Vestas Wind Systems A/S

Good morning everyone and welcome to our presentation of Q2 for 2026.

Strong quarter and let me also here immediately thank our customers, partners, the full supply chain and also colleagues for an exceptionally well executed quarter. And with that, I would like to go to our key highlights for the quarter. So, in quarter, revenue of 4.7 billion euros, that's an increase of 26% year-on-year, driven by strong growth in power solutions of 37%. Even margin of 9.4%, strong profitability improvement driven by both onshore and offshore. EPS of Euro 1.1, Euro per share. Earnings per share grew 46% year-on-year to one of the highest levels in the history of Vestas. The order intake of 3.3 gigawatt, that's an increase of 67% year-on-year, driven by commercial traction in both EMEA and the Americas. Thank you very much. and then outlook for 2026, guidance raised, reflecting the performance in the second quarter and the improved visibility for the rest of the year. With that, I'd like to take you through the markets and environments we are operating and executing in. First of all, wind energy, key to affordability, security and sustainability. No new words in that, but especially the two key words right now for societies worldwide is affordability and security. When we look at the global environment, inflation, raw materials and transport costs are stable, but tariffs and blockages increase costs over time or from time to time, as we say. It's a changeable environment. When we look at the ongoing geopolitical, the trade volatility and energy crisis that are leading to a regionalization, we've spoken about that, we're still seeing it and that trend has not reversed to any better. When we look at the market environment, heightened focus on energy security and affordability, I think most societies we have that. Unfortunately also sometimes included with some non-factual basis and we are probably the one that will strive and keep striving for telling what are the real benefits and what are the costs and how fast can we get the energy. When we look at grid investment, it's prioritized in key markets and getting higher and higher prioritized in key markets, including also EU. When we look at the permitting, it's improving in some markets, but overall permitting, auctions, and market design are still showing challenging things. I will just say here, take Denmark as an example. In November 2024, a failed offshore auction then included better and improved conditions for the developer and customers to us. Then in August 2026, we see that a full subscribed offshore auction But unfortunately, it only leads to that Denmark actually missed the new energy supply with another 18 to 24 months. So we got to change our way of looking at it. On the project level, a really strong project execution this quarter. We have had a really good quarter and thanks to everyone. And also, of course, we will strive whatever we can to keep having that momentum into the second half of the year. So, this time, before we go to the segments, let me also anchor Q226 in the bigger picture and also you in the longer-term picture of our 10% bridge. This bridge and this slide and picture is important for the whole of Team Vestas, and not least for me personally. When we look at it, we're talking about how we get to the 10% EBIT, and it says plus 10%, so that means at 10 or above. We have now a starting point with the grace guidance for today at a midpoint of 8%. We also just want to take you through that the four levers to get to 10% are still the same, but we have rearranged a little bit. But it also means that when you see this in a bigger picture, you've seen it before, now there's 200 basis points to go, and I will assure the investors that raised it at the AGM that we might now be at 8%, but that doesn't satisfy us. We still have the 10% target, and we will work towards that diligently in not least the coming quarters and the coming years. I will start here with the offshore, still the same, by far the largest lever to get us to 10%. It's the ramp up, it's the cost out, and it's extending the competitiveness that we add volume to the platform of our 15 megawatt. We have then rearranged it so we actually have service as the second highest, delivery operation recovery, the commercial reset with the ambition to achieve 25% EBIT margin, and we are assured through our recovery process that is possible and we will work diligently, but it doesn't come overnight. On the quality side, we've moved that so it sort of has a lever and it has a very important lever to us because it's driver operational performance. It's talking about lower warranty cost, but we are at 3% and Jakob will comment on it a bit later. But it's also reduced the cost of poor quality through close collaboration throughout our full value chain, especially also when we source and when we use the inbound in our factories. And last but not least, on the onshore. It is a quarter where we could sort of debate, is there really that big a lever in onshore still? And there is. There is the operational leverage. There is the cost out that we still can do more of. And then there is the retaining the commercial culture. So when we look across the world, it is also what we are talking about today. How do we get other countries to pursue the same alley as, for instance, U.S. and Germany are doing by scaling up? And of course, we will benefit from that. Takeaway, doable, we believe in it and of course the closer you get probably also therefore your level of confidence goes up. With that, I would like to go to the power solution and what has happened in Q2. So, order intake of 3.3 gigawatt in the quarter, driven by strong onshore order intake, especially in the U.S. and Germany. There are no offshore orders in the Q2, but don't worry about that. They come quarter and quarter, and they will be lumpy. So, therefore, we will address that when things happen. On the ASP on new orders, it was €1 million per megawatt for the quarter. The ASP reflects a good mix of project scope and geography and the overall pricing environment remains stable, which of course bodes well for also what we have of quality in our order backlog on Power Solution. The Power Solution order backlog was €36 billion at the end of the quarter. And when we look at it, we continuously see progress in our offshore ramp-up with reduced tack times, better efficiency in manufacturing and improved installation time. So again here, key words for us are the scale offers us the both required but also expected dilution. And we can see that the offshore team and across Vestas are really pulling forward in that journey, which is positive also when we look to the end of the year and also into 27. You can see the numbers described on the charts to the right. With that, I'll go to service. So the recovery plan is progressing, is the heading for Q2. The service order backlog increased to 40.9 billion euros. That's an increase of 5 billion euros compared to a year ago. That's including a 1.3 billion euro uplift from indexation and a 0.2 billion euro headwind from foreign exchange rate movements in the quarter. When we see that, service reached 166 gigawatt under active service contracts. That's an increase of 2 gigawatt compared to last quarter, strong contract renewals, and also new additions more than offset expiries and customer deselection. I think here we are confirmed after Q2 that we are doing the right things in commercial reset as part of this recovery, but we can also see that we have actually been positively surprised over, first of all, the value we create together with our partners, but also therefore the stickiness of our renewal process in service. The service recovery plan is progressing well and we continue to see the operational movement drive down cost levels while the commercial reset is improving the backlog health and we can see that quarter on quarter. Again, the drivers here are working and the new service operation discipline is getting adopted worldwide as we speak and we're getting comfort to see it's being adopted at the pace we are implementing it. With that, I will finish with the sustainability for Q2. Sustainability still in everything we do. And if we start on this, turbines produced and shipped in the last 12 months are expected to avoid 535 million tons of greenhouse gas emissions over the course of their lifetime. This is of course one of the highest number we have had for a quarter and therefore also a reflection of that we see the increase in levels of activity, total turnover up 26% and in the power solution 37%, which of course reflects in this. The carbon emission from our own operation increased by 7% compared to last year. That's mainly due to the vessel emission from increased activity in the offshore. So we know we have to spend some more carbon emission to do also the offset what you just saw above of the 535 million tons. Therefore, it's also worth noticing Thank you very much. Thank you very much. With almost 40,000 employees and some of the sites are also new or have embarked new investors. We will address that as we go and comment on it in the coming quarters. I think it's actually now time, Jakob, that you have been looking forward to take us through the financials. So with that, over to you, Jakob, on the financials.

