Outlook update 7 November 2018

Outlook for 2018 is unchanged for revenue and EBIT margin before special items.

Revenue is expected to range between EUR 10.0bn and 10.5bn, including service revenue, which is expected to grow. Vestas expects to achieve an EBIT margin before special items of 9.5-10.5 percent with the service EBIT margin expected to increase compared to 2017.

Based on improved visibility, as per 7 November 2018, Vestas has adjusted its 2018 outlook on total investments^* and free cash flow^*.

• Total investments* are expected to amount to approx. EUR 600m (previously approx. EUR 500m). Vestas adjusts guidance on total investments primarily due to high activity levels.
  
  
• Free cash flow* is expected to be minimum EUR 100m (previously minimum EUR 400m). The adjustment is a consequence of higher total investments and an increased activity level, which consumes more net working capital. With a record-high order backlog, Vestas expects the 2019 activity levels and revenue to increase compared to 2018. 

It should be emphasised that Vestas’ accounting policies only allow the recognition of revenue when the control has passed to the customer, either at a point in time or over time. Disruptions in production and challenges in relation to shipment of wind turbines and installation hereof, for example bad weather, lack of grid connections, and similar matters, may thus cause delays that could affect Vestas’ financial results for 2018. Further, movements in exchange rates from current levels may also impact Vestas’ financial results for 2018.

Outlook 2018

1) Adjusted 15 August 2018 from EUR 10.0bn-11.0bn
2) Adjusted 15 August 2018 from 9-11%

*) Excl. the acquisition of Utopus Insights, Inc., any investments in marketable securities, and short-term financial investments.

Vestas envisions market conditions which in the long term will reflect wind power having achieved merchant levels in the vast majority of markets. The wind industry is undergoing a transition towards a more mature, unsubsidised renewable energy industry. This transition leads to a highly competitive market, and will likely drive a further consolidation in the industry. Beyond the transition, a matured market for wind energy creates opportunities for Vestas to leverage and strengthen its leadership position.  

Within this context, Vestas is able to present updated long-term financial ambitions that reflect its projection for market conditions and the presumed result of its strategy – including initiatives that are currently being undertaken. 

During the transition, revenue in the Service business is expected to grow organically by at least 10 percent annually, with stable EBIT-margins compared to 2017.

Long-term financial ambitions

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Forward-looking statements include, among other things, statements concerning Vestas’ potential exposure to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections, and assumptions. A number of factors that affect Vestas’ future operations and could cause Vestas’ results to differ materially from those expressed in the forward-looking statements included on this site, include (without limitation): (a) changes in demand for Vestas' products; (b) currency and interest rate fluctuations; (c) loss of market share and industry competition; (d) environmental and physical risks, including adverse weather conditions; (e) legislative, fiscal, and regulatory developments, including changes in tax or accounting policies; (f) economic and financial market conditions in various countries and regions; (g) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, and delays or advancements in the approval of projects; (h) ability to enforce patents; (i) product development risks; (j) cost of commodities; (k) customer credit risks; (l) supply of components; and (m) customer created delays affecting product installation, grid connections and other revenue-recognition factors. 

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