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Edited Transcript of VWS.CO profits convention name or presentation 7-Nov-19 9:00am GMT

Ringkøbing Nov 26, 2019 (Thomson StreetEvents) — Edited Transcript of Vestas Wind Programs A/S profits convention name or presentation Thursday, November 7, 2019 at 9:00:00am GMT

Excellent morning, and a very hot welcome to this 3rd quarter investor name. To begin with, it is every other robust quarter from Vestas. Very sure ramp-up, and subsequently, additionally an excessively prime task quarter for us.

In my view, I will be able to simply say right here, it is a excitement to mention thank to a large number of colleagues, but in addition having the excitement of sharing that a lot of the industry and operations and buyer insights over the previous few months since 1st of August.

So with that, let’s start the presentation for the 3rd quarter. And subsequent to me right here, I’ve Marika, so we, after all, look ahead to take you in the course of the presentation year-to-date.

So the disclaimer first after which our key highlights for the 3rd quarter. So the 3rd quarter this is, once more, larger order consumption and results in an all-time prime order backlog. We had a 4.7 gigawatt of order consumption in Q3, and that still approach if we take a look at the backlog, it is 38% upper year-on-year. And it involves — with reference to EUR 33 billion.

We now have a complete income within the quarter of EUR 3.6 billion, undoubtedly right here, stems from all our areas. So all areas are having a good enlargement in comparison to similar quarter final yr, and it is an general 30% building up in comparison to Q3 ’18. We had an EBITDA of EUR 429 million and EBIT margin of 11.8%. We had a stellar efficiency in our Provider industry, income enlargement of 8% and EBIT of general EUR 125 million within the quarter. That still approach, because of the visibility and the place we’re within the yr, we also are, via this 3rd quarter, launching a proportion buyback program of EUR 200 million, definitely, to regulate the capital construction.

After which at the outlook, we stay unchanged steerage for the yr. We now have quite adjusted the Provider. So it is a minimal enlargement goal for the yr, however that is all we had at the outlook.

So let’s bounce into the markets. As you spot right here from it, it is 4.7 order consumption in Q3. It is Four level — 1.5-gigawatt upper than it used to be in Q3 2018. And naturally, after we take a look at it, it is basically pushed via U.S., Brazil and Saudi Arabia as primary contributor on this quarter. And after we take a look at the ASP at the different aspect, we pop out of the quarter of an ASP of 0.75, stays strong. We now have a somewhat decrease share of EPC within the quarter. So subsequently, we’re moderately proud of the strong ASP for the quarter and with the traditional kind of variances because of geography and form of orders.

After we then take a look at the order backlog, as discussed to start with, we at the moment are at an order backlog of greater than EUR 32 billion. It is up EUR 9.1 billion year-on-year, which is a rise of 38%. Additionally more than happy to peer that we have got the generators at EUR 16.Five billion. It is up EUR 6 billion in comparison to a yr in the past in Q3 ’18. And we’ve got a Provider backlog this is now EUR 16.Three billion, and it is up at somewhat greater than EUR Three billion in comparison to 3rd quarter ’18. So once more, an excessively, very sure backlog for us each to paintings with for the approaching quarter and the approaching years.

After we then deep dive somewhat extra into the areas. It is — obviously, we’ve got had an excessively increasingly more busy quarter in Americas. No longer unusually, we have been happy to peer the ramp-up are operating. We now have had deliveries of three.7 gigawatt within the first Nine months this yr. It is 39% upper than it used to be for the primary Nine months in ’18. If we take a look at the order consumption, we at the moment are 8.Three gigawatt of orders within the first Nine months. And as I mentioned within the left aspect, we’ve got observed very robust order consumption from U.S. and Brazil. And usually, we see an excessively sure building in Brazil. Extra choices are introduced and performed, and different international locations are coming to it in Latin The united states.

And after we then take a look at the income breakdown, we’ve got 14% of the relative income within the first Nine months. However after all, with the expanding ramp-up of deliveries and turnover, we will be able to additionally see that share being somewhat beneath force, however really nice to peer nonetheless that 14% is expounded to Provider.

After we then take a look at Europe, Center East and Africa, I will be able to simply say from a marketplace spotlight viewpoint, an excessively sure building. We now have an public sale right here in Poland, which is occurring in This autumn. We’re most likely somewhat combined at the local weather proposal in Germany. We can inform you that we have got was hoping and anticipated somewhat extra to additionally see how lets calm down what we most likely see as a dock state of affairs round one of the crucial allowing in Germany. They are placing a goal up for — till 2030, however we’re definitely following that with large curiosity and in addition pushing for a way we will be able to take part in serving to.

If we take a look at Italy, they introduced a 5-gigawatt generation auction-neutral in 2021. And usually around the piece and out of doors Europe, we see positives right here additionally bringing up of South Africa the place they’ll paintings against 2030 with most likely one thing in way over 1.Five gigawatt a yr, which, after all, may be very pleasurable to peer.

After we then take a look at the efficiency in Europe, it is if truth be told an excellent quarter. We now see deliveries first Nine months in Europe. The backloaded is — begin to paintings. We had 2.Nine gigawatt in supply, 34% upper than it used to be within the first Nine months of ’18. We now have had an excessively robust order consumption within the area. We’re in way over Four gigawatt for the primary Nine months. It’s also founded in additional than 20 international locations, very pleasurable to peer. And simply to say a couple of right here, we’ve got Finland, Greece, Turkey and France as primary individuals to it. However it is actually great to peer that, that works throughout Europe. So credit score to our Eu setup.

After which within the income breakdown. First Nine months, we had a breakdown, which equals a carrier of 23% out of the EUR 3.2 billion of general income.

After we then move to Asia Pacific, I believe Asia Pacific is, once more, right here, a few feedback to China. We all know so that there’s a very prime consideration to China earlier than year-end 2020 the place the feed-in price lists are finishing, however I additionally assume that most likely leads right into a extra market-based dialogue across the LCOE for the long run. And that, after all, is a factor we’re following and in addition discussing intensely with each coverage and consumers in China.

We now have observed the India auctions being introduced. We’re nonetheless somewhat unsure round how that can spread in India. There are tasks, however there is additionally an excessively prime step-up to achieve the 140 gigawatt as goal in 2030. So extra wishes to come back there to satisfy that focus on.

