Vestas – Interim Financial Report, Third Quarter 2023

In the third quarter of 2023, Vestas generated revenue of EUR 4,353m – an increase of 11.2 percent compared to the year-earlier period. EBIT before special items amounted to EUR 70m, resulting in an EBIT margin before special items of 1.6 percent, compared to (3.2) percent in the third quarter of 2022.

Free cash flow¹⁾ amounted to EUR (251)m compared to EUR (752)m in the third quarter of 2022.

The quarterly intake of firm and unconditional wind turbine orders amounted to 4,502 MW, a 138 percent increase from third quarter 2022. The value of the wind turbine order backlog was EUR 21.6bn as at 30 September 2023.

In addition to the wind turbine order backlog, at the end of the quarter, Vestas had service agreements with expected contractual future revenue of EUR 32.4bn. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 54.0bn – an increase of EUR 6.0bn compared to the year-earlier period.

Based on the results for the first nine months, we are narrowing our full-year guidance. We now expect revenue to range between EUR 14.5bn-15.5bn (previously EUR 14.0bn-15.5bn), including Service, which is still expected to grow around 10 percent.

The outlook for EBIT margin before special items is narrowed to 0-2 percent (previously (2)-3 percent), with the Service EBIT margin now expected to be approx. 21 percent (previously approx. 22 percent). Total investments¹⁾ are expected to amount to approx. EUR 0.8bn (previously approx. EUR 1bn) in 2023.

Group President & CEO Henrik Andersen said: “Vestas’ positive momentum increased in the third quarter of 2023, and we continued the gradual improvement in our execution and profitability. In the quarter, we had an EBIT margin of 1.6 percent, which was achieved through higher gross margin and increased pricing on deliveries. Based on our results for the first nine months, we remain on track to become profitable in 2023 and are narrowing our guidance for the full year. In the quarter, we achieved revenue of EUR 4.4bn, an 11 percent growth year-on-year, which was driven by higher value of delivered projects, stable volumes and continued solid Service performance. Despite continued market design and permitting challenges, we saw strong commercial activity with underlying stable pricing and received 4.5 GW of orders, including 2.1 GW for our V236-15.0 MW offshore turbine. With around 50 days left of 2023, Vestas remains fully focused on becoming profitable again while strengthening our commercial and operational discipline. We would like to thank our customers, partners and 29,000 colleagues for their support and passion for powering the energy transition and Vestas forward.”

Key highlights

Order intake of 4.5 GW
Wind turbine orders more than doubled year-on-year driven by Offshore and higher activity in North America and Europe.

Positive earnings from operations
Return to profitability reflects good execution in the quarter and gradual improvements in project profitability.

Revenue of EUR 4.4bn
Growth of 11 percent year-on-year driven by higher value of turbine deliveries, stable volumes and double-digit growth in Service.

EBIT margin of 1.6 percent
Profitability improvement driven by higher gross margin, better pricing and solid performance and profitability in Service.

Outlook narrowed
On track to deliver positive EBIT in 2023.

1) Excl. acquisitions of subsidiaries, joint ventures, associates, and financial investments.