Vestas Earnings dip While Recording Highest Quarter Intake and Order Backlog

Vestas revealed that revenue and earnings decreased while the highest ever quarterly order intake and combined order backlog at an all-time high level.

Vestas has revealed that 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 an all-time high level.

In the second quarter of 2019, the company generated revenue of EUR 2,121 million – a decrease of 6 percent compared to the year-earlier period. EBIT before special items decreased by EUR 131million to EUR 128 million. 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 million compared to EUR 173 million 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.

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 8.5 billion year-over-year to an all-time high of EUR 31 billion, again demonstrating our global leadership in a highly competitive market.”

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

The wind major announced that it has narrowed the 2019 guidance on revenue to range between EUR 11.0 billion and 12.25 billion (compared to previously EUR 10.75 billion-12.25 billion), 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 800 million (compared to previously approx. EUR 700 million). The adjustments are based on performance and improved visibility for the remainder of the year. 

“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,” Andersen added.