Interim financial report, third quarter 2012
Summary
Vestas generated revenue of EUR 1,988m in the third quarter of 2012 – an increase of 49 per cent to the year-earlier period. EBIT before special items increased by EUR 105m to EUR 13m. The EBIT margin before special items was 0.7 per cent – an improvement of 7.6 percentage points compared to the loss-making third quarter 2011. EBIT after special items was EUR (140)m – negatively impacted by writedowns of development projects and other assets. The free cash flow decreased to EUR (142)m from EUR 276m in the third quarter of 2011. The net debt at 30 September 2012 amounted to EUR 1,287m; an increase of 12 per cent during the quarter. The intake of firm and unconditional wind turbine orders was 401 MW in the third quarter of 2012 and the value of the wind turbine backlog amounted to EUR 8.3bn at 30 September 2012. In addition to the wind turbine order backlog, Vestas had service agreements with contractual future revenue of EUR 4.9bn at the end of September 2012, and thus the value of the combined backlog of wind turbine orders and service agreements stood at EUR 13.2bn. The high safety level at Vestas’ workplaces improved by 20 per cent and the share of renewable energy increased to 58 per cent.
Vestas retains its full-year guidance of an EBIT margin before special items of 0-4 per cent and revenue of EUR 6,500-8,000m, including service revenue, which now is expected to rise to nearly EUR 900m versus the previous guidance of approx EUR 850m. Service EBIT margin before allocation of Group costs is still expected to be approx 17 per cent. Shipments are expected to be approx 6.3 GW. As a consequence of writedowns of R&D projects, closure of R&D centres and scaling down of the activities in India, special items are now expected to amount to EUR 225-250m versus the previous guidance of EUR 75-125m. Investments are lowered by EUR 100m to EUR 350m. The free cash flow is now expected to amount to EUR (500)-0m versus the previous guidance of a positive free cash flow. The change is due to weaker expectations for the 2012 order intake and uncertainty on the exact timing of cash inflows and outflows during the last weeks of 2012 and the first weeks of 2013.
Vestas is evaluating its manufacturing footprint including identification of outsourcing and divestment opportunities and is preparing the organisation for a manufacturing (shipment) level of approx 5 GW. Consequently, Vestas expects to reduce its headcount further during 2013 through divestments, continuation of hiring freeze and layoffs. This is expected to bring down the number of employees to around 16,000 by the end of 2013 compared to 22,721 by the end of 2011 and an expected number of around 18,000 by the end of 2012 or early 2013. The additional cost savings are expected to amount to more than EUR 150m on an annual basis, reducing the costs by more than EUR 400m from year-end 2011 to year-end 2013.
Press and analyst meeting
For analysts, investors and the media, an information meeting will be held today,
Wednesday, 7 November 2012 at 10 a.m. CET (9 a.m. GMT) at Vestas’ Headquarters, Hedeager 44, 8200 Aarhus N, Denmark.
The information meeting will be held in English (with simultaneous interpretation into Danish) and webcast live via vestas.com/investor.
The meeting may be attended electronically, and questions may be asked through a conference call.
The telephone numbers for the conference call are:
Europe: +44 208 817 9301
USA: +1 718 354 1226
Denmark: +45 7026 5040
A replay of the information meeting will subsequently be available on vestas.com/investor.
Contact details
Vestas Wind Systems A/S, Denmark
Lars Villadsen, Senior Vice President, Investor Relations
Tel.: +45 9730 0000