Virksomhedsdagen København, 7. juni 2012

Transcription

1 København, 7. juni 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

3 Agenda 1. Introduction 2. SWOT 3. Vestas today 4. Summing up 5. Questions & answers 3

4 Introduction

5 Vestas installed capacity Vestas has reached an installed global capacity of 50 GW of wind energy Together with our customers, we have reached an installed global capacity of 50 GW of wind energy. This is a significant milestone for maturing the wind industry and getting wind on a par with oil and gas. Vestas has installed more than 46,000 turbines in 69 countries, which generate electricity equivalent to the consumption of all households in Spain and Sweden. These turbines save the world from 55 million tons of CO 2 emissions every year. 5

6 Global market shares 2011 Vestas No. 1 according to three of the leading wind industry consultancies 41.1 GW 40.4 GW 40.8 GW Vestas 12.7% Vestas 12.9% Vestas 12.9% Sinovel 9.0% Goldwind 9.4% Goldwind 8.8% Goldwind 8.7% GE Energy 8.8% Enercon 7.6% Gamesa 8.0% Gamesa 8.2% Suzlon Group 7.6% Enercon 7.8% Enercon 7.9% Siemens 7.6% GE Energy Suzlon Group Guodian United Power Siemens Mingyang 7.7% 7.6% 7.4% 6.3% 3.6% Suzlon Group Sinovel Guodian United Power Siemens Mingyang 7.7% 7.3% 7.1% 6.3% 2.9% GE Energy Sinovel Guodian United Power Gamesa Mingyang 7.4% 7.2% 7.0% 6.4% 2.9% Other 21.2% Other 21.5% Other 24.6% EER "Installed MW" BTM-Navigant "Installations" MAKE "Grid-connected" Sources: IHS EER, BTM-Navigant, MAKE 6

7 EER: 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

8 Overview of Vestas Global Presence 8

9 Product platform It takes a variety of turbines and services to meet customers needs Turbines Service solutions High, medium and low wind, on- and offshore Different service levels for different needs AOM1000 AOM2000 AOM3000 AOM4000 AOM5000 Service on demand. Basic service. Full service. Guaranteed availability. Energy based guaranteed availability. 9

10 New Vestas organisation being implemented Vestas Wind Systems A/S has appointed Dag Gunnar Andresen, 48, as new Chief Financial Officer. [ ] He is expected to take up office around 1 August this year. President and CEO Ditlev Engel CEO Staff functions Manufacturing (Vacant) Turbines R&D Anders Vedel Global Solutions & Services (Vacant) Finance Dag Gunnar Andresen Sales Juan Araluce 10

11 SWOT

12 Strengths 46,000 wind turbines installed in 69 countries Knowledge of wind. Technology leadership. Global footprint. Strong customer relations. SiteHunt 12

13 Strengths High, medium and low wind, on- and offshore Knowledge of wind. Technology leadership. Global footprint. Strong customer relations. Lost production factor Percentage Jan 2009 Jan 2010 Jan 2011 Jan

14 Strengths Knowledge of wind. Technology leadership. Global footprint. Strong customer relations. 14

15 Strengths Knowledge of wind. Technology leadership. Global footprint. Strong customer relations. Customer Loyalty Index

16 Weaknesses A few examples of recent cost-out initiatives Too high product and production costs on new platforms. Too high fixed costs compared to current market environment. V112 crane gallery simplification Standardisation of rear frame cross assembly Cost reduction on lift galleries in towers 16

17 Weaknesses Too high product and production costs on new platforms. Too high fixed costs compared to current market environment. Employees Number of employees, end of period 23,525 22,721 22,576 20,829 20,730 20,400 Contributes to cost reduction of more than EUR 150m FY 2008 FY 2009 FY 2010 FY 2011 Q FY 2012 Expected 17

18 Opportunities Wind is getting increasingly competitive. Market expansion opportunities. Demand for electricity will rise. Renewed focus on climate agenda. Coal and nuclear retirements. Natural resources are getting more expensive. Large installed base creates opportunities for service business. Offshore development could accelerate. Levelised cost of energy (LCOE) USD/MWh Source: Bloomberg New Energy Finance 18

19 Opportunities Wind is getting increasingly competitive. Market expansion opportunities Demand for electricity will rise. Renewed focus on climate agenda. Coal and Nuclear retirements. Natural resources are getting more expensive. Large installed base creates opportunities for service business. Offshore development could accelerate. Delaying action is a false economy: For every $1 of investment avoided in the power sector before 2020 an additional $4.3 would need to be spent after 2020 to compensate for the increased emissions. IEA, World Energy Outlook November 2011 Power generation capacity expected to be decommissioned GW, accumulated Nuclear Coal Source: IHS EER Europe Renewable Power Market Forecasts E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 19

20 Opportunities Wind is getting increasingly competitive. Market expansion opportunities. Demand for electricity will rise. Renewed focus on climate agenda. Coal and Nuclear retirements. Natural resources are getting more expensive. Large installed base creates opportunities for service business. Offshore development could accelerate. Service revenue meur % E 20

21 Opportunities Wind is getting increasingly competitive. Market expansion opportunities Offshore market size Yearly wind power capacity added (GW) 4.6 Demand for electricity will rise. Renewed focus on climate agenda. Coal and Nuclear retirements. Natural resources are getting more expensive. Large installed base creates opportunities for service business. Offshore development could accelerate E E E +35% E E 2016E Source: IHS EER Global Wind Energy Market Forecast , 30 November

