Vestas Reports 67% Increase in Revenue for Q2 2020

Vestas has issued its financial report for Q2 2020, reporting revenue of EUR 3,541 million – an increase of 67% compared to the year-earlier period.

Global wind energy major Vestas has issued its interim financial report for the second quarter (Q2) of the financial year 2020. The firm has shown a strong performance in spite of a challenging environment, reporting that it generated revenue of EUR 3,541 million – an increase of 67 percent compared to the year-earlier period.

The firm has reintroduced its full-year guidance with an unchanged outlook for revenue of EUR 14-15 billion, and an updated EBIT margin before special items of 5-7 percent.

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It has reported that EBIT before special items decreased by EUR 94 million to EUR 34 million. This resulted in an EBIT margin before special items of 1 percent, compared to 6 percent in the second quarter of 2019. The decrease was primarily a result of extraordinary warranty provisions made in the quarter of EUR 175 million, covering a specific repair and upgrade of a confined number of blades already installed; excluding these provisions, the underlying margin was 5.9 percent. Free cash flow amounted to EUR (78) million compared to EUR (75) million in the second quarter of 2019.

The quarterly intake of firm and unconditional wind turbine orders amounted to 4,148 MW. The value of the wind turbine order backlog was EUR 16.2 billion as of June 30, 2020. In addition to the wind turbine order backlog, at the end of June 2020, the firm had service agreements with expected contractual future revenue of EUR 18.9 billion. Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 35.1 billion – an increase of EUR 3.6 billion compared to the year-earlier period.

Group President & CEO Henrik Andersen said “the COVID-19 pandemic continued to impact the renewable energy industry and the global economy in the second quarter of 2020. In these challenging circumstances and without state aid, Vestas’ almost 26,000 employees have performed strongly, growing our revenue by 67 percent compared to the same quarter last year and achieving an order intake of 4.1 GW as well as a record-high total order backlog of more than EUR 35 billion.

“Service continued to grow with high margins in the quarter and played a key role in ensuring stable and renewable energy supply during lockdowns across the globe. Extraordinary warranty provisions impacted our EBIT margin negatively in the quarter, but our underlying EBIT margin of 5.9 percent showcases good execution that gives us the confidence to deliver improving results throughout the remainder of the year. The global pandemic and economic downturn will continue to create uncertainty in 2020, but we remain confident in our ability to ensure business continuity across our value chain and are therefore reintroducing guidance for 2020 with the unchanged outlook for revenue of EUR 14-15 billion, while the EBIT margin is updated to range between 5 and 7 percent.”