Vestas Lowers Full-Year Guidance

Danish wind turbine manufacturer Vestas has lowered its full-year guidance citing supply chain constraints, cost inflation, and restrictions in key markets caused by COVID-19.

Vestas V236-15.0 MW wind turbine. Source: Vestas

These are the characteristics of the current environment the impacts of which are likely to continue in the second half of the year, Vestas said.

The company now expects full-year revenue in 2021 of between EUR 15.5 billion and 16.5 billion, including Service. The previous expectation was between EUR 16 billion and EUR 17 billion.

An overall EBIT margin before special items is expected to be between five and seven per cent for the year, previous projection was between six and eight per cent.

Vestas also expects total investments for the year to be below EUR 1 billion and not around EUR 1 billion as previously projected.

In the second quarter of 2021, Vestas generated revenue of EUR 3.536 billion, in line with the year-earlier period.

EBIT before special items increased by EUR 67 million to EUR 101 million. This resulted in an EBIT margin before special items of 2.9 percent, compared to 1.0 percent in the second quarter of 2020.

The quarterly intake of firm and unconditional wind turbine orders amounted to 5,290 MW.

The value of the wind turbine order backlog was EUR 21.2 billion as at 30 June 2021.

In addition to the wind turbine order backlog, at the end of June 2021, Vestas had service agreements with expected contractual future revenue of EUR 26.9 billion.

Thus, the value of the combined backlog of wind turbine orders and service agreements stood at EUR 48.1 billion – an increase of EUR 13 billion compared to the year-earlier period.

The increase in the combined backlog is attributed to strong order intake and the integration of the offshore segment.

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In the second quarter, the company signed its first preferred supplier agreement for the V236-15.0 MW turbine with EnBW for the 900 MW He Dreiht project in the German North Sea.

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”In the second quarter of 2021, Vestas underlined our market-leading position although the first half of the year has been slower than anticipated due to supply chain constraints in key markets,” Group President & CEO of Vestas, Henrik Andersen, said.

”We achieved revenue of EUR 3.5bn and an EBIT margin of 2.9 percent, which is an improvement of 1.9 percentage points year-over-year. This increase was primarily driven by underlying improved operations and execution, but hampered by the continued cost inflation impacting global industrials. In this environment, our Service business and wind turbine order intake grew 23 percent and 28 percent respectively year-over-year, which resulted in an all-time high order backlog of more than EUR 48bn. Combined with an average selling price of 0.79 EUR/MW for onshore, new offshore orders and our first preferred supplier agreement for our V236-15.0 MW turbine, the quarter was commercially very strong. To reflect the challenges from cost inflation and the global environment we operate in, we have revised our guidance for 2021 and we remain focused on executing our priorities for the year, which enable us to deliver on our commitments, drive the energy transition, and strengthen our market leadership.”