Vestas disappoints yet maintains full-year guidance

Despite booking a deficit of more than EUR 50m and far less revenue than forecast, the OEM is not downgrading its outlook for the year, noting the value of its combined order portfolio.

Photo: vestas

It was practically in the air that Vestas would present a disappointing quarterly report. In part because of Siemens Gamesa's guidance downgrade on Friday last week – and also bearing in mind activity in recent days when the Danish wind turbine maker tried to raise spirits with a series of order announcements. Seen in this light, it can surely be said that Vestas has lived up to expectations.

Looking at the matter from a more traditional perspective, Vestas' performance is disappointing, both for the revenue post of EUR 1.962bn, down 12 percent year-on-year, as well as the bottom line, which shows a deficit of EUR 57m. The market had forecast a small positive result, but even the adjusted operating result shows a retreat to EUR 71m in earnings before interest and taxes.

"Following a strong end to 2020, continued impact from Covid-19 and lower activity levels affected Vestas’ results for the first quarter of 2021," writes Vestas Chief Executive Henrik Andersen in a statement on the interim report.

Unlike Siemens Gamesa, this lackluster quarter has not prompted Vestas to downgrade its full-year guidance, which, for revenue, comes to EUR 16-17, with an adjusted operating margin of 6-8 percent. One quarter into the year, the latter post is -3.9 percent.

Besides that, the positive element, the OEM says, is the value of the combined order book including service, currently at EUR 45bn. That, however, is not due to anything like a massive stream of quarterly orders. Announced orders of 1.060 GW is the lowest figure in six and half years. With a further 956 MW in unannounced supply contracts, the consolidated volume totals to 2.016 GW – the lowest in three years.

However, whereas sales appear sparse, they did change hands for a higher price. Valued at EUR 1.6bn, the average sales price on order intake – in rounded figures – comes to EUR 0.79 per MW.

This is apparently highly affected by the geographic sales mix, where Europe and the rest of the EMEA region accounted for as much as 74 percent of new orders, while only 11 percent originated form the Americas. Traditionally, the scope of orders is greater in Europe, also reflecting the distribution of supply deals. Only 13 percent of incoming orders solely entail delivery, whereas that percentage was 31 in last year's first quarter.

"Our order backlog reached an all-time high of EUR 45bn, and as a reflection of the continued positive price development, our underlying profitability improved in the quarter," Andersen says.

English Edit: Daniel Frank Christensen

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