Vestas - Interim Financial Report, Second Quarter 2021

Vestas Wind Systems A/S, Aarhus, 11 August 2021
Company announcement no. 16/2021

Summary: Revenue overall at the same level as in second quarter 2020, while EBIT increased. Record high combined order backlog as a consequence of strong order intake and the integration of offshore. Full-year guidance revised.

In the second quarter of 2021, Vestas generated revenue of EUR 3,536m – in line with the year-earlier period. EBIT before special items increased by EUR 67m to EUR 101m. This resulted in an EBIT margin before special items of 2.9 percent, compared to 1.0 percent in the second quarter of 2020. Free cash flow^*) amounted to EUR 183m compared to EUR (106)m in the second quarter of 2020.

The quarterly intake of firm and unconditional wind turbine orders amounted to 5,290 MW. The value of the wind turbine order backlog was EUR 21.2bn as at 30 June 2021. In addition to the wind turbine order backlog, at the end of June 2021, Vestas had service agreements with expected contractual future revenue of EUR 26.9bn. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 48.1bn – an increase of EUR 13.0bn compared to the year-earlier period.

To reflect the current environment characterised by supply chain constraints, cost inflation, and restrictions in key markets caused by COVID-19, and the impacts this is likely to continue to have in the second half of the year, Vestas is revising its full-year guidance. The expectations are now a revenue of EUR 15.5-16.5bn (previously EUR 16-17bn), including Service, with an overall EBIT margin before special items of 5-7 percent (previously 6-8 percent). Total investments^*) are now expected to be below EUR 1,000m in 2021 (previously approx. EUR 1,000m).

Group President & CEO Henrik Andersen said: “In the second quarter of 2021, Vestas underlined our market-leading position although the first half of the year has been slower than anticipated due to supply chain constraints in key markets. We achieved revenue of EUR 3.5bn and an EBIT margin of 2.9 percent, which is an improvement of 1.9 percentage points year-over-year. This increase was primarily driven by underlying improved operations and execution, but hampered by the continued cost inflation impacting global industrials. In this environment, our Service business and wind turbine order intake grew 23 percent and 28 percent respectively year-over-year, which resulted in an all-time high order backlog of more than EUR 48bn. Combined with an average selling price of 0.79 EUR/MW for onshore, new offshore orders and our first preferred supplier agreement for our V236-15.0 MW turbine, the quarter was commercially very strong. To reflect the challenges from cost inflation and the global environment we operate in, we have revised our guidance for 2021 and we remain focused on executing our priorities for the year, which enable us to deliver on our commitments, drive the energy transition, and strengthen our market leadership.”

Key highlights

Strong order intake and first preferred supplier agreement on the 15 MW platform
Wind turbine order intake of 5.3 GW with both onshore and offshore contributing.

Revenue of EUR 3.5bn
Revenue impacted by lower onshore activity level and continued supply chain constraints.

EBIT margin of 2.9 percent
Profit impacted by higher fixed costs base from offshore integration and cost inflation.

Solid performance in Service
Revenue growth of 23 percent compared to Q2 2020; EBIT margin of 28.6 percent.

An important step towards zero-waste turbines
CETEC project launched to provide circular economy for epoxy materials in blades.

Outlook for the year revised
Guidance updated to reflect supply chain constraints and cost inflation.

*) Excl. acquisitions of subsidiaries, joint ventures, associates, and financial investments.
 

Information meeting (audiocast)

On Wednesday 11 August 2021 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/en/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 3333 000 804

USA:              +1 6319 131 422

Denmark:        +45 3544 5577

Conference PIN code: 99835184#

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

Investors/analysts:

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

Media:

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