22 Threats Weak economic outlook in OECDcountries. Shale gas exploration drives down electricity prices in North America. Increased NIMBYism. Grid constraints. Fierce competition. 22

23 Threats Weak economic outlook in OECDcountries. Shale gas exploration drives down electricity prices in North America. Increased NIMBYism. Grid constraints. Fierce competition. Henry Hub Natural Gas Spot Price USD/MMBtu Source: Bloomberg 23

24 Threats Weak economic outlook in OECDcountries. Shale gas exploration drives down electricity prices in North America. Increased NIMBYism. Grid constraints. Fierce competition. Picture copyright: Phil Hands, Wisconsin Journal, 20 March

25 Threats Weak economic outlook in OECDcountries. Shale gas exploration drives down electricity prices in North America. Increased NIMBYism. Grid constraints. Fierce competition. Source: Politiken.dk, 6 June

26 Threats Weak economic outlook in OECDcountries. Shale gas exploration drives down electricity prices in some regions. Increased NIMBYism. Grid constraints. Fierce competition. Wind is a wildcard, especially due to all the things that can happen in the strong market in Energy may vary from a slightly good margin to a slightly worse margin. As expected, the second quarter was not easy. GE Q1 12, CEO Jeff Immelt 20 April 2012 Siemens Q2 12, CEO Peter Löscher 25 April 2012 Challenging market conditions in renewable energy, including pricing pressure, are expected to continue in coming quarters. Siemens Q2 12, Company announcement 25 April

27 Vestas today

28 EER: Wind sector outlook The wind sector is entering a lower growth phase Global total wind power capacity added GW +1% +26% % % average global growth is expected in the coming years according to EER Focus shift from growth to profitability E 13E 14E 15E 16E 17E Source: IHS EER 28

29 Turbine and service order backlog End Q backlog was the largest in Vestas history Turbines Services EUR 10.0bn EUR 4.2bn 29

30 Shipments and deliveries 2012 Shipment and delivery activities in 2012 Expected distribution over the year; illustrative example Deliveries Shipments expected to increase by almost 40 per cent in 2012 to around 7 GW. Deliveries will fluctuate and are expected to increase over the year. Cash inflows are correlated to shipments. Deliveries are the primary revenue driver. Shipments 30

31 Outlook for 2012 Revenue (meur) 6,500-8,000 - of which service revenue (meur) 850 EBIT margin (%) 0-4 EBIT margin, service* (%) ~ 14 Investments (meur) Intangible (meur) Tangible (meur) 200 Free cash flow (meur) > 0 Warranty provisions (%) ~ EBIT margin low due to: Too high product and production costs primarily on the V112 turbine and the GridStreamer technology, which will be reduced over the year. Depreciation and amortisation increase by EUR 100m. Special items related to the lay-off of 2,335 employees expected to amount to EUR m. *before allocation of Group costs. 31

32 Cash flow 1,000 Cash flow from operations and investments meur Focus on improving cash flow Free cash flow has been improving after years with high investments. Focus is to secure free cash flow while still maintaining a reasonable level of investments. -1, Cash flow from operations Investments Free cash flow 32

33 Return on invested capital Return on Invested Capital* (ROIC) Percentage 45% 40% 35% 30% 25% 20% 15% 10% 5% Focus on improving ROIC ROIC is hurt by poor results, by investments made to increase regional manufacturing capacity, and by development and conversion of platforms to improve competitiveness. ROIC to be improved by growth in higher margin service business. 0% % *Invested capital includes net working capital, PPE and intangibles. 33

34 Two revenue streams SiteHunt AOM1000 AOM2000 AOM3000 AOM4000 AOM5000 Service on demand Basic service Full service Guaranteed availability Energy based guaranteed availability 34

35 Service revenue Service revenue is 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 E 35

36 Net working capital Net Working Capital, end of period meur 672 Focus on keeping NWC down and 2010 NWC impacted by too large inventories Make-to-order/Just-in-time implementation has paid off in Improved quality and regional suppliers have reduced leadtime

37 Capex Capex declining after years of heavy investments Investments meur Tangible Intangible Expected 37

38 Net Debt/EBITDA Net debt and debt coverage meur and EBITDA 1, x FY x FY x FY x FY x FY x Q FY 2012 Exp. Net debt to EBITDA before special items, last 12 months Net debt 4.0x 3.0x 2.0x 1.0x 0.0x -1.0x -2.0x Revolving credit facility of EUR 1.3bn announced in June 2011 Nine participating banks in the 5 (+1 +1) year facility: Commerzbank AG, DnB NOR Bank ASA, Nordea, HSBC, Rabobank, Royal Bank of Scotland, SEB, Unicredit and Société Générale. Expected positive free cash flow of EUR >295m in the rest of 2012 gives comfortable headroom entering

39 Summing up

40 Today s key points Cost competiveness of wind creates a lot of opportunities in the energy space. The wind industry has entered a lower growth phase; Focus shift from growth to profitability and cash flow. Vestas focuses on lowering fixed costs and direct costs to align with the current market environment. ROIC improvement will be obtained by better utilisation of the invested capital, increasing profitability and further emphasis on the service business. 40

41 Financial calendar August 2012 Disclosure of H1/Q results 7 November 2012 Disclosure of Q results 41

42 Questions & answers

43 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.