Vestas – Interim Financial Report, Second Quarter 2024
Vestas Wind Systems A/S, Aarhus, 14 August 2024
Company Announcement no. 14/2024
Summary: Quarterly revenue of EUR 3.3bn with an EBIT margin before special items of (5.6) percent. Order intake of 3.6 GW and record-high combined order backlog of EUR 63.0bn. Full-year guidance on revenue and EBIT margin narrowed as already announced.
In the second quarter of 2024, Vestas generated revenue of EUR 3,296m – a decrease of 3.9 percent compared to the year-earlier period. EBIT before special items amounted to EUR (185)m, resulting in an EBIT margin before special items of (5.6) percent, as adjustments to planned costs impact current profitability in Vestas’ Service segment.
Adjusted free cash flow amounted to EUR 524m compared to EUR (144)m in the second quarter of 2023.
The quarterly intake of firm and unconditional wind turbine orders amounted to 3,596 MW, a 54 percent increase from second quarter 2023. The value of the wind turbine order backlog was EUR 28.1bn as at 30 June 2024.
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 34.9bn. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 63.0bn – an increase of EUR 11.4bn compared to the year-earlier period.
As announced in Company Announcement No. 12/2024 of 12 August 2024, we have narrowed our full-year guidance: Revenue is now expected to range between EUR 16.5bn and 17.5bn (previously EUR 16bn-18bn), including Service revenue. Service EBIT before special items is expected to amount to around EUR 500m (previously EUR 800m-880m). We expect to achieve an EBIT margin before special items for the Group of 4-5 percent (previously 4-6 percent). The outlook for total investments1 is unchanged at approx. EUR 1.2bn in 2024.
Group President & CEO Henrik Andersen said: “In the second quarter of 2024, Vestas’ underlying earnings improved according to plan, driven by significant progress within Power Solutions of 8 percentage points year-on-year. Our revenue was EUR 3.3bn and Group EBIT margin for the quarter was minus 5.6 percent, which was caused by an adjustment to planned costs in Service. Our Service business remains a strong business area, but in the second quarter of 2024, the increase in our planned costs means Service delivered an EBIT of minus EUR 107m. Our order intake had an average selling price of EUR 1.21m/MW and grew more than 50 percent year-on-year, which together with an adjusted free cash flow of more than EUR 0.5bn highlight the positive trajectory in Power Solutions and our continued strong commercial discipline. Based on our second quarter results, we have narrowed our 2024 guidance on revenue and EBIT margin, and lowered the expectation to Service EBIT, as announced earlier this week. We continue to execute on our strategy to build further momentum and sustain our industry leadership, and we want to thank our customers, employees, and shareholders for their unwavering support and passion to drive Vestas and the energy transition forward.”
Key highlights
Revenue of EUR 3.3bn
Revenue decreased 4 percent YoY, affected by the cost update in Service, offset by higher delivery ASP.
Service impacted by adjustment to planned costs
Service EBIT negative EUR 107m in Q2 due to approx. EUR 300m in negative adjustment – no cash flow effect.
Underlying earnings progressing as expected
Turnaround in Power Solutions in on track and has improved EBIT margin almost 8 percentage points YoY.
Order intake of 3.6 GW
Order intake grew 54 percent YoY driven mainly by onshore projects in both Europe and Asia Pacific.
Strong cash flow
Adjusted Free cash flow of EUR 0.5bn drives leverage down to 0.7x NIBD/EBITDA.
Outlook narrowed
Turnover expected between EUR 16.5-17.5bn and EBIT margin of 4 to 5 percent.
1) Net investments in intangible assets and property, plant and equipment
Conference call
On Wednesday 14 August 2024 at 10 am CEST (9 am BST), Vestas will host a conference call with a presentation on the results. The presentation will be audiocast and can be viewed live or replayed via vestas.com.
The presentation will be held in English and will conclude with a Q&A. 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
Frederik Holm Jacobsen
Senior Specialist, Investor Relations
Media:
Anders Riis, Vice President
Communications
Tel: +45 4181 3922