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.