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“I am very pleased with Vestas’ strong second quarter performance. Our colleagues have executed well on a high activity level, which along with a favourable mix of projects contributed to Vestas achieving extremely solid results on revenue, EBIT margin, net profit, and free cash flow and with an order intake in line with expectations. We are upgrading the full-year guidance on revenue, EBIT margin, and free cash flow, and as a result of the strong performance we also continue delivering tangible shareholder value through the 2016 share buy-back programme that we are launching now”.

Anders Runevad, Group President & CEO

Webcast

The Group President & CEO's and Executive Vice President & CFO's presentation of the interim financial report:
- Webcast
Investor presentation (pdf)

Roadshow

The overview shows which cities Vestas will be visiting during the coming roadshow.

Summary

Compared to the second quarter of 2015, earnings and free cash flow significantly improved, mainly driven by high activity levels in the quarter and higher average project margins. Satisfactory order intake with backlog remaining at high levels. Outlook for 2016 upgraded.

In the second quarter of 2016, Vestas generated revenue of EUR 2,557m – an increase of 46 percent compared to the year-earlier period. EBIT before special items increased by EUR 254m to EUR 399m. The EBIT margin before special items was 15.6 percent compared to 8.3 percent in the second quarter of 2015 and the free cash flow amounted to EUR 330m compared to EUR 183m in the second quarter of 2015.

The intake of firm and unconditional wind turbine orders amounted to 1,790 MW in the second quarter of 2016. The value of the wind turbine order backlog amounted to EUR 8.2bn at 30 June 2016. In addition to the wind turbine order backlog, Vestas had service agreements with contractual future revenue of EUR 9.9bn at the end of June 2016. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 18.1bn – an increase of EUR 1.2bn compared to the year-earlier period.

Vestas upgrades the 2016 guidance on revenue from minimum EUR 9.0bn to minimum EUR 9.5bn, EBIT margin before special items from minimum 11.0 percent to minimum 12.5 percent, and free cash flow from minimum EUR 600m to minimum EUR 800m (incl. the acquisition of Availon Holding GmbH). The upgrade is based on better than expected performance in the first half of 2016 and visibility for the remainder of the year.

Key highlights 

 

High activity levels across the board
Deliveries up by 56 percent in Q2 2016 – driven by all regions.

Strong earnings
EBIT margin before special items of 15.6 percent – up by 7.3 percentage points compared to Q2 2015.

Order backlog continues at record-high level
Combined order backlog at EUR 18.1bn.

Guidance increased
Guidance for 2016 increased on revenue, EBIT margin, and free cash flow based on better than expected H1 2016 performance and visibility for the remainder of the year.

Share buy-back programme for 2016
EUR 400m share buy-back programme launched to adjust the capital structure.