Vestas - Interim financial report, second quarter 2019
Vestas Wind Systems A/S, Aarhus, 15 August 2019
Company announcement No. 13/2019
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.
Group President & CEO Henrik Andersen said: “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.”
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
Guidance for 2019 narrowed for revenue and EBIT margin based on performance and improved visibility
*) Excl. the acquisition of SOWITEC Group GmbH, any investments in marketable securities, and short-term financial investments.
Information meeting (audiocast)
Today, Thursday 15 August 2019 at 10 a.m. CEST (9 a.m. BST), Vestas will host an information meeting via an audiocast. The audiocast will be accessible via vestas.com/investor.
The meeting will be held in English and questions may be asked through a conference call.
The telephone numbers for the conference call are:
Europe: +44 333 300 9265
USA: +1 646 722 4956
Denmark: +45 7815 0109
Presentation material for the information meeting will be available at vestas.com/investor approximately one hour before the meeting.
Vestas Wind Systems A/S, Denmark
Patrik Setterberg, Vice President,
Tel: +45 6122 1913