Wind. It means the world to us.
TM
Company announcement No. 14/2024
Interim Financial Report
Second Quarter 2024
Company Reg. No.: 10403782
Vestas Wind Systems A/S Page 2 of 30
Interim Financial Report – Second Quarter 2024
Contents
Summary ........................................................................................................................................ 3
Financial and operational key figures ......................................................................................... 4
Sustainability key figures ............................................................................................................. 5
Group financial performance ....................................................................................................... 6
Power Solutions ............................................................................................................................ 9
Service ......................................................................................................................................... 11
Sustainability ............................................................................................................................... 12
Strategy and financial and capital structure targets ................................................................ 13
Outlook 2024 ................................................................................................................................ 14
Other events ................................................................................................................................ 15
Consolidated financial statements 1 January – 30 June ......................................................... 16
Statement by the Board of Directors and the Executive Management ................................... 28
Conference call (audiocast)
On Wednesday 14 August 2024 at 10 am CEST (9 am
BST), Vestas will host a conference call with a
presentation on the results. The presentation will be
audiocast and can be viewed live or replayed via
vestas.com.
The presentation will be held in English and will conclude
with a Q&A. Details on how to register for the Q&A are to
be found at vestas.com/en/investor.
Contact details
Vestas Wind Systems A/S, Denmark
Investors/analysts:
Daniel Patterson, Vice President
Investor Relations
Tel: +45 2669 2725
Frederik Holm Jacobsen
Senior Specialist, Investor Relations
Media:
Anders Riis, Vice President
Communications
Tel: +45 4181 3922
Vestas Wind Systems A/S Page 3 of 30
Interim Financial Report – Second Quarter 2024
Summary
Quarterly revenue of EUR 3.3bn with an EBIT margin
before special items of (5.6) percent. Order intake of 3.6
GW and record-high combined order backlog of EUR
63.0bn. Full-year guidance on revenue and EBIT margin
narrowed as already announced.
In the second quarter of 2024, Vestas generated revenue
of EUR 3,296m – a decrease of 3.9 percent compared to
the year-earlier period. EBIT before special items
amounted to EUR (185)m, resulting in an EBIT margin
before special items of (5.6) percent, as
adjustments to
planned costs impact current profitability in Vestas’
Service segment.
Adjusted free cash flow amounted to EUR 524m
compared to EUR (144)m in the second quarter of 2023.
The quarterly intake of firm and unconditional wind turbine
orders amounted to 3,596 MW, a 54 percent increase
from second quarter 2023. The value of the wind turbine
order backlog was EUR 28.1bn as at 30 June 2024.
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 34.9bn.
Thus, the value of the combined backlog of wind turbine
orders and service agreements stood at EUR 63.0bn – an
increase of EUR 11.4bn compared to the year-earlier
period.
As announced in Company Announcement No. 12/2024
of 12 August 2024, we have narrowed our full-year
guidance: Revenue is now expected to range between
EUR 16.5bn and 17.5bn (previously EUR 16bn-18bn),
including Service revenue. Service EBIT before special
items is expected to amount to around EUR 500m
(previously EUR 800m-880m). We expect to achieve an
EBIT margin before special items for the Group of 4-5
percent (previously 4-6 percent). The outlook for total
investments
1
is unchanged at approx. EUR 1.2bn in
2024.
Group President & CEO Henrik Andersen said: “In the
second quarter of 2024, Vestas’ underlying earnings
improved according to plan, driven by significant progress
within Power Solutions of 8 percentage points year-on-
year. Our revenue was EUR 3.3bn and Group EBIT
margin for the quarter was minus 5.6 percent, which was
caused by an adjustment to planned costs in Service. Our
Service business remains a strong business area, but in
the second quarter of 2024, the increase in our planned
costs means Service delivered an EBIT of minus EUR
107m. Our order intake had an average selling price of
EUR 1.21m/MW and grew more than 50 percent year-on-
year, which together with an adjusted free cash flow of
more than EUR 0.5bn highlight the positive trajectory in
Power Solutions and our continued strong commercial
discipline. Based on our second quarter results, we have
narrowed our 2024 guidance on revenue and EBIT
margin, and lowered the expectation to Service EBIT, as
announced earlier this week. We continue to execute on
our strategy to build further momentum and sustain our
industry leadership, and we want to thank our customers,
employees, and shareholders for their unwavering
support and passion to drive Vestas and the energy
transition forward.”
Key highlights
Revenue of EUR 3.3bn
Revenue decreased 4 percent YoY, affected by the cost update in Service, offset by higher delivery ASP.
Service impacted by adjustment to planned costs
Service EBIT negative EUR 107m in Q2 due to approx. EUR 300m in negative adjustment – no cash flow effect.
Underlying earnings progressing as expected
Turnaround in Power Solutions in on track and has improved EBIT margin almost 8 percentage points YoY.
Order intake of 3.6 GW
Order intake grew 54 percent YoY driven mainly by onshore projects in both Europe and Asia Pacific.
Strong cash flow
Adjusted Free cash flow of EUR 0.5bn drives leverage down to 0.7x NIBD/EBITDA.
Outlook narrowed
Turnover expected between EUR 16.5-17.5bn and EBIT margin of 4 to 5 percent.
1
Net investments in intangible assets and property, plant and equipment
Page 4 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Financial and operational key figures
mEUR
Q2
2024
Q2
)
2023
H1
2024
H1
2023
FY
)
2023
Financial key figures
Income statement
Revenue
3,296
3,429
5,977
6,258
15,382
Gross profit
156
221
400
409
1,283
Operating profit/(loss) before amortisation, depreciation and
impairment (EBITDA) before special items
40
132
171
368
1,028
Operating profit/(loss) (EBIT) before special items
(185)
(70)
(253)
(30)
231
Operating profit/(loss) before amortisation, depreciation and
impairment (EBITDA)
40
134
172
396
1,089
Operating profit/(loss) (EBIT)
(185)
(68)
(252)
(2)
292
Net operating profit after tax (NOPAT)
(125)
(60)
(174)
(2)
223
Net financial items
(53)
(58)
(88)
(92)
(164)
Profit/(loss) before tax
(230)
(130)
(335)
(99)
102
Profit/(loss) for the period
(156)
(115)
(231)
(99)
78
Balance sheet
Balance sheet total
23,617
20,333
23,617
20,333
22,514
Equity
2,926
2,849
2,926
2,849
3,042
Investments in property, plant, and equipment
(147)
95
(251)
171
457
Net working capital
(1,507)
(171)
(1,507)
(171)
(1,507)
Capital employed
6,335
5,768
6,335
5,768
6,429
Interest-bearing position (net), end of the period
(557)
(1,283)
(557)
(1,283)
32
Interest-bearing debt, at the end of the period
3,409
2,883
3,409
2,883
3,387
Cash flow statement
Cash flow from operating activities
831
48
76
(926)
1,027
Cash flow from investing activities
(332)
(158)
(547)
(269)
(782)
Free cash flow
499
(110)
(471)
(1,195)
245
Adjusted free cash flow
1)
524
(144)
(474)
(1,423)
(51)
Financial ratios
2)
Financial ratios
Gross margin (%)
4.7
6.4
6.7
6.5
8.3
EBITDA margin (%) before special items
1.2
3.8
2.9
5.9
6.7
EBIT margin (%) before special items
(5.6)
(2.0)
(4.2)
(0.5)
1.5
EBITDA margin (%)
1.2
3.9
2.9
6.3
7.1
EBIT margin (%)
(5.6)
(2.0)
(4.2)
(0.0)
1.9
Return on capital employed (ROCE)
3)
(%) before special items
0.4
(10.8)
0.4
(10.8)
2.9
Net interest-bearing debt / EBITDA
3)
before special items
0.7
4.5
0.7
4.5
0.0
Solvency ratio (%)
12.4
14.0
12.4
14.0
13.5
Return on equity
3)
(%)
(1.7)
(24.3)
(1.7)
(24.3)
2.6
Share ratios
Earnings per share
4)
(EUR)
(0.0)
(0.8)
(0.0)
(0.8)
0.1
Dividend per share (EUR)
-
-
-
-
-
Pay-out ratio (%)
-
-
-
-
-
Share price at the end of the period (DKK)
161.3
181.5
161.3
181.5
214.3
Number of shares at the end of the period (million)
1,010
1,010
1,010
1,010
1,010
Operational key figures
Order intake (bnEUR)
4.4
2.5
6.6
5.4
18.5
Order intake (MW)
3,596
2,333
5,896
5,636
18,386
Order backlog – wind turbines (bnEUR)
28.1
20.0
28.1
20.0
26.0
Order backlog – wind turbines (MW)
27,022
20,096
27,022
20,096
23,315
Order backlog – service (bnEUR)
34.9
31.6
34.9
31.6
34.1
Produced and shipped wind turbines (MW)
3,979
3,656
6,624
6,639
11,666
Produced and shipped wind turbines (number)
780
782
1,272
1,386
2,554
Deliveries (MW)
2,417
2,831
4,137
5,148
12,685
1) Free cash flow adjusted for acquisitions and divestments of businesses and activities, lease liability repayment, special items, net investments in joint ventures and associates
that are deemed outside Vestas’ core business activities, net investments in marketable securities, and other financial assets.
