiocast will be accessible via vestas.com.

The meeting will be held in English and questions may be asked through a conference call. Details on how to register for the Q&A are to be found at vestas.com/en/investor.

Contact details
Vestas Wind Systems A/S, Denmark

Investors/analysts:
Mathias Dalsten, Vice President
Investor Relations
Tel: +45 2829 5383

Daniel Patterson, Senior Specialist
Investor Relations
Tel: +45 2669 2725

Media:
Anders Riis, Vice President
Communications
Tel: +45 4181 3922