Vestas Wind Systems (VWS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was EUR 3.3 billion, a 3.9% year-on-year decrease, mainly due to negative Service performance, partially offset by higher delivery ASP in Power Solutions.

• Service EBIT was negative EUR 107 million in Q2, impacted by a EUR 300 million non-cash accounting adjustment; underlying earnings in other segments progressed as expected.

• Power Solutions turnaround is on track, with EBIT margin improving by almost 8 percentage points year-on-year.

• Order intake reached 3.6 GW, up 54% year-on-year, driven by strong onshore activity in Europe and Asia Pacific; combined order backlog hit a record EUR 63.0 billion.

• Adjusted free cash flow for Q2 was EUR 524 million, reducing leverage to 0.7x net debt/EBITDA.

Financial highlights

• Gross profit for Q2 was EUR 156 million (4.7% margin), negatively affected by the Service adjustment.

• EBIT margin before special items was -5.6% in Q2, mainly due to the Service adjustment.

• Power Solutions EBIT margin before special items improved to 0.7%, up nearly 8 percentage points year-on-year.

• Operating cash flow in Q2 was EUR 830 million, a significant improvement from last year.

• Warranty costs declined to EUR 141 million (4.3% of revenue), down from 5% a year ago.

Outlook and guidance

• Full-year 2024 revenue expected between EUR 16.5 billion and EUR 17.5 billion; guidance narrowed from previous range.

• EBIT margin before special items guided at 4%-5% (previously 4%-6%).

• Service EBIT before special items expected around EUR 500 million, reflecting the EUR 300 million adjustment and down from previous guidance of EUR 800–880 million.

• Total investments for the year projected at approximately EUR 1.2 billion.