2) The ratios have been calculated in accordance with the guidelines from The Danish Finance Society (Recommendations & Financial ratios).
3) Calculated on a Last Twelve Months (LTM) basis
4) Earnings per share has been calculated over a 12-month period and in accordance with IAS 33 on earnings per share.
Page 5 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Sustainability key figures
Q2 2024
LTM
Q2 2023
LTM
FY
2023
Environmental
Utilisation of resources
Consumption of energy (GWh)
631
655
658
- of which renewable energy (GWh)
213
209
213
- of which renewable electricity (GWh)
165
166
166
Renewable energy (%)
34
32
32
Renewable electricity for own activities
(%)
100
100
100
Withdrawal of fresh water (1,000 m³)
295
311
279
Waste
Volume of waste from own operations (1,000 t)
41
44
44
- of which collected for recycling (1,000 t)
27
29
30
Recyclability rate of hub and blade
1)
(%)
//
//
90
Material efficiency (tonnes of waste excl. recycled per MW produced and shipped)
1.2
1.2
1.2
Carbon emissions
Direct emissions of CO
2
e
(scope 1) (1,000 t)
101
108
108
Indirect emissions of CO
2
e
(scope 2) (1,000 t)
1
1
1
Indirect emissions of CO
2
e from the supply chain (scope 3)
1)
(million t)
//
//
7.66
Indirect emissions of CO
2
e from the supply chain (scope 3)
1)
(kg per MWh generated)
//
//
6.30
Products
Expected CO
2
e avoided over the lifetime of the capacity produced and shipped during the
period (million t)
415
404
396
Expected annual CO
2
e
avoided by the total aggregated installed fleet at the end of the period
(million t)
238
226
231
Social
Safety
Total Recordable Injuries per million working hours (TRIR)
2.8
3.1
3.0
Lost Time injuries per million working hours (LTIR)
1.1
1.1
1.3
Total Recordable Injuries (number)
217
207
216
- of which Lost Time Injuries (number)
87
74
91
- of which fatal injuries (number)
1
1
1
Employees
Average number of employees (FTEs)
Employees at the end of the period (FTEs)
32,298
29,197
30,586
Diversity and inclusion
Women in the Board and Executive Management at the end of the period (%)
36
27
21
Women in leadership positions at the end of the period (%)
2)
24
23
24
Human rights
1)
Community grievances
(number)
//
//
3
Community beneficiaries (number)
//
//
9,769
Social Due Diligence on projects in scope
(%)
//
//
59
Governance
Whistle-blower system
1)
EthicsLine compliance cases
(number)
//
//
667
- of which substantiated
//
//
128
- of which unsubstantiated
//
//
461
For general definitions and specifications on these sustainability key figures, see the Notes to Sustainability key figures in the Annual Report 2023, page 128-129. Note that as of Q1
2024, as a standard, sustainability key figures are presented on a Last Twelve Months (LTM) basis to remove seasonal fluctuations.
1) Data only reported on an annual basis.
2) Employees of our subsidiary Utopus Insights, Inc. are not included.
Vestas Wind Systems A/S Page 6 of 30
Interim Financial Report – Second Quarter 2024
Group financial performance
Income statement
Revenue
Revenue in the second quarter of 2024 amounted to EUR
3,296m (Q2 2023: EUR 3,429m), a decrease of 3.9
percent year-on-year, primarily driven by adjustments to
planned costs of a larger portfolio of service contracts in
EMEA and Americas reflecting increasing costs
1
. The
Power Solutions segment was positively affected by MW
delivered at higher average prices. Revenue for the
second quarter of 2024 reflected a negative impact of
approx. EUR 27m from foreign exchange rates compared
to 2023.
For the first half of the year, revenue amounted to EUR
5,977m (H1 2023: EUR 6,258m), a decrease of 4.5
percent, primarily driven by the same factors impacting
the quarter. Revenue for the first half of 2024 reflected a
negative impact of EUR 40m from foreign exchange rates
compared to 2023.
Revenue and EBIT margin before special items
mEUR and percentage
Gross profit
Gross profit amounted to EUR 156m in the second
quarter of 2024, corresponding to a gross margin of 4.7
percent (Q2 2023: EUR 221m; 6.4 percent), which is a 1.7
percentage point decrease compared to the second
quarter of 2023. The decrease was attributable to the
above-mentioned adjustments to completion of service
contracts, partially offset by improved margins on projects
in the Power Solutions segment.
Gross profit in the first half of 2024 amounted to EUR
400m equal to a margin of 6.7 percent of revenue (H1
2023: EUR 409m; 6.5 percent). Gross profit reflects
improved margins in the Power Solutions segment offset
by the above-mentioned revenue adjustment in the
Service segment.
1
Refer to note 1.1 for further information on the adjustments to Service revenue.
Warranty costs
Warranty costs amounted to EUR 141m in the second
quarter of 2024 (Q2 2023: EUR 171m). The warranty
costs are equivalent to a warranty ratio of 4.3 percent of
revenue and on a lower level than last year (Q2 2023: 5.0
percent).
For the first half of 2024, warranty costs amounted to EUR
262m in the first half of 2024 (H1 2023: EUR 284m). The
warranty costs are equivalent to a warranty ratio of 4.4
percent of revenue and on the same level as last year (H1
2023: 4.5 percent).
Research and development costs, Distribution
costs and Administration costs
Total research and development, distribution and
administration costs amounted to EUR 341m in the
second quarter of 2024 (Q2 2023: EUR 307m), equivalent
to 8.5 percent of revenue calculated over the last 12-
month period (Q2 2023: 8.4 percent).
Research and development costs recognised in the
income statement amounted to EUR 89m in the second
quarter of 2024 (Q2 2023: EUR 82m). The increase was
primarily attributable to impairment of a technology
project.
Distribution costs amounted to EUR 127m in the second
quarter of 2024 (Q2 2023: EUR 111m). The second
quarter of 2024 was affected by an increase in IT costs
and losses on customer receivables.
Administration costs amounted to EUR 125m in the
second quarter of 2024 (Q2 2023: EUR 114m). The
increase was driven by employee-related costs.
Depreciation, amortisation, and impairment
In the second quarter of 2024, overall depreciation,
amortisation, and impairment before special items
amounted to EUR 225m (Q2 2023: EUR 202m). The
increase was attributable to the above-mentioned
impairment of a technology project and higher investment
levels.
Income from investments in joint ventures and
associates from core activity
In the second quarter of 2024, no income from
investments in joint ventures and associates related to
Development activities was realised (Q2 2023: gain of
EUR 16m).
