2015, revenue amounted to EUR 8.4bn, EBIT margin before special items was 10.2 percent, total net investments was EUR 425m, and the free cash flow amounted to EUR 1,047m. This is largely in line with the latest expectations to revenue of EUR 8.0bn-8.5bn, EBIT margin before special items of 9-10 percent, total investments of approx EUR 400m, and free cash flow around EUR 750m-950m. The activity level and earnings of the period were driven by the stable execution of strong order books for wind turbines and service, both of which continued to grow during the year as a result of solid execution and a favourable market environment.

The wind turbine order intake increased from 6,544 MW in 2014 to 8,943 MW in 2015 and the value of the service order backlog increased by EUR 1.9bn to EUR 8.9bn. For 2016, Vestas expects revenue to amount to minimum EUR 9bn including service revenue, which is expected to grow. Vestas expects to achieve an EBIT margin before special items of minimum 11 percent with the service EBIT margin remaining stable.

Total net investments are expected to amount to approx EUR 500m (incl. the acquisition of Availon Holding GmbH), and the free cash flow is expected to be minimum EUR 600m (incl. the acquisition of Availon Holding GmbH) in 2016.

As a result of the strong performance during the year, the Board of Directors recommends to the Annual General Meeting that a dividend of DKK 6.82 per share, compared to DKK 3.90 last year, and equivalent to 29.9 percent of the net profit for the year, be distributed to the shareholders.

“In 2015, we executed well on our profitable growth strategy, delivering strong financial and operational results across the board and across the globe. Vestas met or exceeded its full-year 2015 guidance on revenue, EBIT margin, and free cash flow; and delivered double-digit margins and its highest ever net profit. We also secured our highest ever order intake, doing so across 34 countries on five continents, which bodes well for continued high activity levels in 2016. The 20,507 Vestas employees deserve special thanks for the tremendous efforts everyone has made to create these very positive results for the company and our shareholders,” says Anders Runevad, Group President & CEO.

Strong results yet again

 Vestas and the wind power industry continued to grow in 2015. Supported by a stable, regulatory environment in several countries, Vestas was, as the industry in general, given a good backdrop for finding itself in a better and more stable position today, than perhaps ever seen before.

Our financial performance continued to improve in 2015. Both revenue and EBIT margin came out at strong levels in 2015. We once again realised strong cash flows, and I believe it is important to highlight that the cash flow is increasingly created by the profits generated by earnings. With total investments of EUR 425m, we are also investing in the future, and we continue to believe that we can sustainably develop our business with investments in a corridor around the levels seen in recent years, though.

The execution of the Group’s strategy is well on track, as the financial results and achievements in general in 2015 bear witness to. We have made some adjustments to the strategy during 2015, but our four strategic cornerstones remain unchanged as they have proven to provide a strong foundation for bringing Vestas to the next level.

An order intake and deliveries in 2015 of 8,943 and 7,486 MW, respectively, clearly support our ambition to grow profitably in both mature and emerging markets. We have seen good activity levels across all regions with an order intake from 34 countries. I’m pleased to see that the order intake in emerging markets is both substantial and well diversified and, importantly, order intake has grown significantly in our three strategic focus markets, Brazil, India, and China.

The year has obviously also been characterised by strong demand in the USA caused by the Production Tax Credit (PTC), which now seems set to continue. Vestas has historically been committed to the US market and with the recent PTC extension, that prioritisation has resulted in an excellent platform for us to remain a leading player in this attractive market.

So all in all, I’m pleased to be able to state that our global model continues to be a great asset for Vestas in securing a stable stream of orders.

During the year, the service business grew by 20 percent – without impact from currency rate development, the growth would have been 15 percent. Thus, I’m pleased to increase our ambitions for organic growth for the segment from previous 30 percent to now 40 percent over the mid-term. On top of that, we acquired the American independent service provider UpWind Solutions, and, in early 2016, we announced that we have agreed to acquire the Germany-based company Availon. Both acquisitions will further support the acceleration of our growth in the service business.