After which after we take a look at the wider direction in Asia Pacific, a large number of particular person sure messaging from particular person international locations. And amongst others, Australia is now set to satisfy its renewable power goal for 2020, and I am certain that evokes Australia to do extra after we look forward to 2030.

After we take a look at the numbers for the area, we’ve got observed a slight lower in deliveries. We’re 1.2 gigawatt for the primary Nine months. That is 16% down. It’s tougher if you have a measurement of a area of this. So you’ll be up towards tricky comparability with unmarried orders, however basically pushed via legislation in Thailand, China and Mongolia. Australia stays strong, which is sure.

At the order consumption aspect, we’re 14% up in comparison to the similar Nine months in ’18. And there, Australia, China and New Zealand underlying sure. And general for the area, we see 15% of carrier within the area. This is up 4% year-on-year. And I’d just say, out of a complete income of EUR 1 billion, we if truth be told see a large number of sure actions in Provider in that area. And I will be able to additionally say from a Chinese language viewpoint, whilst you get into an ideal parity marketplace and in an open marketplace, we if truth be told pay attention much more consideration to take care of your belongings in each 10, 20 and 30 years.

In order that’s an effective way of leaping to our Provider industry. A stellar efficiency in Q3, we’ve got now long past from 86 gigawatt to 91 gigawatt of onshore generators with energetic carrier contracts within the quarter. An excellent efficiency on this quarter, we duvet 67 international locations with energetic operations. And I’d just say right here, an 18 years of reasonable length approaching, at the new contracts, very encouraging. For us, it is very encouraging for the Provider industry and subsidized via lengthy buyer family members.

After we glance over right here, we if truth be told had Four contracts that had greater than 25 years signed in Q3. We noticed energy upgrades of greater than 25 contracts, which, after all, makes potency beneficial properties for the purchasers. After which we had greater than 500 megawatt of multi-brand contracts throughout U.S. and Europe.

Beneath there, we see a regular cut up within the areas. And once more, there, sure over the development for the Provider industry throughout.

That leads me to the offshore wind, MHI Vestas Offshore. And I’d just say right here, very similar to final quarter and very similar to this yr, totally inquisitive about executing on the place we’re executing at the pipeline. We’re placing up our generators, and it really works neatly. However key highlights for the quarter is now we have turn into a most popular provider to Seagreen. It is as much as 114 wind generators. And once more, it helps the U.Ok. observe file, but in addition it is going to be the most important venture in Scotland.

We have been decided on as a most popular wind turbine provider of 29 megawatt of — in Groix & Belle-Ile Floating Offshore Wind Farm in France. And as you could possibly admire, it isn’t essentially the 29 megawatt of order that’s the takeaway right here. It is the innovation that is going into additionally right here take the time to peer the floating platform get started operating offshore. In order that’s the most important innovation and generation for us.

After we then take a look at it, there used to be an inauguration of the Horns Reef with Vattenfall in Q3, and that brings the entire to 143 offshore wind generators running in Denmark. And under right here, we are simply bringing up the initiatives which can be ongoing and in development in Q3, and we look ahead to replace you on development after we come to the long run quarters.

So with that, let me surrender to Marika.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [2]

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Thanks, Henrik. So if we take a look on the source of revenue remark, I’d say that this obviously displays a large number of the positives already discussed via Henrik. So you spot income is up 30%, and this may be a mirrored image of the extraordinarily back-end loaded profile that we have got for 2019. And the rise is pushed via each Energy answer and Provider.

Gross margin, as a end result, up via 1.Four share level, and that also is undoubtedly impacted via sale of the Romanian venture. The exterior issue stays unfavourable, I’d say, and that is the reason essentially price lists, but in addition transportation and uncooked subject material. So we nonetheless have a problem at the larger prices.

EBIT margin larger via 2 share issues, basically pushed via upper gross benefit and larger leverage at the SG&A prices, which I will be able to come again to. Altogether, I’d say that the very sure is that the prime task stage is one thing that we will be able to obviously ship right here within the quarter.

The SG&A value is still beneath keep watch over. In absolute numbers, it’s up in comparison to Q3 2008, however in share issues, it is only a zero.2 level building up. The larger price is, once more, associated with the upper task stage and, once more, deliberate for as anticipated.

Provider industry, which Henrik already highlighted, very robust carrier efficiency. We see, in comparison to final yr each with regards to income, it’s up, but in addition from a profitability viewpoint. So an excessively robust efficiency within the Provider industry.

The offshore wind, we had an excellent Q3 2018. So this can be a tricky comparability. And each income and benefit is, as a end result, down. The underlying tendencies and already on a prime stage, mentioned once more via Henrik, we’ve got a good view at the offshore area. And the web benefit on this case is impacted via prolong in a venture.

Alternate in internet operating capital. The web operating capital within the quarter is negatively impacted via an larger stage of receivables and in addition a better stock. Having mentioned that, we are following the — on a list aspect, we are following the primary that we have got, and we handiest have some order consumption within the stock. Down- and milestone bills in part offset the larger stage of receivables and stock.

Money waft remark. The money waft from running actions is sure, and we see a unfastened money waft earlier than monetary investments of EUR 205 million in comparison to a unfavourable in the similar order of magnitude in ’18. So altogether, a good money waft right here within the quarter. The web interest-bearing place continues to be at a prime stage of EUR 1.2 billion.

General investments is down in comparison to Q3 of final yr, however nonetheless at a rather prime stage and in addition discussed earlier than. And we are following the similar technique, so no adjustments. We’re capitalizing R&D, and we also are making an investment in capability and, on this case, essentially molds. So no adjustments to what we’ve got highlighted earlier than.

Guaranty provision and misplaced manufacturing issue. We see that the misplaced manufacturing issue continues at a low stage, under 2%. We see — we’ve got quite larger in comparison to final quarter at the guaranty provision ate up. And you’ll additionally see that we have got larger the proportion of income in — to two.6%, and that’s actually to cater for the steep ramp-up that we have got at the moment and in addition the acceleration of recent product introductions.

