Vestas Wind Systems A/S

Good morning and welcome to Vestas' Q3 reporting and also closing and looking forward to close a very solid year 2025. I'll also take here the opportunity to extend a big thank you to our customers, colleagues and not least our external stakeholders. Great support and commitment through the current environment and through the first current nine months of the year to the execution we are talking and going to talk much more about today. So with that, could I go here to the key highlight? So key highlights, revenue of 5.3 billion euros. That's an increase of 3% year on year, driven by higher deliveries despite negative foreign exchange development. When we look at the EBIT margin of 7.8%, earnings achieved through improved onshore project execution, lower warranty costs, partly offset by our manufacturing ramp-up, which is continuing but also progressing well. When we look at the order intake of 4.6 gigawatts, up 4% year-on-year, driven by US and Germany, and onshore is up more than 60% quarter-on-quarter comparison to last year. When we look at the manufacturing ramp up, the driver cost and also investments, the onshore and offshore ramp up is progressing as we focused on delivering a very busy fourth quarter, but also as importantly, getting a strong start of 2026. By this, we also decided to return value to our shareholders. I think most importantly, in line with our capital structure strategy and also solid liquidity position, a share buyback of 150 million will be initiated and will be starting as of tomorrow morning. And then on the outlook, we narrowed the outlook in terms of turnover EBIT, reflecting the lower service EBIT, but also the stronger offshore execution. With that, I will talk about the market environment we are in. And again here, wind energy is key to affordability, security, and sustainability. That is our narrative, and we can see it actually working across many of our markets, as you've also seen in our order intake and not least also in our delivery table. When we look at our global environment, no doubt inflation, raw materials, and transport costs are stable, but tariffs will increase cost over time for the end user. When we look at the ongoing geopolitical and trade volatility leading to a regularization, we have spoken about that in now many of the previous quarters, and I will almost say the previous years, and we are seeing it continuing, and we are dealing and planning and executing well in it. When we look at the market environment, there is a heightened focus on energy security and affordability across many of our main markets. The grid investment is prioritized in our key markets, and we can see it's progressing in a number of markets, but also probably have status quo in a number of others. On the permitting side, it is improving in some markets, but overall permitting, auctions and market design is still challenging. Maybe here is the perfect place also to just express a bit of a concern with Europe's continuing introduction of rules like CSRD, CBAM and others, while the rest of the world are after competitiveness. However, when we then look at the project level, I will say, Vestas, we see a strong project execution in the quarter and also year-to-date. We see some regional disruptions from time to time, but we are coping very well with it. And, of course, that's then leading to the result we're also seeing in power solution today, which I'm sure Jacob will talk much more in details about. When we look at the power solutions in Q3 2025, strong quarter across all key markets. So when we look at the Q3, order intake of 4.6 gigawatt, that's up 4% compared to the last year. The increase was mainly driven by strong order intake in the Americas, especially in the US, as well as continued positive momentum in EMEA, especially in Germany. There are no offshore orders in Q3, so it is a clean onshore order intake quarter. The ASP declined to 101 million per megawatt in Q3 compared to Euro 111 megawatt in the prior quarter. The decline was driven by a change in the order mix with higher share of supply-only orders in the U.S. Generally, we are very pleased with the positive continuing price and price discipline we are showing and our customers support and understand it. When we look at the order backlog and power solution, it increased to 31.6 billion. That's up 3.3 billion compared to one year ago as our energy solutions continue to have good traction with customers across our core markets. And you can see more of the details in the charts to the right. With that, on to service. So service outlook revised and also the recovery plan is progressing as we go through and we are now three quarters in. So the service order backlog increased to 36.6 billion from 35.1 billion a year ago, despite 1.5 billion headwind from foreign exchange rate movements year to date. When we see a service, it reads 159 gigawatt under service. It's flat compared to Q2 as additions were offset by a higher level of expiries and also deselecting in the quarter as the commercial reset continues. This is some of the consequences we have spoken about in the previous quarters as part of our service turnaround. And I think we can now start seeing that some of it also shows, at least in the gigawatt under service as such. When we look at the service recovery plan, which runs until the end of 2026, it's progressing, and we are seeing early signs of operational improvements and also a reduction, especially in our overdue work orders and the backlog of the same. That's very healthy and it's very positive to see, and of course we will continue working with that, and we look forward to talk more in details over the coming days. However, earnings in service are also affected by foreign exchange rate headwinds, as well as some costs related to some specific offshore sites, which has led to a revision of the 2025 outlook of service. You will see here to the right the breakdown of the service order backlog, 36.6 billion overall, of which 31 billion is onshore, 159 gigawatts under active service contracts, and then an average duration of 11 years. You will see the breakdown on the regions below, and as you will also not surprisingly see in Asia Pacific, if you don't have new order intake, it also is limited to how much you grow gigawatt under service. Will that take you through development? Development, not a lot. So I'll have that pretty quickly. Discipline, the same. We also focus very much about finding projects and advancing projects. But as you can also see, the environment right now is a lot of focus on in the key markets to progress projects. And we haven't really progressed anything in Q3. So I'm pretty sure from a performance point of view, they also feel that for Q4. In Q3 2025, we had a pipeline of development projects that was stable around 27 gigawatt with Australia, US, Spain, and Brazil holding the largest opportunities. Strategic focus is on maturing and growing a quality project pipeline as well as conversion of mature projects in project sales and related turbine order intake. You can see the regional breakdown below. And our go-to sustainability in Q3, Vestas is the most sustainable energy company in the world, and we keep having that focus also with our customers and stakeholders. When we look at the turbines produced and shipped in the last 12 months, they are expected to avoid 461 million tonnes of greenhouse gas emissions over the course of their lifetime. You will see that here to the right. And of course, as we are ramping up, we expect that to continue increasing. The carbon emission from our own operations over the last 12 months increased by less than 1%, which is actually a very positive achievement because our activities are increasing. So therefore, keeping scope one and two at the current level is a testament to the focus and execution of our operations across. It's also saying when we ramble offshore, it is a significant change in business mix, so there will be an upward pressure on the carbon emission because we are using and spending more time at sea, at vessels and other transport measures. When we look at the number of recordable injuries per million working hours, that was up from 2.8 to 3.3 year on year, Safety remains a top priority for us as we tirelessly work to improve our safety performance across our value chain. I think also here from a personal point of view, I'll say this is not good enough. When we see overall the year, we have less serious injuries and we have no fatalities, that's positive. But the higher frequencies in especially Northern Europe and North America with onboarding many of our new colleagues, that also means that when we ramp up offshore, we see some of those frequent injuries we shouldn't see. So therefore, we highlighted that, we talked directly to our colleagues. How do we see our colleagues and our family members remain safe on sites in this? So therefore, we are taking it extremely serious that it has not gone down, but actually gone up in the last 12 months after Q3. With that, I will hand over to the financials.