Operating profit (EBIT) before special items
EBIT before special items amounted to negative EUR
185m in the second quarter of 2024, equivalent to an
EBIT margin of negative 5.6 percent (Q2 2023: negative
EUR 70m; negative 2.0 percent). The development was
driven by decreasing gross margin.
Vestas Wind Systems A/S Page 7 of 30
Interim Financial Report – Second Quarter 2024
For the first half of 2024, EBIT before special items
amounted to negative EUR 253m, equal to an EBIT
margin of negative 4.2 percent (H1 2023: negative EUR
30m; negative 0.5 percent). The operating profit in the first
half of 2023 was significantly impacted by the sale of the
converters and controls business. The underlying EBIT
decreased with 1.3 percentage points compared to the
first half of 2023, when disregarding the effects of the sale
in the comparison period, primarily driven by the
decreasing gross margin.
Operating profit (EBIT) after special items
In the second quarter of 2024, EBIT after special items
amounted to negative EUR 185m, equivalent to a
negative margin of 5.6 percent (Q2 2023: negative EUR
68m; negative 2.0 percent).
EBIT after special items in the first half of 2024 amounted
to negative EUR 252m, equivalent to an EBIT margin after
special items of negative 4.2 percent (H1 2023: negative
EUR 2m; negative 0 percent).
Income from investments in joint ventures and
associates from other activities
Income from investments in joint ventures and associates
amounted to a gain of EUR 8m in the second quarter of
2024 (Q2 2023: loss of EUR 4m), primarily driven by
income from Vestas’ investment in Copenhagen
Infrastructure Partners.
Net financial items
Financial items amounted to a net loss of EUR 53m in the
second quarter of 2024 (Q2 2023: loss of EUR 58m). Net
financial items reflected lower losses from foreign
exchange rates partially offset by increasing financing
costs.
Income tax
Income tax amounted to an income of EUR 74m in the
second quarter of 2024, and equivalent to an effective tax
rate of 32 percent (Q2 2023: Effective tax rate of 12
percent). The effective tax rate reflects the full year
expectations to profit before tax.
Net result for the period
The net result amounted to a loss of EUR 156m in the
second quarter of 2024 (Q2 2023: loss of EUR 115m).
The net result for the first half of 2024 amounted to a loss
of EUR 231m (Q2 2023: loss of EUR 99m).
Financial ratios
Earnings per share calculated over a 12-month period
amounted to EUR 0 in the second quarter of 2024 (Q2
2023: negative EUR 0.8). The increase of EUR 0.8 was
driven by improved earnings in the period.
Return on capital employed (ROCE) before special items
calculated over a 12-month period was 0.4 percent in the
second quarter of 2024 (Q2 2023: negative 10.8 percent),
1)
Net investments in intangible assets and property, plant and equipment.
an increase compared to 2023 driven by the improved
operating profit in the period.
Working capital and free cash flow
Net working capital
Net working capital amounted to a net liability of EUR
1,507m as at 30 June 2024 (30 June 2023: a net liability
of EUR 171m). The development was primarily
attributable to a higher level of contract liabilities from
prepayments related to firm order intake and project
milestones achieved.
Cash flow from operating activities
Cash flow from operating activities was positive EUR
831m in the second quarter of 2024 (Q2 2023: positive
48m) and positive EUR 76m in the first half of 2024 (H1
2023: negative EUR 926m). The positive development in
cash flow compared to last year was primarily driven by
the development in net working capital and improved
profit for the period.
Cash flow from investing activities
Total net investments
1
amounted to a net outflow of EUR
269m in the second quarter of 2024 (Q2 2023: outflow
EUR 189m) and a net outflow of EUR 467m in the first
half year of 2024 (H1 2023: net outflow of EUR 301m).
The investment level increased due to ramp-up of the
V236 production.
Adjusted free cash flow
Adjusted free cash flow amounted to positive EUR 524m
in the second quarter of 2024 (Q2 2023 negative EUR
144m) and negative EUR 474m in the first half of 2024
(H1 2023: negative EUR 1,423m). The positive
development was primarily driven by the improved cash
flow from operating activities.
Adjusted free cash flow
mEUR
Q2
2024
Q2
2023
H1
2024
H1
2023
Cash flow from
operating activities
831
48
76
(926)
Cash flow from
investing activities
(332)
(158)
(547)
(269)
Free cash flow
499
(110)
(471)
(1,195)
Net acquisitions in
businesses/activities*
)
-
6
(2)
(159)
Payment of lease
liabilities
(37)
(42)
(85)
(76)
Special items
-
1
2
4
Investments in financial
assets
62
1
82
3
Adjusted free cash
flow
524
(144)
(474)
(1,423)
*) Includes net investments in joint ventures and associates, outside core business
Vestas Wind Systems A/S Page 8 of 30
Interim Financial Report – Second Quarter 2024
Capital structure and financing items
Equity and solvency ratio
As at 30 June 2024, total equity amounted to EUR 2,926m
(30 June 2023: EUR 2,849m) and the solvency ratio 12.4
percent (30 June 2023: 14 percent). The lower solvency
was mainly a result of the issuance of a sustainability-
linked Eurobond of nominal EUR 500m to finance
increasing investment levels and to strengthen the
liquidity position during 2023. In addition, prepayment
levels have increased significantly from a high level of firm
order intake during 2023.
Net interest-bearing position and cash position
As at 30 June 2024, the net interest-bearing debt
amounted to EUR 557m (30 June 2023: EUR 1,283m).
The development was a result of a positive free cash flow
during the last 12 months.
Cash and cash equivalents amounted to EUR 2,636m as
at 30 June 2024, compared to EUR 1,504m at the end of
the second quarter of 2023.
The ratio net interest-bearing debt/EBITDA was 0.7 as at
30 June 2024, compared to 4.5 at the end of the second
quarter of 2023. The ratio was impacted by a lower net
debt position and improved EBITDA during the last 12
months.
Vestas Wind Systems A/S Page 9 of 30
Interim Financial Report – Second Quarter 2024
Power Solutions
Result for the period
In the second quarter of 2024, revenue from the Power
Solutions segment amounted to EUR 2,625m (Q2 2023:
EUR 2,525m), which corresponds to 4.0 percent
increase compared to the second quarter of 2023. The
increase was driven by higher average prices, partially
offset by lower volume of MW delivered. The second
quarter reflected a negative impact of EUR 20m from
foreign exchange rates compared to 2023.
In the first half of 2024, revenue in the Power Solutions
segment amounted to EUR 4,404m, a decrease of 3.2
percent compared to the same period last year (H1 2023:
EUR 4,548m). The first half of the year reflected a
negative impact of EUR 21m from foreign exchange
rates compared to 2023.
EBIT before special items amounted to EUR 19m in the
second quarter of 2024, equal to an EBIT margin of 0.7
percent (Q2 2023: negative EUR 175m; negative 6.9
percent). The positive development in the EBIT margin
was primarily attributable to improved project profitability
and continued commercial discipline.
In the first half of 2024, EBIT before special items
amounted to negative EUR 150m, equal to an EBIT
margin before special items of negative 3.4 percent, 1.6
percentage point above the same period last year (H1
2023: negative EUR 229m, negative 5.0 percent). The
EBIT margin in the first half of 2023 included sale of
technology, and therefore the underlying EBIT margin
increased by 5 percentage points, highlighting improved
margins from projects in the Power Solutions segment.
Power Solutions revenue and EBIT margin before special
items
mEUR and percentage
Wind turbine order intake
In the second quarter of 2024, wind turbine order intake
amounted to 3,596 MW, corresponding to a value of
EUR 4.4bn (Q2 2023: 2,333 MW; EUR 2.5bn). This
represents an increase of 54 percent in MW order intake
compared to the second quarter of 2023. The increase
was related to strong order intake in EMEA and Asia
Pacific in the second quarter of 2024.