Capital construction. Web debt-to-EBITDA continues neatly under threshold, so we’re unfavourable 1.3%. Solvency ratio is 23.3% right here in Q3, and that’s essentially impacted via the rise in general belongings.

Via that, I will go away it to you, Henrik.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [3]

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Thanks, Marika. And that then leaves us with the outlook. And as we mentioned right here, unchanged outlook. We now have, regardless that, modified the carrier to — from approx to mention we develop the Provider industry minimal 10% for the yr. However another way, we will be able to stay the opposite unchanged because the outlook for 2019. So nonetheless between EUR 11 billion to EUR 12.25 billion in income, EBIT margin between 8% and 9% and general funding approx EUR 800 million.

So with that, I will be able to go away it again to the operator for any Q&A.

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Questions and Solutions

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Operator [1]

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(Operator Directions) The primary query is from Claus Almer from Nordea.

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Claus Almer Nielsen, Nordea Markets, Analysis Department – Senior Analyst of Capital Items and IT [2]

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Sure, a couple of questions from me. The primary query is going to the very robust order consumption. Once I take a look at your order consumption for the final 12 months and on the Provider income, I am attending to a degree of income 25% above consensus for subsequent yr. Is that the fitting manner to have a look at your order consumption momentum? And the way this is going to be transformed to income? That will be the first query.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [3]

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Neatly, I must take that, Claus. After we free up our complete yr, we will be able to additionally come again and touch upon what’s the outlook. We now have had an excellent robust yr, however we do not say in what classes or what yr they’re coming to. So you’ll’t make a kind of a detailed assumption on that. We’re usually very sure over it. And what you’ll most likely see additionally right here, we are additionally having a look into 2020 from an task and a most sensible line level sure to that. However allow us to touch upon it after we get to first week in February.

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Claus Almer Nielsen, Nordea Markets, Analysis Department – Senior Analyst of Capital Items and IT [4]

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Certain. It used to be value attempting, a minimum of. My…

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [5]

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It used to be a just right check out, Claus, if truth be told.

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Claus Almer Nielsen, Nordea Markets, Analysis Department – Senior Analyst of Capital Items and IT [6]

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Neatly, the second one query is going to this additional price from rerouting you discussed after Q2. What’s the have an effect on in Q3 from rerouting? And possibly additionally, what have an effect on did you’ve from price lists?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [7]

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K. So what we see, Claus, is mainly what we mentioned in Q2. There is — it is going to be an general have an effect on of one.Five share issues this yr. Then the precise cut up within the quarters, I imply we have not communicated that, however it is indubitably — in comparison to the assumptions after we input into 2019 with the relief we noticed at that time isn’t materializing. So it is going to be a unfavourable of one.Five share level this yr.

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Claus Almer Nielsen, Nordea Markets, Analysis Department – Senior Analyst of Capital Items and IT [8]

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K. And this divestment of the wind farm, the money waft will first are available This autumn, proper?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [9]

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Proper.

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Claus Almer Nielsen, Nordea Markets, Analysis Department – Senior Analyst of Capital Items and IT [10]

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Will that still be paid out to the shareholders, as you’ve completed previously whilst you do those one-off divestments?

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [11]

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I believe we’ve got simply mentioned we’re paying out after we are beginning the percentage buyback of EUR 200 million. In order that’s all incorporated.

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Operator [12]

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The following query is from Kristian Johansen from Danske Financial institution.

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Kristian Tornøe Johansen, Danske Financial institution Markets Fairness Analysis – Senior Analyst [13]

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So first query is relating to venture margins, which you highlighted within the quarter is negatively impacted via business price lists, shipping and uncooked fabrics. I am simply curious, simply assuming we take a look at the arena as it’s nowadays, will those Three results proceed to have a unfavourable have an effect on year-on-year on venture margins for — in 2020?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [14]

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Altogether, Kristian. I imply the sure is the quantity. The opposite sure is the strong worth stage that we see at the moment. The — it is going to — as we see it, until there is any dramatic adjustments, it is going to be a unfavourable or a headwind for us with regards to the total price base. But additionally needless to say the total task stage that we have got and in addition the localization that we are doing and all of the new product launches that we have got is placing a large number of force at the operations at this level. So that also is indubitably impacting us.

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Kristian Tornøe Johansen, Danske Financial institution Markets Fairness Analysis – Senior Analyst [15]

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K. That is just right. Then my 2nd query, I proceed to listen to a large number of worry from traders relating to how you’ll be impacted via the phase-down of the PTC in 2021. So Henrik, your predecessor has in the past indicated that he used to be positive that different markets may mitigate a possible decline within the U.S., making an allowance for you already after which very quickly should signal a large number of orders for deliveries in 2021. I am simply curious to get an up to date view on the way you take a look at the supply combine in 2021.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [16]

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I will be able to then stick with within the footstep of Anders and be positive on that one. I believe, general, externally, we do not see anything else at the moment from a development and a popularity of the renewable power and particularly wind from an LCOE viewpoint that we have got been known. We now have been aggressive in all continents. So I believe at the moment, what we see undoubtedly in Americas, we see, to start with, a U.S. marketplace that still has a lifestyles after ’21. And usually, we see one of the crucial forecast there being upgraded.

Secondly, as you’ll be able to additionally admire, what you’ll see from our panorama of order consumption, South The united states is selecting up increasingly more, particularly with Brazil, however there is additionally particular person international locations out of doors in South The united states. After we move to Europe, I do not believe any folks would have specifically forecasted that Finland can be on the stage they’re now in 2019 if we move 1.Five years again, however that unexpectedly additionally comes and helps. So I believe there are lots of international locations that unexpectedly select as much as if truth be told duvet for a few of that, that comes down.

Then what we see usually throughout in Asia and Pacific, I believe, in the market, we see international locations that unquestionably choices up and get started on both 3-, 5- or 10-year systems. And as you’ll admire, we shouldn’t have a specifically robust order consumption file, for example, in a marketplace like China. However as I mentioned just lately, in China, there’s a converting surroundings and a converting view what is going to occur in China after ’20. So we’re — usually, on that one, we’re sure. And that also is why we say we’re scaling for a better capability, and subsequently, additionally a better task traders for the long run.

