VESTAS WIND SYSTEMS A/S Company announcement No. 16/2021
Interim Financial Report
Second Quarter 2021
Vestas Wind Systems A/S
Hedeager 42,8200 Aarhus N, Denmark
Company Reg. No.: 10403782
Wind. It means the world to us.TM
Contents | |
Group financial performance ....................................................................................................... | 6 |
Power Solutions ............................................................................................................................ | 9 |
Service ......................................................................................................................................... | 12 |
Sustainability............................................................................................................................... | 13 |
Strategy and financial and capital structure targets................................................................ | 14 |
Outlook 2021................................................................................................................................ | 17 |
Consolidated financial statements 1 January - 30 June .......................................................... | 18 |
Management's statement ........................................................................................................... | 31 |
Note on business segments
With the acquisition at the end of 2020 of the offshore business in the previous joint venture MHI Vestas Offshore Wind A/S, the offshore business is now to be regarded as and will be reported as an integrated part of the two segments "Power Solutions" and "Service".
The two business segments:
Power Service
Solutions
Information meeting (audiocast)
On Wednesday 11 August 2021 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/en/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 | 3333 000 804 |
USA: | +1 6319 131 422 | |
Denmark: | +45 | 3544 5577 |
Conference PIN code: 99835184#
Presentation material for the information meeting will be available at vestas.com/investor approximately one hour before the meeting.
Contact details
Vestas Wind Systems A/S, Denmark
Investors/analysts:
Mathias Dalsten, Vice President
Investor Relations
Tel: +45 2829 5383
Media:
Anders Riis, Vice President
Communications
Tel: +45 4181 3922
Vestas Wind Systems A/S | |
Interim Financial Report - Second Quarter 2021 | Page 2 of 32 |
Classification: Public
Summary
Revenue overall at the same level as in second quarter 2020, while EBIT increased. Record high combined order backlog as a consequence of strong order intake and the integration of offshore. Full-year guidance revised.
In the second quarter of 2021, Vestas generated revenue of EUR 3,536m - in line with the year-earlier period. EBIT before special items increased by EUR 67m to EUR 101m. This resulted in an EBIT margin before special items of 2.9 percent, compared to 1.0 percent in the second quarter of 2020. Free cash flow* amounted to EUR 183m compared to EUR (106)m in the second quarter of 2020.
The quarterly intake of firm and unconditional wind turbine orders amounted to 5,290 MW. The value of the wind turbine order backlog was EUR 21.2bn as at 30 June 2021. In addition to the wind turbine order backlog, at the end of June 2021, Vestas had service agreements with expected contractual future revenue of EUR 26.9bn. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 48.1bn - an increase of EUR 13.0bn compared to the year-earlier period.
To reflect the current environment characterised by supply chain constraints, cost inflation, and restrictions in key markets caused by COVID-19, and the impacts this is likely to continue to have in the second half of the year, Vestas is revising its full-year guidance. The
expectations are now a revenue of EUR 15.5-16.5bn (previously EUR 16-17bn), including Service, with an overall EBIT margin before special items of 5-7 percent (previously 6-8 percent). Total investments*) are now expected to be below EUR 1,000m in 2021 (previously approx. EUR 1,000m).
Group President & CEO Henrik Andersen said: "In the second quarter of 2021, Vestas underlined our market- leading position although the first half of the year has been slower than anticipated due to supply chain constraints in key markets. We achieved revenue of EUR 3.5bn and an EBIT margin of 2.9 percent, which is an improvement of 1.9 percentage points year-over-year.This increase was primarily driven by underlying improved operations and execution, but hampered by the continued cost inflation impacting global industrials. In this environment, our Service business and wind turbine order intake grew 23 percent and 28 percent respectively year-over-year,which resulted in an all-timehigh order backlog of more than EUR 48bn. Combined with an average selling price of 0.79 EUR/MW for onshore, new offshore orders and our first preferred supplier agreement for our V236-15.0MW turbine, the quarter was commercially very strong. To reflect the challenges from cost inflation and the global environment we operate in, we have revised our guidance for 2021 and we remain focused on executing our priorities for the year, which enable us to deliver on our commitments, drive the energy transition, and strengthen our market leadership."
Key highlights
Strong order intake and first preferred supplier agreement on the 15 MW platform
Wind turbine order intake of 5.3 GW with both onshore and offshore contributing.
Revenue of EUR 3.5bn
Revenue impacted by lower onshore activity level and continued supply chain constraints.
EBIT margin of 2.9 percent
Profit impacted by higher fixed costs base from offshore integration and cost inflation.
Solid performance in Service
Revenue growth of 23 percent compared to Q2 2020; EBIT margin of 28.6 percent.
An important step towards zero-waste turbines
CETEC project launched to provide circular economy for epoxy materials in blades.
Outlook for the year revised
Guidance updated to reflect supply chain constraints and cost inflation.
*) Excl. acquisitions of subsidiaries, joint ventures, associates, and financial investments.
