Vestas Wind Systems A/S, Aarhus, 5 May 2020
Company announcement No. 13/2020

Vestas - Interim financial report, first quarter 2020

Summary: Revenue increased compared to same quarter 2019. Increased order intake and combined order backlog at all-time high level. Uncertainty around the full impact from COVID-19 prevails - suspension of full-year guidance maintained.

In the first quarter of 2020, Vestas generated revenue of EUR 2,235m - an increase of 29 percent compared to the year-earlier period. EBIT before special items decreased by EUR 97m to EUR (54)m. This resulted in an EBIT margin before special items of (2.4) percent, compared to 2.5 percent in the first quarter of 2019. Free cash flow* amounted to EUR (919)m compared to EUR (876)m in the first quarter of 2019.

The quarterly intake of firm and unconditional wind turbine orders amounted to 3,311 MW. The value of the wind turbine order backlog was EUR 15.9bn as at 31 March 2020. In addition to the wind turbine order backlog, at the end of March 2020, Vestas had service agreements with expected contractual future revenue of EUR 18.2bn. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 34.1bn - an increase of EUR 5.8bn compared to the year-earlier period.

The continuing uncertainty as regards the full impact of COVID-19 makes Vestas maintain the suspension of the 2020 guidance.

According to Vestas' current judgement, however, meeting the initial guidance on revenue and EBIT margin before special items is still possible. Further, with the current visibility for the rest of the year, Vestas assesses revenue growth and EBIT margin before special items for full year in Service to be able to meet the initial expectations of approx. 7 percent and approx. 25 percent, respectively. Additionally, as the focus on cost savings continues, total investments[*)] are currently assessed to be below EUR 700m.

Group President & CEO Henrik Andersen said: "In the first quarter of 2020, the global demand for wind energy remained strong in spite of the COVID-19 pandemic's continuing impact on societies and operations across all continents. In this environment, Vestas delivered increased revenue and order intake year on year, continued strong Service performance, and a record high order backlog of more than EUR 34bn that provides us with stability in the current period of high uncertainty. In line with our expectations, our EBIT margin in the first quarter was negatively impacted by the delivery of low-margin projects, while we also incurred increased execution costs from logistical challenges and supply chain bottlenecks, which were further amplified by the pandemic. Across the company, we have done well to ensure business continuity during the pandemic, but the uncertainty around the full-year impact prevails, and our guidance therefore remains suspended. As the global pandemic and economic crisis move into their next phase, Vestas continues to ensure business continuity and that renewables become a key part in restarting the global economy."

Key highlights

Safety first in a challenging environment
Measures to secure business continuity in the COVID-19 crisis in place.

Increased order intake
Firm order intake of 3.3 GW; up 10 percent compared to Q1 2019.

All-time high order backlog
Combined order backlog of more than EUR 34bn.

Revenue and profitability in line with Vestas' expectations
Revenue increased 29 percent to EUR 2.2bn; profitability impacted by low gross margin in the quarter.

Strong performance in Service
Organic growth of 12 percent in Service compared to Q1 2019; EBIT margin of 26 percent.

*) Excl. any investments in marketable securities, and short-term financial investments.

Information meeting (audiocast)
Today, Tuesday 5 May 2020 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 3333 000 804

USA:              +1 6319 131 422

Denmark:       +45 3544 5577

Conference PIN: 81250319#

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
Patrik Setterberg, Vice President,
Investor Relations
Tel: +45 6122 1913