Second quarter 2019

Interim financial report

Second quarter 2019: Revenue EUR 2,121m – EBIT margin 6.0 % - Order intake – 5,696 MW – Order backlog EUR 31.5bn. Outlook 2019: Narrowed.

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“In the second quarter of 2019, continued high demand for wind energy helped Vestas achieve a record-high order intake of 5.7 GW and 15 percent growth in Service revenue. Based on these strong sales results, our order backlog soared by EUR 8.5bn year-over-year to an all-time high of EUR 31bn, again demonstrating our global leadership in a highly competitive market. Together with our Offshore business’ increased profits, the first half of 2019 highlights the complementarity of our business model’s three main areas, creating a great long-term outlook for Vestas. Prices remained stable in the quarter, but further increases in tariffs, raw material prices and transport costs, continue to increase execution costs, causing our gross margin to decline compared to the same period last year. To finish the year as strongly as possible and prepare for high activity levels in 2020, we remain focused on executing our strategy and delivering an extraordinarily busy second half of 2019.”
Henrik Andersen, Group President & CEO

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Interim financial report Q2 2019

Financial and non-financial highlights
Financial performance
Power solutions
Service
Offshore
Market development
Strategy and financial and capital structure targets
Social and environmental performance
Outlook 2019
Consolidated financial statements

Audiocast

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

Revenue and earnings decreased compared to last year’s second quarter while free cash flow improved. Highest ever quarterly order intake and combined order backlog at all-time high level. Guidance for 2019 narrowed.

In the second quarter of 2019, Vestas generated revenue of EUR 2,121m – a decrease of 6 percent compared to the year-earlier period. EBIT before special items decreased by EUR 131m to EUR 128m. The EBIT margin was 6.0 percent compared to 11.5 percent in the second quarter of 2018 and free cash flow* amounted to EUR (75)m compared to EUR (173)m in the second quarter of 2018.

The intake of firm and unconditional wind turbine orders amounted to 5,696 MW in the second quarter of 2019.

The value of the wind turbine order backlog amounted to EUR 15.9bn as at 30 June 2019. In addition to the wind turbine order backlog, Vestas had service agreements with expected contractual future revenue of EUR 15.6bn at the end of June 2019. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 31.5bn – an increase of EUR 8.5bn compared to the year-earlier period.

Vestas narrows the 2019 guidance on revenue to range between EUR 11.0bn and 12.25bn (compared to previously EUR 10.75bn-12.25bn), and on EBIT margin before special items to 8-9 percent (compared to previously 8-10 percent). Total investments* are expected to amount to approx. EUR 800m (compared to previously approx. EUR 700m). The adjustments are based on performance and improved visibility for the remainder of the year.

*) Excl. the acquisition of SOWITEC Group GmbH, any investments in marketable securities, and short-term financial investments.

Key highlights

Highest ever quarterly order intake and all-time high order backlog
5.7 GW of order intake in Q2 including first order for the new EnVentus platform

Total revenue of EUR 2,121m
Six percent decrease compared to Q2 2018

EBIT of EUR 128m
EBIT margin at 6.0 percent impacted by competitive markets, tariffs, and back-end loaded activity level

Strong service performance
Revenue growth of 15 percent, and EBIT margin of 28.4 percent

Increasing profit in MHI Vestas Offshore Wind
Net profit of EUR 22m; an underlying improvement of EUR 49m YoY

Outlook 2019
Guidance for 2019 narrowed for revenue and EBIT margin based on performance and improved visibility

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