Vestas Wind Systems (VWS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached €5.2 billion, up 19% year-over-year, driven by higher prices and volumes in deliveries.

• EBIT margin improved to 4.5%, nearly three percentage points higher year-over-year, with service EBIT margin at 16%.

• Order intake was 4.4 GW, flat year-over-year, but total backlog hit an all-time high of €63.4 billion, with turbine backlog at €28.3 billion.

• Service order backlog rose to €35.1 billion, with 154 GW under active service contracts and average contract duration of 11 years.

• Manufacturing ramp-up continued in the U.S. and Europe, with workforce surpassing 33,000 globally and ongoing focus on operational efficiency.

Financial highlights

• Gross margin increased to 10.5% from 8.1% a year ago, driven by higher activity and improved performance in Power Solutions.

• EBIT before special items tripled to €235 million, with net profit at €127 million compared to €28 million last year.

• Power Solutions revenue grew 24.5% year-over-year, with EBIT margin before special items up five percentage points to 4.2%.

• Service revenue was flat or declined 1% year-over-year, with EBIT margin at 16%, impacted by higher costs in EMEA and Americas.

• Operating cash flow improved to €89 million; adjusted free cash flow was -€224 million, both better than last year.

Outlook and guidance

• 2024 revenue guidance maintained at €16.5–17.5 billion, with EBIT margin before special items at 4–5%, likely at the lower end.

• Service EBIT guidance adjusted to around €450 million from €500 million previously.

• Total investment guidance reduced to approximately €1 billion from €1.2 billion.

• Guidance subject to risks from production disruptions, shipment delays, and exchange rate movements.