The following is a summary of the Vestas Wind Systems A/S (VWDRY) Q4 2023 Earnings Call Transcript:
Financial Performance:
Vestas reported a return to profitability in 2023, marking an EBIT margin of 1.5%.
The company recorded revenues of €15.4 billion, an increase attributed to higher pricing and the growth of the service business.
Vestas projects a revenue range of €16 billion to €18 billion with an EBIT margin of 4% to 6% for 2024.
A 6% increase in annual revenue was driven by higher priced turbines and growth in the service segment.
Gross margin improved to 8.3%, a rise due to increased revenue, higher pricing Power Solutions, and lessening supply chain disruptions.
Q4 gross margin stood at 11%, up from negative 3% the previous year.
Business Progress:
Vestas introduced low-emission steel towers, a substantial step towards completely circular wind turbines.
The company announced a partnership with ArcelorMittal as part of this initiative.
Vestas maintains an unchanged strategic path with a focus on strong commercial discipline and a 'value over volume' attitude.
Record orders were made with strong onshore activity, particularly in the US, with a growing service order backlog now exceeding €34 billion.
The company plans to invest in capacities, technologies, and talent to secure sustainable growth in the long-term.
Vestas targets a 10% EBIT margin and a 20% return on investment over the cycle.
The company has ESG plans that include carbon neutrality across operations and a 45% Scope 3 reduction by 2030.
Vestas plans to invest in offshore manufacturing, new tools, and equipment for the 4-megawatt platform, with a new offshore facility set to start operations in 2025.
A €500 million sustainability-linked bond shows Vestas' commitment to sustainability.
More details: VESTAS WIND ADR IR
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