Vestas Wind Systems A/S - · PDF file•V112-3.3/3.45 MW ... │ Vestas Wind Systems A/S...

│ Vestas Wind Systems A/S Classification: Public

Vestas Wind Systems A/S

Jakob Warnecke, Specialist, Investor Relations

22 September 2016


Disclaimer and cautionary statement

This document contains forward-looking statements concerning Vestas’ financial condition, results of operations and business. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause

actual results, performance or events to differ materially from those expressed or implied in these statements.

Forward-looking statements include, among other things, statements concerning new potential accounting standards and policies, and Vestas’ potential exposure to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. There are a number of factors that could

affect Vestas’ future operations and could cause Vestas’ results to differ materially from those expressed in the forward-looking statements included in this document, including (without limitation): (a) changes in demand for Vestas' products; (b) currency and interest rate fluctuations; (c) loss of market share and industry competition; (d) environmental and physical risks; (e) legislative, fiscal and regulatory developments, including changes in tax or

accounting policies; (f) economic and financial market conditions in various countries and regions; (g) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, and delays or advancements in the approval of projects; (h) ability to enforce patents; (i) product development risks; (j) cost of commodities; (k) customer credit risks; (l) supply of components from suppliers and vendors; and

(m) customer readiness and ability to accept delivery and installation of products and transfer of risk.

All forward-looking statements contained in this document are expressly qualified by the cautionary statements contained or referenced to in this statement. Undue reliance should not be placed on forward-looking statements. Additional factors that may affect future results are contained in Vestas’ annual report for the year ended 31

December 2015 (available at vestas.com/investor) and these factors should also be considered. Each forward-looking statement speaks only as of the date of this document. Vestas does not undertake any obligation to publicly update or revise any forward-looking statement as a result of new information or future events others than required by Danish law. In light of these risks, results could differ materially from those stated, implied or inferred

from the forward-looking statements contained in this document.

2


About Vestas

1


A global energy company dedicated exclusively to wind energy

4

people employed worldwide

and more than 35 years of

experience with wind energy.

21,781

2013

8,423

2014

6,910

2015

6,084

Revenue

Revenue and EBIT margin

EURm and percent

FCF and net investments

EURm

841

-425-285-239

1,047

2014 2015 2013

1,009

FCF Net investments

2013 2014 2015

117.2

35.3

7.7

Return on invested capital

Percent


3.5

10.2

8.1

EBIT margin Return on invested capital


Vestas at a glance Core business areas to fulfil Vestas’ vision to become the undisputed global wind leader

5

Wind turbines Services MHI Vestas Offshore Wind

Wind turbines covering all wind

classes across the world and

reflecting our customers’ need for

clean, competitive and reliable

energy.

A broad range of service offerings

securing optimal performance

of the wind turbines and the

customers’ return on investment.

Joint Venture between Mitsubishi

Heavy Industries and Vestas to

offer clean, competitive and

reliable energy for the offshore

market.

Superior cost-effective wind technologies, products and services.

│ Vestas Wind Systems A/S Classification: Public 6

Turbine evolution

V10-30 kW

(1979)

V90-2.0 MW

V90-3.0 MW V136-3.45 MW

(2016)

V110-2.0 MW

V10-30 kW (1979)

Swept area: 78.5m2

Hub height: 18 metre

Rated power: 30 kW

V136-3.45 MW (2016)

Swept area: 14,527m2

Hub height: 149 metre

Rated power: 3.45 MW

V39-500 kW

Market requirements, customer demands, and wind turbine innovation in continuous balance


Vestas locations Vestas has a unique global reach in sales, installation, and manufacturing

7

Global headquarters

Sales & Service

Production

Research


Global market presence Vestas has installed almost 57,000 wind turbines, the equivalent of ~74 GW, in 75 countries

across 6 continents

8

North

America

19.2 Europe

41.0

South

America

1.9 Africa

0.5

Asia

9.1

Australia

2.3

Cumulative deliveries by continent, end 2015

GW


World market leader According to Make Consulting, Vestas is the global No. 1 in terms of market shares

9

Vestas

16%

12%

Goldwind Siemens

8%

Suzlon 4%

Enercon

8%

9%

GE

7% Gamesa

Sinovel

4%

30%

3% Guodian

Other

Onshore and offshore, end 2015 Percent

Onshore, 2015 Percent

Cumulative historic installations 2015 grid-connected

100% = 431 GW

Vestas all time No. 1.

