Vestas announces preliminary 2021 figures
The wind power industry continues to be challenged by the current environment characterised by supply chain instability, which is causing significant cost inflation and delay in execution of projects. Furthermore, the current business environment severely impacts both visibility and profitability and Vestas is therefore today announcing preliminary figures for 2021 and financial outlook for 2022. Under very challenging circumstances, Vestas achieved record-high revenue and delivered 16.6 GW in 2021, which is a true testament to our more than 30,000 employees’ hard work and dedication. Our shared determination and resilience ensured we delivered on our commitments to our customers and pushed the energy transition forward while handling challenges from cost inflation, COVID-19, and a cynical cyberattack.
The global business environment for wind energy remains volatile in the short term and prosperous in the long term. As communicated at the release of our results for the third quarter of 2021, we expect the near future and at least 2022 to be heavily impacted by cost inflation, while the emergence of an energy crisis caused by geopolitics and fossil fuel volatility has also resulted in dramatic increases in energy prices.
Preliminary results for full year 2021
As a result of these underlying conditions, preliminary numbers for 2021 show a revenue of EUR 15,587m, which is in line with the outlook of EUR 15.5-16.5bn, while EBIT before special items is expected to amount to EUR 461m, equalling a margin of 3.0 percent, compared to an outlook of around 4 percent. This reflects delays in the installation of some onshore projects, as well as increased cost inflation. These factors also continued to impact warranty provisions in the fourth quarter of 2021, causing increased repair and upgrade costs for existing cases. Consequently, the warranty provision level for the full year 2021 ended at 4.4 percent of revenue.
Preliminary 2021 results
| Preliminary results | Guidance updated 03.11.21 | Initial guidance | |
| Revenue (bnEUR) | 15.6 | 15.5-16.5 | 16-17 |
| EBIT margin (%) before special items | 3.0 | around 4 | 6-8 |
| Total investments** (mEUR) | 813 | below 1,000 | approx. 1,000 |
Free cash flow*) continued to be positive and amounted to EUR 183m, highlighting the continued focus on building Vestas’ financial strength while also underlining the operational resilience.
* Excl. acquisitions of subsidiaries, joint ventures, associates, and financial investments.
Increasing prices on wind turbines are a necessity to address the external cost inflation and ensure the industry’s long-term value creation. Our focus on protecting the value of our products and solutions requires strong discipline to address the increased cost of raw materials and components in customer dialogues, which have prolonged negotiations. In the longer term, however, increasing levels on power purchase agreements and power prices in general also presents an opportunity for our customers to accelerate investments in renewable energy. As a result, order intake amounted to 13.9 GW across both onshore and offshore in 2021. The average selling price increased to EUR 0.83m per MW for 2021 (onshore only: EUR 0.81m per MW) and EUR 0.86m per MW (onshore only: EUR 0.86m per MW) in the fourth quarter.
Wind turbine order intake, 2021
MW
| EMEA | Americas | Asia Pacific | Total | |
| Total order intake | 7,637 | 4,571 | 1,688 | 13,896 |
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Oil and gas, press , | Energy, Climate, Renewable, Wind, Biomass, Sustainability, Oil Price, LPG, Solar, Electric,
