Q3 2024 Vestas Wind Systems A/S Earnings Call Transcript
Key Points
- Vestas Wind Systems AS (VWDRY) reported a 19% year-on-year increase in revenue for Q3 2024, reaching EUR 5.2 billion, driven by higher prices and volumes.
- The company's EBIT margin improved to 4.5%, marking an increase of almost 3 percentage points year-on-year.
- The Service EBIT margin ended at 16%, reflecting ongoing efforts to improve operational efficiency.
- Vestas achieved an all-time high turbine backlog of more than EUR 28 billion, indicating strong demand and future revenue potential.
- The order backlog in Power Solutions increased to EUR 28.3 billion, showing good traction with customers across core markets.
- The Service business faced challenges with a lower-than-expected EBIT margin of 16%, attributed to ongoing cost scrutiny and inflationary pressures.
- Vestas experienced regional disruptions in the supply chain, including a threat of a strike in US harbors, affecting project execution.
- The company is still completing low-margin projects from mid-2022, which continue to impact profitability.
- Warranty costs remained high, with a specific provision for an offshore-related component issue, leading to elevated warranty expenses.
- The ramp-up in manufacturing, particularly in the US and Europe, presents challenges and additional costs, impacting operational efficiency.
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Good morning and welcome to our presentation of our Q3 2024. Surely. It's a special day with circumstances later in the US, 5 of November election day. I'm sure we'll talk more about that. Can I also just take the opportunity to thank our partners, customers and also many of our new and old colleagues for the execution in a busy Q3 and also a very busy and packed Q4 in this year.
With that, I would like to go to our key highlights for Q3 2024. So we had revenue of EUR5.2 billion. It's an increase of 19% year-on-year, driven by higher prices and higher volumes on the deliveries. We had an EBIT margin of 4.5% higher activity and bender underlying performance improved EBIT margin by almost 3% points year-on-year.
The Service EBIT margin ended at 16%. The Service profitability reflects the ongoing scrutiny to improve the operational efficiency. We'll speak more about that later on. The order intake ended at 4.4 gigawatt flat order intake year-on-year leads to an all
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