Third quarter EBIT improved despite 27 per cent lower revenue. Outlook for 2013 upgraded on EBIT margin and free cash flow. Turnaround continues according to plan.
Vestas upgrades the 2013 outlook on EBIT margin before special items from minimum 1 per cent to minimum 2 per cent and free cash flow is upgraded from minimum EUR 200m to EUR 500-700m.
In the third quarter of 2013, Vestas generated revenue of EUR 1,442m – a decrease of 27 per cent to the year-earlier period. Despite the decrease in revenue, EBIT before special items increased by EUR 54m to EUR 67m due to the lower fixed cost base and improved project margins. The EBIT margin before special items was 4.6 per cent and the free cash flow increased by EUR 198m to EUR 56m compared to the third quarter of 2012.
The intake of firm and unconditional wind turbine orders was 1,547 MW in the third quarter of 2013. The value of the wind turbine backlog amounted to EUR 7.3bn at 30 September 2013. In addition to the wind turbine order backlog, Vestas had service agreements with contractual future revenue of EUR 6.1bn at the end of September 2013. Thus the value of the combined backlog of wind turbine orders and service agreements stood at EUR 13.4bn – an improvement of EUR 400m during the quarter.
During the third quarter, Vestas and Mitsubishi Heavy Industries Ltd. have agreed to form a joint venture dedicated to offshore wind energy.
In order to increase the flexibility of Vestas’ supply chain, Vestas has divested its machining and casting units to the German industry group VTC Partners GmbH. The divestment led to write downs of EUR 50m which constitutes the majority of the third-quarter special items of EUR 64m.
Group President & CEO, Anders Runevad said: ”The improved EBIT despite a 27 per cent drop in revenue and another quarter of debt reduction are important results of the ongoing turnaround, and we remain focused on delivering according to plan in the last part of the year.
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