Guodian

5%

5% Mingyang

4%

Envision

Others

Senvion 3%

30%

5%

6%

Vestas

13%

Gamesa

Goldwind

11%

12%

GE

Enercon

5%

Siemens

100% = 58 GW

Vestas No. 1 in 2015.

Source: Make Consulting.


Our key differentiators

2


Key differentiators remain intact Global reach, technology and service leadership, and scale give Vestas a unique position

to compete in the marketplace

11

Global reach Technology and service

leadership Scale

• Pioneer and most experienced

wind energy company in the

world.

• Unique global reach in terms of

sales, manufacturing, installation,

and service.

• In 2015, Vestas had order intake

from 34 countries and deliveries

in 34 countries.

• Wind turbines covering all wind

classes across the world.

• A broad range of service offerings

securing optimal performance.

• Best-in-class quality.

• World-class siting and

forecasting.

• More people dedicated to wind

than anyone else, largest volume.

• Largest global installed base of 74

GW across 75 countries.

• Largest service organisation with

63 GW under service.

• Data insights from monitoring of

more than 30,000 wind turbines.


Unique global reach once again manifested in 2015

Order intake by country, FY 2015

8,943 MW • 34 countries

• 5 continents USA

Balanced order intake from 34 countries across five continents in 2015. Installations in

Guatemala and Serbia expand global reach to 75 countries.

Canada

Mexico

Costa Rica

Chile

Jamaica

Uruguay

Australia

China

Scandinavia

Finland

Sweden

Denmark

Norway

Northern Europe

United Kingdom

Netherlands

Belgium

Ireland

Southern

Europe

France

Turkey

Italy

Portugal

Greece

Georgia*

Brazil

Central Europe

Germany

Poland

Austria

Romania

Serbia*

Switzerland India

South Korea

Thailand

Vietnam

* New markets for Vestas with firm order intake for the first time in 2015.

12


Two highly competitive turbine platforms continue to excel Both platforms delivering strong market performance in 2015 driving our competitiveness

13

20%

18% 61%

Asia Pacific

EMEA

Americas

Order intake by region, 2015 MW

34%

52%

11% 3%

Americas

Offshore

EMEA

Asia Pacific

Order intake by region, 2015 MW

2 MW platform 3 MW platform

Total 2 MW

3,943 MW

Total 3 MW

5,000 MW

Market leading technology with global reach:

• Fulfilling specific needs, e.g. de-icing, LDST, offshore.

• V136 large rotor perfect match for medium to low wind.

• Versatile 3 MW platform now also taking off in the US

with several large orders in 2015.

Demand for proven performance remains strong:

• One of the most trusted platforms in the industry

providing customers great certainty on their business

case.

• Continued demand highlights US flagship status of the

V110-2.0 MW.

Further supported by attractive service offerings and

strong execution, siting and development capabilities.

• V105-3.3/3.45 MW

• V112-3.3/3.45 MW

• V117-3.3/3.45 MW

• V126-3.3/3.45 MW

• V90-3.0 MW

• V136-3.45 MW

• V90-1.8/2.0 MW

• V110-2.0 MW

• V100-1.8/2.0 MW • V100-2.0 MW


Industry leading service capabilities driving growth Operation & maintenance and aftersales solutions to improve turbine efficiency

14

• O&M service packages to tailor customers needs.

• A 24/7 online surveillance system, providing data every

10th minute is used to closely monitor and control

turbine performance.

• Vestas has the ability to predict meteorological

conditions world-wide down to areas of 10x10m.

• After sales solutions include:

- Project planning (site selection and design).

- Construction and installation support.

- Plant optimisation.

Service revenue and EBIT mEUR and percent

Financial performance

MW under service, end 2015

Global reach

Americas

~20 GW Asia Pacific

~6 GW

EMEA

~31 GW

69

29

4954

4439

17% 22%

2015

Q4

2015

Q3

10%

2014

Q3

17%

2015

Q2

2014

Q4

17% 21%

2015

Q1

• The Q3-2015 EBIT was negatively impacted by EUR

19m impairments and write-offs on service inventory.

