Vestas IR in a challenging environment. Nordic IR conference Copenhagen, 20 September 2012

Transcription

1 Vestas IR in a challenging environment Nordic IR conference Copenhagen, 20 September 2012

2 Disclaimer and cautionary statement This presentation 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 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 presentation, 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 presentation 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 2011 (available at vestas.com/investor) and these factors also should be considered. Each forward-looking statement speaks only as of the date of this presentation. 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 presentation. 2 IR in a challenging environment, NIRC, 20 September 2012

3 Vestas in brief

4 Vestas in brief 1 Vestas is the leading wind turbine manufacturer in the world measured on installed base and installations in ,000 We employ more than 20,000 people worldwide from 85 nationalities and have more than 30 years of experience with wind energy 22,000 We monitor more than 22,000 turbines, or nearly 38,000 MW, day and night and the data is used for efficient service planning and pre emptive maintenance 47,000 We have installed more than 47,000 turbines in 71 countries worldwide spanning six continents 50 GW We have an installed base of more than 50 GW ~67% more than our closest competitor* *Source: BTM Consult, IR in a challenging environment, NIRC, 20 September

5 Preparing for 2013 in a busy 2012 Employees Number of employees, end of period 20,829 20,730 23,252 22,721-16% 21,767 ~19,000 Headcount reductions of approx 1,000 employees in H despite ramp-up in manufacturing and service. 8,054 8,861 10,388 9,877 8,590 2,700 employees will have to leave Vestas before year-end. 55 per cent in Europe and Africa, 25 per cent in Asia Pacific and 20 per cent in Americas. 12,775 11,869 12,864 12,843 13,176 End 2012 target decreased to approx 19,000 employees. FY 2008 FY 2009 FY 2010 FY 2011 H FY 2012 Expected Salaried Hourly-paid 5 IR in a challenging environment, NIRC, 20 September 2012

6 Market leader in IR in a challenging environment, NIRC, 20 September 2012 Sources: IHS Emerging Energy Research (EER), BTM-Navigant Consult, MAKE

7 Top 10 largest markets in 2011 Market size No. Market Rank 1 Rank 2 Rank 3 1 China Sinovel Goldwind Guodian 2 USA GE Vestas Siemens 3 India Suzlon Group* Gamesa Vestas 4 Germany Enercon Vestas Suzlon Group* 5 UK Siemens Suzlon Group* Vestas Vestas largest foreign player in China ranked 8 th Vestas in top three in nine out of ten largest markets 6 Canada GE Siemens Vestas 7 France Enercon Vestas Suzlon Group* 8 Romania GE Vestas Gamesa 9 Italy Gamesa Vestas Enercon 10 Spain Gamesa Vestas GE * Including REpower 7 IR in a challenging environment, NIRC, 20 September 2012

8 Levelised Cost of Energy Onshore wind is quite competitive Levelised cost of energy (LCOE) USD/MWh Offshore cost of energy will improve with development of new turbines like the V MW. Source: Bloomberg New Energy Finance (BNEF) LCOE model as of Q IR in a challenging environment, NIRC, 20 September 2012

9 Continually lowering Lost Production Factor and increasing Business Case Certainty Share of the wind energy not harvested by the turbines January 2009 January 2010 January 2011 January IR in a challenging environment, NIRC, 20 September 2012

10 Service revenue Service revenue expected to continue the positive trend Service revenue meur % of all announced MW in 2011 came with a service contract. +26% Service business driven by increasingly large installed base and still more sophisticated offerings Higher earnings on services than on turbines E 10 IR in a challenging environment, NIRC, 20 September 2012

11 Turbines and services: Largest order backlog ever End H1 2012: Combined backlog of EUR 14.4bn Turbines: EUR 9.6bn Services: EUR 4.8bn 11 IR in a challenging environment, NIRC, 20 September 2012

12 Outlook 2012 Shipments (GW) ~6.3 Revenue (meur) 6,500-8,000 - of which service revenue (meur) 850 EBIT margin before special items (%) 0-4 EBIT margin, service* (%) ~17 Investments (meur) Intangible (meur) Tangible (meur) 200 Special items (meur) Free cash flow (meur) > 0 Warranty provisions (%) ~ 3 *Before allocation of Group costs 12 IR in a challenging environment, NIRC, 20 September 2012

13 IR in a challenging environment

14 Changes in our environment leads to changes in our strategy and our IR communication Changes: Market growth slowing down Vestas was loss making in 2011 Further emphasis on short-term earnings and cash flow Shareholder base changing Increased focus on: Detailed explanations of the quarterly figures Internal measures to improve profitability and cash flow generation Explaining balance sheet dynamics Servicing a growing number of shareholders 14 IR in a challenging environment, NIRC, 20 September 2012

15 Presentation of quarterly results Some observations Location Aarhus HQ London Internal/external focus Internal External Number of charts Many Few Pictures and visuals Few Many Pages used on financials Presenter CEO and CFO CEO Right or wrong? Different approaches in very different environments. 15 IR in a challenging environment, NIRC, 20 September 2012

16 Shareholders Share capital by geography 13% End 2009 Denmark End 2009: 1/3 USA, 1/3 Denmark, 1/3 Europe 27% USA 16% UK 14% 30% Other countries Not registered by name H % Denmark H1 2012: More Danish investors fewer US investors 16% 7% 11% 58% USA UK Other countries Not registered by name 16 IR in a challenging environment, NIRC, 20 September 2012

17 Shareholders Increase in Danish retail shareholders Shareholders registered in the book of shareholders 200, , , , , ,000 80,000 International shareholders Danish shareholders 60,000 40,000 20, June IR in a challenging environment, NIRC, 20 September 2012

18 Vestas IR now part of CFO area President and CEO Ditlev Engel Manufacturing Jean-Marc Lechene Turbines R&D Anders Vedel Global Solutions and Service Anders Vedel (interim) Finance Dag Andresen Sales Juan Araluce "Vestas needs exactly the background that Dag Andresen brings along. Not only the financial management skills, but certainly also his major experience in managing the contact to the stock market as well as the financial markets. I look forward to the contributions he can bring to the Executive Management and I have no doubt that he has not only the skills, but also the personality to undertake this important assignment, says Ditlev Engel. 18 IR in a challenging environment, NIRC, 20 September 2012

19 Questions & answers

20 Copyright Notice The documents are created by Vestas Wind Systems A/S and contain copyrighted material, trademarks, and other proprietary information. All rights reserved. No part of the documents may be reproduced or copied in any form or by any means - such as graphic, electronic, or mechanical, including photocopying, taping, or information storage and retrieval systems without the prior written permission of Vestas Wind Systems A/S. The use of these documents by you, or anyone else authorized by you, is prohibited unless specifically permitted by Vestas Wind Systems A/S. You may not alter or remove any trademark, copyright or other notice from the documents. The documents are provided as is and Vestas Wind Systems A/S shall not have any responsibility or liability whatsoever for the results of use of the documents by you. In case we have unintentionally violated copyrighted material, we want to be informed immediately in order to straighten things out and thus to honour any obligatory fees.