The wind power industry’s challenging period continued in 2022 due to unexpected geo-political uncertainty, an accelerating energy crisis, and high inflation. In this environment, Vestas’ fourth quarter results were negatively impacted by additional challenges. The negative impact in the fourth quarter causes the full-year results to be lower than the outlook.
Vestas’ preliminary and unaudited 2022 results show a total revenue of EUR 14,486m, (outlook: EUR 14.5-15.5bn). The Service business accounted for EUR 3,155m of the total revenue, corresponding to a year-on-year growth of 27 percent (outlook: min. 20 percent). The higher-than-expected revenue growth in Service thereby partially offsets the lower-than-expected Power Solutions revenue, which has been impacted by delays in execution.
Based on the preliminary numbers, the EBIT margin before special items was (8.0) percent (outlook: approx. (5) percent), primarily driven by isolated events in the fourth quarter of 2022 as well as delays in a confined number of projects by the end of the fourth quarter. In the fourth quarter, additional warranty provisions of EUR 210m have been made. The higher warranties primarily relate to increased repair and upgrade costs and a few select cases. As a result of an expected challenged profitability and lower order intake for offshore projects utilising the V174 turbine, an impairment of EUR 95m has been made on that platform in the quarter.
The EBIT margin for the Service business is expected to amount to 21.4 percent compared to an outlook of approx. 22 percent. Total investments are expected to amount to EUR 758m (2021: EUR 773m) which is lower than the outlook of approx. EUR 850m.
Increasing the price on wind turbines is and has been a necessity to address the external cost inflation and ensure the industry’s long-term value creation. Its focus on protecting the value of its products and solutions requires strong discipline to address the increased cost of raw materials and components in customer dialogues. Order intake in the fourth quarter was 4.2 GW with an average selling price of EUR 1.15m per MW, a sequential increase of 8 percent. For the full year 2022 this resulted in an average selling price of EUR 1.07m per MW (onshore only: EUR 1.04m per MW).
Revenue for full year 2023 is expected to range between EUR 14.0bn and 15.5bn. Vestas expects to achieve an EBIT margin before special items of (2)-3 percent. Total investments are expected to amount to approx. EUR 1bn in 2023.