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Kristian Tornøe Johansen, Danske Financial institution Markets Fairness Analysis – Senior Analyst [17]

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So simply to be transparent, you do be expecting you’ll ship enlargement in deliveries in 2021 as neatly?

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [18]

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And that used to be a protracted steerage, however what we are saying right here, we’re positive each for ’20 and ’21, sure.

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Operator [19]

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The following query is from Dan Togo from Carnegie.

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Dan Togo Jensen, Carnegie Funding Financial institution AB, Analysis Department – Monetary Analyst [20]

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Sure. The primary query for me is at the unannounced orders, 2 gigawatts right here within the quarter. Strangely robust, I’d say. What’s your visibility into this? And is this kind of a brand new stage we must be expecting? Or is there any kind of, say, abnormal occasions that is affecting this in Q3? And in addition, those orders nowadays come at a good margin or on par so that you can say with dangers. That is the first query.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [21]

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Sure. So I’d say, Dan, that you’d see fluctuations between the quarter as we’ve got observed earlier than. And for us, the extent is prime. It is neatly unfold throughout many nations. So altogether, sure. And in the case of margin and reasonable gross sales worth, we’ve got the similar necessities around the board. So it does not — it is no discrepancy or variances, whether or not it is introduced or unannounced.

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Dan Togo Jensen, Carnegie Funding Financial institution AB, Analysis Department – Monetary Analyst [22]

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Not anything abnormal on this quarter, as I perceive.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [23]

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No.

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Dan Togo Jensen, Carnegie Funding Financial institution AB, Analysis Department – Monetary Analyst [24]

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After which on Asian orders — order consumption, it sort of feels somewhat vulnerable in Q3, and we’re seeing order — others pronouncing fairly large orders from data — has pageant in — specifically friends, and you might have been strolling away in some tenders. Or how must we take a look at this nowadays?

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [25]

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We’re — I imply whilst you take a look at a area there and also you take a look at additionally the dimensions of the area, we’re very humble and respectful for that. We handiest want 1 or 2 orders to modify an image like that. And if anyone places a large number of effort into profitable an order, we — usually, we — as you understand, we’re inquisitive about — that it has to create worth for shareholders and also you. And subsequently, if we stroll clear of one thing, it is usually as a result of both the cost or the venture margin used to be no longer sustainable for us to mention sure to. However in all honesty, in Asia %, as I mentioned previous, we’re very sure over the development. We now have additionally a rising unannounced order, which we’re negotiating and having a look into. And subsequently, we’re simply operating diligently against each finish of the yr for subsequent yr to have a look at new orders. So not anything specific to mention there.

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Dan Togo Jensen, Carnegie Funding Financial institution AB, Analysis Department – Monetary Analyst [26]

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Are you able to remark, specifically on India, at the moment, as a result of some are pronouncing orders right here? And sure, on that mark, what is going on there?

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [27]

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India is a marketplace which we’ve got adopted carefully. We are additionally totally acutely aware of that. There are particular restrictions and constraint within the public sale gadget with the ceiling in India. And usually, if we will be able to’t make our venture profitability to paintings on a few of these or the generation there isn’t the one who is got for and requested for within the auctions, then we do not win. We now have taken some. We’re high-quality. However we additionally see that the steep ramp-up in India continues to be forward folks in the event that they wish to achieve the objective of 140 gig in 2030.

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Operator [28]

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The following query is from Martin Wilkie from Citi.

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Martin Wilkie, Citigroup Inc, Analysis Department – Director [29]

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That is Martin from Citi. Simply a few questions. You have — in the beginning, you might have highlighted execution possibility, given the dimensions of your backlog. I believe the 3rd quarter used to be most likely a more potent quarter of deliveries than many anticipated. Have been initiatives pulled ahead for supply? Or used to be this the phasing that you would all the time expected? And does that, by any means, alleviate one of the crucial supply possibility in This autumn, which all the time seemed adore it used to be going to be moderately a hectic quarter? In order that used to be the primary query, and I will follow-up with a 2nd.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [30]

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Sure. So the Q3, I believe, from our viewpoint, the sure is on — with regards to the task stage, we’re handing over and we’re dealing with the prime task stage expected in Q3. And clearly, when you take a look at the total steerage that we have got now for 2019, that signifies that it is going to be every other very busy quarter in This autumn. And altogether, if you have — when you’ve got flippantly unfold quarters, clearly higher. However on most sensible of it, you’ve an excessively prime task stage expected for this yr. So that may be a constraint at the moment. And on most sensible of it, we’ve got the price lists and the adjustments that, that — or the adjustments that incur as a result of the price lists. And that’s what you noticed in Q2, and that we needed to accommodate at that cut-off date. However except that, I imply it’s the commonplace steep ramp-up that we see and that we’re mitigating at our highest, and it is going to be incessantly busy.

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Martin Wilkie, Citigroup Inc, Analysis Department – Director [31]

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After which simply my follow-up, simply coming again to this query on price lists and transportation prices. I imply you might have mentioned your price base being upper subsequent yr, and clearly, there used to be an annualization impact of price lists. If you must simply explain, are you anticipating incremental price lists right here as neatly? Or is it actually simply the annualization impact that you are relating to?

And in addition, at the transportation aspect, I do know you might have no longer referred to as them out one at a time, however is that kind of a 12-month general drag? Or does that incremental price nonetheless hit you within the first part of subsequent yr? Or are the initiatives that skilled the ones transportation incremental price, is that only a kind of 1- or 2-quarter form of incremental price?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [32]

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Neatly, sure, I perceive your query, Martin. The entire is that obtaining right into a yr like this the place we will be able to — we’ve got a complete visibility, roughly, we plan carefully. And that’s the reason additionally why we noticed a discount from the 1.Five share issues price force down to one%, and that is the reason what we deliberate for. The whole thing used to be signed and sealed. We now have began up manufacturing in Vietnam and in Korea. Then in the middle of the yr, that used to be a part of the price lists. After which the entire rerouting began, after which you’ve the double price. The opposite problem in the case of transportation, which is on — from a broader viewpoint, may be that our form of merchandise require particular automobiles, each on land and in addition on sea. In order that — and there, you’ve a scarcity. So it’s important to time the ones boats with what we’d like at any given cut-off date. And after I glance into — or we glance into subsequent yr, the price lists continues, whether or not this — we don’t seem to be making plans for brand spanking new price lists, we’re making plans for what we all know. But when there will likely be further adjustments additionally in 2020, that can have a unfavourable have an effect on for us. However with what we all know, we proceed with the associated fee base that we see at the moment, and that is the reason the 1.Five share level price base building up that we had for this yr.

