Company announcement no. 01/2023
The wind power industry's challenging period continued in 2022 due to unexpected geo-political uncertainty, an accelerating energy crisis, and high inflation. In this environment, Vestas' fourth quarter results were negatively impacted by additional challenges. The negative impact in the fourth quarter causes the full-year results to be lower than the outlook, primarily driven by a confined number of project delays, an impairment on our V174-9.5 MW turbine and increased warranty provisions.
In 2022, Vestas made strategic and commercial progress in terms of strengthening operations and substantially raising prices that indicates Vestas will deliver improved financial results in 2023. Activity levels in 2023 are expected to be lower than in 2022 followed by a step up in 2024 where installations in key markets are projected to increase.
Preliminary results for full year 2022
Vestas' preliminary and unaudited 2022 results show a total revenue of
Based on the preliminary numbers, the EBIT margin before special items was (8.0) percent (outlook: approx. (5) percent), primarily driven by isolated events in the fourth quarter of 2022 as well as delays in a confined number of projects by the end of the fourth quarter. In the fourth quarter, additional warranty provisions of
Total investments*) are expected to amount to
Preliminary 2022 results
Preliminary results | Guidance updated | Initial guidance | |
Revenue (bnEUR) | 14.5 | 14.5-15.5 | 15-16.5 |
EBIT margin (%) before special items | (8.0) | approx. (5) | 0-4 |
Total investments** (mEUR) | 758 | approx. 850 | approx. 1,000 |
* Excl. acquisitions of subsidiaries, joint ventures, associates, and financial investments.
Increasing the price on wind turbines is and has been a necessity to address the external cost inflation and ensure the industry's long-term value creation. Our focus on protecting the value of our products and solutions requires strong discipline to address the increased cost of raw materials and components in customer dialogues. Order intake in the fourth quarter was 4.2 GW with an average selling price of
Wind turbine order intake, 2022
MW
EMEA | Total | |||
Total order intake | 4.568 | 4,547 | 2,074 | 11,189 |
Free cash flow amounted to
Outlook 2023
In 2023, we expect high inflation levels throughout the supply chain and reduced wind power installations to impact revenue and profitability negatively. The lower level of installations is caused by slow permitting processes in
Revenue for full year 2023 is expected to range between
The outlook for 2023 includes the impact of the sale of Vestas' converter factories announced on
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 thus cause delays that could affect Vestas' financial results for 2023. Further, the full-year results may also be impacted by movements in exchange rates from current levels.
Outlook 2023
Revenue (bnEUR) | 14.0-15.5 |
EBIT margin (%) before special items | (2)-3 |
Total investments* (bnEUR) | approx. 1 |
* Excl. acquisitions of subsidiaries, joint ventures, associates, and financial investments.
Vestas will disclose its Annual Report 2022 on
Information meeting (conference call)
Friday
+44 3333000804 | |
+1 6319131422 | |
+45 35445577 | |
Conference PIN code: | 31844852# |
Contact details
Mathias Dalsten, Vice President,
Investor Relations
Tel: +45 2829 5383
Communications
Tel: +45 4181 3922
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
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