Vestas Wind Systems A/S | |
Interim Financial Report - Second Quarter 2021 | Page 3 of 32 |
Classification: Public
Financial and operational key figures
Q2 | Q2 | H1 | H1 | FY | |||||
mEUR | 2021 | 2020 | 2021 | 2020 | 2020 | ||||
FINANCIAL HIGHLIGHTS | |||||||||
Income statement | |||||||||
Revenue | 3,536 | 3,541 | 5,498 | 5,776 | 14,819 | ||||
Gross profit | 376 | 228 | 565 | 387 | 1,538 | ||||
Operating profit before amortisation, depreciation, and impairment | |||||||||
(EBITDA) before special items | 321 | 188 | 457 | 285 | 1,391 | ||||
Operating profit (EBIT) before special items | 101 | 34 | 30 | (20) | 750 | ||||
Operating profit before amortisation, depreciation, and impairment | |||||||||
(EBITDA) | 321 | 183 | 457 | 270 | 1,382 | ||||
Operating profit (EBIT) | 101 | 34 | 30 | (78) | 698 | ||||
Net financial items | (12) | (35) | (30) | (37) | (95) | ||||
Profit before tax | 122 | (7) | 45 | (114) | 934 | ||||
Profit for the period | 90 | (5) | 33 | (85) | 771 | ||||
Balance sheet | |||||||||
Balance sheet total | 19,557 | 14,934 | 19,557 | 14,934 | 18,160 | ||||
Equity | 4,522 | 3,162 | 4,522 | 3,162 | 4,703 | ||||
Net working capital | (616) | (411) | (616) | (411) | (1,127) | ||||
Capital employed | 6,001 | 4,095 | 6,001 | 4,095 | 6,057 | ||||
Interest-bearing position (net), at the end of the period | 334 | 1,145 | 334 | 1,145 | 1,920 | ||||
Cash flow statement | |||||||||
Cash flow from operating activities | 360 | 51 | (386) | (709) | 743 | ||||
Cash flow from investing activities before acquisitions of | |||||||||
subsidiaries, joint ventures, associates, and financial investments | (177) | (157) | (329) | (317) | (687) | ||||
Free cash flow before acquisitions of subsidiaries, joint ventures, | |||||||||
associates, and financial investments | 183 | (106) | (715) | (1,026) | 56 | ||||
Free cash flow | 166 | 96 | (924) | (823) | 476 | ||||
FINANCIAL RATIOS1) | |||||||||
Financial ratios | |||||||||
Gross margin (%) | 10.6 | 6.4 | 10.3 | 6.7 | 10.4 | ||||
EBITDA margin (%) before special items | 9.1 | 5.3 | 8.3 | 4.9 | 9.4 | ||||
EBIT margin (%) before special items | 2.9 | 1.0 | 0.5 | (0.3) | 5.1 | ||||
EBITDA margin (%) | 9.1 | 5.2 | 8.3 | 4.7 | 9.3 | ||||
EBIT margin (%) | 2.9 | 1.0 | 0.5 | (1.4) | 4.7 | ||||
Return on capital employed (ROCE)2) (%) before special items | 12.3 | 15.4 | 12.3 | 15.4 | 13.5 | ||||
Net interest-bearing debt / EBITDA2) | (0.2) | (0.8) | (0.2) | (0.8) | (1.4) | ||||
Solvency ratio (%) | 23.1 | 21.2 | 23.1 | 21.2 | 25.9 | ||||
Return on equity2) (%) | 21.6 | 15.4 | 21.6 | 15.4 | 21.4 | ||||
Share ratios3) | |||||||||
Earnings per share4) (EUR) | 0.9 | 0.5 | 0.9 | 0.5 | 0.8 | ||||
Dividend per share (EUR) | - | - | - | - | 0.23 | ||||
Pay-out ratio (%) | - | - | - | - | 30.0 | ||||
Share price at the end of the period (EUR) | 32.9 | 18.1 | 32.9 | 18.1 | 38.7 | ||||
Number of shares at the end of the period (million) | 1,010 | 985 | 1,010 | 985 | 1,010 | ||||
OPERATIONAL KEY FIGURES5) | |||||||||
Order intake (bnEUR) | 3.2 | 5.6 | 12.7 | ||||||
4.5 | 6.1 | ||||||||
Order intake (MW) | 4,148 | 7,459 | 17,249 | ||||||
5,290 | 7,306 | ||||||||
Order backlog - wind turbines (bnEUR) | 16.2 | 16.2 | 19.0 | ||||||
21.2 | 21.2 | ||||||||
Order backlog - wind turbines (MW) | 26,334 | 22,183 | 26,334 | 22,183 | 24,630 | ||||
Order backlog - service (bnEUR) | 26.9 | 18.9 | 26.9 | 18.9 | 23.9 | ||||
Produced and shipped wind turbines (MW) | 4,667 | 9,584 | 17,055 | ||||||
5,775 | 10,305 | ||||||||
Produced and shipped wind turbines (number) | 1,423 | 2,899 | 5,239 | ||||||
1,445 | 2,572 | ||||||||
Deliveries (MW) | 3,767 | 4,020 | 5,692 | 6,248 | 17,212 |
- The ratios have been calculated in accordance with the guidelines from The Danish Finance Society (Recommendations & Financial ratios).