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Martin Wilkie, Citigroup Inc, Analysis Department – Director [33]

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However with regards to the ones transportation prices, I admire you might have clearly were given those expense of extra ships and so on, however that also is a value that you’ll be able to be incurring into 2020 as neatly. It is not — glance, it is a small choice of initiatives that will likely be completed via the top of the yr which can be incurring those incremental prices.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [34]

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No. It is around the board, and just because this can be a scarcity as neatly for the kind of automobiles that we’d like.

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Operator [35]

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The following query is from Akash Gupta from JPMorgan.

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Akash Gupta, JP Morgan Chase & Co, Analysis Department – Analysis Analyst [36]

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Sure. My first query is a follow-up from Henrik remark previous on Bloomberg. So Henrik, you mentioned, in step with Bloomberg, that you’ll care for carrier margins. So possibly if you’ll elaborate which base you might be relating to as a result of we’ve got 28% in — over 28% in Q3 and 27.7% in year-to-date, and that your steerage is a minimum of 24%. So whilst you say keeping up margins, if you’ll additionally file the bottom. That is my first query.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [37]

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Sure. The nice factor this is I will say, and I do know precisely what it used to be, I used to be requested to touch upon if we will be able to care for the prime margins we’ve got within the Provider industry. And on that, I replied sure since the funding and the single we’re operating the Provider industry, I am very inspired via the best way we run that. We now have 10,00Zero those who works in and round our Provider industry. We construct a price proposition that sits neatly with our consumers. And usually, quarter-on-quarter, we see consumers increasingly more soliciting for additionally longer and longer commitments in that dating with consumers in line with our generators. So we simply mentioned there, we foresee nonetheless that there are extra issues we will be able to do within the Provider industry, and that can care for and in addition give us alternatives to nonetheless stay development each the Provider industry and the margins and profitability within the Provider industry.

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Akash Gupta, JP Morgan Chase & Co, Analysis Department – Analysis Analyst [38]

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And possibly a follow-up to your remark that consumers are soliciting for longer commitments. I imply you’ve a gorgeous robust stability sheet. So I’d say the chance of you disappearing is sort of subsequent to not anything. And subsequently, when consumers are soliciting for longer commitments, contracts, what do they get in go back from you?

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [39]

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What I will be able to simply say right here, that relies all about what individuals are paying for as a result of we were given other carrier agreements general. So I’d just kind of say, after we take a look at that, a few of it comes all the way down to additionally in sure markets that they’ve a complete carrier bundle. And to some degree, no person is aware of the generators — traders generators higher than we do additionally from a sensor and virtual viewpoint. So we’re more than pleased with that. However we do not usually give one thing we don’t seem to be relaxed and in the end creates large liabilities again. That isn’t how we paintings.

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Akash Gupta, JP Morgan Chase & Co, Analysis Department – Analysis Analyst [40]

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And my 2nd query is on — is ready — extra about possibility from — it is like a possibility from the apparatus that you’ve got offered in recent times. So I imply Vestas’ observation in the previous couple of years has been that business in addition to you might be promoting apparatus on — and products and services in combination on a levelized price foundation, and now we’re seeing that a few of these initiatives, that have been very aggressively a few years in the past, are coming on-line. So a query I’ve is that what kind of ensure do you usually supply in those contracts the place you have been bidding on LCOE foundation? And let’s assume, if the purchasers don’t seem to be getting the specified venture IRRs, then do you’ve any legal responsibility in long term, possibly, let’s assume, if they do not get the specified load issue or one thing they usually would possibly ask for some kind of reimbursement from you? In order that’s query quantity two.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [41]

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I used to be near to to mention, I used to be simply virtually leaping in and reducing you off in the midst of your query. We do not move in and take each and every monetary possibility you’ll consider on and round a wind park or a turbine in that sense. What we all know is we all know the output. We know the way the turbine will create and the way it is going to paintings beneath sure stipulations. After which if you have the upside as an investor in a wind park, you even have one of the crucial downsides. But when it involves uptime of our generators and in addition how they carry out, that is what we usually stand on our behalf. The remaining, in the case of that, we may not take the chance at the climate both. So subsequently, let other people do this. And the IRR, that is the ultimate proprietor of the wind parks, which we do not do.

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Akash Gupta, JP Morgan Chase & Co, Analysis Department – Analysis Analyst [42]

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And possibly a handy guide a rough one for Marika. Marika, thank you for elaborating this one-off that you’ve got from venture gross sales this yr. Are you able to additionally supply when you had any one-off in 2018 or 2017 only for comparability functions?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [43]

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No. However I imply we are — anything else that we see as — we hardly ever take one-offs, as you understand. We now have positives and negatives, and that is going totally into the effects. So anything else that occurs within the corporate, we’ve got complete visibility. We do not take anything else as particular pieces or equivalent.

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Operator [44]

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The following query is from Supriya Subramanian from UBS.

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Supriya Subramanian, UBS Funding Financial institution, Analysis Department – Fairness Analysis Analyst of Industrials [45]

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I had a few questions. One is round, for the reason that the execution ask is moderately prime for 4Q and more likely to be even upper for 2020, what do you spot as dangers of — I am certain the provision chain will likely be moderately stretched. So do you spot dangers of slippages from fourth quarter into 2020 and correspondingly 2020 and to doubtlessly 2021?

And associated with that, to some degree, is, is 2020 as neatly going to be as heavy back-end loaded as 2019? Or do you spot a extra even phasing of revenues around the quarter?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [46]

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K. So if I get started together with your query on slippage in between the quarters, and that can all — the extra we’ve got on the finish of the yr, the extra slippage possibility you’ve against the approaching yr. However it isn’t once more any misplaced income, it is simply — you must doubtlessly see one thing spill over from This autumn into Q1 of subsequent yr. However this is as — and once more, as what to be expected, having a look on the steerage, we will be able to have a hectic fourth quarter this yr and an excessively, very busy fourth quarter.

