Q2 2024 Vestas Wind Systems A/S Earnings Call Transcript
Key Points
- Order intake grew by 54% year-on-year, driven mainly by onshore projects in Europe and Asia Pacific.
- Adjusted free cash flow of EUR 0.5 billion, driving leverage down to 0.7% net interest-bearing debt to EBITDA.
- Revenue increased by 4% year-on-year, indicating underlying business improvement despite challenges.
- Power Solutions segment saw an EBIT margin improvement of almost 8 percentage points year-on-year.
- Strong cash flow in the quarter with operating cash flow at EUR 830 million, a significant improvement from last year.
- Q2 revenue decreased by 4% year-on-year, negatively impacted by the service segment.
- Service EBIT was negative EUR 107 million in Q2 due to a EUR 300 million negative adjustment.
- Gross profit margin was only 4.7%, negatively affected by the service adjustment.
- EBIT margin before special items was -5.6%, indicating ongoing profitability challenges.
- Warranty costs remain high at EUR 141 million, corresponding to 4.3% of revenue.
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Good morning, and welcome to our full presentation of our Q2 and also first half reporting for 2024. Clearly, you've seen it from Monday, the negative quarter for service, but also with a solid progress in most other areas. And I'm sure we will talk more about all of these topics in much more details in the coming good hour.
I'm also sure here that we will look at the trajectory for the full year. And with that, I would like you to take us to the key highlights for Q2 and to some extent, first half. Key highlights for Q2 revenue of EUR3.3 billion. That is a revenue decrease of 4% year-on-year, affected negatively from the service and offset by higher delivery ASP from the Power Solutions. The service impacted by the adjustment to the plant cost service EBIT negative of EUR107 million in Q2 due to the approximately EUR300 million in negative adjustment and also there with no cash flow effect.
Underlying earnings progressing as expected, we've seen the turnaround
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