Service offering


High product quality, reliability, and performance Warranty consumption and LPF continue at very satisfactory low levels

15

Warranty provisions made and consumed

mEUR

Lost Production Factor (LPF)

Percent

122117

148148160

108

84

119

179

95

FY

2015

FY

2014

FY

2011

FY

2012

FY

2013

Provisions consumed Provisions made

• Warranty consumption constitutes approx 1.1

percent of revenue over the last 12 months.

• Warranty provisions made correlates with

revenue in the year, corresponding to approx 1.9

percent in 2015.

Key takes:

• LPF continues at a low level below 2.0.

• LPF measures potential energy production not

captured by the wind turbines.

Key takes:

0

1

2

3

4

5

6

Dec

2009

Dec

2010

Dec

2015

Dec

2013

Dec

2012

Dec

2011

Dec

2014


3

The case for wind


What is the real market opportunity? Today, renewable energy only accounts for a small portion of total world energy consumption

Source: BP Statistical Review of World Energy 2016.

World energy consumption by source

Million tonnes oil equivalent

17


Renewable energy to lead the way in global electricity generation Growth in energy demand expected to be met primarily by renewable energy sources with wind

forecasted to lead

18

Source: IEA, World Energy Outlook 2015, November 2015.

Renewables expected to account for half of additional global electricity generation, overtaking

coal around 2030 to become the largest power source.


Wind increasingly often cheapest new power source On a global level, new wind is cost-competitive with coal and gas already today

19

Source: BNEF, H2 2015 Global Levelised Cost of Electricity Update, October 2015.

Levelised cost of energy (LCOE)

USD/MWh (nominal; excluding subsidies)


Positive investment outlook for wind and renewables until 2040 Planned investments in wind leaves plenty of opportunities for continuously increasing

competitiveness

Cumulative investments 2016e-2040e*

tnUSD (real)

Nuclear Other RE** Fossils Small scale PV Utility-scale PV Wind

2.1

1.5

3.1

1.6

1.8

1.3

* Onshore and offshore. ** Biomass, Geothermal, Hydro, CSP.

Source: BNEF New Energy Outlook June 2016, IEA World Energy Outlook 2015, Nov 2015.

20


Why wind will remain the preferred renewables choice The competitiveness of wind will continue to improve. Market specific reduction between 23 and

36 percent expected 2016-2030

Source: BNEF Global Wind LCOE Update H1-2016.

Expected LCOE development, onshore wind

USD/MWh

64 6049

-23%

2030e 2016 2020e

USA

7560

48

-36%

Mexico

6653 44

-32%

Brazil

78 7356

-27%

Germany

75 6550

-33%

China

6960

48

-30%

Australia

21


4

Our strategy


Profitable Growth for Vestas Market environment and Vestas’ key differentiators support Vestas’ profitable growth strategy

23


Ambitions to strengthen global leadership Each of the four objectives will allow Vestas to reach its vision and long-term ambitions

24

OBJECTIVES STRATEGY AMBITIONS KEY ENABLERS

Profitable Growth

for Vestas

Grow profitably in

mature &

emerging markets 1

Capture full potential of

the service business 2

Reduce the levelised

cost of energy 3

Improve operational

excellence 4

Grow faster than

the market

Grow the service

business by more than 40

percent

ReduceLCOE faster than

market average

Improve earnings

capability

Efficiency

Products

Service

Markets & Customers

Global reach.

Trusted partner.

Installed base.

Service leadership.

R&D scale.

Industrialisation.

Economies of scale.

Full focus on wind.


Outlook 2016 2016 expected to be another year with solid financial performance

25

• Service business is expected to continue to grow with stable margins.

Outlook

Revenue (bnEUR) min. 9.5

EBIT margin before special items (%) min. 12.5

Total investments (mEUR) (incl. the acquisition of Availon GmbH)

approx 500

Free cash flow (mEUR) (incl. the acquisition of Availon GmbH)

min. 800

Note: Outlook for 2016 is subject to exchange rate movements.

│ Vestas Wind Systems A/S Classification: Public 26

Financial calendar 2016:

• Disclosure of Q3 2016 (8 November 2016). Q&A


Thank you for

your attention

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