It is still crucial to Vestas that growth does not collide with product quality and safety considerations, which have high priority by our customers and Vestas. Sadly, one of our colleagues died in a tragic industrial accident in Denmark on 23 October 2015. This accident was a reminder to all of us in Vestas that we must always put safety first to prevent injury and loss of life – no matter where in Vestas we work.

Delivering strong technology to our customers

We continued to lower the cost of energy for our customers in 2015. Amongst other things, we launched the V136-3.45 MW™ turbine and we also announced a broader upgrade of the entire 3 MW platform. I personally find it of utmost importance to ensure that Vestas remains the technology leader in the industry. The investments we are making in R&D and technology allow us to maintain that advantage. It is hard work and a never-ending race to stay ahead. But it’s a race we intend to continue to lead.

I have had the immense pleasure of spending a lot of time with our customers during the year. Whenever I meet them, I’m reminded about the strong position we have in the industry but also that the industry is highly competitive and one, in which satisfying our customers’ needs for high quality, continuously lowering the cost of energy, and generally providing clean and reliable wind power solutions remain of key importance. We enjoy good relationships with our customers but should never rest on our laurels. It takes hard work and a committed company to achieve, and not least maintain, the position we enjoy today.

On that note, let me conclude by thanking all employees in Vestas for their hard work and dedicated efforts throughout the year. The employees’ performance has been remarkable during a busy 2015 and I look forward to continuing the journey with my colleagues in what looks like an even more busy 2016.

Anders Runevad
Group President & CEO

Another year of strong financial performance

2015 was a year characterised by high activity levels and our financial and operational performance clearly indicate that we are executing well on our strategy of profitable growth.

The higher activity levels resulted in a revenue increase of 22 percent compared to 2014, while at the same time fixed costs were kept firmly under control leading to a double-digit EBIT margin before special items of 10.2 percent – an increase of 2.1 percentage points – and the highest net profit ever.

The strong financial performance was also reflected in the cash flow generation. Combined with continued well managed operations, as measured by net working capital, free cash flow amounted to more than EUR 1bn. And yet again, as in 2014, the free cash flow was primarily generated by operating earnings confirming the good development of the company.

All in all, 2015 was a year well executed which is clearly reflected and summarised in the return on invested capital (ROIC) that increased to 117 percent at the end of 2015 – the highest level ever – and hence, the strong shareholder value generating capabilities of the company continues at a very high level.

Capital structure and dividend

Once again, the company finds itself in a position of financial strength and stability. And although the capital structure targets were only partly met in 2015, with the solvency ratio ending slightly below target, the Board will again recommend the distribution of a dividend to our shareholders at the Annual General Meeting. And at an even higher DKK level per share than last year.

Vestas has therefore also chosen to revise its solvency ratio target from minimum 35 percent to a range of 30-35 percent to allow for more flexibility when distributing and allocating excess cash. While more flexible, the new target remains aligned with the ambition of being a financially strong and trustworthy partner for all our stakeholders.

Global trends

2015 was again a positive year for the wind power industry with an increase in onshore installations by 21 percent to 58 GW compared to 2014. Bloomberg New Energy Finance predicts the wind energy market will continue its growth.

Policy decisions, particularly on a national level, continue to influence renewable energy demand, exposing the market to changes and some unpredictability. A general trend can be seen, nonetheless, toward wind energy’s growing competitiveness and the use of market-based mechanisms such as auctions, renewable certificates, and various renewable portfolio standards.

The signs for the wind power industry are positive and with its global footprint, Vestas finds itself well-positioned to reap the benefits from these developments.

Vestas’ market development 2015

With deliveries across 34 countries in 2015, our wide geographic diversification remains a key strategic strength, allowing it to balance out the inevitable ups and downs in any given market. Vestas’ global presence in 75 countries across six continents underlines its ability to provide wind energy solutions anywhere in the world.

During 2015, we continued our focus on early customer engagement, thereby offering more attractive cost-effective wind energy solutions to the benefit of both the customer and Vestas. Combined with the ongoing efforts on expanding customer relationships and partnering with new customers, Vestas experienced growth in order intake across all regions and signed orders in a total of 34 countries in 2015.