And when you take a look at subsequent yr, with the visibility that we have got with regards to that very prime order backlog, clearly, it is going to be a hectic yr. We do not see that it is going to be similarly skewed among the quarters, and we’re in — take note that we’re in the middle of the budgeting procedure as we discuss. However it is going to be a extra commonplace distribution among the quarter, and that is the reason clearly more straightforward to take care of than what we’ve got this yr. However it isn’t going to be a stroll within the park subsequent yr from an operation viewpoint both.

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Supriya Subramanian, UBS Funding Financial institution, Analysis Department – Fairness Analysis Analyst of Industrials [47]

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K. K. Were given it. And once more, kind of into 2020, I do know you’ll’t information at the moment, but when I would possibly put it this manner, if all else being the similar this is there are not any additional tariff escalations, et cetera, internet of all of the headwinds and tailwinds, do you spot margins increasing doubtlessly in 2020?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [48]

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It is onerous to present a dedication on margins. We now have — and we will be able to come again once more for the steerage of subsequent yr in February. However I imply what we’ve got mentioned there stays. We now have a robust order backlog, each within the Provider industry in addition to the turbine industry. We now have a strong worth image as we discuss, and that is like a sure.

Then from an operation viewpoint, it is going to be a busy yr having a look on the visibility that we have got at the moment, and that is the reason all we will be able to remark at this day and age.

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Supriya Subramanian, UBS Funding Financial institution, Analysis Department – Fairness Analysis Analyst of Industrials [49]

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K. And if I would possibly, only one extra fast query. At the offshore industry, do you spot a possibility of pricing force right here, for the reason that there used to be this contemporary information flows of Ørsted as neatly anticipating lower-than-expected IRRs for sure initiatives? I do know that is associated with just a sure set of initiatives of Ørsted, however does that then put possibility directly to the turbine makers with regards to pricing there?

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [50]

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I do not wish to touch upon that particularly. I believe we all know the price. We all know the price of the turbine. We now have had the offshore turbine, our V164 in the market for the longest, so we additionally know the price of that. We do not usually paintings round to present a value force on it. We all know additionally that the initiatives usually will likely be aggressive. So subsequently, we take part in that marketplace with pleasure, and we additionally look ahead to see that the offshore marketplace is gaining increasingly more momentum at a number of continents out of doors the place it at first began in Europe.

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Operator [51]

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The following query is from Casper Blom from ABG Sundal Collier.

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Casper Blom, ABG Sundal Collier Retaining ASA, Analysis Department – Lead Analyst [52]

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Two questions from me as neatly. First, at the operating capital. You might have been the use of your operating capital to construct stock against this very prime choice of deliveries that you are doing now. Will have to we begin to be expecting some kind of free up of operating capital right here in This autumn? Or will you care for a prime stage of stock into 2020 this is having a look to be even this yr? That is my first query.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [53]

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K. So when you take a look at — and as you are pointing out, Casper, we’ve got used the facility to if truth be told construct stock to deal with the prime task stage that we see at the moment. We are following — which you shouldn’t have, we are following our anticipation with regards to how we cut back stock right here within the quarter, however we also are build up for an excessively busy This autumn. And if the entirety works because it must and in addition having a look on the prime task stage that we’re expecting in 2020, we will be able to increase. I will be able to — you’ll see us using at this day and age, the likelihood to have stock additionally going ahead, making an allowance for the prime task stage that we have got. And we are not giving, as you understand, any precise numbers. However you’ll no longer see this — you’ll see a discount, however on the similar time, an building up to increase for 2020 until we’ve got some slippage as a result of that can clearly trade the image in between This autumn and Q1. That used to be an excessively unclear solution. I pay attention that myself. Did you get it, Casper?

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Casper Blom, ABG Sundal Collier Retaining ASA, Analysis Department – Lead Analyst [54]

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As I realize it — as I perceive, you are announcing that we should not kind of be expecting kind of an enormous aid of operating capital after we get the yearly effects.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [55]

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The fast abstract, sure.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [56]

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That used to be great dancing round that, proper, Marika.

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Casper Blom, ABG Sundal Collier Retaining ASA, Analysis Department – Lead Analyst [57]

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Sure. Then a bit of bit hooked up to that, your stability sheet. You might have the final couple of years when presenting the yearly effects. You have had internet money of — soaring round EUR Three billion. Is that kind of nonetheless a degree to search for the place you are relaxed? Or would you if truth be told be extra relaxed at a better stage, for the reason that the corporate is slightly larger with regards to supply now than it used to be only some years in the past?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [58]

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I’d say — I’d put it like this, Casper, the money that we have got, have served us neatly and also will proceed to serve us neatly. And when you take a look at the task stage, you take a look at the extent of investments that we are doing. We’ve not modified our philosophy. We can nonetheless have an excessively prudent view at the stability sheet and the money that we have got. In order that will proceed. We are not easing up on that requirement internally.

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Casper Blom, ABG Sundal Collier Retaining ASA, Analysis Department – Lead Analyst [59]

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No. However if truth be told, what I used to be pointing to used to be no longer an easing up, however extra a tightening, the place you could possibly say now we have if truth be told have more money, given how a lot larger we at the moment are with regards to task and in addition in mild of mainly how vulnerable some competition are to actually stand out competitively on that parameter.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [60]

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However we nonetheless do with the money we’ve got. And I imply as I mentioned, we — it depends upon the place we’re within the cycle, how a lot we need to make investments. And what we’ve got at the stability sheet at the moment with regards to our natural enlargement profile has served us neatly. So we have not modified anything else, neither extra prudent or much less prudent. We’re happy with the stability sheet that we have got at this day and age.

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Operator [61]

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The following query is from Sebastian Growe from Commerzbank.