The average selling price per MW was EUR 1.21m in the
second quarter of 2024, compared to EUR 1.04m in the
second quarter of 2023.
Wind turbine order intake, second quarter 2024
MW
EMEA
Ameri-
cas
Asia
Pacific
Total
Onshore order
intake
1,936
178
822
2,936
Offshore order
intake
660
-
-
660
Total order
intake
2,596
178
822
3,596
Wind turbine deliveries
Deliveries to customers amounted to 2,417 MW in the
second quarter of 2024 (Q2 2023: 2,831 MW), which
corresponds to 14.6 percent decrease compared to the
second quarter of 2023. The decrease was driven by
lower onshore deliveries.
Deliveries
MW
By the end of June 2024, Vestas had installed a total
capacity of 182 GW in 88 countries.
Vestas Wind Systems A/S Page 10 of 30
Interim Financial Report – Second Quarter 2024
Deliveries (onshore and offshore)
MW
Q2
2024
Q2
2023
FY
2023
Germany
419
386
1,486
Italy
154
66
265
Finland
141
73
723
South Africa
136
-
37
Poland
99
84
292
United Kingdom
71
564
896
Sweden
69
17
165
France
59
136
735
Greece
27
67
161
Austria
17
44
197
Denmark
16
3
53
Portugal
11
34
107
Belgium
4
12
65
Ireland
3
-
36
Czech Republic
2
2
9
Lithuania
2
-
68
Romania
2
-
72
Netherlands
1
73
287
Egypt
-
34
145
Spain
-
7
177
Turkey
-
-
32
Utd. Arab Emir.
-
-
42
Estonia
-
-
101
EMEA
1,233
1,602
6,151
o/w Offshore
265
318
563
Brazil
379
407
1,635
USA
225
307
2,079
Argentina
83
112
420
Canada
77
110
275
Chile
13
18
41
Colombia
-
4
332
Dominican Rep.
-
7
18
Puerto Rico
-
-
11
Mexico
-
-
1
Americas
777
965
4,812
o/w Offshore
-
-
-
Australia
226
123
822
Taiwan
129
72
458
Japan
51
43
95
South Korea
1
5
21
China
-
3
21
India
-
1
193
New Zealand
-
15
84
Sri Lanka
-
(1)*
)
6
Vietnam
-
3
9
Philippines
-
-
13
Asia Pacific
407
264
1,722
o/w Offshore
129
77
452
Total
2,417
2,831
12,685
o/w Offshore
394
395
1,015
*)
Negative values can result as part of Vestas’ deliveries are based on a percentage-
of-completion method requiring estimates in relation to stage of completion.
Wind turbine order backlog
At the end of the second quarter of 2024, the wind
turbine order backlog amounted to 27,022 MW, which
corresponds to a value of EUR 28.1bn (30 June 2023:
20,096 MW / EUR 20.0bn), of which EUR 5.5bn relates
to offshore wind power projects (30 June 2023: EUR
2.4bn). The development reflects significant offshore
order intake in Poland and Germany as well as a high
level of onshore order intake in the USA.
Order backlog per region
MW
EMEA
Ameri-
cas
Asia
Pacific
Total
Total backlog as at 30
June 2023
8,462
8,067
3,567
20,096
Order intake
9,875
7,355
1,416
18,646
Deliveries
(5,282)
(4,523)
(1,915)
(11,720)
Total backlog as at 30
June 2024
13,055
10,899
3,068
27,022
o/w Offshore
3,790
-
699
4,489
Development business
At the end of second quarter of 2024, Vestas’ pipeline of
development projects amounted to 28.7 GW (30 June
2023: 30.5 GW). The pipeline includes 15.5 GW in
APAC, 7.8 GW in Americas and 5.4 GW in EMEA, with
Australia, the USA, and Spain being the countries with
the largest project pipelines. During the quarter, Vestas
secured 0.6 GW of new pipeline projects, mainly in
Australia.
Vestas Wind Systems A/S Page 11 of 30
Interim Financial Report – Second Quarter 2024
Service
Result for the period
The Service segment generated revenue of EUR 671m
in the second quarter of 2024 (Q2 2023: EUR 904m),
which corresponds to 25.8 percent decrease compared
to the second quarter of 2023. The lower revenue was
primarily driven by adjustments to planned costs of a
larger portfolio of service contracts in EMEA and
Americas. The updated estimate reflects increasing cost
levels, such as salaries, indirect effects from upgrade
and repair campaigns and operational inefficiencies,
partially offset by expected future efficiency
achievements and cost-out initiatives.
1
Foreign exchan-
ge rates had a EUR 7m negative effect on revenue
growth.
In the first half of 2024, revenue from the Service
segment amounted to EUR 1,573m (H1 2023: EUR
1,710m), an 8.0 percent decrease compared to first half
of 2023, primarily driven by the above-mentioned
adjustments to estimated completion of service
contracts.
Service revenue and EBIT margin before special items
mEUR and percentage
EBIT before special items amounted to negative EUR
107m in the second quarter of 2024, corresponding to
an EBIT margin of negative 15.9 percent, significantly
lower than the same period last year (Q2 2023: EUR
198m; 21.9 percent). The lower margin reflects the
above-mentioned adjustments to planned costs.
In the first half of 2024, EBIT before special items
amounted to EUR 85m with an EBIT margin of 5.4
percent, a 16.9 percentage point decrease compared
to the first half of 2023 (H1 2023: EUR 381m; 22.3
percent). The negative development compared to the
first half of 2023 was attributable to the same factors
impacting the quarter.
Wind turbines under service
At the end of June 2024, Vestas had around 56,000 wind
turbines under service, equivalent to 151 GW.
Lost Production Factor
*)
Percent
*) Data calculated across more than 40,000 Vestas wind turbines under full-scope
service. The lost production factor includes both onshore and offshore turbines.
The overall Lost Production Factor continues to improve,
although still at an unsatisfactory level at the end of
second quarter 2024.
Service order backlog
At the end of June 2024, Vestas had service contracts
in the order backlog with expected contractual future
revenue of EUR 34.9bn, an increase of EUR 3.3bn,
compared to end of the quarter last year (30 June 2023:
EUR 31.6bn). The service order backlog increased
EUR 1.3bn from indexation mechanisms in contracts.
Service order backlog
bnEUR
At the end of the quarter, the average duration of the
service order backlog was 11 years (30 June 2023: 11
years.
1
Refer to note 1.1 for further information on the adjustments to Service revenue.
Page 12 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Sustainability
The Vestas Sustainability Strategy
Vestas has been leading the transition to a world
powered by sustainable energy for over four decades. In
2020, we launched our sustainability strategy to embed
sustainability in everything we do with four clear
ambitions: achieving carbon-neutrality of our own
operations by 2030 − without using carbon offsets, and
with a 45 percent reduction in our supply chain CO
2
e
intensity; creating zero-waste wind turbines by 2040;
becoming the safest, most inclusive and socially
responsible workplace in the energy industry; and
leading the transition to a world powered by sustainable
energy.
For our key sustainability figures (page 5), we have since
1 January 2024 transitioned to present the majority of
figures on a Last-Twelve Month (LTM) basis. The
transition to LTM covers all four KPIs related to our
sustainability strategy. Presenting our figures in this
manner provides us with an enhanced long-term outlook
on progress by removing seasonal fluctuations.
Carbon footprint
Turbines produced and shipped in the last twelve months
are expected to avoid 415 million tonnes of CO
2
e over
the course of their lifetime. This is an increase of 11
million tonnes from the comparable last twelve months
the year prior. This improvement is driven by updated
industry assumptions affecting the calculation method.
In the last 12 months, our total scope 1 and 2 emissions
decreased to 102,000 tonnes from 109,000 tonnes. This
reflects a 6 percent decrease compared to the
comparable last 12 months the year prior. The decrease
in our total scope 1 and 2 emissions is driven by reduced
construction activity in our UK offshore operations,
leading to a decrease in vessel fuel usage.