Market trends and status on the service business

With an indication from the latest market reports that the service market is expected to grow by 10 percent over the next five years and reach a total installed base of 700 GW in 2020, the prospects for the service business are good and the competition also continues to intensify. Driven by customer demand, the ability of wind turbine manufacturers to offer attractive long-term service contracts along with wind turbine supply agreements is becoming an important competitive differentiator.

The service market is growing faster than the wind turbine market, while at the same time becoming more and more important to us as customers shift their focus from capital expenditure to total cost of ownership. The competition is strong, however, as some customers choose to build in-house service capabilities and the number of independent service providers increases.

Vestas’ extensive data processing and asset management capabilities enable us to anticipate and plan service requirements. This means that we have been able to keep a Lost Production Factor consistently under2 percent. Our technology and service know-how are mutually reinforcing elements in maximising wind power plant output and lowering the cost of energy.

During 2015, we have further built our capabilities in servicing non-Vestas turbines based on a larger fleet covering more platforms and markets. In December, Vestas acquired the independent US service provider UpWind Solutions, Inc., which will strengthen Vestas’ offerings servicing a wider range of wind turbines in the USA and Canada. The acquisition is expected to further accelerate the profitable growth strategy within the service area, and contribute to the ambition of being our customers’ preferred fleetwide lifetime service partner globally.

Vestas’ technology and service solutions

The Vestas technology strategy derives its strength from a marketdriven product development and extensive testing at Vestas’ test facility in Denmark – the largest test facility in the wind power industry. This enables us to continuously innovate new and integrate proven technologies to create high-performing products and services in pursuit of the over-riding objective: lowering the cost of energy.

During 2015, we upgraded our 3 MW platform, which among other enables the wind turbines to be used in higher wind classes than previously. Also included was an upgrade of the standard power rating to 3.45 MW, power modes of up to 3.6 MW (except on the V136-3.45 MWTM turbine) tower heights of up to 166 metres; and the introduction of a next-generation advanced control system.

In September 2015, we introduced the V136-3.45 MW™ turbine, the latest and as yet largest addition to the 3 MW wind turbine family, demonstrating the strong technological capabilities of the platform and how far Vestas has come in utilising the advantages of standardisation and modularisation. The V136-3.45 MW™ represents a performance upgrade in the low wind segment making it possible to increase annual energy production by more than 10 percent compared to the existing product (V126-3.3 MW™) depending on site-specific conditions.

Furthermore, the PowerPlus™ programme, a series of upgrades designed to improve the performance of existing wind power plants, was extended to include a wider range of wind turbines. Vestas Online Enterprise was also introduced, enabling customers to access data output from their wind turbines via a webserver.

Manufacturing footprint

2015 was very busy as the number of MW produced and shipped reached 7,948 (3,330 wind turbines), compared to 6,125 MW (2,527 wind turbines) in 2014. To meet demand, further ramp-up of the production was called for, especially in the USA, where the MW produced and shipped increased by 70 percent compared to 2014.

In addition to the general high activity, resources have also been deployed for the implementation across the blades factories of the new structural shell production setup. The installation of the new moulds and the process for the new production lines for the V110 and V126 blades, were fully rolled-out by the end of 2015, with the V136 blades to follow in the coming years.

Continued focus on growth markets

As announced earlier this year, we also intensified our efforts in India, where a new blade factory is planned to be built, supplementing the existing nacelle factory in Chennai, India. The new factory will support our operations in the Indian market as well as potentially servicing activities in other markets. It is expected to be fully operational by early 2017.

The Brazilian Development Bank (BNDES) has in recent years required increasing levels of local content supply for developers seeking the low-rate BNDES financing through the FINAME programme, which in turn reflects on the wind turbine manufacturers. To comply with local content requirements, we have signed partnership agreements with local suppliers, as well as invested in a new factory. The new Vestas facility started operations in December 2015. In the same month, Vestas’ investments and focused strategy allowed Vestas to be included in the approved supplier list of BNDES.