Jacob, take it away. Thank you, Henrik. And let me take us through details I'll just flip the slides. Let's take through the details of the income statement and the highest ever third quarter gross profit. Revenue increased 3% year-on-year, driven by growth in power solutions, offset by slightly lower revenue in service, primarily as a result of negative foreign exchange rate developments. Gross profit that I just spoke to increased to record-breaking $7.72 million in the quarter, the highest ever in the third quarter. The record was achieved by improved profitability in onshore, lower warranty cost, partly offset by manufacturing ramp-up costs. Earn EBIT margin before special item was 7.8% in the third quarter. As mentioned throughout the year, 25 is a back-end loaded year. The third quarter that we are just going out of was a strong start to a busy second half, and we expect a better balance between earnings in the third and fourth quarters compared to previous years. Diving into the segment, starting with the strong performance in power solutions, as Henrik also alluded to. Revenue increased by 4% year-on-year, driven by higher megawatt delivered at stable average selling prices. EBIT margin before special items improved to 3.9 percentage points, year-on-year to 8.1%. The improvement was driven by lower warranty provisions, continued strong onshore project profitability, and importantly, execution, partly offset by costs related to the manufacturing ramp-up in our offshore in Europe and onshore U.S. Moving into the service segment. Service revenue declined 3% year on year due to lower transactional sales compared to last year, while contract revenue was stable. Revenue growth in the quarter was affected by 3% currency headwind. Service generated EBIT of 153 million, corresponding to an EBIT margin of 17%. The profit levels is in line with recent quarters, but we expect additional cost in Q4 related to some specific offshore sites. The service recovery plan continues and it will take time before benefits are visible in the financials. Net working capital decreased in Q3, mainly due to a reduction in inventory as a result of high project deliveries in the quarter and continued focus on working capital management. Important to note is compared to Q3 last year, we have seen Euro 1.4 billion improvement in the net working capital. That leads us into the cash flow statement where importantly and what you have seen also where we say we initiate a share buyback on the back of strong cash flows and our net cash position. Our operating cash flow was 840 million in the quarter, a significant improvement compared to last year. The improvement was driven by better profitability and a favorable development in net working capital as you just saw. Adjusted free cash flow in the quarter amounted to 508 million, also a substantial improvement driven by the same reasons as mentioned in above. And then finally, we ended the quarter with a net cash position of Euro 0.5 billion 500 million. Total investments in the quarter amounted to $274 million in quarter three. The spending is primarily related to tangible investments such as transport equipment and tools, as well as property plans and equipment across our turbine portfolio, such as the offshore 15-megawatt inventors and our 4-megawatt platform in the U.S., Importantly, we are also very pleased to welcome more than 400 new Vestas colleagues at the onshore blade factory in Poland, which we took over in September from LM Wind Power. The factory will deliver blades for our inventors platform and expand our industrial competitiveness in Europe. Looking at provisions and our lost production factor, we see signs of stabilization. The repairs of the sites mentioned in previous quarters are now largely completed. Disregarding these sites, the underlying LPF has trended down during 2025. Warranty costs amounted to $160 million in the quarter, corresponding to 3% of the revenue, and that is a significant improvement from the 6% we saw in Q3 last year. Warranty consumption was 206 million for the quarter. The higher consumption level in the quarter is related to the above-mentioned repairs. And finally, ending on a high, we can report our best EPS and ROSI in five years. Net debt to EBITDA ended the quarter at minus 0.2 times compared to 0.9 a year ago. Investment grade rating for Moody's we still have with a stable outlook. Earnings per share measured on a 12-month rolling basis improved to €0.9, driven by the better profitability. Our return on capital employed, which broke the 10% barrier last quarter, improved again, and now to 13.6% as the earnings recovery continues. And finally, our strong financial position and improved key metrics allows us to return cash to shareholders. Thus, we are initiating a share buyback of 150 million starting tomorrow. And now back to Henrik to take us to the outlook.

Thank you so much. So thank you, Jacob, and thanks. Very nice slide to finish with, and if we were a bit out of sync, I have to catch up with that change of your slides in the future, but we will rehearse that. When we look at the outlook for the year, revenue narrowed 18.5%, 19.5%. billion from previous 18 to 20. Of course, there are some negative foreign exchanges you picked up. On the EBIT margin before special items, 5 to 6 percent narrowed from 4 to 7, and services expected to generate an EBIT before special items of around 625 million, and then total investments remain stable at 1.2 billion, as we also had in our previous outlook. With that, I will just say thank you for listening in. I will pass to the operator and we will go to the Q&A. And also in that slide, you will be able to see the financial calendar for 2026. Over to you, operator.