Scope 3 emissions are reported annually in the Annual
Report.
Conditional agreement with Vattenfall and
BASF for low-emission steel turbines
In June 2024, Vestas signed a conditional agreement
with Vattenfall and BASF to supply 112 V236 offshore
wind turbines for the Nordlicht 1 and 2 projects in
Germany.
The companies are underlining their ambitions to reduce
their CO
2
e emissions along the entire value chain. The
top sections of 56 of the towers will be made with low-
emission steel, accounting for 24 percent of the mass of
the heavy steel plates used for the wind farm area and
leading to a 16 percent reduction in the towers’ overall
carbon footprint.
The low-emission steel is fabricated using 100 percent
steel scrap melted in an electric arc furnace powered by
100 percent wind energy, reducing the carbon footprint
by 66 percent compared to heavy steel plates made via
a conventional steelmaking route.
Circularity
In the last 12 months, our material efficiency rate
remained constant at 1.2 tonnes of waste per MW
produced and shipped, hence already meeting our 2025
target. What seems like a stagnation reflects an
underlying improved recycling rate, however offset by
lower volumes of produced and shipped (MW).
Safety
Working towards becoming the safest workplace in the
energy industry, we aim to reduce the Total Recordable
Injury Rate (TRIR) to 1.5 by 2025 and 0.6 by 2030,
equivalent to a 15 percent year-on-year reduction from
2019.
On 11
May 2024, an incident occurred on a construction
site in Italy, which tragically resulted in a fatality of a
contractor under Vestas’ supervision. Any fatality in
Vestas’ operations is one too many, and we are taking
the necessary measures to understand and further learn
from the incident.
In the second quarter of 2024, our TRIR based on LTM
was reduced to 2.8, compared to 3.0 for full year 2023
and 3.1 for the comparable last 12 months. The reduction
is driven by an improvement in our accounting of working
hours. We continue to improve our understanding of
Health and Safety controls, operationally ensuring we
proactively assess and improve their effectiveness as
well as rolling out broad based Safety leadership
programs. We will continue to seek to improve
performance by maintaining an operational safety focus
across our entire value chain.
Incidence of total recordable injuries (LTM)
Per million working hours
Page 13 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Strategy and financial and
capital structure targets
(For an extended introduction to the Vestas strategy,
please refer to the Annual Report 2023.)
Net zero requires Vestas to scale
For the world to reach net zero, we estimate wind power
installations will need to increase to more than 290 GW
per year by 2050, from 78 GW in 2022
1)
, and Vestas is
ready to meet demand. Through strong partnerships with
key suppliers and customers, through modularisation
and the development of digital solutions, and by investing
in talent and capabilities, we are laying the foundation for
a Vestas that is ready to scale.
Business area strategy
Onshore wind
Our strategic priorities in Onshore continue to be a focus
on value over volume, driving modularisation to ensure
highly competitive products at high quality and lower cost,
and working with digitalisation and efficiency measures
across the value chain. Further, we will cultivate strategic
customer partnerships, and continue to mature industry
dynamics to improve some of the fundamentals in
onshore wind. This means we must continue to lead the
effort to industrialise the wind energy industry, with the
aim of restoring and improving profitability.
Offshore wind
Ramping up Offshore to deliver on significant market
ambitions require discipline and continuous attention to
our business plan. To achieve our goals, we must secure
profitable order intake, sustainably scale up our
manufacturing capacity, and ensure operational
readiness and execution capabilities for the new V236
platform. At the same time, we will lead a market that is
profitable and sustainable in the long term.
Service
To extend our leading position in wind energy service
solutions, we remain focused on maximising customer
returns and energy production when electricity demand
is highest. To achieve this goal, we are employing an
incremental approach to scaling our operations
efficiently. This enables us to reap the full benefit of our
unparalleled service backlog and prepare for expected
growth, onshore and offshore.
Development
Most of our projects are still in early stages of
development. To grow our Development business
profitably, our strategy focuses on maturing the project
pipeline while ensuring project quality. Building on our
industry expertise and experience, we will de-risk
projects and maximise the value of our pipeline while
maintaining commercial and financial discipline.
Capital structure
When it comes to financial management, our objective is
to create the necessary flexibility and stability to
implement strategic development work, while achieving
our financial ambitions in the long term. At the same time,
we aim to have the most effective cost of capital.
We apply the following priorities to capital allocation:
• Reinvest in our manufacturing footprint and R&D to
realise our corporate strategy.
• Make value-creating acquisitions to accelerate or
increase profitable growth and explore divestments
of non-core assets.
• Pay 25-30 percent of net result after tax in dividend.
• Initiate share buy-backs from time to time.
Long-term sustainability ambitions
We are committed to carbon neutrality of our own
operations by 2030 – without using carbon offsets. At the
same time, we are working to decarbonise the entire
wind energy supply chain by working with strategic
suppliers to lower the carbon intensity of energy
generated by our turbines by 45 percent
2)
by 2030.
We are committed to creating zero-waste wind turbines
by 2040. Through our industry-leading Circularity
Roadmap, we have outlined our pathway and interim
targets towards this goal, one of which is to improve our
material efficiency rate to 0.2 by 2030. Further, we aim
to reduce our injury rate (TRIR) to 0.6 by 2030, and to
increase the share of women in leadership positions to
30 percent by 2030.
Long-term financial ambitions
Our industry needs structural change to increase
profitability, especially within the wind turbine segment.
The structural changes primarily entail strengthening the
commercial discipline in customer dialogues, working
closer across the industry supply chain, and lowering the
frequency of new technology introductions as well as
maturing the assessment of risk. In 2023, Vestas
managed to get ‘back in black’ as our commercial and
operational discipline is paying off. The year underlined
that Vestas is on the right strategic path to improve the
industry structurally and continue to build the commercial
and operational maturity to achieve our financial
ambitions. In that context, a 10 percent EBIT margin
remains achievable in the mid-term.
Vestas has the following long-term financial ambitions:
• Grow revenue faster than the market and be the
market leader in revenue.
• Positive free cash flow
• Reach at least 10 percent EBIT margin before
special items.
• Achieve 20 percent ROCE over the cycle.
1)
Source: Global Wind Energy Council: Global Wind Statistics 2023. March 2023.
2)
Baseline year: 2019
Page 14 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Outlook 2024
As announced on 12 August 2024 (Company
Announcement 12/2024), Vestas has narrowed its initial
guidance for full year on revenue and EBIT margin
before special items as a consequence of adjustments to
planned costs in Service, which impact current
profitability in the Service segment.
Revenue is now expected to range between EUR 16.5bn
and 17.5bn (previously EUR 16-18bn), including Service
revenue. Vestas expects to achieve an EBIT margin
before special items of 4-5 percent (previously 4-6
percent).
Expectations to total investments
1
are unchanged; with
an outlook of approx. EUR 1.2bn.
The Service segment is now expected to generate EBIT
before special items of around EUR 500m in 2024.
In relation to forecasts on financials from Vestas in
general, it should be noted that Vestas’ accounting
policies only allow the recognition of revenue when the
control has passed to the customer, either at a point in
time or over time. Disruptions in production and
challenges in relation to shipment of wind turbines and
installation hereof, for example bad weather, lack of grid
connections, and similar matters, may cause delays that
could affect Vestas’ financial results for 2024. Further,
the full-year results may also be impacted by movements
in exchange rates from current levels.
Outlook 2024
Updated
Guidance
2
Initial
guidance
Revenue (bnEUR) 16.5-17.5 16-18
EBIT margin (%) b.s.i. 4-5 4-6
Total investments
**)
(bnEUR) approx.1.2 approx.1.2
1)
Net investments in intangible assets and property, plant and equipment.
2)
Guidance update 12 August 2024, cf. Company Announcement No. 12/2024.