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Sebastian Growe, Commerzbank AG, Analysis Department – Workforce Head of Industrials [62]

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Sure. The primary one is across the headwinds we mentioned earlier than within the U.S. tariff mitigation. I for my part imagine we wish to distinguish right here between what’s actually mitigation as such after which the underlying quantity enlargement, which turns out to head more potent than what in the end everyone have been anticipating earlier than. So my query then is in case you are seeing a better tightness within the general provide chain, be it at the part, be it at the ships that you simply discussed earlier than, Marika, anything else this is actually converting to the dangerous, so that you can discuss, that you’re shedding one of the crucial in the end great quantity beneficial properties that we must be expecting for fiscal ’20? That is the first query.

The second one query is across the CapEx and blend. You continue to information for the EUR 800 million for the entire yr 2019. Clearly, a vital step-up required in quarter 4. I’d be concerned with what the important thing spaces of the spending are. You referred to molds earlier than, if anything else it’s important to do to the footprint as neatly. And if I would possibly then additionally select your mind on combine. And may you simply give us some kind of perception into how a lot the EnVentus platform has been contributing to reserve consumption year-to-date. And with that, additionally then the anticipated contribution in fiscal ’20 in comparison to what it would land at in fiscal ’19.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [63]

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You controlled to squeeze in so much in 2 questions right here. So if I take it — if I get started with the CapEx and what it’s if truth be told, it’s, as I mentioned, it is no trade from the philosophy now we have had in the past. You’ll see that the capitalized R&D will likely be in the similar order of magnitude as 2018. That implies EUR 250 million, EUR 260 million. After which the molds directly to additional make bigger the capability stays. However we even have localization investments as a result of that may be a requirement in lots of the international locations that we promote into, and that still continues.

At the order consumption for EnVentus is rather restricted. It is 300 megawatt at this day and age that we have got order consumption. But additionally needless to say EnVentus is — the entire release for EnVentus is 2021. So it is nonetheless the platform that we’re — it is nonetheless the 3- and 4-megawatt platform that we proceed into ’20.

And sorry, what used to be your first query once more?

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Sebastian Growe, Commerzbank AG, Analysis Department – Workforce Head of Industrials [64]

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Across the headwinds and the honor between what’s the U.S. tariff mitigation and escaping that force and on the similar time, I believe higher than early anticipated quantity enlargement. So I believe it is actually 2 separate buckets.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [65]

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Sure. So the total headwinds is, as I mentioned, 1.Five share level. And one of these the chance on providers is all the time there if you have a prime task stage and prime call for. The nice factor, regardless that, is that, as we’ve got visibility over 2020, I imply — and an excessively robust — the robust order backlog that we have got, we commence toning up. Once you’ve a company order consumption, then we commence toning up the entire provides, the entire transportation. So if the entirety is in step with that plan, we’ve got a just right evaluate. It’s the adjustments in the middle of that making plans length that reasons further headwinds. However it is — I do not see any ease-up in the associated fee base for subsequent yr. It is nonetheless going to be within the order of magnitude as we see this yr. Then when you’ve got adjustments to it, then that will likely be on most sensible of.

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Sebastian Growe, Commerzbank AG, Analysis Department – Workforce Head of Industrials [66]

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However you are no longer seeing any kind of better greediness on behalf of providers I mentioned, is the fitting takeaway?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [67]

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Sure. I imply when you take a look at the total heavy business, they have got other demanding situations than we do as a result of they do not have the call for available in the market. And clearly, we are looking to stability that with out being too explicit on our negotiations.

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Operator [68]

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The following query is from Frans Hoyer from Handelsbanken.

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Frans Hoyer, Handelsbanken Capital Markets AB, Analysis Department – Analyst [69]

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Additionally a query at the 1.5% tariff force on margins in 2019. What used to be it year-to-date, Q1, 2 and three in combination?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [70]

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I imply we have not been explicit right here within the quarter. It’s 1.Five share level for the entire 2019. And as I mentioned, that is 1 — it is 0.Five share level upper than what we expected after we went into this yr, and that is the reason in line with the associated fee base that we have got globally.

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Frans Hoyer, Handelsbanken Capital Markets AB, Analysis Department – Analyst [71]

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K. After which I — after I take a look at the margin steerage for the yr, I take a look at — attempt to take a look at This autumn one at a time, what is implied for the general quarter. And it seems to me like you might be assuming some force even, after all, adjusting for the one-off acquire in Q3. And that force, possibly — k, I perceive the tariff factor is a consider This autumn, however we even have the expanding significance of carrier and we’ve got the possibly upper volumes and higher mounted price absorption within the fourth quarter. So I am simply looking to — is there one thing I am lacking right here in that development within the This autumn margin?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [72]

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No. However I believe your assumptions on This autumn is proper. However needless to say one of the vital prime task stage that might be expected is at file, file prime. And that’s the steep ramp-up, and that can price us one thing. Once more, it isn’t a stroll within the park to have that roughly quantity to be exercised in one quarter. The opposite factor is, clearly, that the later you get into the yr, the extra headwinds you spot from — additionally from an set up viewpoint. It might be delays, and delays may be an excessively pricey workout. So it is going to be a large number of force on us to workout what we’ve got left for — to be completed right here in This autumn.

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Frans Hoyer, Handelsbanken Capital Markets AB, Analysis Department – Analyst [73]

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So a component of protection margin is in there as neatly?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [74]

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I imply we — you’ve the steerage, and it is a vary. And I’d say there is not any protection margin, this can be a very factual what I am describing to you. That’s what we are going through at this day and age.

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Operator [75]

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The following query is from Lars Heindorff from SEB.

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Lars Heindorff, SEB, Analysis Department – Analyst [76]

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Two questions from my aspect as neatly. At the beginning, within the first part this yr, now we have been speaking moderately so much about leftovers, if you’ll name it that, from very low venture margins that you simply took in ’17 and ’18. Are there anything else left right here of that sort within the 3rd quarter? Is it somewhat blank now? That is the first query.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [77]

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Sure. So — and that is the reason completely proper, Lars. We now have exercised one of these extra, name it, at this level, historic however the low-margin venture that got here in. So we’re, nowadays, exercising on a extra contemporary base. But additionally needless to say — I imply this can be a very, very steep ramp-up. That signifies that we’re, once more, making an investment in capability. We now have — this is — and in addition, we also are outsourcing greater than what we’ve got completed in the past. That is clearly the opposite issue. So the leverage will likely be other than what you’ve observed earlier than as a result of then you definitely had extra capability that you simply stuffed up. And nowadays, we’ve got the other. We do not actually have extra. We’re putting in new capability and on the similar time, additionally outsourcing. So from that viewpoint, the leverage will likely be other from what you’ve observed in the past.