Thank you Henrik and as you mentioned a strong quarter where we see earnings per share increase up by 46%. The other highlights of the quarter is that revenue increased by 26% compared to Q2 last year. The increase was driven by power solutions while service revenue was slightly lower. The EBIT margin before special items was 9.4% and increased of almost 8 percentage points year-on-year. The development was driven by improved profitability in power solutions from both onshore and offshore. Then also on the right you can see that we incurred 27 million of special items in the quarter. That's mostly related to our operating model reset including staff severance provisions. Moving in to the segment split and the financials for that, we start with the strong quarter in power solutions. In power solutions, Henrik, as you mentioned, revenue increased by 37% year-on-year, driven mainly by higher megawatt delivered in both onshore and offshore, and to a lesser degree by higher average selling prices on megawatt delivered. EBIT margin of 10.4% in Q2 was strong, up more than 10 percentage points year-on-year. Positive benefits in both onshore and offshore, from operating leverage, outstanding project executions and lower than expected project costs. All of this contributed to the strong profitability in the quarter. and here you can see the quarterly split on the right also the split between onshore and offshore and it is worth to note that onshore revenue is expected to follow the usual back-end loaded profile during the year while offshore revenue is more evenly spread across the quarters so this is and we mentioned it last time this is a change from what you have have seen previously when you look at the total numbers Moving on to our service segment, where, as you mentioned, Henrik, we are really pleased to see Costa coming out and that the commercial reset is working as planned. Service revenue decreased by 5% year-on-year, including a 1% currency headwind. The ongoing recovery plan is working and driving lower cost levels, leading to a decrease in contract revenue that we also spoke about last quarter, so the same trend this quarter. Transactional sales were slightly lower than last year. Our service generated an EBIT of €149 million, equivalent to an EBIT margin of 16.6%, which is in line with our expectations. Moving to the focus on SG&A cost and on our scalability in general. SG&A cost amounted to 7% of revenue on a last 12 months basis, an improvement of 0.4% point compared to a year ago and obviously driven by higher revenue. We continue to work and improve our SG&A costs through the operating model reset program. And we see right now also with an increase in top line, we see an opportunity to scale the organization while growing the business. And as you can see on the right side, we have for the last three quarters seen a marginal decrease in the cost while we have just spoken to the top line increases. So that obviously gives the scalability. Networking capital, we saw a slight increase in the quarter to negative 2.3 billion, mainly driven by an increase in inventories and contract cost. As a percentage of last 12 months revenue, networking capital in the second quarter amounted to negative 11.1%, so still a strong place to be. Operating cash flow was positive by 419 million in the quarter, a significant improvement compared to Q2 in prior year, and that is driven by higher profitability. Total investment amounted to 278 million in Q2, which is stable compared to last year. Adjusted free cash flow in the quarter amounted to 94 million euro, an improvement compared to last year, driven by the reasons mentioned in above. Cash flow from financing activities in the quarter was driven mainly by the repayment of the bond, which we also spoke about last quarter, as well as the dividend payments and share buybacks. We ended the quarter with a net cash position of 92 million euro. Then Henrik, you spoke about quality and here looking at our LPF, our loss production factor, we see a slight improvement in Q2, reflecting the better fleet performance and operational improvements across our serviced turbines. Warranty cost amounted to 141 million in the quarter, corresponding to a 3% of revenue. Warranty consumption was in Q2 218 million and that confirming previous quarter's positive trend where we consume, meaning repair, old identified quality cases more than we provision for new quality cases. The capital structure and shareholder distribution, Henrik, you mentioned the 400 million euro buyback program. The net debt to EBITDA ended the quarter at zero times stable compared to last year and within our targeted range of minus one to plus one. We maintain, as previous quarters, a solid investment grade rating from Moody's with a stable outlook. And given our performance and visibility at this point of time of the year, combined with a healthy capital structure, a new share buyback program of 400 million euro will be initiated, in line with our previously communicated intention to return at least 40% of net profit to shareholders. The buyback will begin tomorrow and run until the end of the calendar year. And as you can see also on the right, the 400 million is covering the two quarters, which is of course different from what we have previously done. And then ending, I've said it before, on my favorite slide, because this is where we look at our long-term shareholder value creation. Here you see the most important financial metrics in a longer perspective. These metrics are central to how we measure our performance and align nicely to our shareholder value creation and of course also our equity story. And I encourage, if you want to read more about that, to read further about that in the annual report. And with that, over to you, Henrik, for the outlook.