Page 15 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Other events
William Fehrman steps down from the Board of
Directors of Vestas Wind Systems A/S
William Fehrman, who was elected as member of the
Board of Directors of Vestas Wind Systems A/S on the
Annual General Meeting 2024, has decided to step down
from his board position with effect as of 14 August 2024,
cf. Company Announcement No. 13/2024 of 14 August
2024.
William Fehrman has taken this decision to avoid any
potential conflict of interest as he has been elected by
the Board of Directors of American Electric Power
Company, Inc. to lead the company as Director,
President and Chief Executive Officer.
Update to Communication Policy regarding order
announcements
As of 14 August 2024, Vestas’ communication policy with
regards to orders will change to the effect that firm and
unconditional wind power plant orders of 1.5 GW or more
will now as a general rule be considered inside
information (previously 1 GW).
The same general rule and threshold will apply to
conditional wind power plant orders.
In cases where one or more projects with a total capacity
of 1.5 GW or more have been announced at the stage of
a conditional agreement, but the individual firm and
unconditional order is below 1.5 GW, the order
announcement will not be considered inside information
and will be disclosed in a press release, referring to the
Company Announcement re. the conditional order.
Vestas’ Investor Relations Communication Policy, which
can be found at vestas.com, has been updated
accordingly.
Page 16 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Consolidated financial statements 1 January – 30 June
Condensed income statement 1 January – 30 June
mEUR
Note
Q2
2024
Q2
2023
H1
2024
H1
2023
Revenue
1.1, 1.2
Production costs
(3,140 )
(3,208 )
(5,577 )
(5,849 )
Gross profit
Research and development costs
(89 )
(82 )
(174 )
(174 )
Distribution costs
(127 )
(111 )
(255 )
(218 )
Administration costs
(125 )
(114 )
(224 )
(219 )
Sale of technology
1.3
Income from investments in joint ventures and associates
Operating profit/(loss) (EBIT) before special items 1.1
(185 )
(70 ) (253
)
(30 )
Special items
1.4
Operating profit/(loss) (EBIT) (185 ) (68 ) (252
)
(2 )
Income from investments in joint ventures and associates
(4 )
(5 )
Net financial items
(53 )
(58 )
(88 )
(92 )
Profit/(loss) before tax
(230 )
(130 )
(335 )
(99 )
Income tax
Profit/(loss) for the period
(156 )
(115 )
(231 )
(99 )
Profit/(loss) is attributable to:
Shareholders of Vestas Wind Systems A/S
(158 )
(115 )
(226 )
(100 )
Non-controlling interests
(5 )
Earnings per share (EPS)
Earnings per share for the period (EUR), basic
(0.16 )
(0.12 )
(0.23 )
(0.10 )
Earnings per share for the period (EUR), diluted
(0.16 )
(0.12 )
(0.23 )
(0.10 )
Condensed statement of comprehensive income 1 January – 30 June
mEUR
Q2
2024
Q2
2023
H1
2024
H1
2023
Profit/(loss) for the period
(156 )
(115 )
(231 )
(99 )
Items that may be reclassified to the income statement subsequently:
Exchange rate adjustments relating to foreign entities
(2 )
(39 )
(61 )
Fair value adjustments of derivative financial instruments for the period
(19 )
Gain/(loss) on derivative financial instruments transferred to the income statement
(35 )
(47 )
(86 )
Share of fair value adjustments of derivative financial instruments of joint ventures and
associates
(1 )
Tax on items that may be reclassified to the income statement subsequently
(24 )
(50 )
Other comprehensive income after tax for the period
(85 )
(91 )
Total comprehensive income for the period
(87 )
(200 )
(75 )
(190 )
The above condensed statement of comprehensive income should be read in conjunction with the accompanying notes.
Page 17 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Condensed balance sheet – Assets
mEUR
Note
30 June
2024
30 June
2023
31 December
2023
Goodwill
Completed development projects
Software
Other intangible assets
Development projects in progress
Total intangible assets
Land and buildings
Plant and machinery
Other fixtures, fittings, tools and equipment
Right-of-use assets
Property, plant and equipment in progress
Total property, plant and equipment
2.1
Investments in joint ventures and associates
Other investments
Tax receivables
Deferred tax
Other receivables
3.4
Financial investments
3.4
Total other non-current assets
Total non-current assets
Inventories
Trade receivables
Contract assets
Contract costs
Tax receivables
Other receivables
3.4
Financial investments
3.4
Cash and cash equivalents
3.2
Total current assets
Total assets
The above condensed balance sheet should be read in conjunction with the accompanying notes.
Page 18 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Condensed balance sheet – Equity and liabilities
mEUR
Note
30 June
2024
30 June
2023
31 December
)
2023
Share capital
3.1
Other reserves
(96 )
(102 )
Retained earnings
Attributable to shareholders of Vestas
Non-controlling interests
Total equity
Provisions
2.2
Deferred tax
Financial debts
3.4
Tax payables
Other liabilities
3.4
Total non-current liabilities
Financial debts
3.4
Contract liabilities
Trade payables
Provisions
2.2
Tax payables
Other liabilities
3.4
Total current liabilities
Total liabilities
Total equity and liabilities
The above condensed balance sheet should be read in conjunction with the accompanying notes.
Page 19 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Condensed statement of changes in equity – six months 2024
Reserves
mEUR
Share
capital
Transla-
tion
reserve
Cash flow
hedging
reserve
Other
reserves
Total
reserves
Retained
earnings
Non-
control-
ling
interests
Total
Equity as at 1 January 2024
(80 )
(24 )
(102 )
Profit/(loss) for the period
(226 )
(5 )
(231 )
Other comprehensive income for the period
Total comprehensive income for the period
(226 )
(3 )
(75 )
Transfer of cash flow hedge reserve to the initial
carrying amount of hedged items
(14 )
(14 )
(14 )
Transaction with shareholders:
Acquisition of treasury shares
(40 )
(40 )
Share-based payments
Tax on equity transactions
(4 )
(4 )
Total transactions with shareholders
(27 )
(27 )
Equity as at 30 June 2024
(63 )
Condensed statement of changes in equity – six months 2023
Reserves
mEUR
Share
capital
Transla-
tion
reserve
Cash flow
hedging
reserve
Other
reserves
Total
reserves
Retained
earnings
Non-
control-
ling
interests
Total
Equity as at 1 January 2023
(1 )
Profit/(loss) for the period
(100 )
(99 )
Other comprehensive income for the period
(60 )
(29 )
(1 )
(90 )
(1 )
(91 )
Total comprehensive income for the period
(60 )
(29 )
(1 )
(90 )
(100 )
(0 )
(190 )
Transfer of cash flow hedge reserve to the initial
carrying amount of hedged items
(21 )
(21 )
(21 )
Transaction with shareholders:
Acquisition of treasury shares
(11 )
(11 )
Share-based payments
Tax on equity transactions
(0 )
(0 )
Total transactions with shareholders
Equity as at 30 June 2023
(50 )
(51 )
(96 )
The above condensed statement of changes in equity should be read in conjunction with the accompanying notes.