- Calculated over a 12-month period.
- As of 28 April 2021, a share split at a ratio of 1:5 of the Vestas share was carried out. Comparative figures have been restated to reflect the change in number of shares.
- Earnings per share has been calculated over a 12-month period and in accordance with IAS 33 on earnings per share.
- The order backlog for Vestas Offshore Wind A/S (former MHI Vestas Offshore Wind A/S) is included as of 31 December 2020. The remaining operational key figures include Vestas Offshore Wind A/S from 14 December 2020.
Vestas Wind Systems A/S | |
Interim Financial Report - Second Quarter 2021 | Page 4 of 32 |
Classification: Public
Sustainability key figures
Q2 | Q2 | H1 | H1 | FY | |||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||
ENVIRONMENTAL1) | |||||||||
Utilisation of resources | |||||||||
Consumption of energy (GWh) | 192 | 144 | 406 | 311 | 621 | ||||
- of which renewable energy (GWh) | 70 | 762) | 150 | 1452) | 295 | ||||
- of which renewable electricity (GWh) | 59 | 682) | 121 | 1272) | 261 | ||||
Renewable energy (%) | 36 | 532) | 37 | 472) | 48 | ||||
Renewable electricity for own activities (%) | 100 | 1002) | 100 | 1002) | 100 | ||||
Withdrawal of fresh water (1,000 m³) | 111 | 115 | 211 | 206 | 421 | ||||
Waste | |||||||||
Volume of waste from own operations (1,000 t) | 20 | 24 | 39 | 46 | 89 | ||||
- of which collected for recycling (1,000 t) | 9 | 12 | 19 | 24 | 46 | ||||
Recyclability rate of hub and blade2) (%) | // | // | // | // | 41 | ||||
Carbon emissions | |||||||||
Direct emissions of CO2e (scope 1) (1,000 t) | 29 | 15 | 57 | 35 | 71 | ||||
Indirect emissions of CO2e (scope 2) (1,000 t) | 1 | 22) | 2 | 22) | 2 | ||||
Indirect emissions of CO2e from the supply chain (scope 3)3) | |||||||||
(million t) | // | // | // | // | 9.79 | ||||
Indirect emissions of CO2e from the supply chain (scope 3)3) (kg | |||||||||
per MWh generated) | // | // | // | // | 6.49 | ||||
Products | |||||||||
Expected CO2e avoided over the lifetime of the MW produced | |||||||||
and shipped during the period (million t) | 167 | 119 | 298 | 244 | 493 | ||||
Annual CO2e avoided by the total aggregated installed fleet | |||||||||
(million t) | 201 | 176 | 201 | 176 | 186 | ||||
SOCIAL | |||||||||
Safety | |||||||||
Total Recordable Injuries (number) | 51 | 44 | 100 | 90 | 185 | ||||
- of which Lost Time Injuries (number) | 21 | 17 | 37 | 30 | 65 | ||||
- of which fatal injuries(number) | 0 | 0 | 0 | 0 | 0 | ||||
Total Recordable Injuries per million working hours (TRIR) | 3.1 | 3.1 | 3.1 | 3.2 | 3.3 | ||||
Lost Time Injuries per million working hours (LTIR) | 1.3 | 1.2 | 1.1 | 1.1 | 1.2 | ||||
Employees | |||||||||
Average number of employees (FTEs) | 29,097 | 25,856 | 29,188 | 25,806 | 26,121 | ||||
Employees at the end of the period (FTEs) | 29,081 | 25,865 | 29,081 | 25,865 | 29,378 | ||||
Diversity and inclusion | |||||||||
Women in the Board3) and Executive Management at the end of | |||||||||
the period (%) | 27 | 27 | 27 | 27 | 27 | ||||
Women in leadership positions4) at the end of the period (%) | 20 | 20 | 20 | 20 | 19 | ||||
Human rights | // | // | |||||||
Community grievances3) (number) | // | // | 20 | ||||||
Community beneficiaries3) (number) | // | // | // | // | 14,770 | ||||
Social Due Diligence on projects in scope3) (%) | // | // | // | // | 78 | ||||
GOVERNANCE | |||||||||
Whistleblower system | // | // | |||||||
EthicsLine compliance cases3) (number) | // | // | 287 | ||||||
- of which substantiated | // | // | // | // | 54 | ||||
- of which unsubstantiated | // | // | // | // | 199 | ||||
- The increase seen compared to second quarter 2020 in consumption of energy, withdrawal of fresh water, and carbon emissions, is mainly due to the inclusion of the offshore business.
- Calculation for first half of 2020 changed to reflect that renewable energy certificates were subsequently bought for non-renewable electricity.
- Only Board members elected by the general meeting are included.
- Employees in leadership positions comprise managers, specialists, project managers, and above.
Vestas Wind Systems A/S | |
Interim Financial Report - Second Quarter 2021 | Page 5 of 32 |
Classification: Public
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Vestas Wind Systems A/S published this content on 11 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 August 2021 06:45:03 UTC.