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Lars Heindorff, SEB, Analysis Department – Analyst [78]

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K. After which the second one query, I imply I may not ask you about your headwind into 2020, however fairly, I imply flip it round and listen to a bit of bit about what, I imply, are you able to do to mitigate this? And you might have been speaking additionally in reference to the Q2 file about rather just right talks with the purchasers about passing a minimum of a few of this price virtually to the purchasers. I imply the place are you on that? And to what extent are you able to kind of offset that via passing a few of that price and headwind directly to the purchasers and into the costs?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [79]

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I’d say that, that has been pondered for moderately a while. But additionally needless to say the company order consumption that we have got within the backlog now could be what we will be able to be exercising subsequent yr. So we’ve got complete visibility. So it is not anything that is going to be on most sensible of that to any important stage. Subsequent yr is, I’d say, as this yr, very prime visibility. So it is been exercising at the most productive we will be able to.

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Lars Heindorff, SEB, Analysis Department – Analyst [80]

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K. After which simply as a follow-up at the outsourcing phase that you simply discussed, which is, I imply, incremental margins. I imply again within the just right outdated days, I believe we mentioned incremental margins of 20% to 30%. Are you able to give us a sign of the place you are expecting the ones to be now with upper stage of outsourcing?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [81]

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That used to be my level previous. The leverage that you’ve got observed previously is, if anything else, it is taking place.

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Lars Heindorff, SEB, Analysis Department – Analyst [82]

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K. So under 20% to 30%?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [83]

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Completely.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [84]

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Neatly, it used to be additionally a quite wide variety, so it’s important to admire there.

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Operator [85]

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The following query is from Klaus Kehl from Nykredit.

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Klaus Kehl, Nykredit Realkredit A/S, Analysis Department – Leader Analyst [86]

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Sure. Two questions from my aspect. You might have highlighted a few instances that you’ve got this execution possibility in This autumn, and I in reality remember the fact that. However are you able to speak about what you if truth be told have completed in an effort to cut back it? Have you ever, for example, produced all of the generators in Q3, and possibly that is the reason why the inventories are so large? That may be my first query.

And secondly, you discussed those energy upgrades within the Provider industry that drives potency beneficial properties for the purchasers. On reasonable, how a lot are you able to lift potency for purchasers? May you communicate a bit of bit about that?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [87]

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So if I — do you wish to have to begin or…

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [88]

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No, please.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [89]

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K. I forgot the query. Sorry, Klaus.

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Klaus Kehl, Nykredit Realkredit A/S, Analysis Department – Leader Analyst [90]

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You wish to have me to copy?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [91]

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No, energy improve used to be the second.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [92]

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First one used to be how does it seem like? What have we completed to mitigate the This autumn task stage? And as mentioned right here, Klaus, as you’ll see within the stock, completely, we’ve got completed what we will be able to. However you’ll additionally admire a few of that stock isn’t all the time on the web page of the place we are placing up the general venture. So right here, it’s nonetheless fourth quarter, and you will not get get right of entry to to the web page earlier than the web page is in a position from preparation to it. And subsequently, it’s, as all the time, tough to get right of entry to web page, and we’re nonetheless topic to the standard. We now have completed the entirety we will be able to, however we do not stock or inventory it at web page. That is simply no longer what lifestyles is. So subsequently, there may be nonetheless a transportation between x manufacturing facility and to the more than a few websites. However we’re neatly ready, however we’re nonetheless topic to, and that also is why we’ve got stored the variability for the turnover steerage between 11 and 12.25, and I am hoping you admire that. You’ll be able to see it within the stock as neatly, so I believe it is going neatly hand-in-hand. However it is one thing that the venture groups are very a lot used to and dealing diligently thru.

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [93]

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I’d say that — sorry for filling in. The most important possibility in This autumn is that we have got a large number of Nordic initiatives that need to be exercised actually right here within the latter a part of the yr. So the elements stipulations or the elements have an effect on goes to be larger because it seems.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [94]

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After which coming to the ability upgrades. It is — we are measuring that during percentages. It’s all the way down to the client of the place the person consumers are, how a lot percentages we’re ready to have an effect on that. And as I mentioned, I’d no longer like to present that away as a remark to this type of extensive discussion board as a result of, as you could possibly admire, this is if truth be told a part of the price proposition and the aggressive merit to consumers.

May we then simply — because of the timing, may we are saying that is the final query, operator?

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Operator [95]

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We can now take the final query from Mark Freshney from Crédit Suisse.

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Mark Freshney, Crédit Suisse AG, Analysis Department – Analysis Analyst [96]

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We’ve got been discussing a large number of the possible unfavourable affects to take a look at and bridge the 2019 to 2020 EBIT margin. However are you able to communicate in regards to the combine impact? As a result of my working out is that it is only just lately in the previous couple of months that you’ve got began transport the V150 and the 4-megawatt merchandise, which I perceive supply a step shift down within the Levelized Value of Power. So are you able to speak about how the product combine will trade going into subsequent yr, what sort of share quantity it’s and doubtlessly, what have an effect on that might — sure have an effect on that can have on staff margins?

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Marika Fredriksson, Vestas Wind Programs A/S – Govt VP & CFO [97]

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Neatly, Mark, we are not commenting at the margins for 2020. As we mentioned, we’ve got a just right visibility. We now have a robust order backlog. We now have a just right reasonable gross sales worth as a result of we see the stableness in the cost, and that is the reason mirrored within the order backlog. The V150 goes to be indubitably a robust product for us in 2020, and that is the reason all we will be able to touch upon at this day and age.

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Henrik Andersen, Vestas Wind Programs A/S – Crew President & CEO [98]

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K. I believe that most likely concludes this investor name. Thanks very a lot on your consideration. Thanks very a lot for the very, to us a minimum of, fascinating questions, and we look ahead to seeing a lot of you over the approaching weeks. And with that, thanks.


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