Page 20 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Condensed cash flow statement 1 January – 30 June
mEUR
Note
Q2
2024
Q2
2023
H1
2024
H1
2023
Profit/(loss) for the period
(156 )
(115 )
(231 )
(99 )
Adjustment for non-cash transactions
Interest paid / received, net
(16 )
(15 )
(1 )
Income tax paid
(39 )
(38 )
(79 )
(53 )
Cash flow from operating activities before change in net working
capital
(3 )
Change in net working capital
(89 )
(1,311 )
Cash flow from operating activities
(926 )
Purchase of intangible assets
(135 )
(94 )
(229 )
(188 )
Purchase of property, plant and equipment
(147 )
(95 )
(251 )
(171 )
Proceeds from sale of intangible assets
Proceeds from sale of property, plant and equipment
Dividends from investments in joint ventures and associates
Purchase of other non-current financial assets
(66 )
(2 )
(129 )
(5 )
Proceeds from sale of other non-current financial assets
Proceeds of investments in joint ventures and associates
(1 )
Net cash flow from deconsolidation of subsidiary
(8 )
Cash flow from investing activities
(332 )
(158 )
(547 )
(269 )
Free cash flow
(110 )
(471 )
(1,195 )
Payment of lease liabilities
(38 )
(41 )
(85 )
(76 )
Proceeds from borrowings
Payment of financial debt
(95 )
(100 )
(106 )
(150 )
Acquisition of treasury shares
(40 )
(11 )
(40 )
(11 )
Cash flow from financing activities
(151 )
(86 )
(187 )
Net change in cash and cash equivalents
(196 )
(658 )
(845 )
Cash and cash equivalents at the beginning of period
Exchange rate adjustments of cash and cash equivalents
(6 )
(7 )
(24 )
(29 )
Cash and cash equivalents at the end of the period
3.2
The above condensed cash flow statement should be read in conjunction with the accompanying notes.
Page 21 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Notes
1 Result for the period
1.1 Segment information
In the second quarter of 2024, revenue in the Service segment was negatively impacted by EUR 312m from adjustments
to planned costs of ongoing service contracts. The adjustments relate to an increase in the expected total cost to complete
the service contracts, primarily driven by updated cost forecasts as well as the expected future impact from cost-out
initiatives.
mEUR
Power
Solutions
Service
Not
allocated
Total Group
Q2 2024
Revenue
2,625
671
-
3,296
Total revenue
2,625
671
-
3,296
Total costs
(2,606)
(778)
(97)
(3,481)
Operating profit/(loss) (EBIT) before special items
19
(107)
(97)
(185)
Special items
0
-
-
0
Operating profit/(loss) (EBIT)
19
(107)
(97)
(185)
Income from investments in joint ventures and associates
-
-
8
8
Net financial items
-
-
(53)
(53)
Profit/(loss) before tax
(230)
Amortisation and depreciation included in total costs
(169)
(46)
(10)
(225)
mEUR
Power
Solutions
Service
Not
allocated
Total Group
Q2 2023
Revenue
2,525
904
-
3,429
Income from investments in joint ventures and associates
16
-
-
16
Total income
2,541
904
-
3,445
Total costs
(2,716)
(706)
(93)
(3,515)
Operating profit/(loss) (EBIT) before special items
(175)
198
(93)
(70)
Special items
2
-
-
2
Operating profit/(loss) (EBIT)
(173)
198
(93)
(68)
Income from investments in joint ventures and associates
-
-
(4)
(4)
Net financial items
-
-
(58)
(58)
Profit/(loss) before tax
(130)
Amortisation and depreciation included in total costs
(153)
(40)
(9)
(202)
Page 22 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
1.1 Segment information (continued)
In the first half of 2024, as described above revenue in the Service segment was negatively impacted by EUR 312m from
adjustments to the estimated percentage-of-completion of ongoing service contracts.
In the first half of 2024, a net income of EUR 2m was recognised in special items relating to the adjustment of the
manufacturing footprint in India, impacting the Power Solutions segment.
In the first half of 2023, a net income of EUR 28m was recognised in special items relating to the adjustment of the
manufacturing footprint in India as well as the Russian invasion of Ukraine, impacting the Power Solutions segment. For
additional information, refer to note 1.4.
In the first half of 2023, a gain of EUR 154m was recognised relating to the sale of the converters and controls business to
KK Wind Solutions impacting the Power Solutions segment. Of this gain, EUR 147m was recognised in sale of technology
and EUR 7m was recognised in production costs.
mEUR
Power
Solutions
Service
Not allocated
Total
Group
H1 2024
Revenue
4,404
1,573
-
5,977
Total revenue
4,404
1,573
-
5,977
Total costs
(4,554)
(1,488)
(188)
(6,230)
Operating profit/(loss) (EBIT) before special items
(150)
85
(188)
(253)
Special items
1
-
-
1
Operating profit/(loss) (EBIT)
(149)
85
(188)
(252)
Income from investments in joint ventures and associates
-
-
5
5
Net financial items
-
-
(88)
(88)
Profit/(loss) before tax
(335)
Amortisation and depreciation included in total costs
(320)
(82)
(22)
(424)
mEUR
Power
Solutions
Service
Not allocated
Total
Group
H1 2023
Revenue
4,548
1,710
-
6,258
Sale of technology
147
-
-
147
Income from investments in joint ventures and associates
25
-
-
25
Total income
4,720
1,710
-
6,430
Total costs
(4,949)
(1,329)
(182)
(6,460)
Operating profit/(loss) (EBIT) before special items
(229)
381
(182)
(30)
Special items
28
-
-
28
Operating profit/(loss) (EBIT)
(201)
381
(182)
(2)
Income from investments in joint ventures and associates
-
-
(5)
(5)
Net financial items
-
-
(92)
(92)
Profit/(loss) before tax
(99)
Amortisation and depreciation included in total costs
(302)
(73)
(23)
(398)
Page 23 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
1.2 Revenue
The illustration below shows the process from order intake to revenue recognition in Vestas.
Disaggregation of revenue
In the following section, revenue is disaggregated for the two reportable segments, by primary geographical market, major
contract types, and timing of revenue recognition.
mEUR Power Solutions Service Total
Q2
2024
Q2
2023
Q2
2024
Q2
2023
Q2
2024
Q2
2023
Timing of revenue recognition
Products and services transferred at a point in time
1,471
1,573
146
109
1,617
1,682
Products and services transferred over time
1,154
952
525
795
1,679
1,747
2,625
2,525
671
904
3,296
3,429
Revenue from contract types
Supply-only
414
373
-
-
414
373
Supply-and-installation (at a point in time)
1,057
1,201
-
-
1,057
1,201
Supply-and-installation (over time)
855
814
-
-
855
814
Turnkey (EPC)
299
137
-
-
299
137
Service
-
-
671
904
671
904
2,625
2,525
671
904
3,296
3,429
Primary geographical markets
EMEA
1,340
1,428
316
484
1,656
1,912
Americas
782
795
278
344
1,060
1,139
Asia Pacific
503
302
77
76
580
378
2,625
2,525
671
904
3,296
3,429
Page 24 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
1.2 Revenue (continued)
mEUR Power Solutions Service Total
H1
2024
H1
2023
H1
2024
H1
2023
H1
2024
H1
2023
Timing of revenue recognition
Products and services transferred at a point in time
2,673
2,789
260
211
2,933
3,000
Products and services transferred over time
1,731
1,759
1,313
1,499
3,044
3,258
4,404
4,548
1,573
1,710
5,977
6,258
Revenue from contract types
Supply-only
427
650
-
-
427
650
Supply-and-installation (at a point in time)
2,246
2,139
-
-
2,246
2,139
Supply-and-installation (over time)
1,186
1,448
-
-
1,186
1,448
Turnkey (EPC)
545
311
-
-
545
311
Service
-
-
1,573
1,710
1,573
1,710
4,404
4,548
1,573
1,710
5,977
6,258
Primary geographical markets
EMEA
2,107
2,544
804
887
2,911
3,431
Americas
1,422
1,438
609
678
2,031
2,116
Asia Pacific
875
566
160
145
1,035
711
4,404
4,548
1,573
1,710
5,977
6,258
1.3 Sale of technology
There was no sale of technology during the first half of 2024. During the first half of 2023, sale of technology includes
consideration received of EUR 147m relating to a perpetual manufacturing license granted to KK Wind Solutions under the
agreement for the sale of the converters and controls business.
1.4 Special items
mEUR
Q2
2024
Q2
2023
H1
2024
H1
2023
Write-down of inventory
-
-
-
33
Provisions
-
-
-
(1)
Impairment loss on intangible and tangible assets
-
2
-
2
Other costs
0
-
1
(7)
Staff costs
-
-
-
(1)
Derecognition of net assets in Russia
-
-
-
2
Special items
0
2
1
28
During the first half of 2024, a net income of EUR 1m was recognised in special items primarily related to the adjustment
of the manufacturing footprint in India.
