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In the first half of 2018, the wind industry strengthened its position as the cheapest form of energy generation in many markets, which drove strong global demand. This development saw Vestas’ second quarter order intake increase 43 percent year over year, contributing to the continued growth of our order backlog to an all-time high. In the second quarter, price per MW stabilised around the levels in recent quarters, but continues to impact short-term results. External factors such as existing and potential tariffs, however, are creating some uncertainty in the industry. In this environment, I am very pleased that Vestas continues to deliver best-in-class margins and achieved a 17 percent organic growth in service, while free cash flow is negative because activity levels in 2018 will be back-end loaded. With long-term perspectives for renewable energy getting stronger, Vestas continues to effectively manage its costs and invest in the solutions that together will help us lead the global energy transition.

Anders Runevad, Group President & CEO


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


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


Revenue on par with last year’s second quarter while earnings and free cash flow decreased. Solid order intake and combined order backlog at high level. Guidance for 2018 narrowed.

In the second quarter of 2018, Vestas generated revenue of EUR 2,260m – an increase of 2 percent compared to the year-earlier period. EBIT decreased by EUR 20m to EUR 259m. The EBIT margin was 11.5 percent compared to 12.6 percent in the second quarter of 2017 and free cash flow* amounted to EUR (173)m compared to EUR (158)m in the second quarter of 2017. 

The intake of firm and unconditional wind turbine orders amounted to 3,807 MW in the second quarter of 2018. The value of the wind turbine order backlog amounted to EUR 10.2bn as at 30 June 2018. In addition to the wind turbine order backlog, Vestas had service agreements with expected contractual future revenue of EUR 12.8bn at the end of June 2018. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 23.0bn – an increase of EUR 2.8bn compared to the year-earlier period. 

Vestas narrows the 2018 guidance on revenue to range between EUR 10.0bn and EUR 10.5bn (compared to previously EUR 10.0bn-11.0bn), and on EBIT margin to 9.5-10.5 percent (compared to previously 9-11 percent). Total investments* are still expected to amount to approx. EUR 500m, and free cash flow* is expected to be minimum EUR 400m in 2018. The adjustments are based on improved visibility for the remainder of the year. 

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

Key highlights 

Strong order intake
Order intake of 3.8 GW; an increase of 43 percent year over year, leading to all-time high order backlog.

EBIT of EUR 259m
EBIT margin at 11.5 percent.

Good service performance
Organic revenue growth of 17 percent, and EBIT margin of 25 percent.

Free cash flow
Free cash flow negative as a result of a back-end loaded activity level in the year.

Share buy-back programme
New EUR 200m share buy-back programme launched.

Outlook 2018
Guidance for 2018 narrowed for revenue and EBIT margin based on improved visibility.

How Vestas performed in first half of 2018

Realised  H1 2018
EUR 3.9bn
Revenue on par with H1 2017
EBIT margin impacted by lower average project margins in the Power solutions segment, partly offset by higher Service margins
EUR (760)m             
Free cash flow as a result of a back-end loaded activity level in the year
EUR 240m
Net investments driven by tangible blade investments and capitalised R&D projects

Power solutions

Order intake and financial performance

During the first two quarters of the year, Vestas achieved another record-high order intake of 5,436 MW compared to 4,716 MW in the same period of 2017. This resulted in an order backlog of 13,521 MW. The order intake was broad-based across 21 countries, and led by the USA. Activity levels remained at a high level with more than 5.8 GW produced and shipped and 3.2 GW delivered to the customers.  

In the first half of 2018, Vestas’ total installed onshore capacity increased from 79 GW to 88 GW – an increase of 11 percent. 

Revenue from Power solutions amounted to EUR 3,175m, which was a decrease of 6 percent compared to the first two quarters of 2017. The EBIT margin for the segment was 9.1 percent in 2018, down 4.4 percentage points compared to 2017. 

Trends in the onshore wind power market

As wind power is becoming increasingly competitive, the trend towards market-based mechanisms continues, and in the first half of 2018 alone, close to 12 GW has been allocated to wind power through auctions. Markets with an already established presence of wind power such as India, Brazil, and Germany were the main contributors, but adding to this, other countries new to wind power conducted auctions, one example being Russia, that has now decided to include wind power in the future energy mix with more than 2 GW allocated during the last year.

In the first half of 2018, Vestas continued to expand its strategic initiatives to support customers across the entire wind power plant value chain, including co-developing projects together with strategic partners and key customers.

In the USA, Vestas was involved in the development of two projects of a total of 312 MW, and in Sweden, Vestas partnered with Swedish utility, Vattenfall, and Danish pension fund, PKA for a 353 MW wind energy project. Through development and ownership of wind energy projects, Vestas is leveraging its unparalleled experience and addresses a wind power plant’s full value chain to maximise return on investment and profitability. 

Technology for the future and optimisation of the manufacturing footprint

Following the announcement of the world’s first utility-scale hybrid project in Australia in 2017, Vestas continues to develop initiatives that will accelerate the transition to an energy mix led by renewable energy. In March, Vestas, together with EDPR, installed a wind and solar photovoltaic hybrid demonstrator that explores new ways to combine sustainable energy sources. 

The ability to continuously lower the cost of energy through new and more efficient wind turbines remains the single most important objective for Vestas. Earlier in the year, a prototype of the newly introduced V120-2.0 MWTM generated its first kilowatt hour of electricity. The wind turbine is part of the extensive upgrade of both the 2 MW and 4 MW platform announced in 2017, offering a significant improvement in power production.

