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“I am very pleased with Vestas’ solid third quarter performance. Revenue and earnings are up strongly, as are deliveries across all regions. Order intake is up 17 percent, while combined turbine and service order backlog declined this quarter, largely due to high turbine delivery activity. With better visibility toward the end of the year, we are also upgrading the full-year guidance.”

Anders Runevad, Group President & CEO

Webcast

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

Roadshow

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

Summary

Compared to the third quarter of 2015, earnings improved significantly, mainly driven by high activity levels in the quarter and to a lesser extent higher average project margins. Free cash flow was at the same level as in the third quarter of 2015. While order intake was satisfactory, the backlog decreased due to the higher activity levels. Outlook for 2016 upgraded.

In the third quarter of 2016, Vestas generated revenue of EUR 2,903m – an increase of 37 percent compared to the year-earlier period. EBIT before special items increased by EUR 201m to EUR 433m. The EBIT margin before special items was 14.9 percent compared to 10.9 percent in the third quarter of 2015 and the free cash flow amounted to EUR 155m compared to EUR 158m in the third quarter of 2015.

The intake of firm and unconditional wind turbine orders amounted to 1,769 MW in the third quarter of 2016. The value of the wind turbine order backlog amounted to EUR 7.2bn at 30 September 2016. In addition to the wind turbine order backlog, Vestas had service agreements with expected contractual future revenue of EUR 9.9bn at the end of September 2016. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 17.1bn – an increase of EUR 0.7bn compared to the year-earlier period.

Vestas upgrades the 2016 guidance on revenue from minimum EUR 9.5bn to EUR 10-10.5bn, EBIT margin before special items from minimum 12.5 percent to 13-14 percent, and free cash flow from minimum EUR 800m to minimum EUR 1,000m. The upgrades are based mainly on improved delivery visibility for the remainder of the year. Vestas also adjusts 2016 guidance on total investments from approx EUR 500m to approx EUR 600m.

Key highlights 

 

High activity levels
Deliveries up by 44 percent in third quarter of 2016 – driven by all regions.

Strong earnings
EBIT margin before special items of 14.9 percent – up by 4.0 percentage points compared to third quarter of 2015.

Solid free cash flow
Free cash flow amounted to EUR 155m in third quarter of 2016 – on a par with third quarter of 2015.

Combined order backlog remains high
Combined order backlog at EUR 17.1bn. Wind turbine order backlog impacted by high activity levels in third quarter of 2016.

Outlook 2016
2016 has proven to be an extraordinary year and based mainly on better visibility for the remainder of the year, guidance for 2016 is increased on all parameters.