During the first half of 2023, a net income of EUR 28m was recognised in special items. The adjustment of the
manufacturing footprint in India resulted in net income of EUR 32m. This was offset by net expense of EUR 4m related to
exiting the Russian market and deconsolidating the Russian entities.
2 Other operating assets and liabilities
2.1 Property, plant and equipment
In the first half of 2024, Vestas acquired assets with a cost of EUR 251m mainly related to manufacturing blade moulds,
transport equipment, and construction tools, compared to EUR 171m in the first half of 2023.
Lease contracts recognised as right-of-use assets during the first half of 2024 amounted to EUR 183m mainly related to
extension of a test rig and new vessel leases, compared to EUR 117m in the first half of 2023.
Page 25 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
2.2 Warranty provisions (included in provisions)
mEUR
30 June
2024
30 June
2023
31 December
2023
Warranty provisions, 1 January
1,747
1,490
1,490
Provisions for the period
265
292
845
Warranty provisions consumed during the period
(258)
(254)
(588)
Warranty provisions
1,754
1,528
1,747
The provisions are expected to be payable as follows:
Non-current
1,035
911
1,031
Current
719
617
716
1,754
1,528
1,747
During the first half of 2024, net warranty provisions charged to the income statement was EUR 262m (EUR 284m in the
first half of 2023), equivalent to 4.4 percent of revenue. The net amount consists of a gross warranty provision of EUR
265m less supplier claims of EUR 3m.
In general, provisions are made for all expected costs associated with wind turbine repairs or replacements, and any
reimbursement from other involved parties is not offset unless a written agreement has been made to that effect.
Provisions are made to cover possible costs of remedy and other costs in accordance with specific agreements. The
provisions are based on estimates, and actual costs may deviate substantially from such estimates.
3 Capital structure and financing items
3.1 Share capital
Pursuant to authorisation granted to the Board of Directors at the Annual General Meeting 9 April 2024, the Board of
Directors was authorised to acquire treasury shares on behalf of Vestas at a nominal value not exceeding 10 percent of
the share capital at the time of authorisation.
Treasury shares
Nominal value (DKK)
30 June
2024
30 June
2023
31 December
2023
Treasury shares as at 1 January
678,721
737,940
737,940
Purchases for the period
328,300
79,785
79,785
Vested treasury shares for the period
(186,092)
(139,004)
(139,004)
Treasury shares
820,929
678,721
678,721
Each share has a nominal value of DKK 0.20.
3.2 Cash and cash equivalents
mEUR
30 June
2024
30 June
2023
31 December
2023
Cash and cash equivalents without disposal restrictions
2,632
1,475
3,288
Cash and cash equivalents with disposal restrictions
4
29
30
Cash and cash equivalents
2,636
1,504
3,318
3.3 Financial risks
Management of financial risks, including liquidity, credit and market risks, is core to Vestas. This is governed by policies,
and these are addressed in the notes to the consolidated financial statements in the Annual Report 2023, note 4.1
(Financial risk management), pages 82-85. The risks in 2024 remain similar in nature.
As at 30 June 2024, Vestas had EUR 2,636m of cash and cash equivalents. Additionally, Vestas has a committed credit
facility of EUR 2,000m maturing in 2028 and uncommitted credit facilities of EUR 475m. As at 30 June 2024, EUR 771m
Page 26 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
of the committed credit facility was converted into ancillary bank guarantee issuance facilities leaving EUR 1,704m
available for cash drawing and/or issuance of guarantees. Vestas has no upcoming bond maturities in the next 12 months.
3.4 Financial instruments
Financial investments consist of interest-bearing investments which do not meet the definition for cash and cash
equivalents. As at 30 June 2024, financial investments comprised marketable securities with a fair value of EUR 100m and
deposits with fair value of EUR 116m, equal to booked value.
Derivative financial instruments were positive with a market value of net EUR 158m, equal to book value, and were
recognised in other receivables and other liabilities with EUR 487m and EUR 329m, respectively.
As at 30 June 2024, the carrying amount of the sustainability-linked bonds issued by Vestas amounted to EUR 1,983m
and the fair value amounted to EUR 1,881m.
Financial instruments measured at fair value have been categorised into level 1, 2, and 3 as addressed in the Annual
Report 2023, note 4.3, page 89.
Financial instrument assets categorised within level 3 comprise other equity investments and renewable energy
certificates. Valuation methods remain unchanged from the description in the Annual Report 2023 and with no significant
changes in fair values.
4 Other disclosures
4.1 Related party transactions
Vestas has had the following material transactions with joint ventures and associates:
mEUR
Q2
2024
Q2
2023
H1
2024
H1
2023
Joint ventures
Revenue for the period
-
2
-
2
Proceeds from investments in joint ventures
-
-
-
5
Capital increase
-
-
-
4
Trade receivable as at 30 June
-
18
-
18
Other assets as at 30 June
23
11
23
11
Other liabilities as at 30 June
-
1
-
1
Associates
Revenue for the period
1
0
2
2
Proceeds from investments in associates
-
0
3
0
Capital increase
0
1
0
2
Trade receivable as at 30 June
21
-
21
-
Other assets as at 30 June
6
16
6 16
Contract liabilities as at 30 June
0
5
0
5
Payable capital contribution as at 30 June
-
8
-
8
No other significant changes have occurred with related parties or types and scale of transactions with these parties other
than what is disclosed in the consolidated financial statements in the Annual Report 2023, note 6.3, page 96.
4.2 Subsequent events
Other than the events recognised or disclosed in the Interim Financial Report, no events have occurred subsequent to 30
June 2024, which could have a significant impact on the report.
Page 27 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
5 Basis for preparation
5.1 General accounting policies
The interim financial report of Vestas comprises a summary of the consolidated financial statements of Vestas Wind
Systems A/S and its subsidiaries.
The interim financial report has been prepared in accordance with IAS 34, Interim Financial Reporting as adopted by the
EU, accounting policies set out in the Annual Report 2023 of Vestas and additional Danish disclosure requirements for
interim financial reporting of listed companies.
The accounting policies remain unchanged compared to the annual report for 2023, to which reference is made.
This interim financial report includes selected notes. Accordingly, this report should be read in conjunction with the annual
report for 2023 and any public announcements made during the interim reporting period.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to the expected annual
profit or loss.
5.2 Implementation of new and amended standards
The following new and amended accounting standards have been implemented as of 1 January 2024:
• Lease liability in a sale and leaseback – amended IFRS 16 Leases
• Non-current liabilities with covenants – amended IAS 1 Presentation of Financial Statements
• Supplier Finance Arrangements – amended IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments:
Disclosures
Vestas did not have to change its accounting policies or make retrospective adjustments as a result of adopting these new
and amended standards.
Page 28 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Statement by the Board of
Directors and the Executive
Management
Page 29 of 30
Vestas Wind Systems A/S
Interim Financial Report – Second Quarter 2024
Executive Management
Board of Directors
)
)
)
*) Employee representative
Vestas Wind Systems A/S Page 30 of 30
Interim Financial Report – Second Quarter 2024
Vestas Wind Systems A/S
Hedeager 42, 8200 Aarhus N
Tel: +45 9730 0000
vestas@vestas.com, vestas.com
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 Vestas’ potential
exposure to market risks and statements expressing
management’s expectations, beliefs, estimates,
forecasts, projections, and assumptions. A number of
factors that affect Vestas’ future operations and could
cause Vestas’ results to differ materially from those
expressed in the forward-looking statements included in
this document, include (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,
including adverse weather conditions; (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; and (m) customer
created delays affecting product installation, grid
connections and other revenue-recognition factors.
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 2023 (available at
vestas.com/en/investor) and these factors also should
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 other than as 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.