In the first half of 2018, Vestas continued to strengthen its manufacturing footprint to support regions and countries with a strong development. Vestas opened manufacturing facilities in Russia, and in Argentina, Vestas announced its plan to establish a nacelle assembly facility to support the success in a promising market for Vestas and for wind power in general.

Furthermore, Vestas strengthened the flexibility and cost-effectiveness by adding a supply agreement to its existing relationship with TPI Composites. With production scheduled to commence in the first half of 2019, the agreement includes producing blades for the newly introduced V150-4.2 MWTM turbine in China to supply primarily Asian markets, but also markets globally when applicable.  


Order intake and financial performance

In the first half of 2018, Vestas’ service business continued to grow its activities with an increased profitability. Revenue for the service business amounted to EUR 779m, with an EBIT margin of 26 percent. This corresponds to an increase in revenue of 5 percent, and 6.6 percentage points in EBIT margin compared to first half of 2017.

Vestas’ fleet under service grew in the first half of 2018, and as a result of a strong order intake, Vestas had a total of 79 GW under service in 64 countries by the end of the period. This resulted in an order backlog with expected contractual future revenue of EUR 12.8bn as at 30 June 2018, an increase of EUR 1.7bn compared to the end of first half of 2017.

Innovation and digitalisation

As the global energy sector is transforming, and wind power projects are becoming increasingly sophisticated, Vestas’ service business continues to grow in importance. Vestas is looking to offer customers digital solutions to deliver greater predictability, increased renewable energy production, more efficient operations, and better integration and management of energy grids. To achieve this, during the first quarter of 2018, Vestas acquired Utopus Insights, Inc., a US based energy analytics provider with 15 years of experience in solutions development.

The acquisition enables Vestas to further leverage its unparalleled data repository, increase operational agility and revenue, and eventually lower the cost of energy.

Developments in Vestas’ service business

The customer landscape continues to change, and among others, global investment funds seeing wind energy as a stable investment, and corporations aiming to consume more renewable energy at a fixed price, curtail the predominance of the global utilities. This presents a great opportunity for the service business, as an advanced service offering on the wind turbines de-risks investments in wind power projects.

Vestas continues to build its capabilities within multibrand servicing. In the first half of 2018, Vestas’ success in the multibrand area was highlighted by being awarded a service contract from Spain’s leading wind power operator, Iberdrola, covering a total of more than 2 GW on non-Vestas turbines across Spain, Portugal, and Mexico.

By the end of first half of 2018, Vestas had service agreements for more than 8 GW of non-Vestas wind turbine platforms. By growing services on third-party wind turbines along with keeping renewal rates at a high level, Vestas aims to increase the share of installed onshore capacity that Vestas services.

Offshore Wind Power

Order intake and operational performance

During the first half of 2018, MHI Vestas Offshore Wind secured a strong order intake of more than 1.1 GW with the Norther project (370 MW) in Belgium and the Borssele III/IV projects (732 MW) in the Netherlands. Further to this, the joint venture received a conditional order for the 224 MW Northwester 2 project in Belgium.

MHI Vestas Offshore Wind continues to further strengthen its track record of successful commissioning of the V164-8.0 MWTM turbine. In 2017, the first large-scale project to use the V164-8.0 MWTM was finished, and in the first half of 2018, the Aberdeen Bay was commissioned using the same type of turbine.

MHI Vestas Offshore Wind also completed the 330 MW Walney Extension Wind Park in the UK, while its largest offshore wind park to date, namely the 400 MW Rampion project, also in the UK, was commissioned.

Positive outlook for the offshore wind industry intact

The first half of 2018 marked the introduction of new important markets for offshore wind power. Taiwan allocated 5.5 GW through auctions, which will be installed between 2020 and 2025. Alongside being appointed preferred supplier for 900 MW of the awarded volume, MHI Vestas Offshore Wind has signed local Memorandums of Understanding with five prestigious Taiwanese companies, and is thereby well positioned to play a vital role in the country’s development of offshore wind power.

The USA marked its entry to offshore wind power as Massachusetts and Rhode Island auctioned out 1.2 GW to developers, setting the stage for large-scale offshore wind power on the Eastern seaboard of the country.

Emergence of volume targets in new markets, combined with modest growth in the established Northern European markets, provides the offshore wind power industry with attractive growth expectation over the next decade. Industry analysts are projecting volumes to grow 15-20 percent annually towards 2026 from the low base of 3 GW in 2017.

New management team to lead expansion

The end of the first quarter of 2018 completed the first four-year management cycle in MHI Vestas Offshore Wind. In accordance with the joint venture agreement, both Mitsubishi Heavy Industries and Vestas agreed to a change in the executive management of the company with Philippe Kavafyan and Lars Bondo Krogsgaard being appointed as CEO and Co-CEO, respectively. At the same time, Vestas’ CEO Anders Runevad was appointed Chairman of the Board of Directors, all of the changes with effect as of 1 April 2018.

Read more at MHI Vestas Offshore Wind's website

Outlook 2018

Based on the visibility for the remainder of the year, Vestas has narrowed guidance on revenue and EBIT margin as per 15 August 2018.

  • Revenue is expected to range between EUR 10.0bn and EUR 10.5bn (previously EUR 10bn-11bn) including Service revenue, which is expected to grow.

  • Vestas expects to achieve an EBIT margin before special items within a range of 9.5-10.5 percent (previously 9-11 percent), with the Service EBIT margin expected to increase compared to 2017 (previously expected to be stable).

Total investments* are expected to amount to approx. EUR 500m, and free cash flow* is expected to be minimum EUR 400m in 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

Revenue (bnEUR)


EBIT margin (%)


Total investments*) (mEUR)

approx. 500

Free cash flow*) (mEUR)

min. 400

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.