Vestas – Interim Financial Report, Second Quarter 2023
Vestas Wind Systems A/S, Aarhus, 9 August 2023
Company Announcement no. 12/2023
Summary: Quarterly revenue of EUR 3.4bn with an EBIT margin before special items of (2.0) percent. Continued strong wind turbine backlog of EUR 20.0bn. Full-year guidance maintained.
In the second quarter of 2023, Vestas generated revenue of EUR 3,429m – an increase of 3.8 percent compared to the year-earlier period. EBIT before special items amounted to EUR (70)m, resulting in an EBIT margin before special items of (2.0) percent, compared to (5.5) percent in the second quarter of 2022.
Free cash flow1) amounted to EUR (140)m compared to EUR (362)m in the second quarter of 2022.
The quarterly intake of firm and unconditional wind turbine orders amounted to 2,333 MW, an 8 percent increase from second quarter 2022. The Onshore average price per MW (ASP) was EUR 0.97m. The value of the wind turbine order backlog was EUR 20.0bn as at 30 June 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 31.6bn. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 51.6bn – an increase of EUR 3.7bn compared to the year-earlier period.
Vestas maintains the full-year guidance. We expect revenue of EUR 14.0bn-15.5bn, however, Service is now expected to grow around 10 percent (previously 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 continued to improve underlying performance in the second quarter of 2023, and based on the first half of the year, we remain on track to achieve our financial outlook for 2023. In the second quarter, our revenue was EUR 3.4bn, a 4 percent increase year-on-year, which was secured by higher value of turbine deliveries and strong growth in our Service business. In line with expectations and the continued execution of older projects with lower margins in our backlog, we achieved an EBIT margin of minus 2 percent. We received 2.3 GW of orders with an average selling price on our onshore solutions that returned to EUR 0.97m/MW. The first half of the year unfortunately also highlighted that permitting and regulatory uncertainty remain a key challenge to speed up the energy transition, and although supply chain disruptions are easing off, we expect disruptions to continue throughout the second half of the year. Vestas remains fully focused on becoming profitable and improve industry maturity and discipline to ensure the operational efficiency, quality, and scalability the energy transition requires. The global business environment is expected to remain challenging for the rest of 2023, and we want to thank our customers, partners and 29,000 colleagues for their continued support and engagement in making Vestas and the industry profitable.”
Key highlights
Order intake of 2.3 GW
Wind turbines orders in GW grew by 8 percent YoY with an Onshore ASP of EUR 0.97m/MW.
Revenue of EUR 3.4bn
Growth of 4 percent YoY driven by 29 percent Service growth, higher average pricing on deliveries, partly offset by lower volume.
EBIT margin of negative 2 percent
Profitability improving due to a strong Service business and increased pricing as we execute the backlog.
Vestas continues to drive industry discipline and maturity
Stronger operational and commercial discipline across the industry imperative to ensure value capture and quality.
Outlook maintained
On track to deliver on the outlook for 2023 with higher Service growth.
1) Excl. acquisitions of subsidiaries, joint ventures, associates, and financial investments.
Information meeting (audiocast)
On Wednesday 9 August 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:
Daniel Patterson, Vice President
Investor Relations
Tel: +45 2669 2725
Media:
Anders Riis, Vice President
Communications
Tel: +45 4181 3922